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.
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"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.
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"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,
▇▇▇▇▇▇ & ▇▇▇▇▇, 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").
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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 3.14, 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:
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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.
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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
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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.
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"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
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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.
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(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
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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.
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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.
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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
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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
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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.
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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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(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 August 30, 1998; provided, however, that the right to
terminate this Agreement under this
581506.1
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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.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chief Financial Officer
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
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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.
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.
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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:_________________________________________
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