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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, 15 U.S.C.18(a) and the rules promulgated thereunder.
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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,
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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, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.A,
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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) ▇▇▇▇ 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
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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
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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
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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.
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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
581500.1
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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
581500.1
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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;
581500.1
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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
581500.1
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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):
581500.1
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(a) if to Seller:
Isolyser Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chief Financial Officer
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
Arnall Golden & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
(b) if to Purchaser:
Thantex Specialties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇▇▇▇▇
with a copy to:
Buist, Moore, ▇▇▇▇▇▇ & ▇▇▇▇▇, PA
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier (▇▇▇) ▇▇▇-▇▇▇▇
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.
581500.1
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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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