SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchantge Act of 1934
Date of report (Date of earliest event reported): August 11, 1998
ISOLYSER COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
0-24866 58-1746149
(Commission File Number) (I.R.S. Employer Identification No.)
650 Engineering Drive, Norcross, Georgia 30092
(Address of Principal Executive Offices (Zip Code)
(770) 582-6363
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets
On August 11, 1998, Isolyser Company, Inc. ("Isolyser"), together with
certain of its wholly-owned subsidiaries (collectively, the "Company"), disposed
of (1) its Arden and Charlotte, North Carolina OREX manufacturing facilities,
(2) the industrial division of White Knight Healthcare, Inc., (3) substantially
all of the assets of SafeWaste Corporation, and (3) certain PVA fiber. These
assets were purchased by Thantex Holdings, Inc. or certain of its affiliates.
Neither Thantex Holdings, Inc. nor any of the affiliated purchaser entities were
or are "affiliates" of Isolyser within the meanings of the Securities Act of
1933, as amended. In connection with such disposition of assets, Isolyser also
contracted to sell its Abbeville, South Carolina OREX manufacturing facility.
The purchase price payable for the assets, exclusive of the Abbeville plant, was
$13.4 million, and the purchase price for the Abbeville plant is $8.0 million.
In connection with the sale of the Arden plant and the pending sale of the
Abbeville plant, the Company will receive 20% of the shares of the corporation
which owns such plants.
Item 7. Financial Statements and Exhibits
1) Financial Statements of Businesses Acquired:
Not applicable.
(b) Pro Forma Financial Information:
The required pro forma financial information will be filed not more than
sixty days after the date this initial report on Form 8-K must be filed.
(c) Exhibits:
2.1 Asset Purchase Agreement dated August 11, 1998, between White Knight
Healthcare, Inc. and Thantex Holdings, Inc.
2.2 Asset Purchase Agreement dated August 11, 1998, between SafeWaste
Corporation and SafeWaste, Inc.
2.3 Arden Plant Agreement dated August 11, 1998, between Isolyser Company,
Inc., Thantex Holdings, Inc. and Thantex Specialties, Inc.
2.4 Barmag Agreement dated August 11, 1998, between Isolyser Company, Inc.
and Thantex Holdings, Inc.
2.5 PVA Agreement dated August 11, 1998, between Isolyser Company, Inc. and
Thantex Holdings, Inc.
2.6 Abbeville Plant Agreement dated August 11, 1998, between Isolyser
Company, Inc., Thantex Specialties, Inc. and Thantex Holdings, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be duly signed on its behalf by the
undersigned hereunto duly authorized.
ISOLYSER COMPANY, INC.
/s/ Peter A. Schmitt
----------------------------------------
By: Peter A. Schmitt,
Chief Financial Officer
and Vice President
Dated: August 24, 1998
ASSET PURCHASE AGREEMENT
WHITE KNIGHT HEALTHCARE, INC.
AND
THANTEX HOLDINGS, INC.
August ___, 1998
WHITE KNIGHT ASSET PURCHASE AGREEMENT (this "Agreement"), dated August
___, 1998, between WHITE KNIGHT HEALTHCARE, INC., a Pennsylvania corporation
("Seller"), and THANTEX HOLDINGS, INC. a Delaware corporation ("Purchaser").
Certain capitalized terms shall have the meaning set forth in Article I.
WHEREAS, in the past, Seller operated through three divisions, White
Knight medical, Struble & Moffit and White Knight industrial. Seller no longer
operates the Struble & Moffit division. Certain of the Struble & Moffit
functions were merged into the White Knight industrial division. The Seller's
parent company, Isolyser Company, Inc. ("Isolyser") holds certain PVA related
patents and the OREX trademark and has used the Seller for the manufacture, sale
and distribution of certain OREX products. Certain functions, operations,
employees and assets are presently shared by the White Knight industrial
division and the White Knight medical division; and
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to
purchase from Seller, the assets of the White Knight Industrial Division, as
hereinafter defined, upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Acquired Intellectual Property Rights" means the Intellectual Property
of the Business which is listed in Section 1.01 of the Disclosure Statement.
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
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"Ancillary Agreements" means the agreements described in Section 5.06
and Exhibit A.
"Assumed Liabilities" means those specific liabilities which the
Purchaser specifically agreed to assume in writing, as listed on Exhibit B. The
Purchaser assumes no other liabilities of the Seller.
"Business" means the business customarily and historically conducted by
the Seller in its White Knight Industrial Division.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in the City of
New York.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as a trustee or
executor (in each case, acting in a fiduciary capacity), of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, as trustee or executor (in each
case, acting in a fiduciary capacity), by contract or credit arrangement or
otherwise.
"Current Assets" means the Accounts Receivable and Inventory being part
of the Subject Business Assets.
"Disclosure Statement" means the Disclosure Statement dated as of the
date hereof delivered to Purchaser by Seller.
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind.
"Equipment Related Property" means (1) all inventory of spare and
replacement parts relating to equipment, (2) all plans, manuals, records and
other documents relating to the equipment, and (3) the Intellectual Property
Rights, if any, directly pertaining to the equipment or the customized products
such equipment has been designed or programmed to produce.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means (1) those assets of the Seller which are used
solely and exclusively in the Seller's medical division, (2) the Seller's former
Struble & Moffit plant, located in New Jersey, (3) the Shared Functions which
the Seller and Purchaser agree are to be retained by Seller (some of which may
be the subject of a Shared Services Agreement) (4) distributorship or other
rights in OREX products and Safety products, (5) those other assets which the
Seller and the Purchaser agree are Excluded Assets and which are listed on
Exhibit
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C and (6) the Face Mask inventory described in Section 1.01 of the Disclosure
Statement and having a value of $461,609.
"GAAP" means United States generally accepted accounting principles in
effect from time to time applied consistently throughout the period involved.
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial or arbitral body, whether federal, state, local or
foreign.
"Governmental Order" means any order, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Intellectual Property Rights" means (a) patent and patent
applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, (c)
copyrights, whether registered or unregistered, and registrations and
applications for registration thereof and (d) trade secrets, formulas,
inventions, invention disclosures, know-how, manufacturing and production
processes and techniques, business and marketing plans, customer and supplier
lists, computer software and other proprietary business and intellectual
property rights.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the executive officers of Seller after due inquiry of the executive
officers of Seller.
"Losses" of a Person means any and all claims, actions or causes of
action, assessments, losses, damages, deficiencies, liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing) actually suffered or incurred by such Person.
"Material Adverse Effect" means, with respect to any Person, any
change in, or effect on, the business of such Person that is materially adverse
to the business, operations, results of operations or the financial condition
thereof or an amount in excess of $10,000.
"Permitted Encumbrances" means those Encumbrances listed in Section
1.01 of the Disclosure Statement, encumbrances to pay taxes or other
governmental assessments which are not yet due and payable, and other
encumbrances which do not in the aggregate materially detract from the value of
the Subject Business Assets or materially impair the use thereof.
"Person" means an individual, corporation, partnership, joint venture,
person (including, without limitation, a "person" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended), trust, association or
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another entity.
"Related Transactions" means those transactions by and among the
Purchaser, the Seller and their Affiliates more fully described on Exhibit D.
"Shared Functions" means the assets, facilities, employees and
operations which have been used jointly by the Seller's industrial division, by
the Seller's medical division or by Affiliates of the Seller. The Seller
represents and warrants that all Shared Functions are identified in Section 1.01
of the Disclosure Statement.
"Subject Business Assets" means (i) the fixed assets of the Business
which are listed in Section 1.01 of the Disclosure Statement, including the
Equipment Related Property pertaining to such assets, (ii) the real property,
fixtures and improvements which together comprise the Childersburg, Alabama
plant (the "Plant") owned by Seller located on the real property more
particularly described in such Section 1.01, (iii) the inventory (the
"Inventory") of the Business (including raw materials, work in process and
finished goods except as may defined as a part of the Excluded Assets, if
applicable) identified in Section 1.01 of the Disclosure Statement, (iv) the
accounts receivable (the "Accounts Receivable") of the Business (both billed and
unbilled) identified in Section 1.01 of the Disclosure Statement, (v) all of
Seller's right to and interest in those contracts (collectively, the
"Contracts") and leases (collectively, the "Leases") identified in such Section
1.01, (vi) the Acquired Intellectual Property Rights (saving and excepting the
Licensed Intellectual Property Rights which are treated separately), (vii) the
Shared Functions which the Seller and the Purchaser agree shall transfer to the
Purchaser and identified in such Section 1.01, (viii) all tangible assets
located at the Plant and in the Seller's offices in Charlotte, North Carolina
and (ix) any other real or personal property owned, leased, or licensed by the
Seller and used primarily in the Business, wherever located; saving and
excepting the Excluded Assets.
"Tax" or "Taxes" means all income, gross receipts, sales, use,
employment, franchise, profits, property, transfer or other taxes, fees, stamp
taxes and duties, assessments or charges of any kind whatsoever (whether payable
directly or by withholding), together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority with
respect thereto.
"White Knight Industrial Division" means the operations of the Seller's
industrial division as it has customarily and historically been operated,
including any operations and functions which were transferred to the industrial
division when the Struble & Moffit division was eliminated (i.e. the manufacture
and sale of blankets and headrests for the transportation industry); excluding,
however, the following (i) the right to manufacture, sell and distribute
patented OREX products, (ii) the Shared Functions which the parties agree are
not Subject Business Assets, and (iii) the Excluded Assets.
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"Working Capital" means, at any time, the Current Assets.
(b) Each of the following terms is defined in the section set
forth opposite such terms below:
Term Section
Agreement Recitals
Authorized Agent 11.10
Accounting Procedures 2.04(b)
CERCLA 3.07(g)
Closing 2.03(a)
Closing Date 2.03(a)
Closing Date Current Assets Statement 2.04
Confidentiality Agreement 5.05
Employees 6.01(a)
Environmental Laws 3.08(g)
Environmental Permits 3.08(g)
Financial Statements 3.04
Hazardous Materials 3.08(g)
Historic Industrial Division 3.04
Indemnified Party 9.04
Indemnifying Party 9.04
Independent Accounting Firm 2.04(d)(ii)
IRS 3.12(a)
Material Contracts 3.16
Maximum Purchase Price 2.02
Plant 1.01
Purchaser Recitals
Purchase Price 2.02
Purchaser's Accountants 2.04(b)
RCRA 3.08(g)
Qualified Accounts Receivable 2.02
Qualified Inventory 2.02
Seller Recitals
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ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions set forth in this Agreement, Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, on the Closing Date, the Subject
Business Assets.
SECTION 2.02. Purchase Price. The aggregate purchase price (the
"Purchase Price") for the Subject Business Assets (exclusive of any additional
consideration set forth in the Ancillary Agreements) shall be the aggregate of
the following amounts:
(i) Inventory: The book value of "Qualified Inventory"
multiplied by 0.70. "Qualified Inventory" shall mean the
inventory of the Business which is of a quality and quantity
commercially usable or saleable in the ordinary and regular
course of the Business, after deduction of reserves
calculated in accordance with the Accounting Procedures
attached as Exhibit E and GAAP. The Qualified Inventory at
closing was calculated to be $3,645,751 and the amount paid
for such inventory was $2,550,626.
(ii) Accounts Receivable. The book value of "Qualified Accounts
Receivable" multiplied by 0.85. "Qualified Accounts
Receivable " shall mean the collectible accounts receivable
of the Business, resulting from services rendered by or
operations of the Business in the ordinary course of
Business and are not subject to setoff or counterclaim,
after deduction of reserves calculated in accordance with
the Accounting Procedures attached as Exhibit E and GAAP.
The Qualified Accounts Receivable at closing was calculated
to be $2,003,101 and the amount paid for such accounts was
$1,702,635.
(iii) Remainder of Subject Business Assets. $500,000 allocated to
the remainder of the Subject Business Assets, including the
Plant.
Subject to adjustment in accordance with Section 2.04, the Purchase Price shall
be payable as provided in Section 2.03(c).
SECTION 2.03. Closing.
(a) Closing Date. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Subject Business Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
Tuesday, August 11, 1998, or on the third Business Day following the
satisfaction or waiver of the conditions to the obligations of the parties set
forth in Article VIII. The Closing will occur at the offices of Buist, Moore,
Smythe
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& McGee, P.A, 5 Exchange Street, Charleston, South Carolina, or at such other
time or on such other date or at such other place as Seller and Purchaser may
mutually agree upon in writing (the day on which the Closing takes place being
the "Closing Date").
(b) Effective Date. The Current Assets and those assets and liabilities
specified the Closing Memorandum of even date are transferred "as of" midnight
July 31, 1998 (the "Effective Date"). The special prorations, allocations and
procedures which apply with respect to the Effective Date are specified in the
Closing Memorandum.
(c) Closing Documents. At the Closing, Seller shall execute and deliver
to Purchaser such transfer and other documents as required to transfer the
Subject Business Assets, together with such other instruments of conveyance,
affidavits, declarations, assignments and other supporting documentation
typically delivered in connection with a transaction of this type and in
accordance with local law or custom (collectively the "Closing Documents")
including:
(i) Bill of Sale in the form attached as Exhibit F
(ii) A warranty Deed in the form attached as Exhibit G, subject
only to any Permitted Encumbrances.
(iii)Trademark Assignment and Agreement in the form attached
hereto as Exhibit H.
(iv) Ancillary Agreements, other than the License Agreement
(v) Assignment and Assumption of the Assumed Liabilities in the
form attached as Exhibit I
(vi) Assignment of Title Certificates to vehicles, if any.
(vii) Consents, as defined in Section 3.21, unless waived by the
parties
(viii) Assignment of Permits, if any, as defined in Section 3.21,
unless waived by the parties.
(ix) Release of all liens and encumbrances on the Subject
Business Assets except Assumed Liabilities and Permitted
Encumbrances, or other arrangements satisfactory to
Purchaser and Seller
(x) Good Standing Certificates of Seller and Purchaser
(xi)Officer's Certificate of Seller and Purchaser including
authorizing resolution, articles of incorporation with all
amendments, by-laws and incumbency certificates.
(xii) FIRPTA affidavit and such other title affidavits as may be
required by Purchaser's title insurance company or customary
practice in the jurisdiction where the real property is
located.
(d) At the Closing, Purchaser shall deliver to Seller the Purchase
Price, by wire transfer in immediately available funds, to an account or
accounts designated at least three Business Days prior to the Closing Date by
Seller in a written notice to Purchaser.
SECTION 2.04. Purchase Price Adjustment. (a) The Purchase Price shall
be subject
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to adjustment after the Closing Date as specified in this Section 2.04.
(b) As soon as practicable after the expiration of 180 days following
the Closing Date (but in no event later than 210 calendar days following the
Closing Date), Purchaser shall prepare and deliver to Seller a statement (the
"Closing Date Current Assets Statement") setting forth the value of the Current
Assets for purposes of the Purchase Price after application of the discounts set
forth in Section 2.02 (the "Closing Date Current Assets"), which will be
determined in accordance with the procedures set forth in the Accounting
Procedures attached as Exhibit E and GAAP. The Closing Date Current Assets
Statement shall be prepared based on Seller's books and records as of the
Closing Date and shall be verified by review by, and shall be accompanied by the
statement thereon of, Ernst & Young L.L.P., accountants of Purchaser
("Purchaser's Accountants"), stating that the Closing Date Current Assets have
been determined in accordance with the Accounting Procedures. Seller and
Purchaser agree that the physical inventory of Seller's Inventory shall be
conducted on the Closing Date in accordance with the procedures set forth in the
Disclosure Statement. During the preparation of the Closing Date Current Asset
Statement by Purchaser and the period of any dispute provided for in Section
2.04(d), Purchaser shall provide Seller and Deloitte & Touche LLP ("Seller's
Accountants") access to the books, records, facilities and employees of
Purchaser (or the applicable subsidiary on site), and, if agreed by Purchaser's
Accountants, the work papers of Purchaser's Accountants, and Purchaser shall
cooperate fully with Seller's Accountants, in each case to the extent required
by Seller and Seller's Accountants in order to review the Closing Date Current
Assets Statement and to investigate the basis for any such dispute.
(c) Subject to the limitations set forth in Section 2.04(d), if
Purchaser has not received a notice of dispute from Seller in accordance with
Section 2.04(d) within 30 Business Days after the date of receipt by Seller of
the Closing Date Current Assets Statement:
(i) If the value of the Closing Date Current Assets shown on the
Closing Date Current Asset Statement is less than the amount
of the applicable Purchase Price component applicable to the
Current Assets, Seller shall pay to Purchaser, as an
adjustment to the Purchase Price, an amount equal to such
difference; and
(ii) If the value of the Closing Date Current Assets shown on the
Closing Date Current Assets Statement is greater than the
amount of the applicable Purchase Price component applicable
to the Current Assets, Purchaser shall pay to Seller, as an
adjustment to the Purchase Price, an amount equal to such
excess; provided that the adjustment does not result in a
purchase price which exceeds the maximum price set forth in
Section 2.02 for either Inventory or Accounts Receivable.
(iii)Notwithstanding any provision to the contrary, if the
Purchaser has not collected $1,500,000 from the Accounts
Receivable by 210 days after the Closing Date, the
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Seller shall pay the Purchaser the difference between the
Purchaser's collections and $1,500,000 within five (5) business
days of request. Purchaser agrees to use commercially reasonable
efforts to collect all Accounts Receivable by such date and to
apply collections first to the Accounts Receivable before
application to accounts receivable generated after Closing. All
payments to be made under this subsection (c) shall be made by
wire transfer of immediately available funds to an account
designated by the receiving party.
(d) (i) If not disputed by Seller in accordance with this Section
2.04(d), the Closing Date Current Assets Statement delivered by Purchaser to
Seller shall be final, binding and conclusive on the parties hereto. Seller may
dispute any amounts reflected on the Closing Date Current Assets Statement,
provided, however, that Seller shall notify Purchaser and Purchaser's
Accountants in writing of each disputed item, specifying, if known, the amount
thereof in dispute and setting forth, in detail, the basis for such dispute,
within 30 Business Days of Seller's receipt of the Closing Date Current Assets
Statement. In the event of such a dispute, each of Seller and Purchaser shall
negotiate in good faith to reconcile their differences.
(ii) If Purchaser and Seller are unable to reach a resolution,
leaving in dispute amounts the net effect of which in the
aggregate would change the Closing Date Current Assets,
Purchaser and Seller shall submit the items remaining in
dispute that Seller shall be entitled to dispute by the terms
of this Section 2.04(d) for resolution to the Charlotte,
North Carolina office of Arthur Anderson, LLP or such other
independent accounting firm as may be mutually acceptable to
Seller and Purchaser (the "Independent Accounting Firm"),
which shall, within 30 Business Days of such submission,
determine and report to Seller and Purchaser upon such
remaining disputed items, and such report shall have the
legal effect of an arbitral award and shall be final, binding
and conclusive on Seller and Purchaser. The fees and
disbursements of the Independent Accounting Firm shall be
allocated between Seller and Purchaser in the same proportion
that the aggregate amount of such remaining disputed items so
submitted to the Independent Accounting Firm that is
unsuccessfully disputed by each such party (as finally
determined by the Independent Accounting Firm) bears to the
total amount of such remaining disputed items so submitted.
(iii)Any amount that is payable under Section 2.04(c), including,
without limitation any portion thereof that is subject to a
dispute resolved under this Section 2.04(d) shall be paid by
Seller or Purchaser, as the case may be, by wire transfer in
immediately available funds, within five Business Days
following the resolution of such dispute and in an amount in
accordance with such resolution.
(e) In acting under this Agreement, Seller's Accountants, Purchaser's
Accountants and the Independent Accounting Firm shall be entitled to the
privileges and immunities of arbitrators.
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(f) Any payment required to be made by Seller or Purchaser pursuant to
Section 2.04(c) shall bear interest from the Closing Date through the date of
payment on the basis of the average of the daily rate of interest publicly
announced by The Chase Manhattan Bank from time to time as its base rate from
the Closing Date to the date of such payment.
SECTION 2.05. Allocation of Purchase Price. The Purchase Price shall be
allocated for tax purposes among each item or class of the Subject Business
Assets as set forth in Exhibit J of this Agreement. Seller and Purchaser agree
that they will prepare and file any notice or other filing required pursuant to
Section 1060 of the Internal Revenue Code, and that any notices or filings will
be prepared based upon such tax allocation of the Purchase Price. Purchaser
agrees to send to Seller a completed copy of its Form 8594 (Asset Acquisition
Statement under Section 1060) with respect to this transaction prior to filing
such form with the Internal Revenue Service.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the date of this
Agreement and through the Closing Date as follows:
SECTION 3.01. Incorporation and Authority of Seller. Seller is a
corporation duly incorporated and validly existing under the laws of
Pennsylvania. Seller is duly qualified as a corporation to do business in each
jurisdiction where the character of its properties owned, operated or leased or
the nature of its activities makes such qualification necessary, except for such
failures to be so qualified that would not have a Material Adverse Effect on
Seller. Seller has all necessary corporate power and authority to enter into
this Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming due
authorization, execution and delivery by Purchaser) this Agreement constitutes a
legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.02. No Conflict. Assuming all consents, approvals,
authorizations and other actions described in Section 3.03 have been obtained,
and except as may result from any facts or circumstances relating solely to
Purchaser or as described in Section 3.02 of the Disclosure Statement, the
execution, delivery and performance of this Agreement by Seller does
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not and will not (a) violate or conflict with the organizational documents of
the Seller, (b) conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the Seller,
except for such conflicts or violations as would not have a Material Adverse
Effect on the ability of Seller to conduct its business as currently conducted
or have a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement or (c) result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Encumbrance on any of the Subject Business Assets or properties
of the Seller pursuant to, any note, bond, mortgage, credit agreement,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument relating to such assets or properties to which the Seller is a party
or by which any of such assets or properties is bound or affected, except as
would not have a Material Adverse Effect on the ability of Seller to conduct its
business as currently conducted or have a Material Adverse Effect on the ability
of Seller to consummate the transactions contemplated by this Agreement.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement by Seller does not, and the performance of this Agreement by
Seller will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Seller from, or delay Seller in,
performing any of its material obligations under this Agreement and would not
have a Material Adverse Effect on the ability of Seller to conduct its business
as currently conducted and as may be necessary as a result of any facts or
circumstances relating solely to Purchaser.
SECTION 3.04. Financial Statements; Absence of Undisclosed Liabilities.
Attached to Section 3.04 of the Disclosure Statement are true and correct copies
the summary financial reports of the White Knight industrial division, without
adjustments for the differences between White Knight industrial division as
previously operated by the Seller and the Business the "Historic Industrial
Division") for 1996, 1997 and the months January, 1998 through June, 1998 (the
"Financial Statements"). To the best of Seller's Knowledge, the Financial
Statements, which are unaudited, fairly present in all material respects the
results of the operations of the Historic Industrial Division for the period
then ended, and include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the information included
therein, except for year-end adjustments.
SECTION 3.05. Absence of Certain Changes or Events. Except as set forth
in Section 3.05 of the Disclosure Statement, since December 31, 1997, Seller has
conducted the Business only in the ordinary course, and there has not been with
respect to the Subject Business Assets (i) any Material Adverse Effect, (ii) any
damage, destruction or loss, due to fire or other casualty, whether or not
covered by insurance, that has or reasonably could be expected to have a
Material Adverse Effect, (iii) any change in accounting methods, principles or
practices by
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Seller materially affecting its assets, liabilities or business, except insofar
as may have been required by a change in GAAP, (iv) any sale, lease, transfer,
or assignment of any material Subject Business Assets other than in the ordinary
course of business, (v) any material capital expenditures other than in the
ordinary course of business, or (vi) any material capital investment in, or loan
to, any other Person outside the ordinary course of business.
SECTION 3.06. Litigation. Except as set forth in Section 3.06 of the
Disclosure Statement, as of the date of this Agreement, there are no claims,
actions, proceedings or investigations pending, or to the Knowledge of Seller,
threatened against Seller or any of its assets or properties, including but not
limited to the Subject Business Assets, before any court, arbitrator or
administrative, governmental or regulatory authority or body that are reasonably
likely to have a Material Adverse Effect on Seller. Except as set forth in
Section 3.06 of the Disclosure Statement, neither Seller nor any of the Subject
Business Assets is subject to any order, writ, judgment, injunction, decree,
determination or award. Except as otherwise set forth in Section 3.06 of the
Disclosure Statement, each of the matters listed on Section 3.06 of the
Disclosure Statement is covered by insurance, and the insurer has acknowledged
coverage of each such matter without reservation.
SECTION 3.07. Compliance with Applicable Laws. Except as set forth in
Section 3.07 of the Disclosure Statement, within the preceding three years
Seller has not violated or failed to comply with any statute, law, regulation,
rule, judgment, decree or order of any Governmental Authority applicable to its
Business, except for violations and failures to comply that would not,
individually or in the aggregate, have a Material Adverse Effect on the ability
of Seller to conduct its Business as currently conducted, and there is no action
pending against Seller charging failure to so comply. The conduct of the
Business of Seller is in conformity with all federal, state and local
governmental and regulatory requirements applicable to its Business and
operations, except where such nonconformity would not, in the aggregate, have a
Material Adverse Effect on the ability of Seller to conduct its Business as
currently conducted. Seller has all permits, licenses, franchises and
certificates of occupancy from Governmental Authorities required to conduct its
Business as now being conducted, except for such permits, licenses, franchises
and certificates the absence of which would not, in the aggregate, have a
Material Adverse Effect on the ability of Seller to conduct its Business as
currently conducted.
SECTION 3.08. Environmental Matters. Except as set forth in Section
3.08 of the Disclosure Statement:
(a) Except as would not have a Material Adverse Effect on the ability
of Seller to conduct its Business as currently conducted, Seller (i) is in
compliance with all applicable Environmental Laws and (ii) holds all
Environmental Permits necessary for its operations and properties and is in
compliance with the terms and conditions of all such Environmental Permits.
(b) Seller has not received any written claim, demand, notice or
complaint
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alleging violation of or liability (including without limitation any liability
for site investigation. Cleanup or corrective action) under any Environmental
Laws concerning the Subject Business Assets.
(c) Except as would not have a Material Adverse Effect on the ability
of Seller to conduct its Business as currently conducted, to Seller's Knowledge,
none of the following exists at the Plant: (i) asbestos-containing material in
any form or condition; (ii) materials containing polychlorinated biphenyls;
(iii) underground storage tanks or surface impoundments; or (iv) landfills,
surface impoundments or disposal areas.
(d) Except as would not have a Material Adverse Effect on the ability
of Seller to conduct its Business as currently conducted , Seller has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any Hazardous Material, or owned or operated
any facility or property, so as to give rise to liabilities for response costs,
natural resource damages or attorneys fees pursuant to CERCLA or other
Environmental Laws.
(e) No written notice of a release of a Hazardous Material has been
filed by or on behalf of Seller and no property or facility now or previously
owned or operated by Seller is on the CERCLA National Priorities List (or
proposed for such listing), the Comprehensive Environmental Response,
Compensation, and Liability Information System list or any similar state or
local list.
(f) Seller has not, either expressly or, to Seller's Knowledge, by
operation of law, assumed or undertaken any liability, including without
limitation any obligation for corrective or remedial action, of any other Person
relating to Environmental Laws.
(g) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Environmental Laws" means any federal, state, local or foreign
statute, law, ordinance, regulation, rule or code, including any judicial or
administrative order, consent decree or judgment, relating to pollution or
protection of the environment or worker health and safety, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge, investigation or cleanup of Hazardous
Materials, in effect as of the date hereof.
"Environmental Permits" means any permit, approval, identification
number, license or other authorization required of Seller under any applicable
Environmental Law.
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"Hazardous Materials" means (a) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls, (b) any chemical, material or substance
defined or regulated as toxic or hazardous under any applicable Environmental
Law or (c) anything that is a "hazardous substance" pursuant to CERCLA, anything
that is a "solid waste" or "hazardous waste" pursuant to RCRA or any
"pesticide", "pollutant", "contaminant", "toxic chemical" or "noise".
"RCRA" means the Resource Conservation and Recovery Act, as amended.
SECTION 3.09. Title and Condition of Properties. (a) Seller has good
and marketable title to, or valid leasehold interests in, all the properties and
assets used by it or located on its premises that are material to the conduct of
the Business with respect to the Subject Business Assets, or which are shown on
the Financial Statements except for such as are licensed, as are no longer
useful in the conduct of its business or as have been disposed of in the
ordinary course of business and except for defects in title, easements,
restrictive covenants and similar impediments that, in the aggregate, would not
have a Material Adverse Effect on the ability of Seller to conduct its Business
as currently conducted and, as to the real property owned by Seller, would not
have a material effect on the value of such property. All such assets and
properties, other than assets and properties in which Seller has leasehold
interests, are free and clear of all Encumbrances (or at Closing will be) except
for (i) liens for taxes not yet due or being contested in good faith by
appropriate procedures, (ii) mechanics, carriers, workmen's, repairmen's or
other like liens arising or incurred in the ordinary course of business for
amounts that are not delinquent and which are not, individually or in the
aggregate, material to Seller's Business, (iii) liens arising under original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business, and (iv) the Permitted
Encumbrances.
(b) Except as set forth in Section 3.09 of the Disclosure Statement or
as would not result in a Material Adverse Effect, the Subject Business Assets
are all of the assets which have been used, and which are necessary, to operate
the Business as it has customarily been conducted.
(c) To the Seller's Knowledge and in reliance upon, and subject to,
the affidavit attached as Exhibit K, the Subject Business Assets are functional
and usable in the ordinary course of the Business and are in sufficiently good
operating condition to conduct the Business as it has been customarily
conducted.
(d) The real property owned or leased by Seller with respect to the
Business is listed in Section 1.01 of the Disclosure Statement and is suitable
for the uses for which these properties are currently used. The Plant has
customary access to the utilities serving such properties sufficient to allow
the conduct of Seller's Business as currently conducted, except for
interruptions in utility service beyond Seller's control.
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SECTION 3.10. Trademarks. Etc. Section 1.01 of the Disclosure Statement
contains a complete and accurate list of (i) all trade names, registered and
Material unregistered trademarks owned by Seller or used in connection with the
Subject Business Assets, other than certain Excluded Assets which are used
jointly by the Business and the Seller's medical division; and (ii) all MIS,
MAPIX and related systems and computer software owned and/or used by Seller in
the Business other than commercially available software with an annual license
fee of less than $1,000. Seller has not granted any licenses to any Person with
respect to the Acquired Intellectual Property. Other than with respect to
computer software and the Licensed Intellectual Property Rights, no Person has
granted any such licenses to the Seller for the conduct of the Business. Except
as set forth in Section 3.10 of the Disclosure Statement, to Seller's Knowledge,
Seller owns (free and clear of all Encumbrances) or has sufficient unrestricted
right to use the Acquired Intellectual Property Rights in order to allow it to
conduct, and continue to conduct, its Business as currently conducted in all
material respects, and the consummation of the transactions contemplated hereby
will not alter or impair such ability in any material respect. To Seller's
Knowledge, except as set forth in Section 3.10 of the Disclosure Statement, (a)
Seller has not infringed, misappropriated or is otherwise not in conflict with
any intellectual property right of any Person in any material respect, and (b)
the conduct of the Business of Seller as currently conducted or as currently
contemplated to be conducted does not and will not conflict in any material
respect with any license, trademark, trademark right, patent, patent right,
invention, industrial model, service mark or copyright of any third Person. No
claims are pending or, to the Knowledge of Seller, threatened by any Person
contesting or challenging the ownership, validity, enforceability or use of the
Acquired Intellectual Property Rights. To the Knowledge of Seller, there are no
claims pending or currently threatened by any Person against Seller alleging
infringement of any intellectual property rights relating to the technology used
in Seller's manufacturing process with respect to the Business. Seller has not
made a claim of a violation or infringement by others of its rights to or in
connection with the Acquired Intellectual Property Rights. Seller has taken
commercially reasonable actions to maintain and protect the Acquired
Intellectual Property Rights. Notwithstanding any provision to the contrary, the
Seller makes no representations with respect to the Tyvek licenses. The Seller
represents and warrants that it is transferring to the Purchaser all of the
Intellectual Property Rights of the Business, including any licenses presently
used in connection with the Seller's face mask equipment (which rights may be
transferred on a non-exclusive basis).
SECTION 3.11. Insurance. Section 3.11 of the Disclosure Statement sets
forth a complete list of all material insurance policies (including policies
providing property, casualty, liability and workers' compensation coverage and
bond and surety arrangements) with respect to the Business or the Subject
Business Assets.
SECTION 3.12. Employee Benefit Matters. (a) Section 3.12 of the
Disclosure Statement, with respect to the Subject Business Assets, sets forth a
true and complete list of each "employee benefit plan" (as defined by Section
3(3) of ERISA), and any other bonus, profit sharing, pension, compensation,
deferred compensation, stock option, stock purchase, fringe
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benefit, severance, post-retirement, scholarship, disability, sick leave,
vacation, individual employment, commission, bonus, payroll practice, retention,
or other plan, agreement, policy, trust fund or arrangement (each such plan,
agreement, policy, trust fund or arrangement is referred to herein as an
"Employee Benefit Plan", and collectively, the "Employee Benefit Plans") that is
for the benefit of (i) directors or employees of Seller working in the Business
or any other persons performing services for Seller in the Business, (ii) former
directors or employees of Seller working in the Business or any other persons
formerly performing services for Seller in the Business, and/or (iii)
beneficiaries of anyone described in (i) or (ii) (collectively, "Business
Employees") or with respect to which Seller or any "ERISA Affiliate" (hereby
defined to include any trade or business, whether or not incorporated, other
than Seller, which has employees who are or have been at any date of
determination occurring within the preceding six (6) years, treated pursuant to
Section 4001(a)(14) of ERISA and/or Section 414 of the Internal Revenue Code as
employees of a single employer which includes Seller) has any obligation on
behalf of any employee of the Business.
(b) Except as disclosed in Section 3.12 of the Disclosure Statement,
each Employee Benefit Plan is in material compliance with the provisions of
ERISA and the provisions of the Internal Revenue Code applicable to it. The
Seller has made available to the Purchaser a true and complete copy of each Plan
and a true and complete copy of the following documents, to the extent
applicable, prepared in connection with each such Plan: (i) the most recently
received IRS determination letter, (ii) the most recently prepared financial
statement (Form 5500's with attachments), (iii) all governmental rulings
determinations and opinions (and pending requests for governmental rulings,
determinations and opinions). Neither Seller nor any ERISA Affiliate has
maintained or contributed to any plan subject to the minimum funding standards
of Section 302 of ERISA or Section 412 of the Internal Revenue Code and/or any
"multiemployer plan" (as defined by Section 3(37) of ERISA). All Employee
Benefit Plans which are "pension plans" as defined in Section 3(2) of ERISA have
received favorable determination letters from the Internal Revenue Service
("IRS") as to their tax-qualified status and the tax-exempt status of any
related trust under Sections 401(a) and 501 of the Internal Revenue Code,
respectively, which determinations are currently in effect.
(c) Other than as may otherwise be provided hereunder (including, but
not by way of limitation, Article VI hereof), Purchaser shall not, as a result
of the transactions contemplated by this Agreement (or any employment by
Purchaser of Business employees): (i) become liable for any contribution, tax,
lien, penalty, cost, interest, claim, loss, action, suit, damage, cost
assessment or other similar type of liability or expense of Seller or any ERISA
Affiliate (including predecessors thereof) with regard to any Employee Benefit
Plan or any Employee Benefit Plan sponsored, maintained or contributed to by an
ERISA Affiliate (including predecessors thereof) (assuming a like definition of
"Employee Benefit Plan" were applicable to ERISA Affiliates as to those same
types of agreements, policies, trusts, funds and arrangements sponsored,
maintained or contributed to by them) (each such plan of an ERISA Affiliate, an
"ERISA Affiliate Employee Benefit Plan"), including, without limitation
withdrawal
581510.1
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liability arising under Title IV, Subtitle E, Part 1 of ERISA, liabilities to
the Pension Benefit Guaranty Corporation, or liabilities under Section 412 of
the Internal Revenue Code or Section 302(a)(2) of ERISA, or (ii) be or become a
party to any Employee Benefit Plan or any ERISA Affiliate Employee Benefit Plan.
(d) Seller, each ERISA Affiliate, each Employee Benefit Plan and each
Employee Benefit Plan "sponsor" or "administrator" (within the meaning of
Section 3(16) of ERISA) has complied in all material respects with the
applicable requirements of Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Internal Revenue Code.
(e) Neither Seller nor any ERISA Affiliate maintains (i) any employee
benefit plan of the type described in Sections 4063 and 4064 of ERISA or in
Section 413(c) of the Internal Revenue Code (and regulations promulgated
thereunder), or (ii) any plan which provides health, life insurance, accident or
other "welfare-type" benefits to current or future retirees or current or future
former employees, their spouses or dependents, other than in accordance with
Section 4980B of the Internal Revenue Code or applicable state continuation
coverage law.
(f) Other than with respect to the Assumed Liabilities, any bonuses,
severance , separation, termination or similar type of benefits, incentive fees,
or other amounts payable to employees of Seller solely as a result of the
consummation of the transactions contemplated by this Agreement will be paid by
Seller.
SECTION 3.13. Labor Matters. (a) There are no material controversies
pending or, to the Knowledge of Seller, threatened, between Seller and any of
its employees with respect to the Business; (b) Seller is not a party to any
collective bargaining agreement or other labor union contract applicable to
Persons employed by Seller with respect to the Business; (c) during the past
three years, there have been no unfair labor practice complaints filed or
pending against Seller before the National Labor Relations Board; and (d) during
the past three years, there have been no strikes, slowdowns, work stoppages,
lockouts, or, to Seller's Knowledge, threats thereof, by or with respect to any
employees of Seller with respect to the Business.
SECTION 3.14. Transactions with Affiliates. All of the material
contracts, leases, agreements or arrangements relating to the Business are
listed in Section 3.14 of the Disclosure Statement which are between the Seller
and Affiliates of Isolyser Company, Inc. and which impact the results of
operations reflected on the Financial Statements.
SECTION 3.15. INTENTIONALLY DELETED.
SECTION 3.16. Material Contracts. (a) Section 3.16(a) of the Disclosure
Statement lists the following contracts (collectively, the "Material Contracts")
to which Seller with respect to the Subject Business Assets or the Business, is
a party or by which its assets may be bound:
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(i) any commitment, contract, agreement, note, loan, evidence of
indebtedness, purchase order or letter of credit and purchase
orders issued in the ordinary course to individual customers
or vendors that Seller reasonably anticipates will, in
accordance with its terms, involve aggregate payments by or
to Seller of more than $20,000 within the 12 month period
following the date hereof and that is not cancelable by
Seller without liability within 60 days;
(ii) any lease of real or personal property involving any annual
expense in excess of $20,000;
(iii)any contract or agreement containing covenants limiting in
any respect the freedom of Seller to engage in any line of
business or compete with any Person:
(iv) any agreement (or group of related agreements) under which
Seller has created, incurred, assumed or guaranteed any
indebtedness for borrowed money, or any capitalized lease
obligations, in excess of $50,000, or under which it has
imposed an Encumbrance on any of its assets (other than any
lien of the type described in the last sentence of Section
3.09(a));
(v) any contract or agreement not entered into in the ordinary
course of Seller's business; and
(vi) any written employment agreement.
(b) Seller is not (and, to the knowledge of Seller, no other party is)
in breach or violation of, or default under, any of the Material Contracts or
any Assumed Liability which would result in a Material Adverse Effect. Each
Material Contract is a valid agreement, arrangement or commitment of Seller,
enforceable against Seller in accordance with its terms except where
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and except where enforceability is subject
to the application of equitable principles or remedies.
SECTION 3.17. Accounts Receivable. The Accounts Receivable represent
bona fide claims against debtors for sales, services performed or other charges
arising on or before the date thereof, and all the sales or services performed
that gave rise to such accounts were delivered or performed in all material
respects in accordance with the applicable orders, contracts or customer
requirements.
SECTION 3.18 Inventories. The Inventory consists only of items of
quality and quantity commercially usable, consumable and salable in the ordinary
course of business.
SECTION 3.19. Brokers. Except for Morgan Keegan & Company, Inc.
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("Morgan Keegan"), no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Seller. Seller is solely responsible for the fees and expenses
of Morgan Keegan.
SECTION 3.20. Product Warranty. To the Knowledge of Seller, since
December 31, 1997, the products sold in the conduct of Seller's business have
been in compliance in all material respects with any warranties made with
respect thereto, and, except as set forth in Section 3.20 of the Disclosure
Statement, there is not currently pending any customer claim alleging any breach
of warranty with respect to such products other than such claims arising in the
ordinary course of business and which in the aggregate will not involve a loss
of greater than $10,000.
SECTION 3.21. Permits and Consents. Section 3.21 of the Disclosure
Statement lists all of the permits, licenses, consents, certificates,
governmental approvals required to conduct the Business (the "Permits") the
absence of which would have a Material Adverse Effect on the Business. The
Seller agrees to assign to Purchaser all Permits, to the extent assignable, as a
part of the Subject Business Assets and the Permits which cannot be transferred
are identified in Section 3.21 of the Disclosure Statement. To the Seller's
Knowledge, the Seller is in full compliance with all Permits and no suspension,
revocation, limitation or cancellation of any of the Permits is threatened or
pending and no cause exists for such, except as would not have a Material
Adverse Effect on the Business. Section 3.21 of the Disclosure Statement sets
forth any third party and governmental consents, approvals, waivers or
authorizations necessary for the valid and enforceable transfer of the Subject
Business Assets and the consummation of this transaction (the "Consents").
SECTION 3.22 Assumed Liabilities. Seller has made available to
Purchaser true and complete copies of all contracts, leases and records relating
to the Assumed Liability in a timely fashion from which the Purchaser has had an
opportunity to verify the terms of the Assumed Liabilities.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby.
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The execution and delivery of this Agreement by Purchaser, the performance by
Purchaser of its obligations hereunder and the consummation by Purchaser of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of Purchaser. This Agreement has been duly executed
and delivered by Purchaser, and (assuming due authorization. execution and
delivery by Seller) constitutes a legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms, subject to
the effect of any applicable bankruptcy, reorganization, insolvency, moratorium
or similar laws affecting creditors' rights generally and subject, as to
enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and performance
of this Agreement by Purchaser does not and will not (a) violate or conflict
with the Certificate of Incorporation or By-laws (or other similar applicable
documents) of Purchaser, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Purchaser or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which Purchaser or any
of its subsidiaries is a party or by which any of such assets or properties is
bound or affected, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent Purchaser from, or delay
Purchaser in, performing any of its material obligations under this Agreement
and (b) as may be necessary as a result of any facts or circumstances relating
solely to Seller.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending before any court, arbitrator or administrative,
governmental or regulatory authority or body that seeks to delay or prevent the
consummation of the transactions contemplated hereby or that would be reasonably
likely to materially and adversely affect or restrict Purchaser's ability to
consummate the transactions contemplated hereby.
SECTION 4.05. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
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ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. (a) Unless
Purchaser otherwise agrees in writing (which agreement will not be unreasonably
withheld) and except as otherwise set forth in Section 5.01 of the Disclosure
Statement, between the date of this Agreement and the Closing Date, Seller will,
as to the Subject Business Assets (i) conduct its business only in the ordinary
course, (ii) use reasonable efforts to preserve intact Seller's Business
organization and assets and retain the services of key employees of the
Business, subject to the conduct of its Business in the ordinary course, and
(iii) use reasonable efforts to preserve the current relationships of the
Business with its respective customers, suppliers, licensors, distributors and
other Persons with which the Business has significant business relationships.
(b) Unless Purchaser otherwise agrees in writing (which agreement will
not be unreasonably withheld) and except as otherwise set forth in Section 5.01
of the Disclosure Statement and except for actions in the ordinary course of
business, between the date of this Agreement and the Closing Date, Seller will
not (i) amend or terminate any contract listed in the Disclosure Statement,,
(ii) sell, transfer, replace or lease any of the Subject Business Assets, (iii)
materially increase or write down the value of any Current Assets without a
written explanation of the cause furnished to Purchaser prior to Closing, (iv)
permit the Subject Business Assets to be subject to any new encumbrance, (v)
increase the compensation of the employees, except following normal review
procedures and prior written notice to Purchaser, or (vi) materially alter its
conduct in its relations with suppliers or customers.
SECTION 5.02. Access to Information. Insofar as relevant to the
Business, from the date hereof until the Closing, upon reasonable notice, Seller
shall (i) afford the officers, employees and authorized agents and
representatives of Purchaser access, during normal business hours, to its
offices, properties, books and records and (ii) furnish to the officers,
employees and authorized agents and representatives of Purchaser such additional
financial and operating data and other information regarding its assets,
properties, goodwill and business as Purchaser may from time to time reasonably
request and which is obtainable without unreasonable effort or expense;
provided, however, that such investigation shall not unreasonably interfere with
any of the businesses or operations of Seller.
SECTION 5.03. Books and Records. (a) Each of Seller and Purchaser
agrees that it shall preserve and keep all books and records relating to
business units then owning or operating the Subject Business Assets, as they
relate to the Subject Business Assets as of the Closing Date, for a period of at
least five years from the Closing Date. During such five-year period, Seller,
Purchaser and their respective representatives shall, upon reasonable notice,
581510.1
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have access thereto during normal business hours to examine, inspect and copy
such books and records.
(b) If, in order properly to prepare its financial statements or
documents required to be filed with Governmental Authorities, it is necessary
that any party hereto or any successors be furnished with additional information
relating to Subject Business Assets as of the Closing Date, and such information
is in the possession of another party hereto, such party agrees to use its
reasonable efforts to furnish such information to such other party, at the cost
and expense of the party being furnished such information.
SECTION 5.04. Governmental Approvals and Consents. (a) Each party
hereto will use its reasonable efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities that may be or become
necessary for the performance of its obligations pursuant to this Agreement and
will cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. The parties hereto will not take
any action that will have the effect of delaying, impairing or impeding the
receipt of any required approvals.
(b) Without limiting the generality of the parties' undertakings
pursuant to Section 5.04(a), each of the parties hereto shall use all reasonable
efforts to (i) respond to any inquiries by any Governmental Authority regarding
matters with respect to the transactions contemplated by this Agreement, (ii)
avoid the imposition of any order or the taking of any action that would
restrain, alter or enjoin the transactions contemplated by this Agreement and
(iii) in the event any Governmental Order adversely affecting the ability of the
parties to consummate the transactions contemplated by this Agreement has been
issued, to have such Governmental Order vacated or lifted.
SECTION 5.05. Confidentiality Agreement. The terms of the
confidentiality letter dated as of June 18, 1998 (the "Confidentiality
Agreement") between Seller and Purchaser are hereby incorporated herein by
reference and shall continue in full force and effect until the Closing and
shall survive the Closing.
SECTION 5.06 Ancillary Agreements. The Seller and the Purchaser will
execute at Closing Ancillary Agreements described and listed on the attached
Exhibit A.
SECTION 5.07 No General Assumption. Except for Permitted Encumbrances
and Assumed Liabilities listed on Exhibit I, Seller shall transfer the Subject
Business Assets to Purchaser free and clear of all encumbrances and without any
assumption of liabilities and obligations and Purchaser shall not assume or
become responsible, by virtue of its purchase of the Subject Business Assets,
for any liabilities or obligations of Seller, including without limitation those
matters disclosed in the Disclosure Statement which are not scheduled as Assumed
Liabilities.
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SECTION 5.08 Prorations. The expenses and accruals of the Assumed
Liabilities and the Subject Business Assets, such as utilities, real and
personal property taxes and rents, shall be prorated as of the date of Closing,
based upon the best available information with corrections to be made by the
parties when the final statements or required information is available.
SECTION 5.09 Inventory Issues. The Inventory to be transferred to
Purchaser is located at the locations listed in Section 5.09 of the Disclosure
Statement. The Seller agrees to segregate, label, protect and preserve the
Inventory and to pay all warehouse fees in connection with such Inventory for
such period as time as is necessary for the Purchaser to make separate
arrangements for the storage of the Inventory. Purchaser agrees to pay its fair
pro rata cost of the warehouse storage fees and other Seller costs directly
related to the Purchaser's Inventory.
For so long as the Inventory is stored together with the Seller's other
inventory, the parties shall cooperate with each other and each agrees to afford
access to the other party, to the extent necessary that each has full and
complete access to its own inventory.
SECTION 5.10 Post-Closing Consents. In the event that the Purchaser
should consent to close without any Consent listed in Section 3.21 of the
Disclosure Statement, the Seller agrees to use reasonable efforts to diligently
obtain such Consent(s) within thirty (30) days after the closing until such
consents are obtained, provided that the Seller shall have no obligation to make
any payments to the party whose consent is required. The Seller and the
Purchaser will cooperate and assist each other in obtaining such Consents after
closing.
SECTION 5.11. Further Instruments. Each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated hereby.
ARTICLE VI.
EMPLOYEE MATTERS
SECTION 6.01. Employees. (a) A roster of all current employees of the
Business is set forth in Section 6.01 of the Disclosure Statement, together with
the "Employee Information", as hereinafter defined with respect to each
employee. "Employee Information" shall mean the name, date of hire, and job
title. Purchaser shall be permitted (but shall not be under any obligation) to
make offers of employment to all such employees, and, in addition thereto, to
such other non-direct employees as may be agreed upon in writing and in advance
with Seller. Promptly and in any event within 30 days following the Closing,
Purchaser shall notify Seller of any such employees who do not become employees
of Purchaser or its Affiliates following the Closing. All such employees who
become employees of Purchaser or its Affiliates are herein called the
"Employees". The vacation and sick day accruals and entitlements of the
581510.1
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<PAGE>
Employees which may be due upon the termination of employment by the Seller
shall not be Assumed Liabilities of the Purchaser.
(b) To the extent that service is relevant for purposes of eligibility,
vesting or benefit accrual under any employee benefit plan, program or
arrangement established or maintained by Purchaser for the benefit of the
Employees, such plan, program or arrangement shall credit such Employees for
service on or prior to the Closing with Seller or any of its Affiliates. All
such Employees shall be allowed to participate from and after Closing in the
medical and dental benefit plans of Purchaser or its Affiliates as employees of
Purchaser or its Affiliates. If the Closing falls within an annual period of
coverage under any group health plan of Purchaser or its Affiliates which
becomes the employer with respect to the Employees, such Employees shall be
given credit for covered expenses paid by that Employee under comparable
employee benefit plans of Seller during the applicable coverage period to the
Closing Date towards satisfaction of any annual deductible limitation and
out-of-pocket maximum that may apply under that group health plan.
SECTION 6.02. WARN Act. While it is currently Purchaser's intention to
continue to operate the Plant, Purchaser shall be liable and responsible for any
notification required to be provided under the Worker Adjustment and Retraining
Notification Act (or under any similar state or local law). In reliance upon
such covenant, Seller shall not give any notices under such laws and Purchaser
shall indemnify Seller and its Affiliates for any claims arising out of a breach
of this covenant or otherwise arising from any such discontinuance of operations
or decision not to employ, or to terminate the employment of any Employees.
SECTION 6.03. Survival. The covenants and agreements of the parties
hereto contained in this Article VI shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth herein.
ARTICLE VII.
TAX MATTERS
SECTION 7.01. Tax Indemnities. (a) From and after the Closing Date,
Seller agrees to indemnify Purchaser, against all Taxes (i) imposed on Seller or
any member of an affiliated group with which Seller files a consolidated or
combined income tax return with respect to any taxable period for which Seller
or any member of an affiliated group with Seller files (or is required by law to
file) an income tax return, and (ii) imposed on Seller with respect to any
taxable period or portion thereof that ends on or as of the Closing Date with
respect to the Subject Business Assets.
(b) From and after the Closing Date, Purchaser shall indemnify Seller
581510.1
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<PAGE>
and its Affiliates against all taxes imposed on or with respect to the Subject
Business Assets with respect to any taxable period or portion thereof beginning
after the Closing Date.
(c) Payment by the indemnitor of any amount due under this Section
7.01 shall be made within ten days following written notice by the indemnitee
that payment of such amounts to the appropriate tax authority is due, provided
that the indemnitor shall not be required to make any payment (i) earlier than
two days before it is due to the appropriate tax authority or (ii) of any Taxes
which the indemnitor has by all appropriate proceedings elected to contest and
is contesting diligently and in good faith. In the case of a Tax that is so
contested, payment of the Tax to the appropriate tax authority will not be
considered to be due earlier than the date a final determination to such effect
is made by the appropriate taxing authority or a court.
(d) For purposes of this Agreement, in the case of any Tax that is
imposed on a periodic basis and is payable for a period that begins before the
Closing Date and ends after the Closing Date, the portion of such Taxes payable
for the period ending on the Closing Date shall be (i) in the case of any Tax
other than a Tax based upon or measured by income, the amount of such Tax for
the entire period multiplied by a fraction, the numerator of which is the number
of days in the period ending on the Closing Date and the denominator of which is
the number of days in the entire period and (ii) in the case of any Tax based
upon or measured by income, the amount which would be payable if the taxable
year ended on the Closing Date. Any credit shall be prorated in the same manner
as the Tax to which such credit relates would be prorated, as described in the
preceding sentence. In the case of any Tax based upon or measured by capital
(including net worth or long-term debt) or intangibles, any amount thereof
required to be allocated under this Section 7.01(d) shall be computed by
reference to the level of such items on the Closing Date.
SECTION 7.02. Refunds and Tax Benefits. Purchaser shall promptly pay to
Seller any refund or credit (including any interest paid or credited with
respect thereto) received by Purchaser (i) imposed on the Subject Business
Assets relating to taxable periods or portions thereof ending on or before the
Closing Date or (ii) attributable to an amount paid by Seller under Section 7.01
hereof.
SECTION 7.03. Conveyance Taxes. All sales, transfer, stamp, real
property transfer and similar Taxes incurred as a result of the sale of the
Subject Business Assets contemplated hereby shall be split equally between the
Seller and the Purchaser.
SECTION 7.04 Survival. The covenants and agreements of the parties
hereto contained in this Article VII shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth in this Article.
581510.1
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SECTION 7.04. Miscellaneous. The parties agree to treat all payments
made under Article IX or this Article VII as adjustments to the purchase price
for Tax purposes.
ARTICLE VIII.
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of All Parties. The obligations
of each party hereto to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Governmental Order which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal
or otherwise restraining or prohibiting consummation of such transactions;
provided however, that each party hereto shall have complied with its
obligations under Section 5.04.
SECTION 8.02. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. (i) The representations
and warranties of Purchaser contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the Closing,
with the same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, which shall be
true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Purchaser on or before the
Closing shall have been complied with in all material respects and (iii) Seller
shall have received a certificate of Purchaser to such effect signed by a duly
authorized officer thereof;
(b) Resolutions. Seller shall have received a true and complete copy,
certified by the Secretary or an Assistant Secretary of Purchaser (or equivalent
officer), of the resolutions, duly and validly adopted by the Board of Directors
of Purchaser evidencing its authorization of the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby;
(c) Incumbency Certificate. Seller shall have received a certificate of
the Secretary or an Assistant Secretary (or equivalent officer) of Purchaser
certifying the names and signatures of the officers of Purchaser authorized to
sign this Agreement and the other documents to be delivered hereunder;
581510.1
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<PAGE>
(d) Closing Documents. The Closing Documents to be delivered or
executed by the Purchaser are in form and substance reasonably satisfactory to
the Seller and its counsel.
(e) Related Transactions. The Related Transactions have taken place as
more fully described on the attached Exhibit D; and
(f) Further Action. All actions to be taken by Purchaser in connection
with the consummation of the transactions contemplated hereby, and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.
SECTION 8.03. Conditions to Obligations of Purchaser. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver, at or prior to the Closing, of each of
the following conditions:
(a) Representations and Warranties; Covenants. (i) The representations
and warranties of Seller contained in this Agreement shall be true and correct
in all material respects as of the date hereof and as of the Closing, with the
same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, which shall be
true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Seller on or before the
Closing shall have been complied with in all material respects and (iii)
Purchaser shall have received a certificate of Seller to such effect signed by a
duly authorized officer thereof;
(b) Resolutions. Purchaser shall have received a true and complete
copy, certified by the Secretary or an Assistant Secretary (or equivalent
officer) of Seller, of the resolutions duly and validly adopted by the Board of
Directors of Seller evidencing its authorization of the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby;
(c) Incumbency Certificate. Purchaser shall have received a certificate
of the Secretary or an Assistant Secretary (or equivalent officer) of Seller
certifying the names and signatures of the officers authorized to sign this
Agreement and the other documents to be delivered hereunder;
(d) Required Third Party Actions. The Persons identified in Section
8.03 of the Disclosure Statement have consented to this transaction and the
Related Transactions, if applicable, and Purchaser has received assurances
satisfactory to the Purchaser that such Person will release its liens on the
Subject Business Assets or will deliver any required Consent or Permit.
(e) FIRPTA. Seller shall have provided Purchaser with a certificate
581510.1
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<PAGE>
pursuant to Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h) that the
Subject Business Assets are not a United States real property interest within
the meaning of Section 897 of the Internal Revenue Code;
(f) Closing Documents The Closing Documents to be delivered or executed
by the Seller are in form and substance reasonably satisfactory to the Purchaser
and its counsel.
(g) Related Transactions. The Related Transactions more fully described
on Exhibit D have taken place;
(h) Key Employees. Purchaser (or any designee of Purchaser) and the
"Key Employees", as hereinafter defined have entered into mutually satisfactory
employment agreements. "Key Employees" shall mean Theodore M. DuBose, IV, E.
Scott Banks and William E. Wolfe, III; and
(i) Further Action. All actions to be taken by Seller (and any of
its applicable subsidiaries) in connection with the
consummation of the transactions contemplated hereby, all
certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to the
Purchaser.
ARTICLE IX.
INDEMNIFICATION
SECTION 9.01. Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties (except the representations
and warranties contained in Sections 3.17 and 3.18 of the Agreement, which shall
not survive the Closing), covenants and agreements of the parties contained
herein shall survive the Closing and shall remain in full force and effect,
regardless of any investigation made by or on behalf of Seller or Purchaser,
until 18 months following the Closing Date; provided however, that the
representations and warranties set forth in Section 3.01 and 4.01 (Incorporation
and Authority) shall survive indefinitely and all representations and warranties
contained in this Agreement relating to Assumed Liabilities shall survive the
term of such Assumed Liabilities.
SECTION 9.02 Indemnification Agreement. The indemnification agreement
by and among Isolyser Company, Inc., SafeWaste Corporation and White Knight
Healthcare, Inc. , as sellers and Thantex Specialties, Inc., White Knight
Industrial, Inc., SafeWaste, Inc. and Thantex Holdings, Inc., as purchasers of
even date shall control all matters relating to indemnification by either the
Seller or the Purchaser with respect to this Agreement.
581510.1
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ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser, if the Closing shall not have
occurred prior to August 30, 1998; provided, however, that the right to
terminate this Agreement under this Section 10.01(b) shall not be available to a
party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date.
Time shall be of the essence in this Agreement.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto (a)
except as set forth in Section 5.05 and Section 11.01 hereof and (b) nothing
herein shall relieve any party hereto from liability for any willful breach
hereof.
SECTION 10.03. Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise expressly provided herein,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
581510.1
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<PAGE>
(and shall be deemed to have been duly given or made upon receipt) by delivery
in Person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
11.02):
(a) if to Seller:
Isolyser Company, Inc.
650 Engineering Drive
Norcross, GA 30092
Chief Financial Officer
Telecopier: (770)441-2592
with a copy to:
Arnall Golden & Gregory, LLP
1201 West Peachtree Street
2800 One Atlantic Center
Atlanta, GA 30309-3450
Attn: Stephen D. Fox, Esq.
Telecopier: (404)873-8529
(b) if to Purchaser:
White Knight Industrial, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Attn: Jerry Zucker and James G. Boyd
Telecopier: (843) 747-4092
with a copy to:
Buist, Moore, Smythe & McGee, PA
5 Exchange Street
P.O. Box 999
Charleston, SC 29401
Attn: Susan M. Smythe, Esq.
Telecopier (843) 723-7398
SECTION 11.03. Press Release and Public Announcements. Unless otherwise
required by applicable law or stock exchange requirements, no party to this
581510.1
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Agreement shall issue any press releases or make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without prior written notification to and
consent of the other party, and the parties will cooperate as to the timing and
contents of any announcement. With respect to announcements and releases
required by applicable law or stock exchange requirements, the Seller shall
afford the Purchaser prior notice and the opportunity to comment prior to
release.
SECTION 11.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
Seller and Purchaser with respect to the subject matter hereof and except as
otherwise expressly provided herein. The exhibits referred to in and attached to
this Agreement form a part of this Agreement and by reference are incorporated
herein.
SECTION 11.07. Assignment. Without the prior written consent of the
other party hereto, neither party hereto may assign its rights or delegate its
obligations hereunder; provided however the Purchaser may assign all or a part
of its rights to an Affiliate if the Purchaser remains responsible for the
performance of all of its obligations hereunder. The Seller agrees that in the
event that it transfers all or substantially all of its remaining assets to a
third party, the Seller shall require such third party to assume the Seller's
obligations under the Ancillary Agreements listed as items 1,2, 3 and 5 on
Exhibit A
SECTION 11.09. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
SECTION 11.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
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SECTION 11.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Seller and Purchaser have caused this White Knight
Asset Agreement to be executed as of the date first written above by their
respective officers hereunto duly authorized.
WHITE KNIGHT HEALTHCARE, INC.
By:______________________________________
Its:_____________________________________
THANTEX HOLDINGS, INC.
By:______________________________________
Its:_____________________________________
581510.1
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ASSET PURCHASE AGREEMENT
SAFEWASTE CORPORATION
AND
SAFEWASTE, INC.
August _____, 1998
ASSET PURCHASE AGREEMENT, dated August ___, 1998 (this "Agreement"),
between SAFEWASTE CORPORATION, a Georgia corporation ("Seller"), and SAFEWASTE,
INC., a Delaware corporation ("Purchaser"). Certain capitalized terms shall have
the meaning set forth in Article I.
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to
purchase from Seller, the Subject Business Assets used in the its Business of
providing on-site medical waste treatment services and other waste treatment and
management services.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Acquired Intellectual Property" means all the Intellectual Property of
the Business, including without limitation those items listed in Section 1.01 of
the Disclosure Schedule, including the name "SafeWaste".
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
"Assumed Liabilities" means those specific liabilities were identified
and fully described by the Seller not less than five (5) days prior to Closing
and which the Purchaser specifically agreed to assume in writing, and as listed
on Exhibit A. The Purchaser assumes no other liabilities of the Seller.
"Business" means the business customarily and historically conducted by
the Seller.
581498.1
<PAGE>
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in the City of
New York.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as a trustee or
executor (in each case, acting in a fiduciary capacity), of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, as trustee or executor (in each
case, acting in a fiduciary capacity), by contract or credit arrangement or
otherwise.
"Disclosure Statement" means the Disclosure Statement dated as of the
date hereof delivered to Purchaser by Seller.
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind.
"Equipment Related Property" means (1) all inventory of spare and
replacement parts relating to the equipment, (2) all plans, manuals, records and
other documents relating to the equipment, and (3) the Intellectual Property, if
any, directly pertaining to the equipment or the customized products such
equipment has been designed or programmed to produce.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means those other assets which the Seller and the
Purchaser agree are Excluded Assets and which are listed on Exhibit B which
includes the accounts receivable other than those included as Joint Venture
Assets.
"GAAP" means United States generally accepted accounting principles in
effect from time to time applied consistently throughout the period involved.
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial or arbitral body, whether federal, state, local or
foreign.
"Governmental Order" means any order, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Intellectual Property Rights" means (a) patent and patent
applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, (c)
copyrights, whether registered or unregistered, and registrations and
applications for registration thereof and (d) trade secrets, formulas,
inventions, invention disclosures, know-how, manufacturing and production
processes and techniques, business and marketing plans, customer and supplier
lists, computer software and other proprietary business and intellectual
property rights.
581498.1
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"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Joint Venture" means that certain joint venture formed by agreement
between Horizon Management Services, Inc., a North Carolina corporation and a
wholly owned subsidiary of Memorial Mission Medical Center, Inc. and SafeWaste
Corporation under agreements described in Section 3.16(a) of the Disclosure
Statement.
"Joint Venture Assets" mean the Seller's interest in the Joint Venture
and in all accounts receivable, promissory notes and other moneys owed to the
Seller by the Joint Venture.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the executive officers of Seller after due inquiry of the executive
officers of Seller.
"Lease" means that certain lease agreement dated September 25, 1995 by
and between Seller and Highwoods/Forsyth Limited Partnership pertaining to
certain property in Charlotte, North Carolina more particularly described in
Section 1.01 of the Disclosure Statement (the "Leased Property").
"Losses" of a Person means any and all claims, actions or causes of
action, assessments, losses, damages, deficiencies, liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing) actually suffered or incurred by such Person.
"Material Adverse Effect" means, with respect to any Person, any
change in, or effect on, the business of such Person that is materially adverse
to the business, operations, results of operations or the financial condition
thereof or an amount in excess of $10,000.
"Permitted Encumbrances" means those Encumbrances listed in Section
1.01 of the Disclosure Statement, encumbrances to pay taxes or other
governmental assessments which are not yet due and payable, and other
encumbrances which do not in the aggregate materially detract from the value of
the Subject Business Assets or materially impair the use thereof.
"Person" means an individual, corporation, partnership, joint venture,
person (including, without limitation, a "person" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended), trust, association or
another entity.
"Related Transactions" means those transactions by and among the
Purchaser, the Seller and their Affiliates more fully described on Exhibit C.
"Subject Business Assets" means all of the real and personal property
(tangible and
581498.1
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<PAGE>
intangible) presently owned, leased or licensed by the Seller and used in the
Business, wherever located, including but not limited to the (i) the fixed
assets of the Business which are listed in Section 1.01 of the Disclosure
Statement, including the Equipment Related Property pertaining to such assets,
(ii) the Lease (iii) the Joint Venture Assets, (iv) all of Seller's right to and
interest in those contracts (collectively, the "Contracts") and leases
(collectively, the "Leases")identified in such Section 1.01, and (vi) the
Acquired Intellectual Property Rights, saving and excepting the Excluded Assets.
"Tax" or "Taxes" means all income, gross receipts, sales, use,
employment, franchise, profits, property, transfer or other taxes, fees, stamp
taxes and duties, assessments or charges of any kind whatsoever (whether payable
directly or by withholding), together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority with
respect thereto.
(b) Each of the following terms is defined in the section set forth
opposite such terms below:
Term Section
Agreement Recitals
Authorized Agent 11.10
CERCLA 3.07(g)
Closing 2.03(a)
Closing Date 2.03(a)
Confidentiality Agreement 5.05
Employees 6.01(a)
Environmental Laws 3.08(g)
Environmental Permits 3.08(g)
Financial Statements 3.04
Hazardous Materials 3.08(g)
IRS 3.12(a)
Material Contracts 3.16
Purchaser Recitals
Purchase Price 2.02
RCRA 3.08(g)
Seller Recitals
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ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions set forth in this Agreement, Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase from Seller, on the Closing Date, the Subject
Business Assets.
SECTION 2.02. Purchase Price. The purchase price (the "Purchase Price")
for the Subject Business Assets shall be $700,000. The Purchase Price shall be
payable as provided in Section 2.03.
SECTION 2.02 Closing Date. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Subject Business Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
Thursday, August 6, 1998, or on the third Business Day following the
satisfaction or waiver of the conditions to the obligations of the parties set
forth in Article VIII. The Closing will occur at the offices of Buist, Moore,
Smythe & McGee, P.A, 5 Exchange Street, Charleston, South Carolina, or at such
other time or on such other date or at such other place as Seller and Purchaser
may mutually agree upon in writing (the day on which the Closing takes place
being the "Closing Date").
SECTION 2.03 Closing Documents. At the Closing, Seller shall execute
and deliver to Purchaser such transfer and other documents as required to
transfer the Subject Business Assets, together with such other instruments of
conveyance, affidavits, declarations, assignments and other supporting
documentation typically delivered in connection with a transaction of this type
and in accordance with local law or custom (collectively the "Closing
Documents") including:
(i) Assignment and Assumption of the Lease, together with
estoppel certificate of the landlord.
(ii) Bill of Sale in the form attached as Exhibit D
(iii) Assignment of Title Certificates to vehicles, if any.
(iv) Consents, as defined in Section 3.21, unless waived by the
parties
(v) Assignment of Permits, if any, as defined in Section 3.21,
unless waived by the parties
(vi) Release of all Encumbrances on the Subject Business Assets,
except Assumed Liabilities and Permitted Encumbrances, or
other arrangements satisfactory to Purchaser and Seller
(vii) Estoppel Certificates from the creditors of the Assumed
Liabilities, to the extent required by the Purchaser
(viii) Good Standing Certificates of Seller and Purchaser
(ix) Officer's Certificate of Seller and Purchaser including
authorizing resolution, articles of incorporation with all
amendments, by-laws and incumbency certificates
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(x) Assignment and Assumption of the Assumed Liabilities in the
form attached as Exhibit E.
(xi) Consent and estoppel certificate from the other joint
venturer
(xii) Amendment to Articles of Incorporation of Seller to change
its name to one which does not include "SafeWaste", to be
filed after closing.
(c) At the Closing, Purchaser shall deliver to Seller the Purchase
Price, by wire transfer in immediately available funds, to an account or
accounts designated at least three Business Days prior to the Closing Date by
Seller in a written notice to Purchaser.
SECTION 2.04. Allocation of Purchase Price. The Purchase Price shall be
allocated for tax purposes among each item or class of Subject Business Assets
as set forth in Exhibit F of this Agreement. Seller and Purchaser agree that
they will prepare and file any notice or other filing required pursuant to
Section 1060 of the Internal Revenue Code, and that any notices or filings will
be prepared based upon such tax allocation of the Purchase Price. Purchaser
agrees to send to Seller a completed copy of its Form 8594 (Asset Acquisition
Statement under Section 1060) with respect to this transaction prior to filing
such form with the Internal Revenue Service.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the date of this Agreement
and through the Closing Date as follows:
SECTION 3.01. Incorporation and Authority of Seller. Seller is a
corporation duly incorporated and validly existing under the laws of Georgia.
Seller is duly qualified as a corporation to do business in each jurisdiction
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification necessary, except for such failures to
be so qualified that would not have a Material Adverse Effect on Seller. Seller
has all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Seller, the
performance by it of its obligations hereunder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of Seller. This Agreement has been duly executed
and delivered by Seller, and (assuming due authorization. execution and delivery
by Purchaser) this Agreement constitutes a legal, valid and binding obligation
of Seller enforceable against it in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
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enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 3.02. No Conflict. Assuming all consents, approvals,
authorizations and other actions described in Section 3.03 and 3.21 have been
obtained, and except as may result from any facts or circumstances relating
solely to Purchaser or as described in Section 3.02 of the Disclosure Statement,
the execution, delivery and performance of this Agreement by Seller does not and
will not (a) violate or conflict with the organizational documents of the
Seller, (b) conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the Seller,
except for such conflicts or violations as would not have a Material Adverse
Effect on the ability of Seller to conduct its business as currently conducted
or have a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement or (c) result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Encumbrance on any of the Subject Business Assets or properties
of the Seller pursuant to, any note, bond, mortgage, credit agreement,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument relating to such assets or properties to which the Seller is a party
or by which any of such assets or properties is bound or affected, except as
would not have a Material Adverse Effect on the ability of Seller to conduct its
business as currently conducted or have a Material Adverse Effect on the ability
of Seller to consummate the transactions contemplated by this Agreement.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement by Seller does not, and the performance of this Agreement by
Seller will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Seller from, or delay Seller in,
performing any of its material obligations under this Agreement and would not
have a Material Adverse Effect on the ability of Seller to conduct its business
as currently conducted and as may be necessary as a result of any facts or
circumstances relating solely to Purchaser.
SECTION 3.04. Financial Statements; Absence of Undisclosed Liabilities.
(a) Attached to Section 3.04 of the Disclosure Statement are true and correct
copies of the balance sheets of the Seller as of the periods ending December 31,
1996 and December 31, 1997 and statements of income for the periods ending
December 31, 1996, and December 31, 1997 (the "Financial Statements"). The
Financial Statements have been prepared in accordance with GAAP except as noted
in Section 3.04 of the Disclosure Statement and fairly present in all material
respects the financial position of the Seller as of the dates thereof and the
results of the operations for the periods then ended.
(b) Seller has delivered to Purchaser true and correct copies of the
summary financial
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reports of the Seller for the months January, 1998 through June, 1998 (the
"Interim Summary Reports"). The Interim Summary Reports, which are unaudited,
fairly present in all material respects the financial position of the Seller as
of the dates thereof and the results of the operations of the Seller for the
period then ended, and include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the information included
therein, subject to year end adjustments.
(c) Except as set forth in Section 3.04 of the Disclosure Statement,
and except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since December 31, 1997, Seller does not
have any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance sheet.
SECTION 3.05. Absence of Certain Changes or Events. Except as set forth
in Section 3.05 of the Disclosure Statement, since December 31, 1997, Seller and
the Joint Venture have conducted the Business only in the ordinary course, and
there has not been with respect to the Subject Business Assets (i) any Material
Adverse Effect, (ii) any damage, destruction or loss, whether or not covered by
insurance, that has or reasonably could be expected to have a Material Adverse
Effect, (iii) any change in accounting methods, principles or practices by
Seller materially affecting its assets, liabilities or business, except insofar
as may have been required by a change in GAAP, (iv) any sale, lease, transfer,
or assignment of any material Subject Business Assets other than in the ordinary
course of business, (v) any material capital expenditures other than in the
ordinary course of business, or (vi) any material capital investment in, or loan
to, any other Person outside the ordinary course of business.
SECTION 3.06. Litigation. Except as set forth in Section 3.06 of the
Disclosure Statement, as of the date of this Agreement, there are no claims,
actions, proceedings or investigations pending, or to the Knowledge of Seller,
threatened against Seller, the Joint Venture or any of their assets or
properties, including but not limited to the Subject Business Assets, before any
court, arbitrator or administrative, governmental or regulatory authority or
body that are reasonably likely to have a Material Adverse Effect on Seller.
Except as set forth in Section 3.06 of the Disclosure Statement, the Seller, the
Joint Venture, or any of the Subject Business Assets are not subject to any
order, writ, judgment, injunction, decree, determination or award. Except as
otherwise set forth in Section 3.06 of the Disclosure Statement, each of the
matters listed on Section 3.06 of the Disclosure Statement is covered by
insurance, and the insurer has acknowledged coverage of each such matter without
reservation.
SECTION 3.07. Compliance with Applicable Laws. Except as set forth in
Section 3.07 of the Disclosure Statement, within the preceding three years
neither Seller nor the Joint Venture has violated or failed to comply with any
statute, law, regulation, rule, judgment, decree or order of any Governmental
Authority applicable to its Business, except for violations and failures to
comply that would not, individually or in the aggregate, have a Material Adverse
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Effect on the ability of Seller or the Joint Venture to conduct its Business as
currently conducted, and there is no action pending against Seller or Joint
Venture charging failure to so comply. The conduct of the Business of Seller and
the Joint Venture is in conformity with all federal, state and local
governmental and regulatory requirements applicable to its Business and
operations, except where such nonconformity would not, in the aggregate, have a
Material Adverse Effect on the ability of Seller or the Joint Venture to conduct
its Business as currently conducted. Seller and the Joint Venture have all
permits, licenses, franchises and certificates of occupancy from Governmental
Authorities required to conduct its Business as now being conducted, except for
such permits, licenses, franchises and certificates the absence of which would
not, in the aggregate, have a Material Adverse Effect on the ability of Seller
or the Joint Venture to conduct its business as currently conducted .
SECTION 3.08. Environmental Matters. Except as set forth in Section
3.08 of the Disclosure Statement:
(a) Except as would not have a Material Adverse Effect on the
ability of Seller or the Joint Venture to conduct its business as currently
conducted, each of the Seller and the Joint Venture (i) is in compliance with
all applicable Environmental Laws and (ii) holds all Environmental Permits
necessary for its operations and properties and is in compliance with the terms
and conditions of all such Environmental Permits.
(b) Neither Seller nor Joint Venture has received any written
claim, demand, notice or complaint alleging violation of or liability (including
without limitation any liability for site investigation. cleanup or corrective
action) under any Environmental Laws.
(c) Except as would not have a Material Adverse Effect on the
ability of Seller or Joint Venture to conduct its Business as currently
conducted, to Seller's Knowledge, none of the following exists at the sites of
the Seller's or Joint Venture's operations: (i) asbestos-containing material in
any form or condition; (ii) materials containing polychlorinated biphenyls;
(iii) underground storage tanks or surface impoundments; or (iv) landfills,
surface impoundments or disposal areas.
(d) Except as would not have a Material Adverse Effect on the
ability of Seller or Joint Venture to conduct its Business as currently
conducted, neither Seller or Joint Venture has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any
Hazardous Material, or owned or operated any facility or property, so as to give
rise to liabilities for response costs, natural resource damages or attorneys
fees pursuant to CERCLA or other Environmental Laws.
(e) No written notice of a release of a Hazardous Material has
been filed by or on behalf of Seller or Joint Venture and no property or
facility now or previously owned or operated by Seller or Joint Venture is on
the CERCLA National Priorities List (or proposed for
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such listing), the Comprehensive Environmental Response, Compensation, and
Liability Information System list or any similar state or local list.
(f) Neither Seller nor Joint Venture has, either expressly or,
to Seller's Knowledge, by operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective or remedial action,
of any other Person relating to Environmental Laws.
(g) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule or code. including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment or worker health and safety,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge,
investigation or cleanup of Hazardous Materials, in effect as of the date
hereof.
"Environmental Permits" means any permit, approval,
identification number, license or other authorization required of Seller under
any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls, (b) any chemical,
material or substance defined or regulated as toxic or hazardous under any
applicable Environmental Law or (c) anything that is a "hazardous substance"
pursuant to CERCLA, anything that is a "solid waste" or "hazardous waste"
pursuant to RCRA or any "pesticide", "pollutant", "contaminant", "toxic
chemical" or "noise".
"RCRA" means the Resource Conservation and Recovery Act, as
amended.
SECTION 3.09. Title and Condition of Properties. (a) Each of Seller and
Joint Venture has good and marketable title to, or valid leasehold interests in,
all the properties and assets used by it or located on its premises that are
material to the conduct of the Business with respect to the Subject Business
Assets, or which are shown on the Financial Statements except for such as are
licensed, as are no longer useful in the conduct of its business or as have been
disposed of in the ordinary course of business and except for defects in title,
easements, restrictive covenants and similar impediments that, in the aggregate,
would not have a Material Adverse Effect on the ability of Seller or the Joint
Venture to conduct its Business as currently conducted and, as to the real
property owned by Seller, would not have a material effect on the value of such
property. All such assets and properties, other than assets and properties in
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which Seller or Joint Venture have leasehold interests, are (or will be as of
Closing) free and clear of all Encumbrances except for (i) liens for taxes not
yet due or being contested in good faith by appropriate procedures, (ii)
mechanics, carriers, workmen's, repairmen's or other like liens arising or
incurred in the ordinary course of business for amounts that are not delinquent
and which are not, individually or in the aggregate, material to Seller's
Business, (iii) liens arising under original purchase price conditional sales
contracts and equipment leases with third parties entered into in the ordinary
course of business, and (iv) the Permitted Encumbrances.
(b) Except as set forth in Section 3.09 of the Disclosure Statement,
the Subject Business Assets are all of the assets which are necessary to operate
the Business as it has customarily been conducted.
(c) To the Seller's Knowledge and in reliance upon, and subject to, the
affidavit attached as Exhibit G, the Subject Business Assets are functional and
usable in the ordinary course of the Business and are in sufficiently good
operating condition to conduct the Business as it has been customarily
conducted.
(d) The real property owned or leased by Seller is listed in Section
3.09 of the Disclosure Statement and is suitable for the uses for which these
properties are currently used. The Leased Property has customary access to the
utilities serving such properties sufficient to allow the conduct of Seller's
Business as currently conducted except for interruptions in utility service
beyond Seller's control.
SECTION 3.10. Trademarks. Etc. Section 1.01 of the Disclosure Statement
contains a complete and accurate list of (i) all trade names, registered and
Material unregistered trademarks owned by Seller or used in connection with the
Subject Business Assets; and (ii) all computer software owned and/or used by
Seller or the Joint Venture in the Business other than commercially available
software with an annual license fee of less than $1,000. Seller has not granted
any licenses to any Person with respect to the Acquired Intellectual Property.
Other than with respect to computer software, no Person has granted any such
licenses to the Seller for the conduct of the Business. Except as set forth in
Section 3.10 of the Disclosure Statement, to Seller's Knowledge, Seller owns
(free and clear of all Encumbrances) or has sufficient unrestricted right to use
the Acquired Intellectual Property Rights in order to allow it to conduct, and
continue to conduct, its Business as currently conducted in all material
respects, and the consummation of the transactions contemplated hereby will not
alter or impair such ability in any material respect. To Seller's Knowledge,
except as set forth in Section 3.10 of the Disclosure Statement, (a) Seller has
not infringed, misappropriated or is otherwise not in conflict with any
intellectual property right of any Person in any material respect, and (b) the
conduct of the Business of Seller as currently conducted or as currently
contemplated to be conducted does not and will not conflict in any material
respect with any license, trademark, trademark right, patent, patent right,
invention, industrial model, service mark or copyright of any third Person. No
claims are pending or, to the Knowledge of Seller, threatened by any
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Person contesting or challenging the ownership, validity, enforceability or use
of the Acquired Intellectual Property Rights. To the Knowledge of Seller, there
are no claims pending or currently threatened by any Person against Seller
alleging infringement of any intellectual property rights relating to the
technology used in Seller's manufacturing process with respect to the Business.
Seller has not made a claim of a violation or infringement by others of its
rights to or in connection with the Acquired Intellectual Property Rights.
SECTION 3.11. Insurance. Section 3.11 of the Disclosure Statement sets
forth a complete list of all material insurance policies (including policies
providing property, casualty, liability and workers' compensation coverage and
bond and surety arrangements) with respect to the Business or the Subject
Business Assets or the Joint Venture.
SECTION 3.12. Employee Benefit Matters. (a) Section 3.12 of the
Disclosure Statement, with respect to the Subject Business Assets, sets forth a
true and complete list of each "employee benefit plan" (as defined by Section
3(3) of ERISA), and any other bonus, profit sharing, pension, compensation,
deferred compensation, stock option, stock purchase, fringe benefit, severance,
post-retirement, scholarship, disability, sick leave, vacation, individual
employment, commission, bonus, payroll practice, retention, or other plan,
agreement, policy, trust fund or arrangement (each such plan, agreement, policy,
trust fund or arrangement is referred to herein as an "Employee Benefit Plan",
and collectively, the "Employee Benefit Plans") that is for the benefit of (i)
directors or employees of Seller working in the Business or any other persons
performing services for Seller in the Business, (ii) former directors or
employees of Seller working in the Business or any other persons formerly
performing services for Seller in the Business, and/or (iii) beneficiaries of
anyone described in (i) or (ii) (collectively, "Business Employees") or with
respect to which Seller or any "ERISA Affiliate" (hereby defined to include any
trade or business, whether or not incorporated, other than Seller, which has
employees who are or have been at any date of determination occurring within the
preceding six (6) years, treated pursuant to Section 4001(a)(14) of ERISA and/or
Section 414 of the Internal Revenue Code as employees of a single employer which
includes Seller) has any obligation on behalf of any employee of the Business.
(b) Except as disclosed in Section 3.12 of the Disclosure Statement,
each Employee Benefit Plan is in material compliance with the provisions of
ERISA and the provisions of the Internal Revenue Code applicable to it. The
Seller has made available to the Purchaser a true and complete copy of each Plan
and a true and complete copy of the following documents, to the extent
applicable, prepared in connection with each such Plan: (i) the most recently
received IRS determination letter, (ii) the most recently prepared financial
statement (Form 5500's with attachments), (iii) all governmental rulings
determinations and opinions (and pending requests for governmental rulings,
determinations and opinions). Neither Seller nor any ERISA Affiliate has
maintained or contributed to any plan subject to the minimum funding standards
of Section 302 of ERISA or Section 412 of the Internal Revenue Code and/or any
"multiemployer plan" (as defined by Section 3(37) of ERISA). All Employee
Benefit Plans which are "pension plans"
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as defined in Section 3(2) of ERISA have received favorable determination
letters from the Internal Revenue Service ("IRS") as to their tax-qualified
status and the tax-exempt status of any related trust under Sections 401(a) and
501 of the Internal Revenue Code, respectively, which determinations are
currently in effect.
(c) Other than as may otherwise be provided hereunder (including, but
not by way of limitation, Article VI hereof), Purchaser shall not, as a result
of the transactions contemplated by this Agreement (or any employment by
Purchaser of Business employees): (i) become liable for any contribution, tax,
lien, penalty, cost, interest, claim, loss, action, suit, damage, cost
assessment or other similar type of liability or expense of Seller or any ERISA
Affiliate (including predecessors thereof) with regard to any Employee Benefit
Plan or any Employee Benefit Plan sponsored, maintained or contributed to by an
ERISA Affiliate (including predecessors thereof) (assuming a like definition of
"Employee Benefit Plan" were applicable to ERISA Affiliates as to those same
types of agreements, policies, trusts, funds and arrangements sponsored,
maintained or contributed to by them) (each such plan of an ERISA Affiliate, an
"ERISA Affiliate Employee Benefit Plan"), including, without limitation
withdrawal liability arising under Title IV, Subtitle E, Part 1 of ERISA,
liabilities to the Pension Benefit Guaranty Corporation, or liabilities under
Section 412 of the Internal Revenue Code or Section 302(a)(2) of ERISA, or (ii)
be or become a party to any Employee Benefit Plan or any ERISA Affiliate
Employee Benefit Plan.
(d) Seller, each ERISA Affiliate, each Employee Benefit Plan and each
Employee Benefit Plan "sponsor" or "administrator" (within the meaning of
Section 3(16) of ERISA) has complied in all material respects with the
applicable requirements of Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Internal Revenue Code.
(e) Neither Seller nor any ERISA Affiliate maintains (i) any employee
benefit plan of the type described in Sections 4063 and 4064 of ERISA or in
Section 413(c) of the Internal Revenue Code (and regulations promulgated
thereunder), or (ii) any plan which provides health, life insurance, accident or
other "welfare-type" benefits to current or future retirees or current or future
former employees, their spouses or dependents, other than in accordance with
Section 4980B of the Internal Revenue Code or applicable state continuation
coverage law.
(f) Other than with respect to the Assumed Liabilities, any bonuses,
severance , separation, termination or similar type of benefits, incentive fees,
or other amounts payable to employees of Seller solely as a result of the
consummation of the transactions contemplated by this Agreement will be paid by
Seller.
(g) The Joint Venture does not have any employees, except as set
forth on Section 6.01 of the Disclosure Statement.
SECTION 3.13. Labor Matters. (a) There are no material controversies
pending
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or, to the Knowledge of Seller, threatened, between Seller and any of its
employees with respect to the Business; (b) Seller is not a party to any
collective bargaining agreement or other labor union contract applicable to
Persons employed by Seller with respect to the Business; (c) during the past
three years, there have been no unfair labor practice complaints filed or
pending against Seller before the National Labor Relations Board; and (d) during
the past three years, there have been no strikes, slowdowns, work stoppages,
lockouts, or, to Seller's Knowledge, threats thereof, by or with respect to any
employees of Seller with respect to the Business.
SECTION 3.14. Transactions with Affiliates. All of the Material
contracts, leases, agreements or arrangements relating to the Business are
listed in Section 3.14 of the Disclosure Statement which are between the Seller
and Affiliates of Isolyser Company, Inc. or between the Joint Venture and
Affiliates of Isolyser Company, Inc. and which impact the results of operations
reflected on the Financial Statements.
SECTION 3.15. INTENTIONALLY OMITTED.
SECTION 3.16. Material Contracts. (a) Section 3.16(a) of the Disclosure
Statement lists the following contracts (collectively, the "Material Contracts")
to which Seller or the Joint Venture is a party or by which its assets may be
bound:
(i) any commitment, contract, agreement, note, loan, evidence
of indebtedness, purchase order or letter of credit and purchase orders issued
in the ordinary course to individual customers or vendors that Seller reasonably
anticipates will, in accordance with its terms, involve aggregate payments by or
to Seller of more than $20,000 within the 12 month period following the date
hereof and that is not cancelable by Seller without liability within 60 days;
(ii) any lease of real or personal property involving any
annual expense in excess of $20,000;
(iii) any contract or agreement containing covenants limiting
in any respect the freedom of Seller to engage in any line of business or
compete with any Person:
(iv) any agreement (or group of related agreements) under
which Seller has created, incurred, assumed or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligations, in excess of $50,000, or
under which it has imposed an Encumbrance on any of its assets (other than any
lien of the type described in the last sentence of Section 3.09(a));
(v) any contract or agreement not entered into in the ordinary
course of Seller's business; and
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(vi) any written employment agreement.
(b) Neither Seller nor the Joint Venture is (and, to the
knowledge of Seller, no other party is) in breach or violation of, or default
under, any of the Material Contracts or Assumed Liabilities (except as would not
result in a Material Adverse Effect). Each Material Contract is a valid
agreement, arrangement or commitment of Seller or the Joint Venture, enforceable
against Seller or the Joint Venture in accordance with its terms except where
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and except where enforceability is subject
to the application of equitable principles or remedies.
SECTION 3.17. Joint Venture Assets. The Seller is current on all
payments due by the Seller to the Joint Venture and the Joint Venture is current
on all payments due by the Joint Venture, except as set forth in Section 3.17 of
the Disclosure Statement. All of the Joint Venture Assets are listed in Section
3.17 of the Disclosure Statement.
SECTION 3.18 Joint Venture Financial Statements; Absence of Undisclosed
Liabilities. (a) Attached to Section 3.18 of the Disclosure Statement are true
and correct copies of the balance sheets applicable to the Joint Venture for the
periods ending December 31, 1996 and December 31, 1997 and statements of income
for the periods ending December 31, 1996, and December 31, 1997 (the "Joint
Venture Financial Statements"). The Joint Venture Financial Statements have been
prepared in accordance with GAAP except as noted in Section 3.04 of the
Disclosure Statement and fairly present in all material respects the financial
position of the Joint Venture as of the dates thereof and the results of the
operations for the periods then ended.
(b) Seller has delivered to Purchaser true and correct copies of the
summary financial reports of the Joint Venture for the months January, 1998
through June 30, 1998 (the "Joint Venture Interim Summary Reports"). The Interim
Summary Reports, which are unaudited, fairly present in all material respects
the financial position of the Joint Venture as of the dates thereof and the
results of the operations of the Seller for the period then ended, and include
all adjustments (consisting of normal recurring adjustments) necessary for a
fair presentation of the information included therein, subject to year end
adjustments.
(c) Except as set forth in Section 3.18 of the Disclosure Statement,
and except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since June 30, 1998, the Joint Venture
does not have any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth on a balance
sheet.
SECTION 3.19. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller.
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SECTION 3.20. Product Warranty. To the Knowledge of Seller, since
December 31, 1997, the products sold or services performed in the conduct of
Seller's business have been in compliance in all material respects with any
warranties made with respect thereto, and, except as set forth in Section 3.20
of the Disclosure Statement, there is not currently pending any customer claim
alleging any breach of warranty with respect to such products or services other
than such claims arising in the ordinary course of business and which in the
aggregate will not involve a loss of greater than $10,000.
SECTION 3.21. Permits and Consents. Section 3.21 of the Disclosure
Statement lists all of the permits, licenses, consents, certificates,
governmental approvals required to conduct the Business (the "Permits") the
absence of which would have a Material Adverse Effect on the Business. The
Seller agrees to assign to Purchaser all Permits, to the extent assignable, as a
part of the Subject Business Assets and the Permits which cannot be transferred
are identified in Section 3.21 of the Disclosure Statement. To the Seller's
Knowledge, the Seller is in full compliance with all Permits and no suspension,
revocation, limitation or cancellation of any of the Permits is threatened or
pending and no cause exists for such, except as would not have a Material
Adverse Effect on the Business. Section 3.21 of the Disclosure Statement sets
forth any third party and governmental consents, approvals, waivers or
authorizations necessary for the valid and enforceable transfer of the Subject
Business Assets and the consummation of this transaction (the "Consents").
SECTION 3.22 Assumed Liabilities. Seller has made available to
Purchaser true and complete copies of all contracts, leases and records relating
to the Assumed Liability in a timely fashion from which the Purchaser has had an
opportunity to verify the terms of the Assumed Liabilities.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser, and (assuming due authorization. execution and delivery by Seller)
constitutes a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, subject to the effect of any
applicable
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bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to the effect of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and performance
of this Agreement by Purchaser does not and will not (a) violate or conflict
with the Certificate of Incorporation or By-laws (or other similar applicable
documents) of Purchaser, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Purchaser or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which Purchaser or any
of its subsidiaries is a party or by which any of such assets or properties is
bound or affected, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent Purchaser from, or delay
Purchaser in, performing any of its material obligations under this Agreement
and (b) as may be necessary as a result of any facts or circumstances relating
solely to Seller.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending before any court, arbitrator or administrative,
governmental or regulatory authority or body that seeks to delay or prevent the
consummation of the transactions contemplated hereby or that would be reasonably
likely to materially and adversely affect or restrict Purchaser's ability to
consummate the transactions contemplated hereby.
SECTION 4.05. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. (a) Unless
Purchaser
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otherwise agrees in writing (which agreement will not be unreasonably withheld)
and except as otherwise set forth in Section 5.01 of the Disclosure Statement,
between the date of this Agreement and the Closing Date, Seller will, as to the
Subject Business Assets (i) conduct its business only in the ordinary course,
(ii) use reasonable efforts to preserve intact Seller's Business organization
and assets and retain the services of key employees of the Business, subject to
the conduct of its Business in the ordinary course, and (iii) use reasonable
efforts to preserve the current relationships of the Business with its
respective customers, suppliers, licensors, distributors and other Persons with
which the Business has significant business relationships.
(b) Unless Purchaser otherwise agrees in writing (which agreement will
not be unreasonably withheld) and except as otherwise set forth in Section 5.01
of the Disclosure Statement and except for actions in the ordinary course of
business, between the date of this Agreement and the Closing Date, Seller will
not (i) amend or terminate any contract listed in the Disclosure Statement,,
(ii) sell, transfer, replace or lease any of the Subject Business Assets, (iii)
materially increase or write down the value of any Current Assets without a
written explanation of the cause furnished to Purchaser prior to Closing, (iv)
permit the Subject Business Assets to be subject to any new encumbrance, (v)
increase the compensation of the employees, except following normal review
procedures and prior written notice to Purchaser, or (vi) materially alter its
conduct in its relations with suppliers or customers.
SECTION 5.02. Access to Information. Insofar as relevant to the
Business, from the date hereof until the Closing, upon reasonable notice, Seller
shall (i) afford the officers, employees and authorized agents and
representatives of Purchaser access, during normal business hours, to its
offices, properties, books and records and (ii) furnish to the officers,
employees and authorized agents and representatives of Purchaser such additional
financial and operating data and other information regarding its assets,
properties, goodwill and business as Purchaser may from time to time reasonably
request and which is obtainable without unreasonable effort or expense;
provided, however, that such investigation shall not unreasonably interfere with
any of the businesses or operations of Seller.
SECTION 5.03. Books and Records. (a) Each of Seller and Purchaser
agrees that it shall preserve and keep all books and records relating to
business units then owning or operating the Subject Business Assets, as they
relate to the Subject Business Assets as of the Closing Date, for a period of at
least five years from the Closing Date. During such five-year period, Seller,
Purchaser and their respective representatives shall, upon reasonable notice,
have access thereto during normal business hours to examine, inspect and copy
such books and records.
(b) If, in order properly to prepare its financial statements
or documents required to be filed with Governmental Authorities, it is necessary
that any party hereto or any successors be furnished with additional information
relating to Subject Business Assets as of the
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Closing Date, and such information is in the possession of another party hereto,
such party agrees to use its reasonable efforts to furnish such information to
such other party, at the cost and expense of the party being furnished such
information.
SECTION 5.04. Governmental Approvals and Consents. (a) Each party
hereto will use its reasonable efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities that may be or become
necessary for the performance of its obligations pursuant to this Agreement and
will cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. The parties hereto will not take
any action that will have the effect of delaying, impairing or impeding the
receipt of any required approvals.
(b) Without limiting the generality of the parties'
undertakings pursuant to Section 5.04(a), each of the parties hereto shall use
all reasonable efforts to (i) respond to any inquiries by any Governmental
Authority regarding matters with respect to the transactions contemplated by
this Agreement, (ii) avoid the imposition of any order or the taking of any
action that would restrain, alter or enjoin the transactions contemplated by
this Agreement and (iii) in the event any Governmental Order adversely affecting
the ability of the parties to consummate the transactions contemplated by this
Agreement has been issued, to have such Governmental Order vacated or lifted.
SECTION 5.05. Confidentiality Agreement. The terms of the
confidentiality letter dated as of June 18, 1998 (the "Confidentiality
Agreement") between Seller and Purchaser are hereby incorporated herein by
reference and shall continue in full force and effect until the Closing and
shall survive the Closing.
SECTION 5.06 No General Assumption. Except for Permitted Encumbrances
and Assumed Liabilities listed on Exhibit A, Seller shall transfer the Subject
Business Assets to Purchaser free and clear of all encumbrances and without any
assumption of liabilities and obligations and Purchaser shall not assume or
become responsible, by virtue of its purchase of the Subject Business Assets,
for any liabilities or obligations of Seller, including without limitation those
matters disclosed in the Disclosure Statement which are not scheduled as Assumed
Liabilities.
SECTION 5.07 Prorations The expenses and accruals of the Assumed
Liabilities and the Subject Business Assets, such as utilities, real and
personal property taxes and rents, shall be prorated as of the date of Closing,
based upon the best available information with corrections to be made by the
parties when the final statements or required information is available.
SECTION 5.08 Post-Closing Consents. In the event that the Purchaser
should consent to close without any Consent listed in Section 3.21 of the
Disclosure Statement, the
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Seller agrees to use reasonable due diligence to obtain such Consent(s) after
the closing, provided that the Seller shall have no obligation to make any
payments to the party whose consent is required. The Seller and the Purchaser
will cooperate and assist each other in obtaining such Consents after closing.
SECTION 5.09. Further Instruments. Each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated hereby.
ARTICLE VI.
EMPLOYEE MATTERS
SECTION 6.01. Employees. (a) A roster of all current employees of the
Business is set forth in Section 6.01 of the Disclosure Statement, together with
the "Employee Information", as hereinafter defined with respect to each
employee. "Employee Information" shall mean the name, date of hire, job title,
form of employment (written agreement, at-will, etc), full or part time (less
than 20 hours per week), pay rate of salary, vacation day entitlements/accruals
as of Closing Date (based on employee's employment with Seller) and shall
include a list of employees on (i) medical, family or other leave (whether
contractual or statutory), short term disability as defined in short term
disability policy covering Business and long-term disability as defined
long-term disability policy covering Business. Purchaser shall be permitted (but
shall not be under any obligation) to make offers of employment to all such
employees, and, in addition thereto, to such other non-direct employees as may
be agreed upon in writing and in advance with Seller. Promptly and in any event
within 30 days following the Closing, Purchaser shall notify Seller of any such
employees who do not become employees of Purchaser or its Affiliates following
the Closing. All such employees who become employees of Purchaser or its
Affiliates are herein called the "Employees". The vacation and sick day accruals
and entitlements of the Employees which may be due upon the termination of
employment by the Seller shall not be Assumed Liabilities of the Purchaser.
(b) To the extent that service is relevant for purposes of
eligibility, vesting or benefit accrual under any employee benefit plan, program
or arrangement established or maintained by Purchaser for the benefit of the
Employees, such plan, program or arrangement shall credit such Employees for
service on or prior to the Closing with Seller or any of its Affiliates. All
such Employees shall be allowed to participate from and after Closing in the
medical and dental benefit plans of Purchaser or its Affiliates as employees of
Purchaser or its Affiliates. If the Closing falls within an annual period of
coverage under any group health plan of Purchaser or its Affiliates which
becomes the employer with respect to the Employees, such Employees shall be
given credit for covered expenses paid by that Employee under comparable
employee benefit plans of Seller during the applicable coverage period to the
Closing Date
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towards satisfaction of any annual deductible limitation and out-of-pocket
maximum that may apply under that group health plan.
SECTION 6.02. Survival. The covenants and agreements of the parties
hereto contained in this Article VI shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth herein.
ARTICLE VII.
TAX MATTERS
SECTION 7.01. Tax Indemnities. (a) From and after the Closing Date,
Seller agrees to indemnify Purchaser, against all Taxes (i) imposed on Seller or
any member of an affiliated group with which Seller files a consolidated or
combined income tax return with respect to any taxable period for which Seller
or any member of an affiliated group with Seller files (or is required by law to
file) an income tax return, and (ii) imposed on Seller with respect to any
taxable period or portion thereof that ends on or as of the Closing Date with
respect to the Subject Business Assets.
(b) From and after the Closing Date, Purchaser shall indemnify
Seller and its Affiliates against all taxes imposed on or with respect to the
Subject Business Assets with respect to any taxable period or portion thereof
beginning after the Closing Date.
(c) Payment by the indemnitor of any amount due under this Section
7.01 shall be made within ten days following written notice by the indemnitee
that payment of such amounts to the appropriate tax authority is due, provided
that the indemnitor shall not be required to make any payment (i) earlier than
two days before it is due to the appropriate tax authority or (ii) of any Taxes
which the indemnitor has by all appropriate proceedings elected to contest and
is contesting diligently and in good faith. In the case of a Tax that is so
contested, payment of the Tax to the appropriate tax authority will not be
considered to be due earlier than the date a final determination to such effect
is made by the appropriate taxing authority or a court.
(d) For purposes of this Agreement, in the case of any Tax
that is imposed on a periodic basis and is payable for a period that begins
before the Closing Date and ends after the Closing Date, the portion of such
Taxes payable for the period ending on the Closing Date shall be (i) in the case
of any Tax other than a Tax based upon or measured by income, the amount of such
Tax for the entire period multiplied by a fraction, the numerator of which is
the number of days in the period ending on the Closing Date and the denominator
of which is the number of days in the entire period and (ii) in the case of any
Tax based upon or measured by income, the amount which would be payable if the
taxable year ended on the Closing Date. Any
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credit shall be prorated in the same manner as the Tax to which such credit
relates would be prorated, as described in the preceding sentence. In the case
of any Tax based upon or measured by capital (including net worth or long-term
debt) or intangibles, any amount thereof required to be allocated under this
Section 7.01(d) shall be computed by reference to the level of such items on the
Closing Date.
SECTION 7.02. Refunds and Tax Benefits. Purchaser shall promptly pay to
Seller any refund or credit (including any interest paid or credited with
respect thereto) received by Purchaser (i) imposed on the Subject Business
Assets relating to taxable periods or portions thereof ending on or before the
Closing Date or (ii) attributable to an amount paid by Seller under Section 7.01
hereof.
SECTION 7.03. Conveyance Taxes. All sales, transfer, stamp, real
property transfer and similar Taxes incurred as a result of the sale of the
Subject Business Assets contemplated hereby shall be split equally between the
Seller and the Purchaser.
SECTION 7.04 Survival. The covenants and agreements of the parties
hereto contained in this Article VII shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth in this Article.
SECTION 7.04. Miscellaneous. The parties agree to treat all payments
made under Article IX or this Article VII as adjustments to the purchase price
for Tax purposes.
ARTICLE VIII.
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of All Parties. The obligations
of each party hereto to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Governmental Order which is in
effect and has the effect of making the transactions contemplated by this
Agreement illegal or otherwise restraining or prohibiting consummation of such
transactions; provided however, that each party hereto shall have complied with
its obligations under Section 5.04.
SECTION 8.02. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver, at or prior to the Closing, of each of the
following conditions:
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(a) Representations and Warranties; Covenants. (i) The
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Purchaser on or before the
Closing shall have been complied with in all material respects and (iii) Seller
shall have received a certificate of Purchaser to such effect signed by a duly
authorized officer thereof;
(b) Resolutions. Seller shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of Purchaser
(or equivalent officer), of the resolutions, duly and validly adopted by the
Board of Directors of Purchaser evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) Incumbency Certificate. Seller shall have received a
certificate of the Secretary or an Assistant Secretary (or equivalent officer)
of Purchaser certifying the names and signatures of the officers of Purchaser
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(d) Closing Documents The Closing Documents to be delivered or
executed by the Purchaser are in form and substance reasonably satisfactory to
the Seller and its counsel.
(e) Related Transactions. The Related Transactions have taken
place as more fully described on the attached Exhibit C;
(f) Further Action. All actions to be taken by Purchaser in
connection with the consummation of the transactions contemplated hereby, and
all certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.
SECTION 8.03. Conditions to Obligations of Purchaser. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver, at or prior to the Closing, of each of
the following conditions:
(a) Representations and Warranties; Covenants. (i) The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Seller on or before the
Closing shall have been complied with in all material respects and (iii)
Purchaser shall have received a certificate of Seller to such
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effect signed by a duly authorized officer thereof;
(b) Resolutions. Purchaser shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary (or
equivalent officer) of Seller, of the resolutions duly and validly adopted by
the Board of Directors of Seller evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) Incumbency Certificate. Purchaser shall have received a
certificate of the Secretary or an Assistant Secretary (or equivalent officer)
of Seller certifying the names and signatures of the officers authorized to sign
this Agreement and the other documents to be delivered hereunder;
(d) Required Third Party Actions. The Persons identified in
Section 8.03 of the Disclosure Statement have consented to this transaction and
the Related Transactions, if applicable, and Purchaser has received assurances
satisfactory to the Purchaser that such Person will release its liens on the
Subject Business Assets or will deliver any required Consent or Permit.
(e) FIRPTA. Seller shall have provided Purchaser with a
certificate pursuant to Treasury Regulations Sections 1.1445-2(c)(3) and
1.897-2(h) that the Subject Business Assets are not a United States real
property interest within the meaning of Section 897 of the Internal Revenue
Code;
(f) Closing Documents The Closing Documents to be delivered or
executed by the Seller are in form and substance reasonably satisfactory to the
Purchaser and its counsel.
(g) Related Transactions. The Related Transactions more fully
described on Exhibit C have taken place.
(h) Key Employees. Purchaser (or any designee of Purchaser)
and the "Key Employees", as hereinafter defined have entered into mutually
satisfactory employment agreements. "Key Employees" shall mean Theodore M.
DuBose, IV, E. Scott Banks and William E. Wolfe, III; and
(i) Further Action. All actions to be taken by Seller (and any
of its applicable subsidiaries) in connection with the consummation of the
transactions contemplated hereby, all certificates, opinions, instruments, and
other documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Purchaser.
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ARTICLE IX.
INDEMNIFICATION
SECTION 9.01. Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties, covenants and agreements of
the parties contained herein shall survive the Closing and shall remain in full
force and effect, regardless of any investigation made by or on behalf of Seller
or Purchaser, until 18 months following the Closing Date; provided however, that
the representations and warranties set forth in Section 3.01 and 4.01
(Incorporation and Authority) shall survive indefinitely and all representations
and warranties contained in this Agreement relating to Assumed Liabilities shall
survive the term of such Assumed Liabilities.
SECTION 9.02 Indemnification Agreement. The indemnification agreement
by and among Isolyser Company, Inc., SafeWaste Corporation and White Knight
Healthcare, Inc. , as sellers and Thantex Specialties, Inc., White Knight
Industrial, Inc., SafeWaste, Inc. and Thantex Holdings, Inc., as purchasers of
even date shall control all matters relating to indemnification by either the
Seller or the Purchaser with respect to this Agreement.
ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser, if the Closing shall not
have occurred prior to August 30, 1998; provided, however, that the right to
terminate this Agreement under this Section 10.01(b) shall not be available to a
party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date.
Time shall be of the essence in this Agreement.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto (a)
except as set forth in Section 5.05 and Section 11.01 hereof and (b) nothing
herein shall relieve any party hereto from liability for any willful breach
hereof.
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SECTION 10.03. Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise expressly provided herein,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in Person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
11.02):
(a) if to Seller:
Isolyser Company, Inc.
650 Engineering Drive
Norcross, GA 30092
Chief Financial Officer
Telecopier: (770)441-2592
with a copy to:
Arnall Golden & Gregory, LLP
1201 West Peachtree Street
2800 One Atlantic Center
Atlanta, GA 30309-3450
Attn: Stephen D. Fox, Esq.
Telecopier: (404)873-8529
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(b) if to Purchaser:
SafeWaste, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Attn: Jerry Zucker and James G. Boyd
Telecopier: (843) 7474092
with a copy to:
Buist, Moore, Smythe & McGee, PA
5 Exchange Street
P.O. Box 999
Charleston, SC 29401
Attn: Susan M. Smythe, Esq.
Telecopier (843) 723-7398
SECTION 11.03. Press Release and Public Announcements. Unless otherwise
required by applicable law or stock exchange requirements, no party to this
Agreement shall issue any press releases or make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without prior written notification to and
consent of the other party, and the parties will cooperate as to the timing and
contents of any announcement. With respect to announcements and releases
required by applicable law or stock exchange requirements, the Seller shall
afford the Purchaser prior notice and the opportunity to comment prior to
release.
SECTION 11.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements
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and undertakings, both written and oral, between Seller and Purchaser with
respect to the subject matter hereof and except as otherwise expressly provided
herein. The exhibits referred to in and attached to this Agreement form a part
of this Agreement and by reference are incorporated herein.
SECTION 11.07. Assignment. Without the prior written consent of the
other party hereto, neither party hereto may assign its rights or delegate its
obligations hereunder; provided however the Purchaser may assign its rights to
an Affiliate if the Purchaser remains responsible for the performance of all of
its obligations hereunder.
SECTION 11.09. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
SECTION 11.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 11.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
581498.1
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<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have caused this SafeWaste
Asset Agreement to be executed as of the date first written above by their
respective officers hereunto duly authorized.
SAFEWASTE CORPORATION
By:___________________________________
Its:__________________________________
SAFEWASTE, INC.
By:___________________________________
Its:__________________________________
581498.1
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ARDEN PLANT AGREEMENT
ISOLYSER COMPANY, INC.
AND
THANTEX HOLDINGS, INC.
THANTEX SPECIALTIES, INC.
August ____, 1998
ARDEN PLANT AGREEMENT, dated August ____, 1998 (this "Agreement"),
between ISOLYSER COMPANY, INC., a Georgia corporation ("Seller"), and THANTEX
HOLDINGS, INC., a Delaware corporation, and THANTEX SPECIALTIES, INC., a
Delaware corporation (Collectively "Purchaser"). Certain capitalized terms shall
have the meaning set forth in Article I.
WHEREAS, subject to the terms and conditions of this Agreement, the
Seller shall convey an 80% interest in the Subject Business Assets for the
Purchase Price and shall contribute the remaining 20% interest in the Subject
Business Assets in exchange for common stock in the Purchaser equal to a 20%
equity interest in the Purchaser.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
"Arden Plant" means that certain real property, located in Arden, North
Carolina more fully described in Section 1.01 of the Disclosure Statement,
together with all fixtures, easements and appurtenant rights.
"Arden Equipment" means all of the equipment, furnishings and fixtures
located in the Arden Plant more fully described in Section 1.01 of the
Disclosure Statement, other than the Excluded Assets.
581506.1
<PAGE>
"Assumed Liabilities" means those specific liabilities which were
identified and fully described by the Seller not less than five (5) days prior
to Closing and which the Purchaser specifically agreed to assume in writing, as
listed on Exhibit A. The Purchaser assumes no other liabilities of the Seller.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as a trustee or
executor (in each case, acting in a fiduciary capacity), of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, as trustee or executor (in each
case, acting in a fiduciary capacity), by contract or credit arrangement or
otherwise.
"Disclosure Statement" means the Disclosure Statement dated as of the
date hereof delivered to Purchaser by Seller.
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind,
other than ad valorem taxes not yet due and payable.
"Equipment Related Property" means (1) all inventory of spare and
replacement parts relating to the Arden Equipment, (2) all plans, manuals,
records and other documents relating to the equipment, and (3) the Intellectual
Property, if any, directly pertaining to the equipment or the customized
products such equipment has been designed or programmed to produce (excluding
any rights relating to Orex products).
"Excluded Assets" means those assets of the Seller or its Affiliates
located at the Arden Plant and which are listed on Exhibit B.
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial or arbitral body, whether federal, state, local or
foreign.
"Intellectual Property Rights" means (a) patent and patent
applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, (c)
copyrights, whether registered or unregistered, and registrations and
applications for registration thereof and (d) trade secrets, formulas,
inventions, invention disclosures, know-how, manufacturing and production
processes and techniques, business and marketing plans, customer and supplier
lists, computer software and other proprietary business and intellectual
property rights.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the executive officers of Seller after due inquiry of the executive
officers of Seller.
581506.1
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<PAGE>
"Losses" means any and all claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs and expenses
(including reasonable legal fees, interest, penalties, and all reasonable
amounts paid in investigation, defense or settlement of any of the foregoing)
actually suffered or incurred.
"Material Adverse Effect" means, with respect to any Person, any
change in, or effect on, the business of such Person that is materially adverse
to the business, operations, results of operations or the financial condition
thereof or an amount in excess of $10,000.
"Permitted Encumbrances" means those Encumbrances listed in Section
1.01 of the Disclosure Statement, encumbrances to pay taxes or other
governmental assessments which are not yet due and payable, and other
encumbrances which do not in the aggregate materially detract from the value of
the Subject Business Assets or materially impair the use thereof.
"Related Transactions" means those transactions by and among the
Purchaser, the Seller and their Affiliates more fully described on Exhibit C.
"Subject Business Assets" means (i) the Arden Plant, (ii) the Arden
Equipment (iii) the Equipment Related Property of the Arden Equipment (iv) the
Contracts and Leases identified in Section 1.01 of the Disclosure Statement and
(v) any tangible personal property belonging to the Seller or its Affiliates
located in the Arden Plant on the day of Closing which are not Excluded Assets
under this Agreement or not Excluded Assets under the White Knight Asset
Purchase Agreement unless the Seller and Purchaser agree in writing otherwise at
or prior to Closing.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. Purchase Price. The Purchase Price for the Subject
Business Assets shall be $5,700,000. At the Closing, Purchaser shall deliver to
Seller the Purchase Price, by wire transfer in immediately available funds, to
an account or accounts designated at least three Business Days prior to the
Closing Date by Seller in a written notice to Purchaser.
SECTION 2.02 Closing Date. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Subject Business Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
Tuesday, August 11, 1998, or on the third Business Day following the
satisfaction or waiver of the conditions to the obligations of the parties set
forth in Article VIII The Closing will occur at the offices of Buist, Moore,
Smythe & McGee, P.A, 5 Exchange Street, Charleston, South Carolina, or at such
other time or on such other date or at such other place as Seller and Purchaser
may mutually agree upon in writing (the day on which the Closing takes place
being the "Closing Date").
581506.1
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<PAGE>
SECTION 2.03 Closing Documents. At the Closing, Seller shall execute
and deliver to Purchaser such transfer and other documents as required to
transfer the Subject Business Assets, together with such other instruments of
conveyance, affidavits, declarations, assignments and other supporting
documentation typically delivered in connection with a transaction of this type
and in accordance with local law or custom (collectively the "Closing
Documents") including:
(i) Bill of Sale in the form attached as Exhibit D
(ii) A warranty Deed in the form attached as Exhibit E, subject
only to any Permitted Encumbrances.
(iii) Assignment and Assumption of the Assumed Liabilities in the
form attached as Exhibit F
(iv) Assignment of Title Certificates to vehicles, if any.
(v) Consents, as defined in Section 3.14, unless waived by the
parties
(vi) Assignment of Permits, if any, as defined in Section 3.14,
unless waived by the parties.
(vii) Release of all liens and encumbrances on the Subject
Business Assets except Assumed Liabilities and Permitted
Encumbrances, or other arrangements satisfactory to
Purchaser and Seller
(viii) Good Standing Certificates of Seller and Purchaser
(ix) Officer's Certificate of Seller and Purchaser including
authorizing resolution, articles of incorporation with all
amendments, by-laws and incumbency certificates.
(x) FIRPTA affidavit and such other title affidavits as may be
required by Purchaser's title insurance company or customary
practice in the jurisdiction where the real property is
located.
SECTION 2.04. Allocation of Purchase Price. The Purchase Price shall be
allocated for tax purposes among each item or class of the Subject Business
Assets as set forth in Exhibit G of this Agreement. Seller and Purchaser agree
that they will prepare and file any notice or other filing required pursuant to
Section 1060 of the Internal Revenue Code, and that any notices or filings will
be prepared based upon such tax allocation of the Purchase Price. Purchaser
agrees to send to Seller a completed copy of its Form 8594 (Asset Acquisition
Statement under Section 1060) with respect to this transaction prior to filing
such form with the Internal Revenue Service.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the date of this Agreement
and through the Closing Date as follows:
581506.1
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<PAGE>
SECTION 3.01. Incorporation and Authority of Seller. Seller is a
corporation duly incorporated and validly existing under the laws of Georgia.
Seller has all necessary corporate power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming due
authorization. execution and delivery by Purchaser) this Agreement constitutes a
legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.02. No Conflict. The execution, delivery and performance of
this Agreement by Seller does not and will not (a) violate or conflict with the
organizational documents of the Seller, (b) conflict with or violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to the Subject Business Assets or (c) result in any breach of,
or constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Encumbrance on any of the Subject Business Assets or properties
of the Seller pursuant to, any note, bond, mortgage, credit agreement,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument relating to such assets or properties to which the Seller is a party
or by which any of such assets or properties is bound or affected, except as
would not have a Material Adverse Effect on the ability of Seller to consummate
the transactions contemplated by this Agreement and except the security
interests granted by the Seller to Thantex Holdings, Inc.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement by Seller does not, and the performance of this Agreement by
Seller will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Seller from, or delay Seller in,
performing any of its material obligations under this Agreement and would not
have a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement and except as may be necessary as a
result of any facts or circumstances relating solely to Purchaser.
SECTION 3.04. INTENTIONALLY DELETED.
581506.1
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<PAGE>
SECTION 3.05. Absence of Certain Changes or Events. Except as set forth
in Section 3.05 of the Disclosure Statement, since December 31, 1997, there has
not been with respect to the Subject Business Assets (i) any Material Adverse
Effect, (ii) any damage, destruction or loss, due to fire or other casualty,
whether or not covered by insurance, that has or reasonably could be expected to
have a Material Adverse Effect, (iii) any change in accounting methods,
principles or practices by Seller materially affecting its assets, liabilities
or business, except insofar as may have been required by a change in GAAP, (iv)
any sale, lease, transfer, or assignment of any material Subject Business Assets
other than in the ordinary course of business, or (v) any material capital
expenditures other than in the ordinary course of business.
SECTION 3.06. Litigation. Except as set forth in Section 3.06 of the
Disclosure Statement, as of the date of this Agreement, there are no claims,
actions, proceedings or investigations pending, or to the Knowledge of Seller,
threatened against Seller with respect to the Subject Business Assets, before
any court, arbitrator or administrative, governmental or regulatory authority or
body that are reasonably likely to have a Material Adverse Effect on Seller.
Except as set forth in Section 3.06 of the Disclosure Statement, the Subject
Business Assets are not subject to any order, writ, judgment, injunction,
decree, determination or award. Except as otherwise set forth in Section 3.06 of
the Disclosure Statement, each of the matters listed on Section 3.06 of the
Disclosure Statement is covered by insurance, and the insurer has acknowledged
coverage of each such matter without reservation.
SECTION 3.07. Compliance with Applicable Laws. Except as set forth in
Section 3.07 of the Disclosure Statement, within the preceding three years
Seller has not violated or failed to comply with any statute, law, regulation,
rule, judgment, decree or order of any Governmental Authority applicable to the
Subject Business Assets, except for violations and failures to comply that would
not, individually or in the aggregate, have a Material Adverse Effect on the
Seller's use of the Subject Business Assets. The Seller's use of the Subject
Business Assets is in conformity with all federal, state and local governmental
and regulatory requirements applicable to the subject Business Assets, except
where such nonconformity would not, in the aggregate, have a Material Adverse
Effect on the ability of Seller to use or operate the Subject Business Assets.
Seller has all permits, licenses, franchises and certificates of occupancy from
Governmental Authorities required to use and operate the Subject Business
Assets, except for such permits, licenses, franchises and certificates the
absence of which would not, in the aggregate, have a Material Adverse Effect on
the ability of Seller to use and operate the Subject Business Assets.
SECTION 3.08. Environmental Matters. Except as set forth in Section
3.08 of the Disclosure Statement with respect to the Subject Business Assets:
(a) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, Seller (i) is
in compliance with all applicable
581506.1
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<PAGE>
Environmental Laws and (ii) holds all Environmental Permits necessary for its
operations and properties and is in compliance with the terms and conditions of
all such Environmental Permits.
(b) Seller has not received any written claim, demand, notice
or complaint alleging violation of or liability (including without limitation
any liability for site investigation.
cleanup or corrective action) under any Environmental Laws.
(c) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, to Seller's
Knowledge, none of the following exists at the Plant: (i) asbestos-containing
material in any form or condition; (ii) materials containing polychlorinated
biphenyls; (iii) underground storage tanks or surface impoundments; or (iv)
landfills, surface impoundments or disposal areas.
(d) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, Seller has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any Hazardous Material, or owned or operated
any facility or property, so as to give rise to liabilities for response costs,
natural resource damages or attorneys fees pursuant to CERCLA or other
Environmental Laws.
(e) No written notice of a release of a Hazardous Material has
been filed by or on behalf of Seller and no property or facility now or
previously owned or operated by Seller is on the CERCLA National Priorities List
(or proposed for such listing), the Comprehensive Environmental Response,
Compensation, and Liability Information System list or any similar state or
local list.
(f) Seller has not, either expressly or, to Seller's
Knowledge, by operation of law, assumed or undertaken any liability, including
without limitation any obligation for corrective or remedial action, of any
other Person relating to Environmental Laws.
(g) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule or code. including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment or worker health and safety,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge,
investigation or cleanup of Hazardous Materials, in effect as of the date
hereof.
581506.1
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<PAGE>
"Environmental Permits" means any permit, approval,
identification number, license or other authorization required of Seller under
any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls, (b) any chemical,
material or substance defined or regulated as toxic or hazardous under any
applicable Environmental Law or (c) anything that is a "hazardous substance"
pursuant to CERCLA, anything that is a "solid waste" or "hazardous waste"
pursuant to RCRA or any "pesticide", "pollutant", "contaminant", "toxic
chemical" or "noise".
"RCRA" means the Resource Conservation and Recovery Act, as
amended.
SECTION 3.09. Title and Condition of Properties. (a) Seller has good
and marketable title to all the Subject Business Assets free and clear of all
Encumbrances, other than Permitted Encumbrances.
(b) Except as would not result in a Material Adverse Effect, the Arden
Equipment (i) contains all of the assets which are necessary to operate the
manufacturing lines included within the Subject Business Assets as they have
customarily been operated.
(c) To the Seller's Knowledge and in reliance upon , and subject to,
the affidavit attached as Exhibit H, the Subject Business Assets are functional
and usable in the ordinary course of business and are in sufficiently good
operating condition.
(d) The real property of the Arden Plant is suitable for the uses for
which these properties are currently used. The Arden Plant has customary access
to the utilities serving such properties sufficient to allow the use of the
Arden Plant as it is currently used except for interruptions in utility service
beyond Seller's control.
SECTION 3.10. Insurance. Section 3.10 of the Disclosure Statement sets
forth a complete list of all material insurance policies (including policies
providing property, casualty, liability and workers' compensation coverage and
bond and surety arrangements) with respect to the Subject Business Assets.
SECTION 3.11. Employee Benefit Matters. (a) Section 3.11 of the
Disclosure Statement, with respect to the Subject Business Assets, sets forth a
true and complete list of each "employee benefit plan" (as defined by Section
3(3) of ERISA), and any other bonus, profit sharing, pension, compensation,
deferred compensation, stock option, stock purchase, fringe benefit, severance,
post-retirement, scholarship, disability, sick leave, vacation, individual
employment, commission, bonus, payroll practice, retention, or other plan,
agreement, policy, trust fund or arrangement (each such plan, agreement, policy,
trust fund or arrangement is referred to herein as an "Employee Benefit Plan",
and collectively, the "Employee Benefit
581506.1
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<PAGE>
Plans") that is for the benefit of (i) directors or employees of Seller working
in the Business or any other persons performing services for Seller in the
Business, (ii) former directors or employees of Seller working in the Business
or any other persons formerly performing services for Seller in the Business,
and/or (iii) beneficiaries of anyone described in (i) or (ii) (collectively,
"Business Employees") or with respect to which Seller or any "ERISA Affiliate"
(hereby defined to include any trade or business, whether or not incorporated,
other than Seller, which has employees who are or have been at any date of
determination occurring within the preceding six (6) years, treated pursuant to
Section 4001(a)(14) of ERISA and/or Section 414 of the Internal Revenue Code as
employees of a single employer which includes Seller) has any obligation on
behalf of any employee of the Business.
(b) Except as disclosed in Section 3.11 of the Disclosure Statement,
each Employee Benefit Plan is in material compliance with the provisions of
ERISA and the provisions of the Internal Revenue Code applicable to it. The
Seller has made available to the Purchaser a true and complete copy of each Plan
and a true and complete copy of the following documents, to the extent
applicable, prepared in connection with each such Plan: (i) the most recently
received IRS determination letter, (ii) the most recently prepared financial
statement (Form 5500's with attachments), (iii) all governmental rulings
determinations and opinions (and pending requests for governmental rulings,
determinations and opinions). Neither Seller nor any ERISA Affiliate has
maintained or contributed to any plan subject to the minimum funding standards
of Section 302 of ERISA or Section 412 of the Internal Revenue Code and/or any
"multiemployer plan" (as defined by Section 3(37) of ERISA). All Employee
Benefit Plans which are "pension plans" as defined in Section 3(2) of ERISA have
received favorable determination letters from the Internal Revenue Service
("IRS") as to their tax-qualified status and the tax-exempt status of any
related trust under Sections 401(a) and 501 of the Internal Revenue Code,
respectively, which determinations are currently in effect.
(c) Other than as may otherwise be provided hereunder (including, but
not by way of limitation, Article VI hereof), Purchaser shall not, as a result
of the transactions contemplated by this Agreement (or any employment by
Purchaser of Business employees): (i) become liable for any contribution, tax,
lien, penalty, cost, interest, claim, loss, action, suit, damage, cost
assessment or other similar type of liability or expense of Seller or any ERISA
Affiliate (including predecessors thereof) with regard to any Employee Benefit
Plan or any Employee Benefit Plan sponsored, maintained or contributed to by an
ERISA Affiliate (including predecessors thereof) (assuming a like definition of
"Employee Benefit Plan" were applicable to ERISA Affiliates as to those same
types of agreements, policies, trusts, funds and arrangements sponsored,
maintained or contributed to by them) (each such plan of an ERISA Affiliate, an
"ERISA Affiliate Employee Benefit Plan"), including, without limitation
withdrawal liability arising under Title IV, Subtitle E, Part 1 of ERISA,
liabilities to the Pension Benefit Guaranty Corporation, or liabilities under
Section 412 of the Internal Revenue Code or Section 302(a)(2) of ERISA, or (ii)
be or become a party to any Employee Benefit Plan or any ERISA Affiliate
Employee Benefit Plan.
581506.1
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<PAGE>
(d) Seller, each ERISA Affiliate, each Employee Benefit Plan and each
Employee Benefit Plan "sponsor" or "administrator" (within the meaning of
Section 3(16) of ERISA) has complied in all material respects with the
applicable requirements of Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Internal Revenue Code.
(e) Neither Seller nor any ERISA Affiliate maintains (i) any employee
benefit plan of the type described in Sections 4063 and 4064 of ERISA or in
Section 413(c) of the Internal Revenue Code (and regulations promulgated
thereunder), or (ii) any plan which provides health, life insurance, accident or
other "welfare-type" benefits to current or future retirees or current or future
former employees, their spouses or dependents, other than in accordance with
Section 4980B of the Internal Revenue Code or applicable state continuation
coverage law.
(f) Other than with respect to the Assumed Liabilities, any bonuses,
severance , separation, termination or similar type of benefits, incentive fees,
or other amounts payable to employees of Seller solely as a result of the
consummation of the transactions contemplated by this Agreement will be paid by
Seller.
SECTION 3.12. Labor Matters. (a) There are no material controversies
pending or, to the Knowledge of Seller, threatened, between Seller and any of
its employees with respect to the Business; (b) Seller is not a party to any
collective bargaining agreement or other labor union contract applicable to
Persons employed by Seller with respect to the Subject Business Assets; (c)
during the past three years, there have been no unfair labor practice complaints
filed or pending against Seller before the National Labor Relations Board; and
(d) during the past three years, there have been no strikes, slowdowns, work
stoppages, lockouts, or, to Seller's Knowledge, threats thereof, by or with
respect to any employees of Seller with respect to the Subject Business Assets.
SECTION 3.13. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller.
SECTION 3.14. Permits and Consents. Section 3.14 of the Disclosure
Statement lists all of the permits, licenses, consents, certificates,
governmental approvals required to operate the Subject Business Assets (the
"Permits") the absence of which would have a Material Adverse Effect on the
operation of the Subject Business Assets. The Seller agrees to assign to
Purchaser all Permits, to the extent assignable, as a part of the Subject
Business Assets and the Permits which cannot be transferred are identified in
Section 3.14 of the Disclosure Statement. To the Seller's Knowledge, the Seller
is in full compliance with all Permits and no suspension, revocation, limitation
or cancellation of any of the Permits is threatened or pending and no cause
exists for such, except as would not have a Material Adverse Effect on the
operation of the Subject Business Assets. Section 3.14 of the Disclosure
Statement sets forth any third party and governmental consents, approvals,
waivers or authorizations
581506.1
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<PAGE>
necessary for the valid and enforceable transfer of the Subject Business Assets
and the consummation of this transaction (the "Consents").
SECTION 3.15 Assumed Liabilities. Seller has made available to
Purchaser true and complete copies of all contracts, leases and records relating
to the Assumed Liability in a timely fashion from which the Purchaser has had an
opportunity to verify the terms of the Assumed Liabilities.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser, and (assuming due authorization. execution and delivery by Seller)
constitutes a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and performance
of this Agreement by Purchaser does not and will not (a) violate or conflict
with the Certificate of Incorporation or By-laws (or other similar applicable
documents) of Purchaser, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Purchaser or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which Purchaser or any
of its subsidiaries is a party or by which any of such assets or properties is
bound or affected, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
581506.1
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<PAGE>
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent Purchaser from, or delay
Purchaser in, performing any of its material obligations under this Agreement
and (b) as may be necessary as a result of any facts or circumstances relating
solely to Seller.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending before any court, arbitrator or administrative,
governmental or regulatory authority or body that seeks to delay or prevent the
consummation of the transactions contemplated hereby or that would be reasonably
likely to materially and adversely affect or restrict Purchaser's ability to
consummate the transactions contemplated hereby.
SECTION 4.05. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.01 No General Assumption. Seller shall transfer the Subject
Business Assets to Purchaser free and clear of all Encumbrances and without any
assumption of liabilities and obligations, other than the Permitted Encumbrances
and the Assumed Liabilities. Purchaser shall not assume or become responsible,
by virtue of its purchase of the Subject Business Assets, for any liabilities or
obligations of Seller.
SECTION 5.02 Prorations The expenses and accruals of the Subject
Business Assets, such as utilities, real and personal property taxes and rents,
shall be prorated as of the date of Closing, based upon the best available
information with corrections to be made by the parties when the final statements
or required information is available.
SECTION 5.03 Related Transactions The Closing on the Subject Business
Assets is to occur simultaneously with the closing on the other Related
Transactions. Each of the Related Transactions are contingent upon the closing
of the other Related Transactions.
SECTION 5.04. Confidentiality Agreement. The terms of the
confidentiality letter dated as of June 18, 1998 (the "Confidentiality
Agreement") between Seller and Purchaser are hereby incorporated herein by
reference and shall continue in full force and effect until the Closing and
shall survive the Closing.
581506.1
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<PAGE>
SECTION 5.05 Post-Closing Consents. In the event that the Purchaser
should consent to close without any Consent listed in Section 3.14 of the
Disclosure Statement, the Seller agrees to use reasonable due diligence to
obtain such Consent(s) after the closing, provided that the Seller shall have no
obligation to make any payments to the party whose consent is required. The
Seller and the Purchaser will cooperate and assist each other in obtaining such
Consents after closing.
SECTION 5.06 Casualty Damage at Arden Plant. Notwithstanding any
provision or implication to the contrary contained herein or in the Indemnity
Agreement described in Section 9.02, the Seller shall bear the entire cost of
repairing the 1998 fire casualty damage to the building and equipment. This
obligation shall survive closing and shall not be subject to the limitations
contained in the Indemnity Agreement, described in Section 9.02.
SECTION 5.07. Further Instruments. Each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated hereby.
ARTICLE VI.
EMPLOYEE MATTERS
SECTION 6.01. Employees. (a) A roster of all current employees of the
Business is set forth in Section 6.01 of the Disclosure Statement, together with
the "Employee Information", as hereinafter defined with respect to each
employee. "Employee Information" shall mean the name, date of hire, job title,
service credit, form of employment (written agreement, at-will, etc), full or
part time (less than 20 hours per week), pay rate of salary, last pay increase
(when and how much), last two bonuses (when and how much), vacation and sick day
entitlements/accruals as of Closing Date (based on employee's employment with
Seller) and shall include a list of employees on (i) medical, family or other
leave (whether contractual or statutory), short term disability as defined in
short term disability policy covering Business and long-term disability as
defined long-term disability policy covering Business. Purchaser shall be
permitted (but shall not be under any obligation) to make offers of employment
to all such employees, and, in addition thereto, to such other non-direct
employees as may be agreed upon in writing and in advance with Seller. Promptly
and in any event within 30 days following the Closing, Purchaser shall notify
Seller of any such employees who do not become employees of Purchaser or its
Affiliates following the Closing. All such employees who become employees of
Purchaser or its Affiliates are herein called the "Employees". The vacation and
sick day accruals and entitlements of the Employees which may be due upon the
termination of employment by the Seller shall not be Assumed Liabilities of the
Purchaser.
(b) To the extent that service is relevant for purposes of eligibility,
vesting or
581506.1
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<PAGE>
benefit accrual under any employee benefit plan, program or arrangement
established or maintained by Purchaser for the benefit of the Employees, such
plan, program or arrangement shall credit such Employees for service on or prior
to the Closing with Seller or any of its Affiliates. All such Employees shall be
allowed to participate from and after Closing in the medical and dental benefit
plans of Purchaser or its Affiliates as employees of Purchaser or its
Affiliates. If the Closing falls within an annual period of coverage under any
group health plan of Purchaser or its Affiliates which becomes the employer with
respect to the Employees, such Employees shall be given credit for covered
expenses paid by that Employee under comparable employee benefit plans of Seller
during the applicable coverage period to the Closing Date towards satisfaction
of any annual deductible limitation and out-of-pocket maximum that may apply
under that group health plan.
SECTION 6.02. WARN Act. While it is currently Purchaser's intention to
continue to operate the Plant, Purchaser shall be liable and responsible for any
notification required to be provided under the Worker Adjustment and Retraining
Notification Act (or under any similar state or local law). In reliance upon
such covenant, Seller shall not give any notices under such laws and Purchaser
shall indemnify Seller and its Affiliates for any claims arising out of a breach
of this covenant or otherwise arising from any such discontinuance of operations
or decision not to employ, or to terminate the employment of any Employees.
SECTION 6.03. Survival. The covenants and agreements of the parties
hereto contained in this Article VI shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth herein.
ARTICLE VII.
TAX MATTERS
SECTION 7.01. Tax Indemnities. (a) From and after the Closing Date,
Seller agrees to indemnify Purchaser, against all Taxes (i) imposed on Seller or
any member of an affiliated group with which Seller files a consolidated or
combined income tax return with respect to any taxable period for which Seller
or any member of an affiliated group with Seller files (or is required by law to
file) an income tax return, and (ii) imposed on Seller with respect to any
taxable period or portion thereof that ends on or as of the Closing Date with
respect to the Subject Business Assets.
(b) From and after the Closing Date, Purchaser shall indemnify Seller
and its Affiliates against all taxes imposed on or with respect to the Subject
Business Assets with respect to any taxable period or portion thereof beginning
after the Closing Date.
(c) Payment by the indemnitor of any amount due under this Section 7.01
shall
581506.1
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<PAGE>
be made within ten days following written notice by the indemnitee that payment
of such amounts to the appropriate tax authority is due, provided that the
indemnitor shall not be required to make any payment (i) earlier than two days
before it is due to the appropriate tax authority or (ii) of any Taxes which the
indemnitor has by all appropriate proceedings elected to contest and is
contesting diligently and in good faith. In the case of a Tax that is so
contested, payment of the Tax to the appropriate tax authority will not be
considered to be due earlier than the date a final determination to such effect
is made by the appropriate taxing authority or a court.
(d) For purposes of this Agreement, in the case of any Tax that is
imposed on a periodic basis and is payable for a period that begins before the
Closing Date and ends after the Closing Date, the portion of such Taxes payable
for the period ending on the Closing Date shall be (i) in the case of any Tax
other than a Tax based upon or measured by income, the amount of such Tax for
the entire period multiplied by a fraction, the numerator of which is the number
of days in the period ending on the Closing Date and the denominator of which is
the number of days in the entire period and (ii) in the case of any Tax based
upon or measured by income, the amount which would be payable if the taxable
year ended on the Closing Date. Any credit shall be prorated in the same manner
as the Tax to which such credit relates would be prorated, as described in the
preceding sentence. In the case of any Tax based upon or measured by capital
(including net worth or long-term debt) or intangibles, any amount thereof
required to be allocated under this Section 7.01(d) shall be computed by
reference to the level of such items on the Closing Date.
SECTION 7.02. Refunds and Tax Benefits. Purchaser shall promptly pay to
Seller any refund or credit (including any interest paid or credited with
respect thereto) received by Purchaser (i) imposed on the Subject Business
Assets relating to taxable periods or portions thereof ending on or before the
Closing Date or (ii) attributable to an amount paid by Seller under Section 7.01
hereof.
SECTION 7.03. Conveyance Taxes. All sales, transfer, stamp, real
property transfer and similar Taxes incurred as a result of the sale of the
Subject Business Assets contemplated hereby shall be split equally between the
Seller and the Purchaser.
SECTION 7.04 Survival. The covenants and agreements of the parties
hereto contained in this Article VII shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth in this Article.
SECTION 7.04. Miscellaneous. The parties agree to treat all payments
made under Article IX or this Article VII as adjustments to the purchase price
for Tax purposes.
581506.1
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<PAGE>
ARTICLE VIII.
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of All Parties. The obligations
of each party hereto to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Governmental Order which is in
effect and has the effect of making the transactions contemplated by this
Agreement illegal or otherwise restraining or prohibiting consummation of such
transactions; provided however, that each party hereto shall have complied with
its obligations under Section 5.04.
SECTION 8.02. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. (i) The
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Purchaser on or before the
Closing shall have been complied with in all material respects and (iii) Seller
shall have received a certificate of Purchaser to such effect signed by a duly
authorized officer thereof;
(b) Resolutions. Seller shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of Purchaser
(or equivalent officer), of the resolutions, duly and validly adopted by the
Board of Directors of Purchaser evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) Incumbency Certificate. Seller shall have received a
certificate of the Secretary or an Assistant Secretary (or equivalent officer)
of Purchaser certifying the names and signatures of the officers of Purchaser
authorized to sign this Agreement and the other documents to be delivered
hereunder;
(d) Closing Documents The Closing Documents to be delivered or
executed by the Purchaser are in form and substance reasonably satisfactory to
the Seller and its counsel.
(e) Related Transactions. The Related Transactions have taken
place as more fully described on the attached Exhibit C;
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<PAGE>
(f) Further Action. All actions to be taken by Purchaser in
connection with the consummation of the transactions contemplated hereby, and
all certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.
SECTION 8.03. Conditions to Obligations of Purchaser. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver, at or prior to the Closing, of each of
the following conditions:
(a) Representations and Warranties; Covenants. (i) The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing, with the same force and effect as if made as of the Closing, other than
such representations and warranties as are made as of another date, which shall
be true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Seller on or before the
Closing shall have been complied with in all material respects and (iii)
Purchaser shall have received a certificate of Seller to such effect signed by a
duly authorized officer thereof;
(b) Resolutions. Purchaser shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary (or
equivalent officer) of Seller, of the resolutions duly and validly adopted by
the Board of Directors of Seller evidencing its authorization of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) Incumbency Certificate. Purchaser shall have received a
certificate of the Secretary or an Assistant Secretary (or equivalent officer)
of Seller certifying the names and signatures of the officers authorized to sign
this Agreement and the other documents to be delivered hereunder;
(d) Required Third Party Actions. The Persons identified in
Section 8.03 of the Disclosure Statement have consented to this transaction and
the Related Transactions, if applicable, and Purchaser has received assurances
satisfactory to the Purchaser that such Person will release its liens on the
Subject Business Assets or will deliver any required Consent or Permit.
(e) FIRPTA. Seller shall have provided Purchaser with a
certificate pursuant to Treasury Regulations Sections 1.1445-2(c)(3) and
1.897-2(h) that the Subject Business Assets are not a United States real
property interest within the meaning of Section 897 of the Internal Revenue
Code;
581506.1
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<PAGE>
(f) Closing Documents The Closing Documents to be delivered or
executed by the Seller are in form and substance reasonably satisfactory to the
Purchaser and its counsel.
(g) Related Transactions. The Related Transactions more fully
described on Exhibit C have taken place.
(h) Further Action. All actions to be taken by Seller (and any
of its applicable subsidiaries) in connection with the consummation of the
transactions contemplated hereby, all certificates, opinions, instruments, and
other documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Purchaser.
ARTICLE IX.
INDEMNIFICATION
SECTION 9.01. Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties, covenants and agreements of
the parties contained herein shall survive the Closing and shall remain in full
force and effect, regardless of any investigation made by or on behalf of Seller
or Purchaser, until eighteen months following the Closing Date; provided
however, that the representations and warranties set forth in Section 3.01 and
4.01 (Incorporation and Authority) shall survive indefinitely, and all
representations and warranties contained in this Agreement relating to Assumed
Liabilities shall survive the term of such Assumed Liabilities.
SECTION 6.02 Indemnification Agreement. The indemnification agreement
by and among Isolyser Company, Inc., SafeWaste Corporation and White Knight
Healthcare, Inc. , as sellers and Thantex Specialties, Inc., White Knight
Industrial, Inc., SafeWaste, Inc. and Thantex Holdings, Inc., as purchasers of
even date shall control all matters relating to indemnification by either the
Seller or the Purchaser with respect to this Agreement.
.
ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser, if the Closing shall not
have occurred prior to August 30, 1998; provided, however, that the right to
terminate this Agreement under this
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<PAGE>
Section 10.01(b) shall not be available to a party whose failure to fulfill any
obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur prior to such date.
Time shall be of the essence in this Agreement.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto (a)
except as set forth in Section 5.04 and Section 11.01 hereof and (b) nothing
herein shall relieve any party hereto from liability for any willful breach
hereof.
SECTION 10.03. Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise expressly provided herein,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in Person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
11.02):
(a) if to Seller:
Isolyser Company, Inc.
650 Engineering Drive
Norcross, GA 30092
Chief Financial Officer
Telecopier: (770)441-2592
581506.1
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<PAGE>
with a copy to:
Arnall Golden & Gregory, LLP
1201 West Peachtree Street
2800 One Atlantic Center
Atlanta, GA 30309-3450
Attn: Stephen D. Fox, Esq.
Telecopier: (404)873-8529
(b) if to Purchaser:
Thantex Specialties, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Attn: Jerry Zucker and James G. Boyd
Telecopier: (843) 7474092
with a copy to:
Buist, Moore, Smythe & McGee, PA
5 Exchange Street
P.O. Box 999
Charleston, SC 29401
Attn: Susan M. Smythe, Esq.
Telecopier (843) 723-7398
SECTION 11.03. Press Release and Public Announcements. Unless otherwise
required by applicable law or stock exchange requirements, no party to this
Agreement shall issue any press releases or make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without prior written notification to and
consent of the other party, and the parties will cooperate as to the timing and
contents of any announcement. With respect to announcements and releases
required by applicable law or stock exchange requirements, the Seller shall
afford the Purchaser prior notice and the opportunity to comment prior to
release.
SECTION 11.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
Agreement is
581506.1
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invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
Seller and Purchaser with respect to the subject matter hereof and except as
otherwise expressly provided herein. The exhibits referred to in and attached to
this Agreement form a part of this Agreement and by reference are incorporated
herein.
SECTION 11.07. Assignment. Without the prior written consent of the
other party hereto, neither party hereto may assign its rights or delegate its
obligations hereunder.
SECTION 11.08. No Third Party Beneficiaries. Except as provided in
Article IX, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other Person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 11.09. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
SECTION 11.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 11.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
581506.1
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IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be executed as of the date first written above by their respective officers
hereunto duly authorized.
ISOLYSER COMPANY, INC.
By:__________________________________________
Its:_________________________________________
THANTEX HOLDINGS, INC.
By:__________________________________________
Its:_________________________________________
THANTEX SPECIALTIES, INC.
By:__________________________________________
Its:_________________________________________
581506.1
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BARMAG AGREEMENT
ISOLYSER COMPANY, INC.
AND
THANTEX HOLDINGS, INC.
July __, 1998
BARMAG AGREEMENT, dated July ___, 1998 (this "Agreement"), between
ISOLYSER COMPANY, INC., a Georgia corporation ("Seller"), and THANTEX HOLDINGS,
INC., a Delaware corporation ("Purchaser"). Certain capitalized terms shall have
the meaning set forth in Article I.
WHEREAS, Seller owns certain equipment and leasing rights in Charlotte,
North Carolina which the Seller desires to transfer and the Purchaser desires to
acquire in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
"BarMag Equipment" means that certain manufacturing line acquired by
the Seller from American BarMag Corporation and located in Charlotte, North
Carolina and more fully described in Section 1.01 of the Disclosure Statement.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as a trustee or
executor (in each case, acting in a fiduciary capacity), of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, as trustee or executor (in each
case, acting in a fiduciary capacity), by contract or credit arrangement or
otherwise.
581507.1
<PAGE>
"Disclosure Statement" means the Disclosure Statement dated as of the
date hereof delivered to Purchaser by Seller.
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind,
other than ad valorem taxes not yet due and payable.
"Equipment Related Property" means (1) all inventory of spare and
replacement parts relating to the BarMag Equipment, (2) all plans, manuals,
records and other documents relating to the BarMag Equipment, (3) the
Intellectual Property, if any, directly pertaining to the equipment or the
customized products such equipment has been designed or programmed to produce
(excluding any Orex 7 products).
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial or arbitral body, whether federal, state, local or
foreign.
"Intellectual Property Rights" means (a) patent and patent
applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, (c)
copyrights, whether registered or unregistered, and registrations and
applications for registration thereof and (d) trade secrets, formulas,
inventions, invention disclosures, know-how, manufacturing and production
processes and techniques, business and marketing plans, customer and supplier
lists, computer software and other proprietary business and intellectual
property rights.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the executive officers of Seller after due inquiry of the executive
officers of Seller.
"Lease" means that certain lease by and between American BarMag
Corporation (ATenant") and Freeway Self Storage, LLC (the ALandlord") dated June
28, 1996.
"Losses" means any and all claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs and expenses
(including reasonable legal fees, interest, penalties, and all reasonable
amounts paid in investigation, defense or settlement of any of the foregoing)
actually suffered or incurred.
"Material Adverse Effect" means, with respect to any Person, any
change in, or effect on, the business of such Person that is materially adverse
to the business, operations, results of operations or the financial condition
thereof or an amount in excess of $10,000.
"Related Transactions" means those transactions by and among the
Purchaser, the Seller and their Affiliates more fully described on Exhibit A.
581507.1
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"Sublease" means that certain sublease by and between American BarMag
Corporation (ASublandlord") and Seller (ASubtenant") dated July 1, 1996 for
approximately 10,000 square feet located in Mecklinburg County, North Carolina
which is the subject of the Lease.
"Subject Business Assets" means (i) the assignment of the Sublease,
(ii) the BarMag Equipment (iii) the Equipment Related Property of the BarMag
Equipment and (iv) any tangible personal property belonging to the Seller or its
Affiliates located on the property of the Sublease on the day of Closing unless
the Seller and Purchaser agree in writing otherwise at or prior to Closing.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. Purchase Price. The Purchase Price for the Subject
Business Assets shall be $100,000. At the Closing, Purchaser shall deliver to
Seller the Purchase Price, by wire transfer in immediately available funds, to
an account or accounts designated at least three Business Days prior to the
Closing Date by Seller in a written notice to Purchaser.
SECTION 2.02 Closing Date. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Subject Business Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
Thursday, August 6, 1998, or on the third Business Day following the
satisfaction or waiver of the conditions to the obligations of the parties. The
Closing will occur at the offices of Buist, Moore, Smythe & McGee, P.A, 5
Exchange Street, Charleston, South Carolina, or at such other time or on such
other date or at such other place as Seller and Purchaser may mutually agree
upon in writing (the day on which the Closing takes place being the "Closing
Date").
SECTION 2.03 Closing Documents. At the Closing, Seller shall execute
and deliver to Purchaser such transfer and other documents as required to
transfer the Subject Business Assets, together with such other instruments of
conveyance, affidavits, declarations, assignments and other supporting
documentation typically delivered in connection with a transaction of this type
and in accordance with local law or custom (collectively the "Closing
Documents") including:
(i) Bill of Sale in the form attached as Exhibit B
(ii) Assignment and Assumption of the Sublease in the form
attached as Exhibit C
(iii) Estoppel and Consents of Subtenant and Sublandlord in form
attached as Exhibit D
(iv) Release of all Encumbrances on the Subject Business Assets,
or other arrangements satisfactory to Purchaser and Seller
(v) Good Standing Certificates of Seller and Purchaser
581507.1
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<PAGE>
(vi) Officer's Certificate of Seller and Purchaser including
authorizing resolution, articles of incorporation with all
amendments, by-laws and incumbency certificates.
(vii) FIRPTA affidavit
SECTION 2.04. Allocation of Purchase Price. The Purchase Price shall be
allocated for tax purposes among each item or class of the Subject Business
Assets as set forth in Exhibit E of this Agreement. Seller and Purchaser agree
that they will prepare and file any notice or other filing required pursuant to
Section 1060 of the Internal Revenue Code, and that any notices or filings will
be prepared based upon such tax allocation of the Purchase Price. Purchaser
agrees to send to Seller a completed copy of its Form 8594 (Asset Acquisition
Statement under Section 1060) with respect to this transaction prior to filing
such form with the Internal Revenue Service.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the date of this
Agreement and through the Closing Date as follows:
SECTION 3.01. Incorporation and Authority of Seller. Seller is a
corporation duly incorporated and validly existing under the laws of Georgia.
Seller has all necessary corporate power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming due
authorization. execution and delivery by Purchaser) this Agreement constitutes a
legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.02. No Conflict. The execution, delivery and performance of
this Agreement by Seller does not and will not (a) violate or conflict with the
organizational documents of the Seller, (b) conflict with or violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to the Subject Business Assets or (c) (other than the Lease and
Sublease) result in any breach of, or constitute a default (or event
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which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the Subject Business Assets or properties of the Seller pursuant to, any
note, bond, mortgage, credit agreement, indenture, contract, agreement, lease,
license, permit, franchise or other instrument relating to such assets or
properties to which the Seller is a party or by which any of such assets or
properties is bound or affected, except as would not have a Material Adverse
Effect on the ability of Seller to consummate the transactions contemplated by
this Agreement.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement by Seller does not, and the performance of this Agreement by
Seller will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Seller from, or delay Seller in,
performing any of its material obligations under this Agreement and would not
have a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement and except as may be necessary as a
result of any facts or circumstances relating solely to Purchaser.
SECTION 3.04. INTENTIONALLY DELETED.
SECTION 3.05. Absence of Certain Changes or Events. Since December 31,
1997, there has not been with respect to the Subject Business Assets (i) any
Material Adverse Effect, (ii) any damage, destruction or loss, due to fire or
other casualty, whether or not covered by insurance, that has or reasonably
could be expected to have a Material Adverse Effect, (iii) any change in
accounting methods, principles or practices by Seller materially affecting its
assets, liabilities or business, except insofar as may have been required by a
change in GAAP, (iv) any sale, lease, transfer, or assignment of any material
Subject Business Assets other than in the ordinary course of business, or (v)
any material capital expenditures other than in the ordinary course of business.
SECTION 3.06. Litigation. As of the date of this Agreement, there are
no claims, actions, proceedings or investigations pending, or to the Knowledge
of Seller, threatened against Seller with respect to the the Subject Business
Assets, before any court, arbitrator or administrative, governmental or
regulatory authority or body that are reasonably likely to have a Material
Adverse Effect on the operation of the Subject Business Assets. None of the
Subject Business Assets are subject to any order, writ, judgment, injunction,
decree, determination or award. Except as otherwise set forth in Section 3.06 of
the Disclosure Statement, each of the matters listed on Section 3.06 of the
Disclosure Statement is covered by insurance, and the insurer has acknowledged
coverage of each such matter without reservation.
SECTION 3.07. Compliance with Applicable Laws. Within the preceding
three years
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Seller has not violated or failed to comply with any statute, law, regulation,
rule, judgment, decree or order of any Governmental Authority applicable to the
Subject Business Assets, except for violations and failures to comply that would
not, individually or in the aggregate, have a Material Adverse Effect on the
Seller's use of the Subject Business Assets. The Seller's use of the Subject
Business Assets is in conformity with all federal, state and local governmental
and regulatory requirements applicable to the subject Business Assets, except
where such nonconformity would not, in the aggregate, have a Material Adverse
Effect on the ability of Seller to use or operate the Subject Business Assets.
Seller has all permits, licenses, franchises and certificates of occupancy from
Governmental Authorities required to use and operate the Subject Business
Assets, except for such permits, licenses, franchises and certificates the
absence of which would not, in the aggregate, have a Material Adverse Effect on
the ability of Seller to use and operate the Subject Business Assets.
SECTION 3.08. Environmental Matters. With respect to the Subject
Business Assets:
(a) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, Seller (i) is
in compliance with all applicable Environmental Laws and (ii) holds all
Environmental Permits necessary for its operations and properties and is in
compliance with the terms and conditions of all such Environmental Permits.
(b) Seller has not received any written claim, demand, notice
or complaint alleging violation of or liability (including without limitation
any liability for site investigation, cleanup or corrective action) under any
Environmental Laws.
(c) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, to Seller's
Knowledge, none of the following exists at the property which is subject to the
Sublease: (i) asbestos-containing material in any form or condition; (ii)
materials containing polychlorinated biphenyls; (iii) underground storage tanks
or surface impoundments; or (iv) landfills, surface impoundments or disposal
areas.
(d) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, Seller has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any Hazardous Material, or owned or operated
any facility or property, so as to give rise to liabilities for response costs,
natural resource damages or attorneys fees pursuant to CERCLA or other
Environmental Laws.
(e) No written notice of a release of a Hazardous Material has
been filed by or on behalf of Seller and no property or facility now or
previously owned or operated by Seller is on the CERCLA National Priorities List
(or proposed for such listing), the Comprehensive Environmental Response,
Compensation, and Liability Information System list or any similar state or
local list.
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(f) Seller has not, either expressly or, to Seller's
Knowledge, by operation of law, assumed or undertaken any liability, including
without limitation any obligation for corrective or remedial action, of any
other Person relating to Environmental Laws.
(g) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule or code. including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment or worker health and safety,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge,
investigation or cleanup of Hazardous Materials, in effect as of the date
hereof.
"Environmental Permits" means any permit, approval,
identification number, license or other authorization required of Seller under
any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls, (b) any chemical,
material or substance defined or regulated as toxic or hazardous under any
applicable Environmental Law or (c) anything that is a "hazardous substance"
pursuant to CERCLA, anything that is a "solid waste" or "hazardous waste"
pursuant to RCRA or any "pesticide", "pollutant", "contaminant", "toxic
chemical" or "noise".
"RCRA" means the Resource Conservation and Recovery Act, as
amended.
SECTION 3.09. Title and Condition of Properties. (a) Seller has good
and marketable title to, or valid leasehold interests in, all the Subject
Business Assets. The BarMag Equipment is free and clear of all Encumbrances.
(b) The real property which is the subject of the Lease and Sublease is
suitable for the uses for which this property is currently used and has
customary access to the utilities serving such property sufficient to allow the
use of the property as it is currently used except for interruptions in utility
service beyond Seller's control.
(c) To the Seller's Knowledge and in reliance upon, and subject to, the
affidavit attached as Exhibit F, the BarMag Equipment is in working order, and
contains all of the equipment and parts essential for running the manufacturing
line(s), except as disclosed in Section 3.09 of the Disclosure Statement.
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SECTION 3.10. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser, and (assuming due authorization. execution and delivery by Seller)
constitutes a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and performance
of this Agreement by Purchaser does not and will not (a) violate or conflict
with the Certificate of Incorporation or By-laws (or other similar applicable
documents) of Purchaser, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Purchaser or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which Purchaser or any
of its subsidiaries is a party or by which any of such assets or properties is
bound or affected, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not,
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require any consent, approval, authorization or other action by, or filing with
or notification to, any Governmental Authority, except (a) where failure to
obtain such consent, approval, authorization or action, or to make such filing
or notification, would not prevent Purchaser from, or delay Purchaser in,
performing any of its material obligations under this Agreement and (b) as may
be necessary as a result of any facts or circumstances relating solely to
Seller.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending before any court, arbitrator or administrative,
governmental or regulatory authority or body that seeks to delay or prevent the
consummation of the transactions contemplated hereby or that would be reasonably
likely to materially and adversely affect or restrict Purchaser's ability to
consummate the transactions contemplated hereby.
SECTION 4.05. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.01 No General Assumption. Except for the Sublease, Seller
shall transfer the Subject Business Assets to Purchaser free and clear of all
Encumbrances and without any assumption of liabilities and obligations.
Purchaser shall not assume or become responsible, by virtue of its purchase of
the Subject Business Assets, for any liabilities or obligations of Seller, other
than the Sublease.
SECTION 5.02 Prorations The expenses and accruals of the Subject
Business Assets, such as utilities, real and personal property taxes and rents,
shall be prorated as of the date of Closing, based upon the best available
information with corrections to be made by the parties when the final statements
or required information is available.
SECTION 5.03 Related Transactions The Closing on the Subject Business
Assets is to occur simultaneously with the closing on the other Related
Transactions. Each of the Related Transactions are contingent upon the closing
of the other Related Transactions.
SECTION 5.04. Confidentiality Agreement. The terms of the
confidentiality letter dated as of June 18, 1998 (the "Confidentiality
Agreement") between Seller and Purchaser are hereby incorporated herein by
reference and shall continue in full force and effect until the Closing and
shall survive the Closing.
SECTION 5.05 Post-Closing Consents. In the event that the Purchaser
should consent to close without any consent or estoppel certificate listed in
Section 2.03, the Seller
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agrees to use reasonable due diligence to obtain such Consent(s) after the
closing, provided that the Seller shall have no obligation to make any payments
to the party whose consent is required. The Seller and the Purchaser will
cooperate and assist each other in obtaining such consents after closing.
SECTION 5.04. Further Instruments. Each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated hereby.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties, covenants and agreements of
the parties contained herein shall survive the Closing and shall remain in full
force and effect, regardless of any investigation made by or on behalf of Seller
or Purchaser, until 18 months following the Closing Date; provided however, that
the representations and warranties set forth in Section 3.01 and 4.01
(Incorporation and Authority) shall survive indefinitely.
SECTION 6.02 Indemnification Agreement. The indemnification agreement
by and among Isolyser Company, Inc., SafeWaste Corporation and White Knight
Healthcare, Inc. , as sellers and Thantex Specialties, Inc., White Knight
Industrial, Inc., SafeWaste, Inc. and Thantex Holdings, Inc., as purchasers of
even date shall control all matters relating to indemnification by either the
Seller or the Purchaser with respect to this Agreement. .
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
SECTION 7.03. Conveyance Taxes. All sales, transfer, stamp, property
transfer and similar Taxes incurred as a result of the sale of the Subject
Business Assets contemplated hereby shall be split equally between the Seller
and the Purchaser.
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SECTION 7.03. Expenses. The Seller shall pay all sales taxes, if
applicable, which are due and payable as a result of the Closing. Except as
otherwise expressly provided herein, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, whether or not the Closing shall have occurred.
SECTION 7.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
Person, by courier service, by cable, by telecopy, by telegram, by telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section):
(a) if to Seller:
Isolyser Company, Inc.
650 Engineering Drive
Norcross, GA 30092
Chief Financial Officer
Telecopier: (770)441-2592
with a copy to:
Arnall Golden & Gregory, LLP
1201 West Peachtree Street
2800 One Atlantic Center
Atlanta, GA 30309-3450
Attn: Stephen D. Fox, Esq.
Telecopier: (404)873-8529
(b) if to Purchaser:
Thantex Holdings, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Attn: Jerry Zucker and James G. Boyd
Telecopier: (843) 7474092
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with a copy to:
Buist, Moore, Smythe & McGee, PA
5 Exchange Street
P.O. Box 999
Charleston, SC 29401
Attn: Susan M. Smythe, Esq.
Telecopier (843) 723-7398
SECTION 7.05. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 7.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 7.07. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
Seller and Purchaser with respect to the subject matter hereof and except as
otherwise expressly provided herein. The exhibits referred to in and attached to
this Agreement form a part of this Agreement and by reference are incorporated
herein.
SECTION 7.08. Assignment. Without the prior written consent of the
other party hereto, neither party hereto may assign its rights or delegate its
obligations hereunder.
SECTION 7.09. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
SECTION 7.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 7.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when
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executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, Seller and Purchaser have caused this BarMag
Agreement to be executed as of the date first written above by their respective
officers hereunto duly authorized.
ISOLYSER COMPANY, INC.
By:___________________________________
Its:__________________________________
THANTEX HOLDINGS, INC.
By:___________________________________
Its:__________________________________
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PVA AGREEMENT
ISOLYSER COMPANY, INC.
AND
THANTEX HOLDINGS, INC.
August __, 1998
PVA AGREEMENT, dated August ___, 1998 (this "Agreement"), between ISOLYSER
COMPANY, INC., a Georgia corporation ("Isolyser"), and THANTEX HOLDINGS, INC., a
Delaware corporation ("Holdings"). Certain capitalized terms shall have the
meaning set forth in Article I.
WHEREAS, Isolyser owns 8,185,747 pounds of PVA inventory and Isolyser holds
certain patent rights involving PVA (the "PVA Patents"); and
WHEREAS, Isolyser or Isloyser Affiliates have contracted to sell to Thantex
Specialties, Inc., a Delaware corporation ("Specialties") a plant in Arden, N.C.
and a plant in Abbeville, S.C. and in connection with such transactions,
Isolyser will receive an equity interest in Specialties; and
WHEREAS, the parties have reached certain agreements with respect to
Isolyser's PVA inventory, the plants owned by Specialties and the PVA Patents.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Holdings and Isolyser hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
"Control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as a trustee or executor
(in each case, acting in a fiduciary capacity), of the power to direct or cause
the direction of the management or policies of a Person, whether through the
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ownership of voting securities, as trustee or executor (in each case, acting in
a fiduciary capacity), by contract or credit arrangement or otherwise.
"Encumbrance" means a pledge, lien, security interest, mortgage, charge,
adverse claim of ownership or use, or other encumbrance of any kind.
"Initial Sale" means the sale of 4,500,000 pounds of PVA pursuant to
Section 2.01.
"Isolyser Parties" means Isolyser and all entities controlled by Isolyser.
"PVA" means poly-vinyl alcohol fiber, having the specifications listed on
Exhibit A.
"PVA Equivalent" mean (i) PVA, (ii) PVA woven rollgoods, (iii) PVA nonwoven
rollgoods and (iv) products made from PVA rollgoods.
"PVA Equivalent Pounds" means the pounds of PVA in the PVA Equivalent or
used in the making of the PVA Equivalent and shall include the gross waste
pounds resulting from the conversion of PVA fiber to a converted product and
only pertains to the PVA component of converted goods.
"PVA Inventory" means the PVA owned by Isolyser on the date of this
Agreement as more fully described on the attached Exhibit B.
"PVA License" means the license from Isolyser, as licensor in the form
attached hereto as Exhibit C.
"Related Transactions" means those transactions by and among Holdings,
Isolyser and their Affiliates more fully described on Exhibit D.
"Remaining Inventory" means the 3,685,747 pounds of PVA Inventory remaining
after the Initial Sale; poundage for which Isolyser has rebated a pro rata share
of the Option price pursuant to Section 2.04(b)(3) shall no longer be considered
a part of "Remaining Inventory".
"TS Plants" mean the Arden, N.C. plant owned, or to be owned by Specialties
and the Abbeville, S.C. plant owned, or to be owned by Specialties.
ARTICLE II.
SALES TO HOLDINGS
AND LICENSE
SECTION 2.01 Initial Sale. Isolyser shall sell and Holdings or its
Affiliates shall purchase 4,500,000 pounds of PVA at the closing of the Related
Transactions. The PVA will be sold pursuant to a bill of sale in substantially
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the form attached hereto as Exhibit E. The PVA to be sold and its locations are
listed on Exhibit B-1.
SECTION 2.02 Purchase Price for Holdings. The purchase price of any PVA
Inventory purchased by Holdings or its Affiliates shall be $0.45 per pound of
PVA Inventory. The purchase price to be paid at the Initial Sale shall be paid
by wire transfer. The purchase price for any other purchases of PVA from
Isolyser will be FOB warehouse, 30 day terms.
SECTION 2.03 License Agreement. At the Initial Sale, Isolyser shall deliver
the License.
SECTION 2.04 Holdings Option on Remaining Inventory.
(a) Holdings shall have the option (the "Holdings Option") to acquire
the Remaining Inventory in accordance with the terms and conditions of Section
2.02. Holdings shall pay $200,000 at the closing of the Initial Sale for the
Holdings Option. Holdings shall purchase in increments of not less than 10,000
pounds. The Holdings Option shall expire on the fourth anniversary of the
Initial Sale.
(b) Notwithstanding the Holdings Option, Isolyser shall have the right
to utilize all or part of the Remaining Inventory upon the following terms and
conditions:
(1) Isolyser shall provide Holdings with a non-binding rolling
three month forecast of its PVA requirements, including
purchases from Holdings or its Affiliates pursuant to Sections
2.07, 3.01 and 3.02 and including Isolyser's estimated use of
the PVA fiber in the Remaining Inventory.
(2) Isolyser will give Holdings not less than thirty (30) days
prior written notice of its intentions to use a part of the
Remaining Inventory and Holdings shall have the right to
exercise all or part of the Holdings Option within such thirty
(30) day period. After the expiration of the thirty day period
and the use by Isolyser of the specified amount of PVA, the
Holdings Option shall remain in full force and effect with the
remainder of the Remaining Inventory.
(3) With respect to each pound of PVA used by Isolyser or
otherwise unavailable for purchase under the Holdings Option
(because of casualty loss, theft, or otherwise), Isolyser
agrees to promptly rebate to Holdings within five (5) days of
recognition an amount equal to the per pound price of the
Holdings Option ($200,000 /3,685,747) times the number of
pounds then recognized as eliminated from the Holdings Option.
(4) Isolyser will provide upon request quarterly reports to
Holdings on the current poundage of the Remaining Inventory
and its locations.
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SECTION 2.05 Protection of Remaining Inventory. Isolyser agrees to keep the
Remaining Inventory fully insured in an amount not less than the replacement
cost of the PVA and to provide Holdings with a copy of the insurance policy. The
Remaining Inventory shall be kept at the locations set forth on the attached
Exhibit __, unless the parties agree in writing otherwise (for which Holdings
shall not unreasonably withhold its agreement). Holdings shall have the right to
inspect the Remaining Inventory upon request, after reasonable notice and at
reasonable times.
SECTION 2.06 Quality of PVA. Isolyser represents and warrants that the PVA
to be sold or optioned to Holdings is of good, merchantable quality,
commercially usable, consumable and saleable in the ordinary course of business
and meets the specifications set forth in Exhibit A. All sales of PVA will be
for "white fiber" unless specifically designated as "green fiber". Isolyser
agrees that in no event will it transfer to Holdings or its designee "green
fiber" in a greater ratio than 20% green to 80% white. Isolyser represents and
warrants that it has good and marketable title to the PVA which is subject to
this Agreement and that it will not encumber or permit any Encumbrances of the
PVA during the term of this Agreement, except for Holdings security interests
more fully described on Exhibit F and the existing security interests in the
PVA.
SECTION 2.07. Exclusive Converter. (a) Isolyser agrees that the Isolyser
Parties will use the TS Plants owned by Specialties as their exclusive converter
of PVA woven and non- woven rollgoods for such products as each of the TS Plants
is capable of producing and provided that the TS Plant is competitive with
respect to price, quality, delivery and other material converter terms with
respect to the products required by the Isolyser Party. An Isolyser Party may
use a third party converter when the objectives of the Isolyser Party are
broader than mere conversion of product.
(b) Isolyser agrees to cause each Isolyser Party to abide by the terms
of this Section.
(c) The provisions of this Section will terminate with respect to each
TS Plant upon the earlier of (i) divesture of the TS Plant by Specialties to an
unrelated third party and (ii) Isolyser or an Isolyser Affiliate no longer owns
an equity interest in such TS Plant. In the event that an Isolyser Party sells a
business or substantially all of the assets of a business which previously
utilized a TS Plant for conversion of PVA to an unrelated third party, the
purchaser of such business or asssets shall have no obligation to continue the
relationship with the TS Plant.
583274.1
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ARTICLE III
ISOLYSER PURCHASES
SECTION 3.01 Isolyser Purchase Obligation.
(a) Isolyser agrees to purchase from Holdings or its Affiliates
2,600,000 pounds of PVA Equivalents. The purchase price for the PVA component of
any PVA Equivalents shall be $0.80 per PVA Equivalent Pound, FOB with 30 day
terms. Isolyser agrees to purchase 650,000 PVA Equivalent Pounds per year,
measured on a cumulative basis from the date of this Agreement, in relatively
equal quarterly amounts, until the 2.6 million pounds has been purchased.
(b) Isolyser shall provide Holdings with a non-binding rolling three
month forecast of its PVA purchases.
(c) Isolyser shall have the right to cure any breach of its purchase
obligations by payment of the purchase price for the unpurchased poundage within
30 days of notice from Holdings, which payment may be used as a credit against
future purchases of PVA Equivalents.
(d) Specialties and Isolyser shall negotiate in good faith the cost of
converted PVA goods, including a reasonable margin for Holdings and a reasonable
price for Isolyser, pursuant to the terms of Section 2.07 above.
SECTION 3.02 Additional Isolyser Purchases. After Isolyser has purchased
the required amounts of PVA Equivalents required by Section 3.01, Holdings
agrees to sell additional PVA Equivalents (but not PVA fiber) upon the following
terms and conditions:
(a) The purchase price for the PVA component of any PVA Equivalents
shall be the lesser of $0.80 per PVA Equivalent Pound or the then current market
pricing for PVA fiber, but in no event less than $0.45 per PVA Equivalent Pound.
(b) Holdings will be obligated to sell PVA Equivalents to Isolyser only
to the extent that (i) Holdings has PVA remaining from the Initial Sale or from
purchases under the Holdings Option that Holdings has elected in its sole
discretion to purchase, and (ii) Holdings does not want to use such remaining
PVA for its own purposes or uses.
SECTION 3.03 Security Agreement. In order to provide security for its
obligations under this Agreement, Isolyser shall deliver to Holdings a Security
Agreement and UCC Financing Statements in substantially the form attached hereto
as Exhibit F.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 4.01 Further Instruments. Each of the parties hereto shall execute
and deliver such documents and other papers and take such further actions as may
be reasonably required to carry out the provisions hereof and give effect to the
transactions contemplated hereby.
583274.1
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SECTION 4.02 Holdings Authority. Holdings represents and warrants that this
Agreement and all agreements and actions contemplated by this Agreement have
been duly authorized, that the transactions do not violate any agreements by
which Holdings or its Affiliates are bound and that there is no pending or
threatened litigation relating to the subject matters of this Agreement.
SECTION 4.03 Isolyser Authority. Isolyser represents and warrants that this
Agreement and all agreements and actions contemplated by this Agreement have
been duly authorized, that the transactions do not violate any agreements by
which Isolyser or its Affiliates are bound and that there is no pending or
threatened litigation relating to the subject matters of this Agreement.
SECTION 4.04. Waiver. At any time prior to the Closing, each of the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby.
SECTION 4.05. Expenses. Except as otherwise expressly provided herein, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 4.06. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
Person, by courier service, by cable, by telecopy, by telegram, by telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
11.02):
(a) if to Isolyser: Isolyser Company, Inc.
650 Engineering Drive
Norcross, GA 30092
Chief Financial Officer
Telecopier: (770)441-2592
583274.1
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with a copy to: Arnall Golden & Gregory, LLP
1201 West Peachtree Street
2800 One Atlantic Center
Atlanta, GA 30309-3450
Attn: Stephen D. Fox, Esq.
Telecopier: (404)873-8529
(b)if to Holdings: Holdings Holdings, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Attn: Jerry Zucker and James G. Boyd
Telecopier: (843)747-4092
with a copy to: Buist, Moore, Smythe & McGee, PA
5 Exchange Street
P.O. Box 999
Charleston, SC 29401
Attn: Susan M. Smythe, Esq.
Telecopier (843) 723-7398
SECTION 4.07. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 4.08. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 4.09. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
Isolyser and Holdings with respect to the subject matter hereof and except as
otherwise expressly provided herein. The exhibits referred to in and attached to
583274.1
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this Agreement form a part of this Agreement and by reference are incorporated
herein.
SECTION 4.10. Assignment. This agreement shall be binding on the parties,
their successors and permitted assigns. Holdings may fulfill its obligations
hereunder through a Holdings Related Party, provided Holdings remains primarily
liable. Isolyser may fulfill its obligations hereunder through an Isolyser
Related Party, provided Isolyser remains primarily liable. Except as otherwise
provided in this agreement, neither party hereto may assign its rights or
delegate its obligations under this Agreement without the prior written consent
of the other party.
SECTION 4.12. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Isolyser and Holdings.
SECTION 4.13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 4.14. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Isolyser and Holdings have caused this PVA Agreement to
be executed as of the date first written above by their respective officers
hereunto duly authorized.
ISOLYSER COMPANY, INC.
By:___________________
Its:__________________
THANTEX HOLDINGS, INC.
By:___________________
Its:__________________
8
ABBEVILLE PLANT AGREEMENT
ISOLYSER COMPANY, INC.
THANTEX HOLDINGS, INC.
AND
THANTEX SPECIALTIES, INC.
August ____, 1998
ABBEVILLE PLANT AGREEMENT, dated August ___, 1998 (this "Agreement"), by
and among ISOLYSER COMPANY, INC., a Georgia corporation ("Seller") and THANTEX
SPECIALTIES, INC., a Delaware corporation ("Specialties") and THANTEX HOLDINGS,
INC., a Delaware corporation ("Holdings") (Specialties and Holdings
collectively, the "Purchaser"). Certain capitalized terms shall have the meaning
set forth in Article I.
WHEREAS, Seller owns a weaving and spinning facility in Abbeville, South
Carolina which the Seller desires to transfer and the Purchaser desires to
acquire in accordance with the terms of this Agreement; and
WHEREAS, the Seller shall convey an 80% interest in the Subject Business
Assets for the Purchase Price and shall contribute the remaining 20% interest in
the Subject Business Assets in exchange for common stock in Specialties equal to
a 20% equity interest in Specialties.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Purchaser and Seller hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of a specified Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with, such specified Person.
"Abbeville Plant" means that certain real property, located in
Abbeville, South Carolina more fully described in Section 1.01 of the Disclosure
Statement, together with all fixtures, easements and appurtenant rights.
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"Abbeville Equipment" means all of the equipment, furnishings and
fixtures located in the Abbeville Plant more fully described in Section 1.01 of
the Disclosure Statement.
"Assumed Liabilities" means those specific liabilities which were
identified and fully described by the Seller not less than five (5) days prior
to Closing and which the Purchaser specifically agreed to assume in writing, as
listed on Exhibit A. The Purchaser assumes no other liabilities of the Seller
"Bonds" means the Abbeville County, South Carolina Industrial Revenue
Bonds, Series 1995 (Isolyser Company, Inc. Project) (the "IRB Bonds") and
Abbeville County, South Carolina, Special Source Revenue Bonds, Series 1995
(Special Source Revenue Bonds, Series 1995 (Isolyser Company, Inc. Project) (the
"SSRB Bonds"), both of which are owned by the Seller as holder.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as a trustee or
executor (in each case, acting in a fiduciary capacity), of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, as trustee or executor (in each
case, acting in a fiduciary capacity), by contract or credit arrangement or
otherwise.
"Disclosure Statement" means the Disclosure Statement dated as of the
date hereof delivered to Purchaser by Seller.
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind,
other than ad valorem taxes not yet due and payable.
"Equipment Related Property" means (1) all inventory of spare and
replacement parts relating to the equipment, (2) all plans, manuals, records and
other documents relating to the equipment, and (3) the Intellectual Property
Rights, if any, directly pertaining to the equipment or the customized products
such equipment has been designed or programmed to produce.
"Excluded Assets" means those assets of the Seller or its Affiliates
located at the Abbeville Plant and which are listed on Exhibit B.
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial or arbitral body, whether federal, state, local or
foreign.
"HSR Act shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, 15 U.S.C.18(a) and the rules promulgated thereunder.
581500.1
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"Intellectual Property Rights" means (a) patent and patent
applications, (b) trademarks, service marks, logos, trade dress, trade names and
corporate names and registrations and applications for registration thereof, (c)
copyrights, whether registered or unregistered, and registrations and
applications for registration thereof and (d) trade secrets, formulas,
inventions, invention disclosures, know-how, manufacturing and production
processes and techniques, business and marketing plans, customer and supplier
lists, computer software and other proprietary business and intellectual
property rights.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the executive officers of Seller after due inquiry of the executive
officers of Seller.
"Losses" means any and all claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs and expenses
(including reasonable legal fees, interest, penalties, and all reasonable
amounts paid in investigation, defense or settlement of any of the foregoing)
actually suffered or incurred.
"Material Adverse Effect" means, with respect to any Person, any change
in, or effect on, the business of such Person that is materially adverse to the
business, operations, results of operations or the financial condition thereof
or an amount in excess of $10,000.
"Permitted Encumbrances" means those Encumbrances listed in Section
1.01 of the Disclosure Statement, encumbrances to pay taxes or other
governmental assessments which are not yet due and payable, and other
encumbrances which do not in the aggregate materially detract from the value of
the Subject Business Assets or materially impair the use thereof.
"Related Transactions" means those transactions by and among the
Purchaser, the Seller and their Affiliates more fully described on Exhibit C.
"Subject Business Assets" means (i) the Abbeville Plant, (ii) the
Abbeville Equipment (iii) the Equipment Related Property of the Abbeville
Equipment, (iv) any tangible personal property belonging to the Seller or its
Affiliates located in the Abbeville Plant on the day of Closing which are not
Excluded Assets unless the Seller and Purchaser agree in writing otherwise at or
prior to Closing, (v) the contracts and leases identified in Section 1.01 of the
Disclosure Statement and specifically assumed by the Purchaser as "Assumed
Liabilities" and (vi) the Bonds, if requested by the Purchaser.
ARTICLE II.
PURCHASE AND SALE
SECTION 2.01. Purchase Price. The Purchase Price for the Subject
Business Assets shall be Eight Million ($8,000,000) Dollars. At the Closing,
581500.1
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Purchaser shall deliver to Seller the Purchase Price, by wire transfer in
immediately available funds, to an account or accounts designated at least three
Business Days prior to the Closing Date by Seller in a written notice to
Purchaser.
SECTION 2.02 Closing Date. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Subject Business Assets contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
August 28, 1998, or on the third Business Day following the satisfaction or
waiver of the conditions to the obligations of the parties set forth in Article
VIII The Closing will occur at the offices of Buist, Moore, Smythe & McGee, P.A,
5 Exchange Street, Charleston, South Carolina, or at such other time or on such
other date or at such other place as Seller and Purchaser may mutually agree
upon in writing (the day on which the Closing takes place being the "Closing
Date").
SECTION 2.03 Closing Documents. At the Closing, Seller shall execute
and deliver to Purchaser such transfer and other documents as required to
transfer the Subject Business Assets, together with such other instruments of
conveyance, affidavits, declarations, assignments and other supporting
documentation typically delivered in connection with a transaction of this type
and in accordance with local law or custom (collectively the "Closing
Documents") including:
(i) Bill of Sale in the form attached as Exhibit D.
(ii) A Warranty Deed in the form attached as Exhibit E, subject
only to any Permitted Encumbrances.
(iii) Assignment and Assumption of the Assumed Liabilities in the
form attached as Exhibit F.
(iv) Assignment of Title Certificates to vehicles, if any.
(v) Consents as defined in Section 3.21, unless waived by the,
parties.
(vi) Assignment of Permits, if any, as defined in Section 3.21,
unless waived by the parties.
(vii) Release of all liens and encumbrances on the Subject
Business Assets except Assumed Liabilities and Permitted
Encumbrances, or other arrangements satisfactory to
Purchaser and Seller.
(viii) Good Standing Certificates of Seller and Purchaser (ix)
Officer's Certificate of Seller and Purchaser including
authorizing resolution, articles of incorporation with all
amendments, by-laws and incumbency certificates. (x) FIRPTA
affidavit and such other title affidavits as may be required
by Purchaser=s title insurance company or customary practice
in the jurisdiction where the real property is located (xi)
Assignment of the Bonds and related Bond documents by Seller
as holder, if applicable (xii) Assignment by Seller, as
tenant and Assumption by Purchaser of Purchase/Lease
581500.1
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Agreement and related Bond documents, if applicable.
(ix) Indemnity and Proration agreement with respect to Fee In
Lieu of Taxes, if applicable
SECTION 2.04. Allocation of Purchase Price. The Purchase Price shall be
allocated for tax purposes among each item or class of the Subject Business
Assets as set forth in Exhibit G of this Agreement. Seller and Purchaser agree
that they will prepare and file any notice or other filing required pursuant to
Section 1060 of the Internal Revenue Code, and that any notices or filings will
be prepared based upon such tax allocation of the Purchase Price. Purchaser
agrees to send to Seller a completed copy of its Form 8594 (Asset Acquisition
Statement under Section 1060) with respect to this transaction prior to filing
such form with the Internal Revenue Service.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser, as of the date of this Agreement
and through the Closing Date as follows:
SECTION 3.01. Incorporation and Authority of Seller. Seller is a
corporation duly incorporated and validly existing under the laws of Georgia.
Seller has all necessary corporate power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming due
authorization. execution and delivery by Purchaser) this Agreement constitutes a
legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.02. No Conflict. Subject to Section 8.01(b) and matters
relating to the Bonds, the execution, delivery and performance of this Agreement
by Seller does not and will not (a) violate or conflict with the organizational
documents of the Seller, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
the Subject Business Assets or (c) result in any breach of, or constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the Subject Business Assets or properties of the
581500.1
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Seller pursuant to, any note, bond, mortgage, credit agreement, indenture,
contract, agreement, lease, license, permit, franchise or other instrument
relating to such assets or properties to which the Seller is a party or by which
any of such assets or properties is bound or affected, except as would not have
a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement by Seller does not, and the performance of this Agreement by
Seller will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Seller from, or delay Seller in,
performing any of its material obligations under this Agreement and would not
have a Material Adverse Effect on the ability of Seller to consummate the
transactions contemplated by this Agreement and except as may be necessary as a
result of any facts or circumstances relating solely to Purchaser.
SECTION 3.04. INTENTIONALLY DELETED.
SECTION 3.05. Absence of Certain Changes or Events. Except as set forth
in Section 3.05 of the Disclosure Statement, since December 31, 1997, there has
not been with respect to the Subject Business Assets (i) any Material Adverse
Effect, (ii) any damage, destruction or loss, due to fire or other casualty,
whether or not covered by insurance, that has or reasonably could be expected to
have a Material Adverse Effect, (iii) any change in accounting methods,
principles or practices by Seller materially affecting its assets, liabilities
or business, except insofar as may have been required by a change in GAAP, (iv)
any sale, lease, transfer, or assignment of any material Subject Business Assets
other than in the ordinary course of business, or (v) any material capital
expenditures other than in the ordinary course of business.
SECTION 3.06. Litigation. Except as set forth in Section 3.06 of the
Disclosure Statement, as of the date of this Agreement, there are no claims,
actions, proceedings or investigations pending, or to the Knowledge of Seller,
threatened against Seller with respect to the Subject Business Assets, before
any court, arbitrator or administrative, governmental or regulatory authority or
body that are reasonably likely to have a Material Adverse Effect on Seller.
Except as set forth in Section 3.06 of the Disclosure Statement, none of the
Subject Business Assets are subject to any order, writ, judgment, injunction,
decree, determination or award. Except as otherwise set forth in Section 3.06 of
the Disclosure Statement, each of the matters listed on Section 3.06 of the
Disclosure Statement is covered by insurance, and the insurer has acknowledged
coverage of each such matter without reservation.
SECTION 3.07. Compliance with Applicable Laws. Except as set forth in
Section 3.07 of the Disclosure Statement, within the preceding three years
Seller has not violated or failed to comply with any statute, law, regulation,
rule, judgment, decree or order of any Governmental
581500.1
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Authority applicable to the Subject Business Assets, except for violations and
failures to comply that would not, individually or in the aggregate, have a
Material Adverse Effect on the Seller=s use of the Subject Business Assets. The
Seller=s use of the Subject Business Assets is in conformity with all federal,
state and local governmental and regulatory requirements applicable to the
subject Business Assets, except where such nonconformity would not, in the
aggregate, have a Material Adverse Effect on the ability of Seller to use or
operate the Subject Business Assets. Seller has all permits, licenses,
franchises and certificates of occupancy from Governmental Authorities required
to use and operate the Subject Business Assets, except for such permits,
licenses, franchises and certificates the absence of which would not, in the
aggregate, have a Material Adverse Effect on the ability of Seller to use and
operate the Subject Business Assets.
SECTION 3.08. Environmental Matters. Except as set forth in Section
3.08 of the Disclosure Statement with respect to the Subject Business Assets:
(a) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, Seller (i) is
in compliance with all applicable Environmental Laws and (ii) holds all
Environmental Permits necessary for its operations and properties and is in
compliance with the terms and conditions of all such Environmental Permits.
(b) Seller has not received any written claim, demand, notice
or complaint alleging violation of or liability (including without limitation
any liability for site investigation.
cleanup or corrective action) under any Environmental Laws.
(c) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, to Seller's
Knowledge, none of the following exists at the property which is subject to the
Sublease: (i) asbestos-containing material in any form or condition; (ii)
materials containing polychlorinated biphenyls; (iii) underground storage tanks
or surface impoundments; or (iv) landfills, surface impoundments or disposal
areas.
(d) Except as would not have a Material Adverse Effect on the
ability of Seller to use and operate the Subject Business Assets, Seller has not
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any Hazardous Material, or owned or operated
any facility or property, so as to give rise to liabilities for response costs,
natural resource damages or attorneys fees pursuant to CERCLA or other
Environmental Laws.
(e) No written notice of a release of a Hazardous Material has
been filed by or on behalf of Seller and no property or facility now or
previously owned or operated by Seller is on the CERCLA National Priorities List
(or proposed for such listing), the Comprehensive Environmental Response,
Compensation, and Liability Information System list or any similar state or
local list.
581500.1
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(f) Seller has not, either expressly or, to Seller's
Knowledge, by operation of law, assumed or undertaken any liability, including
without limitation any obligation for corrective or remedial action, of any
other Person relating to Environmental Laws.
(g) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule or code. including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment or worker health and safety,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge,
investigation or cleanup of Hazardous Materials, in effect as of the date
hereof.
"Environmental Permits" means any permit, approval,
identification number, license or other authorization required of Seller under
any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls, (b) any chemical,
material or substance defined or regulated as toxic or hazardous under any
applicable Environmental Law or (c) anything that is a "hazardous substance"
pursuant to CERCLA, anything that is a "solid waste" or "hazardous waste"
pursuant to RCRA or any "pesticide", "pollutant", "contaminant", "toxic
chemical" or "noise".
"RCRA" means the Resource Conservation and Recovery Act, as
amended.
SECTION 3.09. Title and Condition of Properties. (a) Seller has good
and marketable title to all the Subject Business Assets free and clear of all
Encumbrances, other than Permitted Encumbrances.
(b) The Abbeville Equipment (i) contains all of the assets which are
necessary to operate the manufacturing lines included within the Subject
Business Assets as they have customarily been operated.
(c) To the Seller's Knowledge and in reliance upon, and subject to, the
affidavit attached as Exhibit H, the Subject Business Assets are functional and
usable in the ordinary course of business and are in sufficiently good operating
condition.
(d) The real property of the Abbeville Plant is suitable for the uses
for which these properties are currently used. The Abbeville Plant has customary
access to the utilities serving
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such properties sufficient to allow the use of the Abbeville Plant as it is
currently used except for interruptions in utility service beyond Seller's
control.
SECTION 3.10. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller.
SECTION 3.11. Permits and Consents. Section 3.11 of the Disclosure
Statement lists all of the permits, licenses, consents, certificates,
governmental approvals required to use and operate the Subject Business Assets
(the "Permits"). The Seller agrees to assign to Purchaser all Permits, to the
extent assignable, as a part of the Subject Business Assets and the Permits
which cannot be transferred are identified in Section 3.11 of the Disclosure
Statement. To the Seller=s Knowledge, the Seller is in full compliance with all
Permits and no suspension, revocation, limitation or cancellation of any of the
Permits is threatened or pending and no cause exists for such. Except for
compliance with Section 8.01(b) and transfer restrictions relating to the Bonds,
Section 3.11 of the Disclosure Statement sets forth any third party and
governmental consents, approvals, waivers or authorizations necessary for the
valid and enforceable transfer of the Subject Business Assets and the
consummation of this transaction (the "Consents").
SECTION 3.12 Bonds. The Seller has set forth in Section 3.12 of the
Disclosure Statement (1) the approximate amount expended upon the acquisition
and expansion of the Abbeville Plant and the total number of full-time jobs
created at the Abbeville Plant, each calculated in accordance with the
provisions of the documents executed in connection with the Bonds (the "Bond
Documents"), (2) the approximate amount of Fee-In-Lieu of Taxes ("FILOT")
benefits to date which are subject to forfeiture and penalties in the event that
the qualifying investments in the Abbeville Plant are less than $20 million or
the employment at the Abbeville Plant does not reach the level of 150 full time
jobs by the Threshold Date, as defined in the Bond Documents, (3) the present
approximate outstanding balance of the IRB Bonds and the SSRB Bonds. The Seller
is in full compliance with all of the terms, conditions and covenants of the
Bonds, all rent, expenses, interest and other amounts due from the Seller as
Tenant under the Bond Documents are current and paid in full. The Seller is the
sole holder of the Bonds and has not assigned any of its right, title or
interest in the Bonds as holder to any Person, other than a collateral
assignment to Seller's primary lender.
SECTION 3.15 Assumed Liabilities. Seller has made available to
Purchaser true and complete copies of all contracts, leases and records relating
to the Assumed Liability in a timely fashion from which the Purchaser has had an
opportunity to verify the terms of the Assumed Liabilities.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Purchaser represents and warrants to Seller as follows:
SECTION 4.01. Incorporation and Authority of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser, and (assuming due authorization. execution and delivery by Seller)
constitutes a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to enforceability, to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to Seller, the execution, delivery and performance
of this Agreement by Purchaser does not and will not (a) violate or conflict
with the Certificate of Incorporation or By-laws (or other similar applicable
documents) of Purchaser, (b) conflict with or violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award applicable to
Purchaser or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument relating to such assets or properties to which Purchaser or any
of its subsidiaries is a party or by which any of such assets or properties is
bound or affected, except as would not, individually or in the aggregate, have a
Material Adverse Effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent Purchaser from, or delay
Purchaser in, performing any of its material obligations under this Agreement
and (b) as may be necessary as a result of any facts or circumstances relating
solely to Seller.
SECTION 4.04. Absence of Litigation. No claim, action, proceeding or
investigation is pending before any court, arbitrator or administrative,
governmental or regulatory authority or body that seeks to delay or prevent the
consummation of the transactions contemplated hereby
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or that would be reasonably likely to materially and adversely affect or
restrict Purchaser's ability to consummate the transactions contemplated hereby.
SECTION 4.05. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V.
ADDITIONAL AGREEMENTS
SECTION 5.01 No General Assumption. Seller shall transfer the Subject
Business Assets to Purchaser free and clear of all Encumbrances and without any
assumption of liabilities and obligations. Purchaser shall not assume or become
responsible, by virtue of its purchase of the Subject Business Assets, for any
liabilities or obligations of Seller.
SECTION 5.02 Prorations. The expenses and accruals of the Subject
Business Assets, such as utilities, real and personal property taxes and rents,
shall be prorated as of the date of Closing, based upon the best available
information with corrections to be made by the parties when the final statements
or required information is available.
SECTION 5.03 FILOT. The Purchaser and the Seller agree to review the
Bond Documents and the agreements relating to the Fee-In-Lieu of Taxes ("FILOT")
agreements with Abbeville County to determine any contingent liability which
would be assumed by the Purchaser, such as the consequences of employment of
less than 150 full-time employees at or after the Threshold Date and thereafter,
should the Purchaser elect to take an assignment of the Bonds and to consent to
the continuation of the FILOT arrangement after Closing. In the event that the
Purchaser agrees to assume such contingent liability, the Seller agrees to
deliver an indemnity agreement in form and substance satisfactory to the
Purchaser and Seller for all liability (including interest and penalties) that
relates FILOT benefits received prior to Closing. The indemnity agreement shall
provide that in the event that the Seller defaults, such default will be treated
as a default of a Capital Call under the Stockholders Agreement whereby the
entire amount due by the Seller to the Purchaser under the indemnity agreement
would be considered the Seller's pro rata share of a Capital Call paid by
Thantex Holdings, Inc. but unpaid by the Seller. Notwithstanding any provision
to the contrary contained herein, in the event that the Purchaser shall
determine in its sole but reasonable discretion that the requirements of the
FILOT benefits are not likely to be met by the Threshold Date, the Purchaser
shall have the right to require that the FILOT arrangement and the Bonds be
canceled by the Seller at Closing.
SECTION 5.05 Subordinated Seller Note. The Seller agrees to loan
Specialties $500,000 at, or immediately after, Closing, to be evidenced by a
subordinated promissory note, bearing interest at the rate of LIBOR plus 175
basis points, in substantially the form attached hereto as Exhibit I.
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SECTION 5.06. Confidentiality Agreement. The terms of the
confidentiality letter dated as of June 18, 1998 (the "Confidentiality
Agreement") between Seller and Purchaser are hereby incorporated herein by
reference and shall continue in full force and effect until the Closing and
shall survive the Closing.
SECTION 5.07 Post-Closing Consents. In the event that the Purchaser
should consent to close without any Consent listed in Section 3.11 of the
Disclosure Statement, the Seller agrees to use reasonable due diligence to
obtain such Consent(s) after the closing, provided that the Seller shall have no
obligation to make any payments to the party whose consent is required. The
Seller and the Purchaser will cooperate and assist each other in obtaining such
Consents after closing.
SECTION 5.08. Further Instruments. Each of the parties hereto shall
execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions hereof and
give effect to the transactions contemplated hereby.
ARTICLE VI.
EMPLOYEE MATTERS
SECTION 6.01. Employees. (a) A roster of all current employees of the
Business is set forth in Section 6.01 of the Disclosure Statement, together with
the "Employee Information", as hereinafter defined with respect to each
employee. "Employee Information" shall mean the name, date of hire, job title,
pay rate of salary, last pay increase (when and how much), last two bonuses
(when and how much), vacation and sick day entitlements/accruals as of Closing
Date (based on employee=s employment with Seller). Purchaser shall be permitted
(but shall not be under any obligation) to make offers of employment to all such
employees, and, in addition thereto, to such other non-direct employees as may
be agreed upon in writing and in advance with Seller. Promptly and in any event
within 30 days following the Closing, Purchaser shall notify Seller of any such
employees who do not become employees of Purchaser or its Affiliates following
the Closing. All such employees who become employees of Purchaser or its
Affiliates are herein called the "Employees". The vacation and sick day accruals
and entitlements of the Employees which may be due upon the termination of
employment by the Seller shall not be Assumed Liabilities of the Purchaser.
(b) To the extent that service is relevant for purposes of eligibility,
vesting or benefit accrual under any employee benefit plan, program or
arrangement established or maintained by Purchaser for the benefit of the
Employees, such plan, program or arrangement shall credit such Employees for
service on or prior to the Closing with Seller or any of its Affiliates. All
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such Employees shall be allowed to participate from and after Closing in
the medical and dental benefit plans of Purchaser or its Affiliates as employees
of Purchaser or its Affiliates. If the Closing falls within an annual period of
coverage under any group health plan of Purchaser or its Affiliates which
becomes the employer with respect to the Employees, such Employees shall be
given credit for covered expenses paid by that Employee under comparable
employee benefit plans of Seller during the applicable coverage period to the
Closing Date towards satisfaction of any annual deductible limitation and
out-of-pocket maximum that may apply under that group health plan.
SECTION 6.02. WARN Act. While it is currently Purchaser's intention to
continue to operate the Plant, Purchaser shall be liable and responsible for any
notification required to be provided under the Worker Adjustment and Retraining
Notification Act (or under any similar state or local law). In reliance upon
such covenant, Seller shall not give any notices under such laws and Purchaser
shall indemnify Seller and its Affiliates for any claims arising out of a breach
of this covenant or otherwise arising from any such discontinuance of operations
or decision not to employ, or to terminate the employment of any Employees.
SECTION 6.03. Survival. The covenants and agreements of the parties
hereto contained in this Article VI shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth herein.
ARTICLE VII.
TAX MATTERS
SECTION 7.01. Tax Indemnities. (a) From and after the Closing Date,
Seller agrees to indemnify Purchaser, against all Taxes (i) imposed on Seller or
any member of an affiliated group with which Seller files a consolidated or
combined income tax return with respect to any taxable period for which Seller
or any member of an affiliated group with Seller files (or is required by law to
file) an income tax return, and (ii) imposed on Seller with respect to any
taxable period or portion thereof that ends on or as of the Closing Date with
respect to the Subject Business Assets.
(b) From and after the Closing Date, Purchaser shall indemnify Seller
and its Affiliates against all taxes imposed on or with respect to the Subject
Business Assets with respect to any taxable period or portion thereof beginning
after the Closing Date.
(c) Payment by the indemnitor of any amount due under this Section 7.01
shall be made within ten days following written notice by the indemnitee that
payment of such amounts to the appropriate tax authority is due, provided that
the indemnitor shall not be required to make any payment (i) earlier than two
days before it is due to the appropriate tax authority
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or (ii) of any Taxes which the indemnitor has by all appropriate proceedings
elected to contest and is contesting diligently and in good faith. In the case
of a Tax that is so contested, payment of the Tax to the appropriate tax
authority will not be considered to be due earlier than the date a final
determination to such effect is made by the appropriate taxing authority or a
court.
(d) For purposes of this Agreement, in the case of any Tax that is
imposed on a periodic basis and is payable for a period that begins before the
Closing Date and ends after the Closing Date, the portion of such Taxes payable
for the period ending on the Closing Date shall be (i) in the case of any Tax
other than a Tax based upon or measured by income, the amount of such Tax for
the entire period multiplied by a fraction, the numerator of which is the number
of days in the period ending on the Closing Date and the denominator of which is
the number of days in the entire period and (ii) in the case of any Tax based
upon or measured by income, the amount which would be payable if the taxable
year ended on the Closing Date. Any credit shall be prorated in the same manner
as the Tax to which such credit relates would be prorated, as described in the
preceding sentence. In the case of any Tax based upon or measured by capital
(including net worth or long-term debt) or intangibles, any amount thereof
required to be allocated under this Section 7.01(d) shall be computed by
reference to the level of such items on the Closing Date.
SECTION 7.02. Refunds and Tax Benefits. Purchaser shall promptly pay to
Seller any refund or credit (including any interest paid or credited with
respect thereto) received by Purchaser (i) imposed on the Subject Business
Assets relating to taxable periods or portions thereof ending on or before the
Closing Date or (ii) attributable to an amount paid by Seller under Section 7.01
hereof.
SECTION 7.03. Conveyance Taxes. All sales, transfer, stamp, real
property transfer and similar Taxes incurred as a result of the sale of the
Subject Business Assets contemplated hereby shall be split equally between the
Seller and the Purchaser.
SECTION 7.04 Survival. The covenants and agreements of the parties
hereto contained in this Article VII shall survive the Closing and shall remain
in full force and effect until the expiration of all statutes of limitations
with respect to the respective matters set forth in this Article.
SECTION 7.04. Miscellaneous. The parties agree to treat all payments
made under Article IX or this Article VII as adjustments to the purchase price
for Tax purposes.
ARTICLE VIII.
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of All Parties. The obligations
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of each party hereto to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Governmental Order which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal
or otherwise restraining or prohibiting consummation of such transactions;
provided however, that each party hereto shall have complied with its
obligations under Section 5.04.
(b) HSR Act Waiting Period. Any waiting period applicable to the
consummation of the transactions contemplated by this Agreement shall have
expired or terminated, and any other statutory requirements for the valid
consummation of such transactions shall have been fulfilled.
SECTION 8.02. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. (i) The representations
and warranties of Purchaser contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the Closing,
with the same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, which shall be
true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Purchaser on or before the
Closing shall have been complied with in all material respects and (iii) Seller
shall have received a certificate of Purchaser to such effect signed by a duly
authorized officer thereof;
(b) Resolutions. Seller shall have received a true and complete copy,
certified by the Secretary or an Assistant Secretary of Purchaser (or equivalent
officer), of the resolutions, duly and validly adopted by the Board of Directors
of Purchaser evidencing its authorization of the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby;
(c) Incumbency Certificate. Seller shall have received a certificate of
the Secretary or an Assistant Secretary (or equivalent officer) of Purchaser
certifying the names and signatures of the officers of Purchaser authorized to
sign this Agreement and the other documents to be delivered hereunder;
(d) Closing Documents The Closing Documents to be delivered or executed
by the Purchaser are in form and substance reasonably satisfactory to the Seller
and its counsel.
(e) Related Transactions. The Related Transactions have taken place as
more fully described onthe attached Exhibit C;
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(f) Further Action. All actions to be taken by Purchaser in connection
with the consummation of the transactions contemplated hereby, and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.
SECTION 8.03. Conditions to Obligations of Purchaser. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver, at or prior to the Closing, of each of
the following conditions:
(a) Representations and Warranties; Covenants. (i) The representations
and warranties of Seller contained in this Agreement shall be true and correct
in all material respects as of the date hereof and as of the Closing, with the
same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, which shall be
true and correct in all material respects as of such date, (ii) the covenants
contained in this Agreement to be complied with by Seller on or before the
Closing shall have been complied with in all material respects and (iii)
Purchaser shall have received a certificate of Seller to such effect signed by a
duly authorized officer thereof;
(b) Resolutions. Purchaser shall have received a true and complete
copy, certified by the Secretary or an Assistant Secretary (or equivalent
officer) of Seller, of the resolutions duly and validly adopted by the Board of
Directors of Seller evidencing its authorization of the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby;
(c) Incumbency Certificate. Purchaser shall have received a certificate
of the Secretary or an Assistant Secretary (or equivalent officer) of Seller
certifying the names and signatures of the officers authorized to sign this
Agreement and the other documents to be delivered hereunder;
(d) Required Third Party Actions. The Persons identified in Section
8.03 of the Disclosure Statement have consented to this transaction and the
Related Transactions, if applicable, and Purchaser has received assurances
satisfactory to the Purchaser that such Person will release its liens on the
Subject Business Assets or will deliver any required Consent or Permit.
(e) FIRPTA. Seller shall have provided Purchaser with a certificate
pursuant to Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h) that the
Subject Business Assets are not a United States real property interest within
the meaning of Section 897 of the Internal Revenue Code;
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(f) Closing Documents. The Closing Documents to be delivered or
executed by the Seller are in form and substance reasonably satisfactory to the
Purchaser and its counsel.
(g) Related Transactions. The Related Transactions more fully described
on Exhibit C have taken place.
(h) Further Action. All actions to be taken by Seller (and any of its
applicable subsidiaries) in connection with the consummation of the transactions
contemplated hereby, all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Purchaser.
ARTICLE IX.
INDEMNIFICATION
SECTION 9.01. Survival. Subject to the limitations and other provisions
of this Agreement, the representations, warranties, covenants and agreements of
the parties contained herein shall survive the Closing and shall remain in full
force and effect, regardless of any investigation made by or on behalf of Seller
or Purchaser, until eighteen months following the Closing Date; provided
however, that the representations and warranties set forth in Section 3.01 and
4.01 (Incorporation and Authority) shall survive indefinitely, and all
representations and warranties contained in this Agreement relating to Assumed
Liabilities shall survive the term of such Assumed Liabilities.
SECTION 6.02 Indemnification Agreement. The indemnification agreement
by and among Isolyser Company, Inc., SafeWaste Corporation and White Knight
Healthcare, Inc. , as sellers and Thantex Specialties, Inc., White Knight
Industrial, Inc., SafeWaste, Inc. and Thantex Holdings, Inc., as purchasers of
even date shall control all matters relating to indemnification by either the
Seller or the Purchaser with respect to this Agreement.
ARTICLE X.
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser, if the Closing shall not have
occurred prior to September 30, 1998; provided, however, that the right to
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terminate this Agreement under this Section 10.01(b) shall not be available
to a party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date.
Time shall be of the essence in this Agreement.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto (a)
except as set forth in Section 5.05 and Section 11.01 hereof and (b) nothing
herein shall relieve any party hereto from liability for any willful breach
hereof.
SECTION 10.03. Waiver. At any time prior to the Closing, each of the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the party to be bound thereby.
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise expressly provided herein,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in Person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
11.02):
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(a) if to Seller:
Isolyser Company, Inc.
650 Engineering Drive
Norcross, GA 30092
Chief Financial Officer
Telecopier: (770)441-2592
with a copy to:
Arnall Golden & Gregory, LLP
1201 West Peachtree Street
2800 One Atlantic Center
Atlanta, GA 30309-3450
Attn: Stephen D. Fox, Esq.
Telecopier: (404)873-8529
(b) if to Purchaser:
Thantex Specialties, Inc.
4838 Jenkins Avenue
North Charleston, SC 29405
Attn: Jerry Zucker and James G. Boyd
Telecopier: (843) 7474092
with a copy to:
Buist, Moore, Smythe & McGee, PA
5 Exchange Street
P.O. Box 999
Charleston, SC 29401
Attn: Susan M. Smythe, Esq.
Telecopier (843) 723-7398
SECTION 11.03. Press Release and Public Announcements. Unless otherwise
required by applicable law or stock exchange requirements, no party to this
Agreement shall issue any press releases or make any public announcements in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without prior written notification to and
consent of the other party, and the parties will cooperate as to the timing and
contents of any announcement. With respect to announcements and releases
required by applicable law or stock exchange requirements, the Seller shall
afford the Purchaser prior notice and the opportunity to comment prior to
release.
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SECTION 11.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, between
Seller and Purchaser with respect to the subject matter hereof and except as
otherwise expressly provided herein. The exhibits referred to in and attached to
this Agreement form a part of this Agreement and by reference are incorporated
herein.
SECTION 11.07. Assignment. Without the prior written consent of the
other party hereto, neither party hereto may assign its rights or delegate its
obligations hereunder; provided however the Purchaser may assign its rights to
an Affiliate if the Purchaser remains responsible for the performance of all of
its obligations hereunder.
SECTION 11.08. No Third Party Beneficiaries. Except as provided in
Article IX, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other Person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 11.09. Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by Seller and Purchaser.
SECTION 11.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
SECTION 11.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, Seller and Purchaser have caused this Abbeville
Plant Agreement to be executed as of the date first written above by their
respective officers hereunto duly authorized.
ISOLYSER COMPANY, INC.
By:_________________________________
Its:________________________________
THANTEX SPECIALTIES, INC.
By:_________________________________
Its:________________________________
THANTEX HOLDINGS, INC.
By:_________________________________
Its:________________________________
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