-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A76mD/Ve8AfRKhUS2cc6BENDTvFj4xt8+ZwGWM05FoxRmkYngcwNNUGVxy8lVST/ b98+uoo2wOqMLoTM59q53Q== 0000950123-02-005696.txt : 20020528 0000950123-02-005696.hdr.sgml : 20020527 20020528144400 ACCESSION NUMBER: 0000950123-02-005696 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20020520 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLIANT CORP CENTRAL INDEX KEY: 0001049442 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, FOIL & COATED PAPER BAGS [2673] IRS NUMBER: 870496065 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-40067 FILM NUMBER: 02663412 BUSINESS ADDRESS: STREET 1: 2755 EAST COTTONWOOD PARKWAY CITY: SALT LAKE CITY STATE: UT ZIP: 84121 BUSINESS PHONE: 8019938200 MAIL ADDRESS: STREET 1: 2755 EAST COTTONWOOD PARKWAY CITY: SALT LAKE CITY STATE: A1 ZIP: 84121 FORMER COMPANY: FORMER CONFORMED NAME: HUNTSMAN PACKAGING CORP DATE OF NAME CHANGE: 19971110 8-K 1 y61088e8vk.txt PLIANT CORPORATION ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 May 20, 2002 ---------------------------- (Date of earliest event reported) PLIANT CORPORATION ------------------ (Exact name of registrant as specified in its charter) Utah 333-40067 87-0496065 - --------------------------------- ------------------------ ---------------------- (State or other jurisdiction of (Commission File No.) (I.R.S. Employer incorporation or organization) Identification No.)
1515 Woodfield Road, Suite 600 Schaumburg, Illinois 60173 (847) 969-3300 ------------------------------------------------------------------------- (Address of principal executive offices and telephone number, including area code) ================================================================================ ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On May 20, 2002, Pliant Corporation (the "Company"), through its wholly-owned subsidiary, Pliant Solutions Corporation, acquired substantially all of the assets of Decora Industries, Inc. and its operating subsidiary, Decora, Incorporated (collectively, "Decora"), a New York based manufacturer of printed, plastic films, including plastic films sold under the Con-Tact(R) brand name. Decora is a debtor in possession in a voluntary case filed under Chapter 11 of the United States Bankruptcy Code. The purchase of Decora's assets by Pliant was approved by the United States Bankruptcy Court. The aggregate purchase price for the acquisition of Decora's assets was approximately $18 million in cash. The aggregate purchase price was determined based upon several factors, including evaluations of Decora, negotiations with the management and investment banker of Decora, as well as with the court appointed representatives of Decora's unsecured creditors. The financing for the acquisition of Decora's assets was provided under Pliant's existing credit facilities, as amended, with Bankers Trust Company, as administrative agent and collateral agent, JPMorgan Chase Bank, as syndication agent, The Bank of Nova Scotia, as documentation agent, and a syndicate of banking and financial institutions party thereto. The assets purchased consist of one plant and related equipment used by Decora primarily to print, laminate and convert plastic films into adhesive shelf liner. The Company intends to continue to use the assets to manufacture these products. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) The Company intends to file financial statements of Decora no later than August 5, 2002. (b) The Company intends to file pro forma financial statements reflecting its acquisition of the Decora assets no later than August 5, 2002. (c) Exhibits 2.1 Asset Purchase Agreement, dated December 31, 2001, among the Company, Pliant Investment, Inc., Decora Industries, Inc. and Decora, Incorporated. 2.2 Amendment No. 1 to Asset Purchase Agreement dated March 29, 2002. 2.3 Amendment No. 2 to Asset Purchase Agreement dated April 26, 2002. 2.4 Assignment, Assumption and Consent Agreement, dated May 13, 2002, among the Company, Pliant Investment, Inc., Pliant Solutions Corporation, Decora Industries, Inc. and Decora, Incorporated. 2.5 Amendment No. 3 to Asset Purchase Agreement dated May 20, 2002. 2.6 Order Pursuant to Sections 105(a), 363, 365 and 1146 of the Bankruptcy Code Authorizing the Sale of Substantially All of Decora's Assets. 99.1 Press Release dated May 21, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PLIANT CORPORATION /s/ Jack E. Knott II ------------------------------------------ Jack E. Knott II President and Chief Operating Officer Date: May 28, 2002 INDEX TO EXHIBITS Exhibits 2.1 Asset Purchase Agreement, dated December 31, 2001, among the Company, Pliant Investment, Inc., Decora Industries, Inc. and Decora, Incorporated. 2.2 Amendment No. 1 to Asset Purchase Agreement dated March 29, 2002. 2.3 Amendment No. 2 to Asset Purchase Agreement dated April 26, 2002. 2.4 Assignment, Assumption and Consent Agreement, dated May 13, 2002, among the Company, Pliant Investment, Inc., Pliant Solutions Corporation, Decora Industries, Inc and Decora, Incorporated. 2.5 Amendment No. 3 to Asset Purchase Agreement dated May 20, 2002. 2.6 Order Pursuant to Sections 105(a), 363, 365 and 1146 of the Bankruptcy Code Authorizing the Sale of Substantially All of Decora's Assets. 99.1 Press Release dated May 21, 2002. EX-2.1 3 y61088exv2w1.txt ASSET PURCHASE AGREEMENT EXECUTION COPY EXHIBIT 2.1 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement (the "Agreement") is made and entered into as of December 31, 2001, by and between Pliant Corporation, a Utah corporation ("Parent"), Pliant Investment, Inc., a Utah corporation and wholly owned subsidiary of Parent ("Buyer"), on the one hand, and Decora Industries, Inc., a Delaware corporation, and its operating subsidiary, Decora, Incorporated, a Delaware corporation (collectively, "Seller"), on the other hand. RECITALS A. Seller is generally engaged in the sourcing and distribution of decorative consumer self-adhesive products through retail customers (the "Business"). B. Seller wishes to sell to Buyer certain of the assets it uses in connection with the Business at the price and on the other terms and conditions specified in detail below and Buyer wishes to so purchase and acquire such assets from Seller. C. Parent will effect the acquistion of such assets from Seller through Buyer. D. The parties hereto recognize that the Seller has filed petitions commencing bankruptcy cases (collectively, the "Case") under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on December 5, 2000 (the "Petition Date"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: ARTICLE I. TRANSFER OF ASSETS Section 1.1 Purchase and Sale of Assets. On the Closing Date, in consideration of the covenants, representations and obligations of Parent and Buyer hereunder, and subject to the conditions hereinafter set forth, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title and interest as of the Closing Date in and to the following assets (but excluding the Excluded Assets, as described in Section 1.2), wherever located (collectively, the "Acquired Assets"): (a) Real Property. Seller's right, title and interest as owner of that real property described on Schedule 1.1(a) to this Agreement (the "Real Property"). (b) Assumed Contracts. Seller's right, title and interest (i) as lessee under those real property leases described on Schedule 1.1(b)(i) to this Agreement (collectively, the "Real Property Leases") and (ii) as lessee under those equipment, personal property and intangible property leases, rental agreements, licenses, contracts, agreements and similar arrangements and as a party to those other contracts, leases, orders, purchase orders, licenses, contracts, agreements and similar arrangements described on Schedule 1.1(b)(ii) (collectively with the Real Property Leases, the "Assumed Contracts"). The parties acknowledge and agree that Buyer shall have the right to amend Schedules 1.1(b)(i) and 1.1(b)(ii) at any time, and from time to time, prior to the Closing and thereby exclude any item set forth on such schedules, whereupon such item shall not be an Assumed Contract. (c) Improvements. Any improvements located on the Real Property occupied by Seller and on the premises occupied by the Seller under the Real Property Leases, but in all events only to the extent, if any, of Seller's interest in the same (collectively, the "Improvements"). (d) Personal Property. All of those items of equipment and tangible personal property owned by Seller and described on Schedule 1.1(d) attached to this Agreement and any other tangible personal property acquired by Seller after the date hereof but prior to the Closing Date used or held for use in connection with the Business (collectively, the "Personal Property"). As used in this Agreement, the Personal Property shall not include the Inventory or the items set forth in Section 1.2(m). (e) Intangible Property. All intangible personal property owned or held by Seller and used or held for use in connection with the Business, including all Intellectual Property, but in all cases only to the extent of Seller's interest therein and only to the extent transferable, together with all books, records and like items pertaining thereto (collectively, the "Intangible Property"), including, without limitation, the trademark "Con-Tact," the right to use business letterhead, business cards, sales and marketing materials, and boxes, containers and shippping materials bearing the "Decora" name until the current supply of such materials is exhausted, and the items identified on Schedule 1.1(e) hereto. As used in this Agreement, Intangible Property shall in all events exclude (i) any materials containing privileged communications or information about employees, the disclosure of which would violate an employee's reasonable expectation of privacy and any other materials which are subject to attorney-client, attorney work product, or any other privilege, and (ii) Seller's Corporate Records. (f) Inventory. All supplies, goods, materials, work in process, inventory and stock in trade owned by Seller used or held for use or sale in the ordinary course of the Business wherever located (collectively, the "Inventory"). (g) Receivables. All accounts receivable arising out of the sale of Inventory in the ordinary course of the Business and all causes of action specifically pertaining to the collection of the foregoing, including all outstanding cash related thereto on the Closing Date to the extent such amounts are collected after the Closing Date or not previously applied against the Seller's debtor-in-possession credit facilities (collectively, the "Receivables"). (h) Books and Records. All Books and Records of the Seller, other than Seller's Corporate Records. (i) Certain Cash. All uncollected lock-box cash not previously applied against the DIP Loan Amount prior to the Closing Date to the extent such funds become collected after the Closing Date (j) Permits. All Permits of Seller. 2 (k) Product Rights. All rights of the Seller in and to product sold on or before the Closing Date (including products returned after the Closing Date and rights of rescission, replevin and reclamation). (l) Prepaid Items. All credits, prepaid expenses, deferred charges, advance payments, security deposits, and prepaid items related to the Business. (m) Seller Claims. Any claims of Seller or its affiliates against Buyer or its affiliates relating to goods or services provided by Buyer or its affiliates to Seller or its affiliates. (n) Goodwill. All goodwill generated by or associated with the Business. Section 1.2 Excluded Assets. Notwithstanding anything to the contrary contained in Section 1.1 or elsewhere in this Agreement, the Acquired Assets shall not include, and such items shall not be part of the sale and purchase and shall remain the property of Seller after the Closing Date (the "Excluded Assets"): (a) those items excluded pursuant to the provisions of Section 1.1 above; (b) any cash, cash equivalents or cash collateralizing letters of credit or bank or other financial accounts of any Seller except as provided in Sections 1.1(g) and 1.1(i) above; (c) Inventory transferred, used or sold by Seller in the ordinary course of the Business prior to the Closing Date; (d) any lease, rental agreement, contract, agreement, license or similar arrangement ("Contracts") not described on Schedule 1.1(b) and all rights and causes of action relating thereto; (e) any right, property or asset listed on Schedule 1.2 hereto; (f) all preference and avoidance claims and other causes of action of the Seller against persons other than parties to this Agreement, including, without limitation, any such claims and actions arising under Sections 544, 547, 548, 549, or 550 of the United States Bankruptcy Code; (g) the Sellers' rights under this Agreement and all cash and non-cash consideration payable or deliverable to the Seller pursuant to the terms and provisions hereof; (h) insurance proceeds, rights, claims, credits and causes of action with respect to or arising in connection with any Excluded Asset or any Excluded Liability, and all guarantees, warranties, indemnities, and similar rights in favor of Seller in respect of any Excluded Asset or Excluded Liability; (i) any tax attribute of any Seller, including any right to any tax refund or net operating loss; 3 (j) Seller's capital stock, minute books, stock records, and corporate documents relating to Seller's existence ("Corporate Records"); (k) professional retainers paid by any Seller; (l) all rights in connection with and assets of the Employee Plans; and (m) (i) all empty ink, solvent, or chemical drums and containers in excess of 25 such drums or containers, and (ii) all drums and containers containing waste or spent inks, solvents or chemicals, located on the Real Property. Section 1.3 Instruments of Transfer. The sale, assignment, transfer, conveyance and delivery of the Acquired Assets to Buyer and the assumption of liabilities provided herein by Buyer shall be made by appropriately executed assignments, deeds, bills of sale, and other instruments of assignment, transfer and conveyance provided for in Section 3 below and such other instruments as may reasonably be requested by Buyer or Seller to demonstrate satisfaction of the conditions and compliance with the covenants set forth in this Agreement. None of the foregoing documents shall increase in any material way the obligations imposed by this Agreement upon Seller or Buyer. ARTICLE II. CONSIDERATION Section 2.1 Purchase Price and Acceptance of Consideration. Upon the terms and subject to the conditions of this Agreement, the Buyer shall assume the Assumed Liabilities and pay to the Seller in immediately available funds the sum of (a) all amounts outstanding under the Seller's debtor-in-possession credit facilities, as of the Closing Date, as identified on Schedule 2.1 (the "DIP Loan Amount") (in the amount, as of October 31, 2001, of $15,690,685.87), and (b) the Postpetition Expense Payment (such assumption and payments, collectively, the "Purchase Price") at Closing. The Seller accepts, and hereby agrees that, the payment of the Purchase Price as provided for in this Article II constitutes payment in full and is the sole consideration for the sale, transfer, conveyance, assignment and delivery of the Acquired Assets to the Buyer by the Seller and for all of the other agreements of the Seller provided for in this Agreement. Section 2.2 Assumed Liabilities. Effective on the Closing Date, the Buyer shall assume and perform the following liabilities of the Seller (the "Assumed Liabilities") relating to the Business: (a) all amounts outstanding as of the Closing Date with respect to the postpetition trade accounts payable identified on Schedule 2.2(a), representing amounts due and owing on account of trade accounts payable first arising on or after the Petition Date (in the amount, as of October 31, 2001, of $3,833,580.94); (b) the obligations of Seller in connection with any Assumed Contracts that first arise on or after the Closing Date; and 4 (c) any obligations in connection with any of the Acquired Assets that first arise on or after the Closing Date. In addition, Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller), protect, and save and hold Seller harmless from and against any and all claims or demands asserted by any person or entity in connection with the liabilities and obligations assumed by Buyer pursuant to this Section 2.2. Section 2.3 Excluded Liabilities.The Buyer is not assuming and shall not be liable for any of the Excluded Liabilities and the Seller shall retain and be responsible for the discharge of all Excluded Liabilities whenever and however arising. Section 2.4 Postpetition Expense Payment. On the Closing Date, the Buyer shall cause to be transferred to the Seller by wire transfer of immediately available funds an amount attributed to the additional assumed liabilities as of the Closing Date identified on an unitemized statement which Seller shall submit to Buyer no less than two (2) Business Days prior to the Closing (the "Postpetition Expense Payment"); provided, that, in no event, shall the Postpetition Expense Payment be in excess of $1,800,000. Section 2.5 Assumption and Assignment of Assumed Contracts. Buyer shall cooperate in all reasonable respects in connection with Sale Motion proceedings commenced by Seller in accordance with Section 8.6(b) of this Agreement for the purpose of obtaining, pursuant to the Approval Order, an order of the Bankruptcy Court authorizing and directing the Seller to assign the Assumed Contracts to Buyer pursuant to Section 365 of the Bankruptcy Code and otherwise to gain approval for the transactions contemplated by this Agreement. For greater clarity, Buyer shall reasonably cooperate in efforts to demonstrate "adequate assurance" of Buyer's performance of its obligations under the Assumed Contracts; provided, however, that no later than the Closing Date, Buyer may, in its sole and complete discretion, elect to not provide "adequate assurance" with respect to any Assumed Contract, in which case such Assumed Contract shall not constitute an Assumed Contract, such Assumed Contract shall not be assigned, transferred or conveyed to the Buyer as part of the Acquired Assets, and the Seller shall remain solely and completely liable for all obligations arising under such Assumed Contract. Any Contract for which "adequate assurance" as set forth in this Section 2.5 is not given by the Closing Date shall not be an Assumed Contract and shall either be rejected under the Bankruptcy Code as of the Closing Date or as soon as is reasonably practicable thereafter. Section 2.6 Deposit. No later than the first (1st) Business Day after the entry of the Procedures Order, Buyer shall deposit with the Seller $1,000,000 (the "Deposit") in immediately available funds. If the transactions contemplated herein terminate by reason of (i) Seller's material default of its obligations hereunder (a "Seller Default Termination"), (ii) the failure of a condition to Buyer's obligation to purchase the Acquired Assets that is not within the Buyer's control, or (iii) the consummation of a sale to a third party as described in Section 8.6(b) below, this Agreement shall be terminated and the Seller shall return the Deposit in immediately available funds to Buyer within three (3) Business Days of the occurrence of such event. In all other events, but except as otherwise provided in Section 3.4(a), the Deposit shall be retained by Seller for its own account, shall be deemed liquidated damages, and shall constitute Seller's sole 5 and complete remedy for any claims against Buyer relating to this Agreement or the transactions contemplated hereby. ARTICLE III. CLOSING TRANSACTIONS Section 3.1 Closing. The purchase and sale and the closing of the transactions provided for herein (the "Closing") shall take place at the offices of Latham & Watkins, Sears Tower - 58th Floor, Chicago, Illinois or such other location as the parties determine. For purposes of this Agreement, "Closing Date" means the time and date that the Closing actually takes place. Section 3.2 Closing Date. The Closing shall be held within five (5) days after satisfaction or waiver of the conditions to closing contained in Section 4, but in no event later than February 28, 2002 (the "Outside Date"); provided, however, that the Outside Date shall automatically be extended for one (1) thirty (30) day period if the only condition remaining to be satisfied is the condition specified in Section 4.1(c). In the event the conditions to Closing have not been satisfied or waived on or before the Outside Date, then any party who is not in material default hereunder may terminate this Agreement by delivering to the other party written notice of termination. Alternatively, the parties may mutually agree to an extended Outside Date. Until this Agreement is either terminated or the parties have agreed upon an extended Outside Date, the parties shall diligently continue to work to satisfy all conditions to Closing. Section 3.3 Sellers' Deliveries to Buyer at Closing. On the Closing Date, subject to satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2, Seller shall make the following deliveries to Buyer: (a) an assignment and assumption agreement, in a form agreed upon by the parties hereto, duly executed by Seller, pursuant to which Seller assigns to Buyer the Assumed Contracts (the "Assignment Agreement"); (b) deeds, bills of sale, assignments and other instruments of conveyance, all in form agreed upon by the parties hereto, duly executed by Seller, pursuant to which Seller transfers to Buyer the Acquired Assets other than the Assumed Contracts (the "Other Transfer Documents"); and (c) the certificate provided for in Section 4.3(a) and (d), duly executed by Seller. Section 3.4 Buyer's Deliveries to Seller at Closing. On the Closing Date, subject to satisfaction of the conditions precedent set forth in Sections 4.1 and 4.3, Buyer shall make or cause to be made the following deliveries to Seller: (a) payment of the DIP Loan Amount and the Postpetition Expense Payment by immediately available funds via wire transfer (less the Deposit which shall be credited toward payment of the Purchase Price); (b) the Assignment Agreement, duly executed by Buyer; and 6 (c) the certificates provided for in Sections 4.2(a) and (d), each duly executed by Buyer. Section 3.5 Prorations. Post-petition rent, current real property taxes, utilities and other items of expense that are customarily prorated between parties to an asset purchase and sale transaction shall be prorated between Seller and Buyer as of the Closing Date. Except as set forth in Section 2.2, all obligations due in respect of periods following the commencement of the Case but prior to the Closing Date shall be paid in full or otherwise satisfied by Seller and all obligations due in respect of periods on and after the Closing Date shall be paid in full or otherwise satisfied by Buyer. Post-petition rent shall be prorated on the basis of a thirty (30) day month. Section 3.6 Sales, Use and Other Taxes. To the extent the sale of the Acquired Assets and other transactions contemplated hereby are subject under applicable law to sales, transfer, use, stamp or similar taxes that are not exempt under Bankruptcy Code Section 1146, such sales, transfer, use stamp or similar taxes shall be borne by Seller. Section 3.7 Possession. Right to possession of the Acquired Assets shall transfer to Buyer on the Closing Date. Seller shall transfer and deliver to Buyer on the Closing Date such keys, lock and safe combinations and other similar items as Buyer shall require to obtain immediate and full occupation and control of the Acquired Assets, and shall also make available to Buyer at Seller's then existing locations all documents in Seller's possession that are required to be transferred to Buyer by this Agreement. ARTICLE IV. CONDITIONS PRECEDENT TO CLOSING Section 4.1 Conditions Precedent to Obligation of the Seller and the Buyer. Seller's and Buyer's obligations to make their respective deliveries as set forth in Section 3 on the Closing Date shall be subject to the satisfaction or waiver of the following conditions: (a) all applicable waiting periods relating to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or been terminated and any proceedings that may have been filed or instituted thereunder by any governmental agency shall have been satisfactorily concluded; (b) no action, suit or other proceedings shall be pending before any court, tribunal or Governmental Authority seeking or threatening to restrain or prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain substantial damages in respect thereof, or involving a claim that consummation thereof would result in the violation of any law, decree or regulation or any Governmental Authority having appropriate jurisdiction; (c) the Bankruptcy Court shall have entered the Procedures Order in accordance with Section 8.6(a) below and the Approval Order in accordance with Section 8.6(b) below, and the Approval Order shall not have been stayed, modified, amended, dissolved, revoked or rescinded in any material way, as of the Closing Date; and 7 (d) the Case shall not have been dismissed or converted to a Chapter 7 bankruptcy pursuant to provisions of the Bankruptcy Code. Section 4.2 Conditions Precedent to Seller's Obligations. Seller's obligation to make the deliveries of Seller set forth in Section 3 on the Closing Date shall be subject to the satisfaction or waiver by Seller of each of the following conditions: (a) all of the representations and warranties of Buyer contained in Section 6 shall continue to be true and correct as of the Closing Date in all material respects, all covenants and obligations to be performed by Buyer on or prior to the Closing Date shall have been performed in all material respects, and Buyer shall have certified the foregoing to Seller in writing; (b) Buyer shall have executed and delivered to Seller the Assignment Agreement and each other document reasonably requested by Seller pursuant to Section 1.3; (c) Seller shall have received the total Purchase Price; (d) Buyer shall have delivered to Seller appropriate evidence of all necessary corporate action by Buyer in connection with the transactions contemplated herein, including, without limitation: (i) certified copies of resolutions duly adopted by Buyer's directors approving the transactions contemplated herein and authorizing the execution, delivery, and performance by Buyer of this Agreement; and (ii) a certificate as to the incumbency of officers of Buyer executing this Agreement and any instrument or other document delivered in connection with the transactions contemplated herein; and (e) Seller shall have determined that it will not incur any liability under the Worker Adjustment and Retraining Notification Act in connection with the consummation of this transaction. Section 4.3 Conditions Precedent to Buyer's Obligations. Buyer's obligation to make the deliveries of Buyer set forth in Section 3 on the Closing Date shall be subject to the satisfaction or waiver by Buyer of each of the following conditions: (a) all of the representations and warranties of Seller contained in Section 5 shall continue to be true and correct on the Closing Date in all material respects, all covenants and obligations to be performed by Seller on or prior to the Closing Date shall have been performed in all material respects, and Seller shall have certified the foregoing to Buyer in writing; (b) Seller shall have executed and delivered to Buyer the Assignment Agreement (if necessary), the Other Transfer Documents, and each other document reasonably requested by Buyer pursuant to Section 1.3; (c) Seller shall have delivered that certain Policy of Title Insurance dated May 5, 2000, and issued by First American Title Insurance Company of New York (Policy No. B 286485) (the "Title Policy") and that certain Survey dated May 6, 1965, and revised April 21, 2000, and prepared by Coulter & McCormack (the "Survey"), and Buyer shall, in its 8 reasonable judgment, be satisfied that title to the Real Property is vested in fee simple to Decora, Incorporated, and that the Survey accurately describes the Real Property and accurately shows the correct boundaries of the Real Property, together with all buildings, tanks, fences, rail spurs, utility lines, parking lots, walks, easements and other items described on Item 8 of Schedule B of the Title Policy; (d) Seller shall have delivered to Buyer appropriate evidence of all necessary corporate action by Seller in connection with the transactions contemplated herein, including, without limitation: (i) certified copies of resolutions duly adopted by Seller's directors, approving the transactions contemplated herein and authorizing the execution, delivery, and performance by Seller of this Agreement; and (ii) a certificate as to the incumbency of officers of Seller executing this Agreement and any instrument or other document delivered in connection with the transactions contemplated herein; and (e) Seller shall have removed the drums and containers described in Section 1.2(m). Section 4.4 Termination. If any of the above conditions is neither satisfied nor waived on or before the Outside Date, then any party who is not then in default hereunder may terminate this Agreement by delivering to the other written notice of termination. Upon termination by Buyer pursuant to the second sentence of Section 2.6, the Deposit shall be returned to the Buyer. Any waiver of a condition shall be effective only if such waiver is stated in writing and signed by the waiving party; provided, however, that the consent of a party to the Closing shall constitute a waiver by such party of any conditions to Closing not satisfied as of the Closing Date. ARTICLE V. SELLERS' REPRESENTATIONS AND WARRANTIES Seller hereby makes the following representations and warranties to Buyer as of the date of this Agreement and as of the Closing Date: Section 5.1 Validity of Agreement. Upon obtaining the Approval Order, this Agreement shall constitute the valid and binding obligation of Seller enforceable in accordance with its terms. Section 5.2 Organization, Standing and Power. Except as set forth in Schedule 5.2, each of Decora Industries, Inc. and Decora, Incorporated is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware. Schedule 5.2 sets forth a complete and accurate list of any other jurisdiction in which Seller does business and indicates whether Seller is qualified to do business as a foreign corporation and in good standing in such jurisdiction(s). Subject to the applicable provisions of bankruptcy law, Seller has all requisite corporate power and authority to own, lease and operate its properties, to carry on its business as now being conducted and, subject to the Seller's obtaining the Approval Order, to execute, deliver and perform this Agreement and all writings relating hereto. Seller has no material subsidiaries except as disclosed in Schedule 5.2. Section 5.3 No Conflicts or Violations. Upon obtaining the Approval Order, the execution and delivery of this Agreement, the consummation of the transactions contemplated herein, and the performance of, fulfillment of and compliance with the terms and conditions hereof by Seller do not and will not: (a) conflict with or result in a breach of the articles of incorporation or the 9 by-laws of Seller; (b) violate any statute, law, rule or regulation, or any order, writ, injunction or decree of any court or Governmental Authority; or (c) violate or conflict with or constitute a default or accelerate the maturity, performance or payment under any agreement, instrument or writing of any nature to which Seller is a party or by which Seller or its assets or properties may be bound. Section 5.4 Title to the Acquired Assets. Seller has good and marketable title to the Acquired Assets. At the Closing, Buyer will acquire all of Seller's right, title and interest in and to all of the Acquired Assets, free and clear of any liens, claims or encumbrances, subject to Section 2.2 hereof. Section 5.5 Financial Information. (a) Schedule 5.5 sets forth (i) audited consolidated balance sheets of the Seller as of the end of each of the fiscal years ended March 31, 2001, 2000 and 1999 (the "Audited Balance Sheets") and the related audited consolidated statements of operations and retained earnings and cash flows of the Seller for such fiscal years (the Audited Balance Sheets and such audited consolidated statements of operations and retained earnings and cash flows are hereinafter collectively referred to as the "Audited Statements") and (ii) the unaudited consolidated balance sheets of the Seller as of October 31 and November 30, 2001 as provided to the U.S. Trustee in the Case (the "Unaudited Balance Sheets") and the unaudited consolidated statements of operations of the Seller for each of the seven (7) months ending October 31, 2001 (the Unaudited Balance Sheets and such unaudited consolidated statements of operations are hereafter collectively referred to as the "Unaudited Financial Statements" and, together with the Audited Financial Statements, the "Financial Statements"). (b) The Financial Statements, including without limitation the notes thereto, (i) are complete and correct in all material respects, (ii) have been prepared in accordance with the Books and Records of the Seller, and (iii) present fairly the consolidated financial position of the Seller in the format required by the U.S. Trustee in the Case, and their consolidated results of operations and cash flows as of and for the respective dates and time periods in accordance with GAAP applied on a basis consistent with prior accounting periods, except as noted thereon and subject to, in the case of the Unaudited Statements, the absence of footnotes and normal and recurring year-end adjustments which are not expected to be material in amount. There have been no changes in accounting methods (for financial accounting purposes) made, agreed to, requested, or required with respect to the Seller since March 31, 2000. (c) Notwithstanding the foregoing, since the end of the Seller's last fiscal year on March 31, 2001, the Seller has not evaluated its Inventories with respect to what Inventory, if any, may be deemed to be slow moving or obsolete. Accordingly, no adjustments have been made to give effect to any potential slow moving or obsolete Inventory. (d) During the past 24 months, Seller has neither received any management letters from Seller's auditors to Seller's board of directors, audit committee or senior financial officers nor sent any related responses. 10 Section 5.6 Intellectual Property. (a) Seller has taken all necessary steps and actions to obtain, maintain and renew all Intellectual Property used or held for use in the Business. (b) To the Seller's knowledge, the Seller owns or otherwise has the right or license to use the Intellectual Property, free and clear of all liens (subject to the approval of the Bankruptcy Court). (c) No Approval of any third party will be required for the use by the Buyer of any of the Intellectual Property or the transfer of the Seller's rights therein to the Buyer. (d) No claims are currently pending, or to Seller's knowledge, are threatened in writing by any person involving or questioning the Seller's right to use any of the Intellectual Property or challenging or questioning the validity or effectiveness of any license or similar agreement related to the Intellectual Property. (e) Except as set forth on Schedule 5.6(e), to the Seller's knowledge, the use of the Intellectual Property by the Seller does not infringe the rights of any person nor, to the Seller's knowledge, is any infringing use of the Intellectual Property currently ongoing by any person. Section 5.7 Proceedings. There is no Proceeding pending or, to the knowledge of the Seller, threatened, against the Seller relating to the Business or any Acquired Assets, before any Governmental Authority that may affect the Business or the Acquired Assets or that questions or challenges the validity of this Agreement or any action taken or proposed to be taken by the Seller pursuant hereto or thereto or in connection with the transactions contemplated hereby or thereby, or would, if adversely determined, have a material adverse effect on the Seller or the Acquired Assets. Section 5.8 Compliance with Laws. Except those the failure of which to be in compliance with would not reasonably be expected to have a material adverse effect on the Acquired Assets or the Business or materially impair or delay the ability of the Seller to consummate the transactions contemplated hereby, (a) the Seller has not been notified in writing of and is not aware of any violation of any laws binding on it relating to the Business or the Acquired Assets, (b) since January 1, 2001, the Seller has not been notified in writing, or senior management of the Seller does not have actual knowledge, that it has been charged with or threatened in writing with, any charge concerning, nor is the Seller under any investigation with respect to, any violation of any provision of any law relating to the Business or the Acquired Assets that has not already been resolved, and (c) the Seller is not in violation of, or in default under, and no event has occurred which, with the lapse of time or the giving of notice, or both, would result in the violation of or default under, the terms of any judgment, decree, order, injunction or writ of any Governmental Authority relating to the Acquired Assets or the Business. Section 5.9 Approvals. Except for Approval of the Bankruptcy Court or those for which the failure to obtain would not reasonably be expected to have material adverse effect on the Acquired Assets or the Business or materially impair or delay the ability of the Seller to consummate the transactions contemplated hereby, no approval of any Governmental Authority 11 or other person is required to be made, obtained or given by or with respect to the Seller in connection with the execution or delivery by the Seller of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby, including without limitation the sale of the Acquired Assets to the Buyer. Section 5.10 Environmental Matters. (a) The Acquired Assets and operations of the Business are in material compliance with all Environmental Laws and with all requirements of applicable approvals issued pursuant to Environmental Laws. (b) Except as set forth on Schedule 5.10(b), to the Seller's knowledge, there are no actions pending against the Seller that involve, or relate to, environmental conditions, noncompliance with Environmental Laws or the release, use or disposal of any Hazardous Materials at the Real Property, and Seller has not received any written notice from any Governmental Authority or other Person during the five years prior to the date hereof claiming any violation of or any potential liability under any Environmental Law relating to the Business, Acquired Assets or Real Property. (c) All permits, licenses, authorizations, registrations and other governmental consents required under Environmental Laws ("Environmental Permits") relating to the operation of the Business and the Acquired Assets, including the manufacture, processing, distribution, use, treatment, storage, disposal, discharge, emission, transport, Release, recycling or handling of Hazardous Materials in connection with the operation of the Business, are valid and in full force and effect. To the Seller's knowledge, there are no pending administrative or judicial proceedings to revoke, cancel, modify or declare such Environmental Permits invalid. (d) To the Seller's knowledge, none of the Real Property is listed in the United States Environmental Protection Agency's National Priorities List of Hazardous Waste Sites under CERCLA or any similar state list under any comparable state statute. (e) To the Seller's knowledge, Seller has not received any written notice from any Governmental Authority or any other Person of any allegation of any actual or potential responsibility for any release of any Hazardous Materials to or at which Seller allegedly transported, disposed or arranged for the disposal of any Hazardous Materials. (f) To the Seller's knowledge, there has not been, and is not now occurring, any material Release of any Hazardous Material on, in, under, about or from the Real Property, including, a Release that has come to be located on or under the Real Property. (g) To the Seller's knowledge, except as set forth on Schedule 5.10(g), no above ground or underground storage tanks or wells are located on, under or about the Real Property, or have been located on, under or about the Real Property and then subsequently been removed or filled. 12 Section 5.11 Labor Matters. (a) To the Seller's knowledge, during the past two years there have been no actual or threatened actions, work stoppages or other labor difficulties relating to any of the Seller's past or current Union Employees or Non-Union Employees. In addition, the Seller is a party to that certain Collective Bargaining Agreement with respect to Union Employees and, to the Seller's knowledge, is not in default of any of the material provisions contained in the Collective Bargaining Agreement. Seller has not been notified in writing of any pending actions or grievances filed with respect to the Collective Bargaining Agreement. (b) Seller is and has been in material compliance with all applicable laws regarding employment and employment practices, terms and conditions of employment, wages and hours and is not and has not been engaged in any unfair labor practice. (c) Except as disclosed on Schedule 5.11(c), there are no pending claims, and to Seller's knowledge, no threatened claims, by or on behalf of any of its employees under any federal, state or local labor or employment laws or regulations, including but not limited to, the Fair Labor Standards Act, the National Labor Relations Act, Labor Management Relations Act, Civil Rights Act of 1964, Civil Rights Act of 1991, Walsh-Healy Act, Davis Bacon Act, Post Civil War Civil Rights Acts, (42 USC Sections 1981-88), Age Discrimination in Employment Act, Older Workers' Benefit Protection Act, Equal Pay Act of 1963, Executive Order 11246, Uniformed Service Employees Employment and Reemployment Rights Act, Occupational Safety and Health Act, Employee Retirement Income Security Act, Americans with Disabilities Act, Rehabilitation Act of 1973, Family and Medical Leave Act, Worker Adjustment and Retraining Notification Act, applicable workers' and unemployment compensation laws, all as amended, or any applicable contract, tort or other common law theories. (d) Except as set forth on Schedule 5.11(d), each of Seller's employees is an "at-will" employee and there are no written employment, commission, compensation or severance agreements of any kind between Seller and any of its employees. True and complete copies of each of Seller's employment or supervisory manuals, employment or supervisory policies, and written information generally provided to employees (such as applications or notices) have been made available to Buyer. Seller does not have any agreements or understandings with its employees except as reflected in the items listed in Schedules 5.11(d) or any employment practices contrary to those reflected in the items made available to Buyer. (e) Except as set forth on Schedule 5.11(e), Seller has no severance pay plan, policy, practice or agreement with any of its employees. Seller shall have sole responsibility for severance pay, if any, to its employees for any termination of employment by Seller on, prior to or following the Closing Date. (f) Schedule 5.11(f) contains a complete and accurate list of all directors, officers, employees or consultants of Seller as of the date hereof, specifying their names and job title, the total amount paid or payable as compensation to each such person, and the basis 13 of such compensation, whether fixed or commission or a combination thereof, as of the date hereof. Section 5.12. ERISA. Except as disclosed on Schedule 5.12, (a) each pension plan (as defined in Section 3(2) of ERISA) maintained or contributed by Seller which is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service that such pension plan is so qualified and no fact or circumstances exist which would adversely affect the qualified status of such pension plan in form or operation, (b) no pension plan maintained or contributed to by Seller is subject to the provisions of Title IV of ERISA, the funding requirements of Section 412 of the Code or is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA), (c) no welfare plan (as defined in Section 3(1) of ERISA) maintained by Seller provides post retirement medical or life coverage to any employees, other than as required by COBRA, (d) each pension plan and welfare plan maintained by Seller is in all material respects in compliance with the provisions of ERISA, the Code and all applicable laws and Seller has not received any written notice alleging the contrary with respect to any such plans, (e) there is no action, claim or demand of any kind (other than routine claims for benefit) that has been brought, or to Seller's knowledge is threatened, against any such plans, and (f) each contribution or other payment that is required to have been accrued or made under or with respect to any such plans has been duly accrued and made on a timely basis. Section 5.13. Receivables. All Receivables that are reflected on the March 31, 2001 Audited Balance Sheet or any Unaudited Balance Sheet or on the accounting Books and Records of Seller as of the Closing Date represent or will represent valid obligations arising from sales actually made or services actually performed by Seller in the ordinary course of business. Except to the extent paid prior to the Closing Date, such Receivables are or will be as of the Closing Date current and collectible net of the respective reserves shown on such balance sheets (which reserves are adequate and calculated consistent with past practice). There is no contest, claim, defense or right of setoff, other than returns in the ordinary course of business of Seller, under any contract with any account debtor of a Receivable relating to the amount or validity of such Receivable. Schedule 5.13 contains a complete and accurate list of all Receivables as of the date of the October 31, 2001 Unaudited Balance Sheet, which list sets forth the aging of each such Receivable. Section 5.14 Inventory. Seller is not in possession of any Inventory not owned by Seller, including goods already sold. Except for the Inventory in possession of AtomicBox.com, Inc., no other person is in possession of any Inventory of Seller. All of the Inventory has been valued at the lower of cost or market value on a first in, first out basis. Inventory now on hand that was purchased after the date of the Audited Balance Sheet or the November 30, 2001 Unaudited Balance Sheet was purchased in the ordinary course of business of Seller at a cost not exceeding market prices prevailing at the time of purchase. Section 5.15 Owned and Leased Real Property. Schedules 1.1(a) and 1.1(b)(i) set forth the correct legal description, street address and tax parcel number for each parcel of Real Property owned or leased by Seller. Section 5.16. Permits. Schedule 5.16 sets forth all material certificates, licenses, permits, authorizations, and approvals issued or granted to Seller by Governmental Authorities that are 14 necessary or desirable for the conduct of the Business ("Permits"). Except as set forth on Schedule 5.16, (i) all such Permits are validly held by Seller, and Seller has complied in all material respects with all terms and conditions of the Permits, (ii) during the past five years, Seller has not received notice of any Proceedings relating to the revocation or modification of any of such Permits, and (iii) none of such Permits will be subject to suspension, modification, revocation, or nonrenewal as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated herein. Seller possesses all Permits necessary to own or lease and operate the Acquired Assets and to conduct the Business as currently conducted. Section 5.17 Post-Petition Trade Accounts Payable. Each item set forth on Schedule 2.2(a) represents a bona fide trade account payable of Seller first incurred by Seller in the ordinary course of business on or after the Petition Date, and Schedule 2.2(a) reflects the true and correct amount owed by Seller for all trade accounts payable, individually, and in the aggregate, as of October 31, 2001 and as of the Closing Date (with respect to a revised version of such Schedule delivered as of the Closing Date). Section 5.18 Disclosure. No representation or warranty of Seller contained in this Agreement, and no statement contained in any other document, certificate, or schedule furnished or to be furnished by or on behalf of Seller by any of its representatives pursuant to this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading or necessary in order to fully and fairly provide the information required to be provided in any such document, certificate or schedule. ARTICLE VI. PARENT'S AND BUYER'S REPRESENTATIONS AND WARRANTIES Parent and Buyer hereby make the following representations and warranties to Seller as of the date of this Agreement and as of the Closing Date: Section 6.1 Validity of Agreement. All action on the part of Parent and Buyer necessary for the authorization, execution, delivery and performance of this Agreement by Parent and Buyer, including, but not limited to, the performance of Parent's and Buyer's obligations hereunder, has been duly taken. This Agreement when executed and delivered by Parent and Buyer, shall constitute the valid and binding obligation of Parent and Buyer enforceable in accordance with its terms. Section 6.2 Organization, Standing and Power. Each of Parent and Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah. Each of Parent and Buyer has all requisite corporate power and authority to own, lease and operate its properties, to carry on its respective business as now being conducted and to execute, deliver and perform this Agreement and all writings relating hereto. Section 6.3 No Conflicts or Violations. The execution and delivery of this Agreement, the consummation of the transactions contemplated herein, and the performance of, fulfillment of and compliance with the terms and conditions hereof by Parent and Buyer do not and will not: (i) 15 conflict with or result in a breach of the articles of incorporation or by-laws of Parent and Buyer; (ii) violate any statute, law, rule or regulation, or any order, writ, injunction or decree of any court or Governmental Authority; or (iii) violate or conflict with or constitute a default under any agreement, instrument or writing of any nature to which Parent and Buyer is a party or by which Parent and Buyer or its assets or properties may be bound. Section 6.4 Financing. Buyer has sufficient funds available to consummate the transactions contemplated herein - THERE IS NO FINANCING CONTINGENCY WITH RESPECT TO THIS TRANSACTION. ARTICLE VII. "AS IS" TRANSACTION BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ARTICLE 5 ABOVE OR ELSEWHERE IN THIS AGREEMENT, THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE ACQUIRED ASSETS INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE ACQUIRED ASSETS, THE PHYSICAL CONDITION OF ANY PERSONAL PROPERTY COMPRISING A PART OF THE ACQUIRED ASSETS OR WHICH IS THE SUBJECT OF ANY OTHER ASSUMED CONTRACT TO BE ASSUMED BY BUYER AT THE CLOSING, THE ENVIRONMENTAL CONDITION OR OTHER MATTERS RELATING TO THE PHYSICAL CONDITION OF ANY REAL PROPERTY OR IMPROVEMENTS WHICH THE SELLER OWNS OR WHICH ARE THE SUBJECT OF ANY REAL PROPERTY LEASE TO BE ASSUMED BY BUYER AT THE CLOSING, THE ZONING OF ANY SUCH REAL PROPERTY OR IMPROVEMENTS, THE VALUE OF THE ACQUIRED ASSETS (OR ANY PORTION THEREOF), THE TRANSFERABILITY OF THE ACQUIRED ASSETS, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY OF ANY ASSUMED LIABILITIES, THE TITLE TO THE ACQUIRED ASSETS (OR ANY PORTION THEREOF), THE MERCHANTABILITY OR FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF THE ACQUIRED ASSETS FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE ACQUIRED ASSETS OR ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE ACQUIRED ASSETS. BUYER FURTHER ACKNOWLEDGES THAT BUYER HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL CONDITION OF THE ACQUIRED ASSETS AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE ACQUIRED ASSETS AS BUYER DEEMED NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE ACQUIRED ASSETS, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE 5 OR ELSEWHERE IN THIS AGREEMENT, BUYER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, BUYER WILL ACCEPT THE ACQUIRED ASSETS AT THE CLOSING "AS IS," "WHERE IS," AND "WITH ALL FAULTS." 16 ARTICLE VIII. CONDUCT AND TRANSACTIONS PRIOR TO CLOSING Section 8.1 Access to Records and Properties of Seller. From and after the date of this Agreement until the Closing Date, Seller shall, upon reasonable advance notice, afford to Buyer's officers, independent public accountants, counsel, lenders, consultants and other representatives who shall be bound as "Representatives" under the confidentiality agreement heretofore signed by Parent, reasonable access during normal business hours to the Acquired Assets and all records pertaining to the Acquired Assets or the Business. Buyer, however, shall not be entitled to access any materials containing privileged communications or information about employees, disclosure of which might violate an employee's reasonable expectation of privacy. Section 8.2 Notice of Filings. From and after the date hereof until the Closing Date, Seller shall provide Buyer with drafts of all documents, agreements or other instruments proposed to be included in any filings with the Court related to the transactions contemplated by this Agreement (each, a "Court Document" and, collectively, the "Court Documents") and a reasonable opportunity for Buyer to comment thereon prior to the filing, of any such Court Document with the Court (Court Documents so filed, collectively, "Court Filings"). Seller shall provide Buyer with all Court Filings and any responses or objections to such Court Filings in a timely manner. Section 8.3 Hart-Scott-Rodino Cooperation. To the extent applicable, Parent, Buyer and Seller shall cooperate with each other (at their respective sole cost and expense) to comply with, and provide the information required by, the pre-merger notification and waiting period rules of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (codified in Section 18(a) of Title 15, U.S. Code), if necessary, in any Federal Trade Commission regulations, and in any provisions or regulations of or relating to the Clayton Act. In that connection, Parent, Buyer and Seller shall use diligent efforts to make their joint pre-merger notification filing with the Federal Trade Commission, if necessary, no later than three (3) days following the hearing of the Sale Motion, if Buyer is the successful bidder. The parties acknowledge that a Hart-Scott-Rodino filing would not appear to be necessary. Section 8.4 Operation of Seller's Business Pending Closing. From the date hereof to the Closing Date, except as permitted by the prior written consent of Buyer, or as required by the Bankruptcy Court or applicable law: (a) the Business shall be conducted only in the ordinary course of business and in a manner consistent with past practice of the Business and Seller shall not take any action in connection with the operation of the Business except in the ordinary course of Business and in a manner consistent with past practice of the Business; (b) Seller shall use commercially reasonable efforts to preserve intact the Business, maintain the Acquired Assets in working order, condition and repair (subject to ordinary wear and tear), comply with all laws applicable to the Business, keep available the services of employees whose continuing employment in connection with the Business is advantageous to the conduct of the Business, and preserve the present relationships of the Business with customers and suppliers and other persons with which the Business has significant business relations; (c) Seller shall not take any actions or omit to take any actions, the effect of which would result in (i) material acceleration of the sale of the Inventory or material acceleration of the generation or collection of Receivables or (ii) 17 material deferral or delay in the payment of accounts payable or capital expenditures relative to the past practices of the Business; (d) Seller shall not modify, amend or otherwise alter or change any of the material terms or provisions of any Assumed Contracts; and (e) Seller shall continue to seek customary trade credit and shall make payments to trade vendors consistent with the Seller's past practices since the Petition Date. Section 8.5 Employees. The Seller shall use its commercially reasonable efforts to retain all of the employees engaged in the Business, and to maintain in good standing through the Closing all relationships and agreements with employees, independent contractors, or consultants necessary to the Business, in each case from the date hereof through the Closing Date and to cooperate with the Buyer in hiring employees engaged in the Business who are offered employment by the Buyer; provided, that the foregoing shall not require that the Seller offer employment to any person who is employed by the Seller on or prior to the Closing Date. Section 8.6 Bankruptcy Court Approvals. (a) Bankruptcy Court Approval of Sale Procedures. Seller has filed a motion (the "Sale Procedure Motion") with the Bankruptcy Court and shall use reasonable efforts to obtain the entry of an order (the "Procedures Order") (i) fixing the time, date, and location of a hearing (the "Approval Hearing") to approve Sellers' consummation of this Agreement, (ii) fixing the time and date of an auction (the "Auction") to be held at Young Conaway Stargatt & Taylor, LLP, Eleventh Floor, Wilmington Trust Center, 1100 North Market Street, Wilmington, Delaware, at which higher and better offers to purchase the Acquired Assets may be presented to Seller, (iii) providing that if Seller receives from a third party a higher and better offer to purchase the Acquired Assets at the Auction, and such third party offer is subsequently approved by the Bankruptcy Court and closes as provided by its terms, then Buyer will be entitled to receive from Seller a flat fee payment (not dependent on amounts actually expended or incurred by Buyer) in immediately available funds in the amount of three percent (3%) of the aggregate of the Purchase Price (the "Break-Up Fee") which payment shall be made to Buyer concurrently with the consummation of such third party sale and (iv) no prospective purchaser who bids for the Acquired Assets at the Auction shall be entitled to purchase the Acquired Assets unless such prospective purchaser offers to purchase the Acquired Assets for consideration which is at least five percent (5%) greater than the aggregate of the Purchase Price and otherwise on terms at least as favorable to Seller as those set forth in this Agreement, as determined by HLHZ and the Seller. Should overbidding take place, Buyer shall have the right, but not the obligation, to participate in the overbidding and to be approved as the overbidder at the Approval Hearing based upon Buyer's submission of the highest and best offer to purchase the Acquired Assets and Seller's acceptance of such overbid. (b) Bankruptcy Court's Approval of Sale. Promptly after the date hereof, Seller shall file a motion with the Bankruptcy Court (the "Sale Motion") requesting entry of an order (the "Approval Order") which, among other things, (i) approves the sale of the Acquired Assets to Buyer on the terms and conditions set forth in this Agreement (or such higher and better terms and conditions offered at the Auction) and authorizes the Seller to proceed with this transaction or such higher and better transaction, (ii) includes specific 18 findings that (A) this Agreement was proposed and negotiated by Buyer and Seller in good faith and at arm's length, (B) Buyer is a good faith purchaser of the Acquired Assets under Section 363(m) of the Bankruptcy Code, and (C) the provisions of Section 363(n) of the Bankruptcy Code have not been violated, (iii) authorizes and directs the Seller to sell the Acquired Assets to Buyer pursuant to this Agreement and Section 363 of the Bankruptcy Code, free and clear of all liens, claims, interests, liabilities and encumbrances other than the Assumed Liabilities, (iv) authorizes and directs Seller to assume and assign the pre-Petition Date Assumed Contracts to Buyer pursuant to Section 365 of the Bankruptcy Code and pay all cure amounts payable to the counterparties to the Assumed Contracts as a condition to such assumption and assignment, (v) authorizes and directs the Seller to execute, deliver, perform under, consummate and implement this Agreement, together with all additional instruments and documents that may be reasonably necessary or desirable to implement the foregoing, and (vi) permanently enjoins each and every holder of a lien, claim or interest that is not an Assumed Liability from commencing, continuing or otherwise pursuing or enforcing any remedy, claim or cause of action against Buyer relative to such lien, claim or interest. Following the filing of the Sale Motion, Seller shall use reasonable efforts to obtain entry of the Approval Order. Both Buyer's and Seller's obligations to consummate the transactions contemplated herein which Buyer and Seller may hereafter enter into shall be conditioned upon the Bankruptcy Court's entry of the Approval Order. ARTICLE IX. ADDITIONAL COVENANTS Section 9.1 Employment Matters. (a) As of the Closing Date, the Buyer shall employ those salaried employees of Seller listed on Schedule 9.1(a), without diminution of base salary or responsibility for not less than six (6) months after the Closing Date unless terminated by the Buyer for cause (the "Transferred Employees"). The parties acknowledge and agree that Buyer shall have the right to amend Schedule 9.1(a) at any time, and from time to time, prior to the Closing and to exclude any employee of Seller listed on such schedule, and any such employee who is excluded by Buyer from such schedule shall not be employed by Buyer at the Closing and shall not be a Transferred Employee. (b) The Buyer will recognize all years of service of the Transferred Employees with the Seller for purposes of eligibility to participate in and to vest under those employee benefit plans, within the meaning of Section 3(3) of ERISA, of the Buyer in which the Transferred Employees are eligible to participate in after the Closing Date. (c) The Buyer shall recognize all years of service of the Transferred Employees with the Seller for purposes of vacation and severance accrual under the Buyer's vacation and severance policies. The Buyer shall cause all pre-existing condition exclusions under any medical and dental plans made available by the Buyer to Transferred Employees to be waived in respect of such employees and dependents, but only to the extent Seller's medical and dental plans recognize such Transferred Employees and their dependents as having satisfied any pre-existing conditions exclusion under Seller's medical and dental 19 plans. The Buyer shall take commercially reasonable efforts to ensure that the medical and dental plans made available by Buyer to Transferred Employees credit such Transferred Employees' and their dependents with the amount of out-of-pocket expense limitations and deductibles satisfied under the Sellers' medical and dental plans. (d) To the extent required by law, the Buyer shall be responsible for providing continuation coverage as required by COBRA, under a group health plan maintained by the Buyer, to the Transferred Employees and other qualified beneficiaries under COBRA with respect to such employees engaged in the Business as of the Closing Date, who have a COBRA qualifying event (due to termination of employment with the Seller or otherwise) solely as a result of the transactions contemplated by this Agreement. The Buyer shall indemnify and hold Seller harmless from any and all damages, liabilities, claims or expenses incurred by the Seller as a result of the failure of the Buyer to comply with any of the requirements of COBRA, including applicable notice requirements. (e) No provision of this Section 9.1 shall create any third party beneficiary or other rights in any employee or former employee (including any beneficiary or dependent thereof) of the Seller or of any of its subsidiaries in respect of employment or continued employment (or resumed employment) with either the Business, the Buyer, or any of its affiliates and no provision of this Section 9.1 shall create any such rights in any such persons in respect of any benefits that may be provided, directly or indirectly, under any of Seller's employee benefit plans or any plan or arrangement which may be established by the Buyer or any of its affiliates. No provision of this Agreement shall constitute a limitation on rights to amend, modify or terminate after the Closing Date any such plans or arrangements of the Buyer or any of its affiliates. (f) The Buyer shall assume the obligations and duties of the Seller specified in the Collective Bargaining Agreement. As a result, it is the intent of the parties to satisfy the provisions of Section 4204 of ERISA with respect to any obligation that Seller may have under the Paper Industry Union-Management Pension Fund (the "Plan"). Therefore, Seller and Buyer agree that, after the Closing, Buyer shall continue making contributions to the Plan in accordance with the terms of the Collective Bargaining Agreement for substantially the same number of contribution base units for which Seller had an obligation to contribute to the Plan on the Closing Date and that each party will attempt to comply with the requirements of Section 4204 of ERISA, or obtain a variance therefrom. Nothing contained herein shall prevent Buyer from modifying or otherwise eliminating Buyer's obligations to contribute to the Plan under the Collective Bargaining Agreement to the extent permitted by law. However, in the event Buyer withdraws from the Plan under Sections 4203 or 4205 of ERISA prior to the fifth anniversary of the Closing Date, then Buyer shall indemnify and hold Seller harmless from any claims made (including all costs or liabilities incurred) against Seller for withdrawal liability by the Plan. (g) With respect to each Transferred Employee, the Buyer agrees that each such Transferred Employee who is terminated by Buyer as a result of (i) termination without cause, (ii) Buyer requiring the Transferred Employee to relocate from the Transferred Employee's current domicile, or (iii) substantial diminution in the Transferred Employee's base salary or responsibility, in each case, on or prior to the six (6) month 20 anniversary of the Closing Date shall receive a severance payment from Buyer that is not less than the amount provided for each such Transferred Employee on Schedule 9.1(a), which severance payments or amounts have been approved by the Seller's Board of Directors and the Seller's creditors' committee. Section 9.2 Name Change. The Seller covenants that at the Closing, or as soon thereafter as is practicable (but in no event later than the ninetieth day after the Closing Date), it will not use the corporate names "Decora Industries, Inc." and "Decora, Incorporated" or any names similar thereto in any business activity except as is necessary for the administration of the Bankruptcy Cases and except in the conduct or operation of any Excluded Assets. ARTICLE X. MISCELLANEOUS Section 10.1 Attorneys' Fees. In the event that either party hereto brings an action or other proceeding to enforce or interpret the terms and provisions of this Agreement, the prevailing party in that action or proceeding shall be entitled to have and recover from the non-prevailing party all such fees, costs and expenses (including, without limitation, all court costs and reasonable attorneys' fees) as the prevailing party may suffer or incur in the pursuit or defense of such action or proceeding. Section 10.2 Reasonable Access to Records and Certain Personnel. So long as the Case is pending: (a) Buyer shall permit Sellers' counsel and other professionals employed in the Case reasonable access to the financial and other books and records relating to the Acquired Assets or the Business (whether in documentary or data form) for the purpose of the continuing administration of the Case (including, without limitation, the pursuit of any avoidance, preference or similar action), which access shall include (i) the right of such professionals to copy, at Sellers' expense, such documents and records as they may request in furtherance of the purposes described above, and (ii) Buyer's copying and delivering to Seller or its professionals such documents or records as they may request, but only to the extent Seller or its professionals furnishes Buyer with reasonably detailed written descriptions of the materials to be so copied and Seller reimburses Buyer for the reasonable costs and expenses thereof); and (b) Buyer shall provide Seller and such professionals (at no cost to Seller) with reasonable access to Ron Artzer, Rob Hanlon, Dana Case and those former Seller employees who are Transferred Employees at the time of any such request who have access to the financial and other records of Seller which are acquired by Buyer hereunder during regular business hours to assist Seller in the continuing administration of the Case, provided that such access does not unreasonably interfere with Buyer's business operations. Section 10.3 Notices. Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and delivered by any of the following methods: (a) hand delivery; (b) certified U.S. mail, return receipt requested, postage prepaid; (c) overnight courier; or (d) facsimile, in each case directed to the following persons and at the following addresses or facsimile numbers, or such other person(s), address(es), and number(s) as to which written notice has been given: 21 If to the Buyer, to Pliant Corporation 1515 Woodfield Road, Suite 600 Schaumburg, Illinois 60173 Telecopy: 847-969-3338 Attention: Brian Johnson E-mail: Brian.johnson@pliantcorp.com with a copy (which shall not constitute notice) to: Stoel Rives LLP 201 South Main Street, Suite 1100 Salt Lake City, UT 84111 Telecopy: 801-578-6999 Attention: Ronald Moffitt E-mail: rmoffitt@stoel.com If to Sellers, to: Decora Industries 1 Mill Street Fort Edward, New York 12828 Telecopy: 518-747-9425 Attention: Ron Artzer E-mail: rartzer@decoraind.com with copies (which shall not constitute notice) to: Latham & Watkins 233 South Wacker Drive Sears Tower - Suite 5800 Chicago, Illinois 60606 Telecopy: 312-993-9767 Attention: Marc Bassewitz E-mail: marc.bassewitz@lw.com and Latham & Watkins 633 West Fifth Street, Suite 4000 Los Angeles, California 90071-2007 Telecopy: 213-891-8763 Attention: Robert Klyman E-mail: robert.klyman@lw.com 22 or to such other place and with such other copies as any party may designate as to itself by written notice to the others. All notices will be deemed received as follows: (i) in the event of hand-delivery, on the date of delivery; (ii) in the event of delivery by certified U.S. mail, on the date of receipt appearing on the return receipt card; (iii) in the event of delivery by overnight courier service, on the next Business Day following deposit with such service for delivery; or (iv) in the event of transmission by facsimile, on the date of receipt printed by the sending facsimile machine when it reports that the transmission is complete. Section 10.4 Entire Agreement. This instrument and the documents to be executed pursuant hereto contain the entire agreement between the parties relating to the sale of the Acquired Assets. Any oral representations or modifications concerning this Agreement or any such other document shall be of no force and effect excepting a subsequent modification in writing, signed by the party to be charged. Section 10.5 Modification. This Agreement may be modified, amended or supplemented only by a written instrument duly executed by all the parties hereto. Section 10.6 Closing Date. All actions to be taken at the Closing pursuant to this Agreement shall be deemed to have occurred simultaneously, and no act, document or transaction shall be deemed to have been taken, delivered or effected until all such actions, documents and transactions have been taken, delivered or effected. Section 10.7 Severability. Should any term, provision or paragraph of this Agreement be determined to be illegal or void or of no force and effect, the balance of the Agreement shall survive except that, if Buyer cannot acquire and Seller cannot sell substantially all of the Acquired Assets, either party may terminate this Agreement, and it shall be of no further force and effect, unless both parties agree in writing to the contrary. Section 10.8 Captions. All captions and headings contained in this Agreement are for convenience of reference only and shall not be construed to limit or extend the terms or conditions of this Agreement. Section 10.9 Further Assurances. Each party hereto will execute, acknowledge and deliver any further assurance, documents and instruments reasonably requested by any other party hereto for the purpose of giving effect to the transactions contemplated herein or the intentions of the parties with respect thereto. Section 10.10 Waiver. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. Section 10.11 Brokerage Obligations. Seller is represented by HLHZ as its exclusive sales agent with respect to the transactions contemplated herein pursuant to Seller's engagement agreement with HLHZ, and HLHZ's fees and expenses are to be paid by Seller in accordance with the terms and provisions of such engagement agreement. Seller and Buyer each represent and warrant to the other that, except for HLHZ, such party has incurred no liability to any broker or agent with respect to the payment of any commission, fees or expenses regarding the 23 consummation of the transaction contemplated hereby. Except for fees and expenses of HLHZ payable by Seller in accordance with the aforementioned engagement agreement, it is agreed that if any claims for commissions, fees or other compensation, including, without limitation, brokerage fees, finder's fees, or commissions are ever asserted against Buyer or Seller in connection with this transaction, all such claims shall be handled and paid by the party whose actions form the basis of such claim and such party shall indemnify, defend (with counsel reasonably satisfactory to the party entitled to indemnification), protect, and save and hold the other harmless from and against any and all such claims or demands asserted by any person, firm or corporation in connection with the transaction contemplated hereby. Section 10.12 Payment of Fees and Expenses. Except as provided in Sections 10.1 and 10.11, each party to this Agreement shall be responsible for, and shall pay, all of its own fees and expenses, including those of its counsel, incurred in the negotiation, preparation and consummation of the Agreement and the transactions contemplated herein. Section 10.13 Survival. Except for covenants and agreements hereunder to be performed after the Closing Date, none of the respective representations, warranties, covenants and agreements of Seller and Buyer herein, or in any certificates or other documents delivered prior to or at the Closing, shall survive the Closing. Section 10.14 Assignments. This Agreement shall not be assigned by either party hereto without the prior written consent of the other party hereto. Section 10.15 Binding Effect. Subject to the provisions of Section 10.14 above, this Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties hereto. Section 10.16 Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware. Section 10.17 Construction. In the interpretation and construction of this Agreement, the parties acknowledge that the terms hereof reflect extensive negotiations between the parties and that this Agreement shall not be deemed, for the purpose of construction and interpretation, drafted by either party hereto. Section 10.18 Counterparts. This Agreement may be signed in counterparts. The parties further agree that this Agreement may be executed by the exchange of facsimile signature pages. Section 10.19 Time is of the Essence. Time is of the essence in this Agreement, and all of the terms, covenants and conditions hereof. Section 10.20 Bankruptcy Court Jurisdiction. BUYER AND SELLER AGREE THAT THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER MATTERS RELATING TO (a) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR (b) THE PROPERTY AND/OR ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO AND AGREES NOT TO CONTEST SUCH EXCLUSIVE JURISDICTION. 24 Section 10.21 Performance by Buyer. Parent shall cause Buyer prior to the Closing Date to comply with its obligations hereunder and shall, subject to the terms herein, cause Buyer to consummate the transaction contemplated herein and whenever prior to the Closing Date this Agreement requires Buyer to take any action, such requirement shall be deemed to include an undertaking of Parent to cause Buyer to take such action. ARTICLE XI. DEFINITIONS Capitalized terms used in this Agreement shall have the following meanings: "Acquired Assets" shall have the meaning ascribed to such term in Section 1.1 hereof. "Agreement" shall have the meaning ascribed to such term in the preamble to this Agreement. "Approval" shall mean any approval, authorization, consent, license, franchise, order or permit of or by, notice to, or filing or registration with, a person. "Approval Hearing" shall have the meaning ascribed to such term in Section 8.6(a) hereof. "Approval Order" shall have the meaning ascribed to such term in Section 8.6(b) hereof. "Assignment Agreement" shall have the meaning ascribed to such term in Section 3.3(a) hereof. "Assumed Contracts" shall have the meaning ascribed to such term in Section 1.1(b) hereof. "Assumed Liabilities" shall have the meaning ascribed to such term in Section 2.2 hereof. "Auction" shall have the meaning ascribed to such term in Section 8.6(a). "Audited Balance Sheets" shall have the meaning ascribed to such term in Section 5.5(a) hereof. "Audited Statements" shall have the meaning ascribed to such term in Section 5.5(a) hereof. "Bankruptcy Court" shall have the meaning ascribed to such term in the recitals to this Agreement. "Books and Records" shall mean originals or copies of all books, financial and other records and information which has been reduced to written, recorded or encoded form relating to the Business or the Acquired Assets, including without limitation, customer lists and related sales histories, credit policies and credit information with respect to existing customers, distribution and sales lists, broker, agent and distributor lists, supplier lists, existing cost and 25 pricing data, existing business plans, advertising and promotion plans and materials, product development plans, product advertisement and packaging designs, forecasts, market research reports, competitor information, reference catalogs and product efficacy research in each case in existence as of the date hereof, as such items may be modified or augmented in the ordinary course of business. "Break-Up Fee" shall have the meaning ascribed to such term in Section 8.6(a) hereof. "Business" shall have the meaning ascribed to such term in the recitals to this Agreement. "Business Day" shall mean a day that is not a Saturday, a Sunday or a day on which banks in the State of New York are required or authorized to close for regular banking business. "Buyer" shall have the meaning ascribed to such term in the preamble to this Agreement. "Case" shall have the meaning ascribed to such term in the recitals to this Agreement. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. "Closing" shall have the meaning ascribed to such term in Section 3.1 hereof. "Closing Date" shall have the meaning ascribed to such term in Section 3.1 hereof. "COBRA" shall mean the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as set forth in Section 4980B of the Code and Part I, Section I of ERISA. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. "Collective Bargaining Agreement" shall mean (i) the Agreement dated March 14, 1999 by and between Decora Manufacturing and the Union, (ii) or the Agreement effective January 6, 2002-March 13, 2005 by and between Seller and the Union or (iii) such other agreement as the Buyer may negotiate with the Union. "Contracts" shall have the meaning ascribed to such term in Section 1.2(d) hereof. "Corporate Records" shall have the meaning ascribed to such term in Section 1.2(j) hereof. "Court Document" shall have the meaning ascribed to such term in Section 8.2 hereof. "Court Filing" shall have the meaning ascribed to such term in Section 8.2 hereof. "Deposit" shall have the meaning ascribed to such term in Section 2.6 hereof. "DIP Loan Amount" shall have the meaning ascribed to such term in Section 2.1(a) hereof. 26 "Employee Plans" shall mean any "employee benefit plans" as defined in Section 3(3) of ERISA and any other material plans or programs pursuant to which Seller has an obligation to provide compensation or other employee benefits to any present or former employee or any beneficiary thereof. "Environmental, Health and Safety Liabilities" means any cost, damages, expense, liability, obligation or other responsibility arising from or under any Environmental Laws or Occupational Safety and Health Law, including those consisting of or relating to: (a) any environmental, health or safety matter or condition (including on-site or off-site contamination, occupational safety and health and regulation of any chemical substance or product); (b) any fine, penalty, judgment, award, settlement, legal or administrative proceeding, damages, loss, claim, demand or response, remedial or inspection cost or expense arising under any Environmental Law or Occupational Safety and Health Law; (c) financial responsibility under any Environmental Law or Occupational Safety and Health Law for cleanup costs or corrective action, including any cleanup, removal, containment or other remediation or response actions ("Cleanup") required by any Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Authority or any other person) and for any natural resource damages; or (d) any other compliance, corrective or remedial measure required under any Environmental Law or Occupational Safety and Health Law. The terms "removal," "remedial," and "response action" include the types of activities covered by the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). "Environmental Laws" shall mean Laws relating to the protection of the environment and/or human health and safety from environmental effects or to the generation, management, removal, remediation, emission, discharge, control, processing, use, treatment, storage, disposal, transport, release, recycling, or handling of Hazardous Materials including, without limitation, CERCLA and the Resource Conservation and Recovery Act (42 U.S.C. section 6901 et seq.) and the regulations promulgated thereunder. "Environmental Permits" shall have the meaning ascribed to such term in Section 5.10(c) hereof. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "Excluded Assets" shall have the meaning as ascribed to such term in Section 1.2 hereof. 27 "Excluded Liabilities" shall mean every liability of Seller other than the Assumed Liabilities, including, without limitation: (i) any liability arising out of or relating to products of Seller to the extent manufactured or sold prior to the Closing Date; (ii) any liability under any Assumed Contract pursuant to Section 1.1(b) that arises after the Closing Date, but that arises out of or relates to any breach that occurred prior to the Closing Date; (iii) any liability for taxes, including (A) any taxes arising as a result of Seller's operation of the Business or ownership of the Assets prior to the Closing Date and (B) any deferred taxes of any nature; (iv) any liability under any contract not assumed by Buyer under Sections 1.1(b) or 2.5; (v) any Environmental, Health and Safety Liabilities arising out of or relating to Seller's operation of the Business or Seller's leasing, ownership or operation of Real Property or personal property; (vi) except as provided in Section 9.1(f), any liability under the Employee Plans or relating to payroll, vacation, sick leave, workers' compensation, unemployment benefits, pension benefits, employee stock option or profit-sharing plans, deferred compensation plans or contracts, health care plans or benefits or any other employee plans or benefits of any kind for Seller's employees or former employees or both; (vii) any liability under any employment, severance, retention or termination agreement with any employee of Seller or any of its related persons; (viii) any liability arising out of or relating to any employee grievance whether or not the affected employees are hired by Buyer; (ix) any liability of Seller to any shareholder or related person of Seller or any shareholder; (x) any liability to or any obligation to indemnify, reimburse or advance amounts to any officer, director, employee or agent of Seller; (xi) any liability to distribute to any of Seller's shareholders or otherwise apply all or any part of the consideration received hereunder; (xii) any liability arising out of any Proceeding pending as of the Closing Date; (xiii) any liability arising out of any Proceeding commenced after the Closing Date and arising out of or relating to any occurrence or event happening prior to the Closing Date; (xiv) any liability arising out of or resulting from Seller's compliance or non-compliance with any legal requirement or order of any Governmental Authority; (xv) any liability of Seller under this Agreement or any other document executed in connection with this Agreement; (xvi) any liability of Seller based upon Seller's acts or omissions occurring after the Closing Date; and (xvii) any amounts Seller may be required to pay to counterparties to the Assumed Contracts pursuant to Section 365 of the Bankruptcy Code as a condition to assuming and assigning any such Assumed Contract(s). 28 "Financial Statements" shall have the meaning ascribed in Section 5.5(a) hereof. "GAAP" shall mean generally accepted accounting principles in the United States, consistently applied. "Governmental Authority" shall mean any foreign, federal, state, local or other governmental, administrative or regulatory authority, body, agency, court, tribunal or similar entity including any arbitrator or arbitration panel. "Hazardous Materials" shall mean any substance: (i) the presence of which requires or may require investigation, remediation, monitoring or control of any kind under any Environmental Laws; or (ii) which is or becomes regulated or defined as "hazardous waste," "hazardous material," "hazardous substance," "friable asbestos," "radioactive material," "radioactive waste," "low-level radioactive waste," "oil," "petroleum," "petroleum products," "polychlorinated biphenyls," "volatile organic compounds" (including those that are airborne) or "wastewater" under any Environmental Law. "HLHZ" shall mean Houlihan Lokey Howard & Zukin Capital. "Improvements" shall have the meaning ascribed to such term in Section 1.1(c) hereof. "Intangible Property" shall have the meaning ascribed to such term in Section 1.1(e) hereof. "Intellectual Property" shall mean all of the following irrespective of where any of the same were issued, are pending or exist that are owned by, issued to or licensed by the Seller: United States and foreign patents of any description, and applications therefor; United States (federal and state) and foreign trademarks (and goodwill associated therewith) and other trade names, labels, trade dress, advertising and package designs, and other trade rights, whether or not registered and all applications therefor; United States and foreign copyrights, whether or not registered and all applications therefor (including copyrights in computer software and computer software documentation, source code and systems documentation); Web sites, know-how, trade secrets, business leads, research and results thereof, technology, techniques, data, methods, processes, instructions, drawings and specifications, inventions, discoveries, improvements, designs, processes, formulae, recipes, whether patented or patentable or not (whether or not such items have been reduced to written, computer-readable or other tangible form); shop rights and license agreements and other agreements of every kind and character relating to any of the foregoing; and all claims and causes of action relating to any of the foregoing, including claims and causes of action for past infringement. "Inventory" shall have the meaning ascribed to such term in Section 1.1(f) hereof. "knowledge" shall mean, with respect to Seller, the actual knowledge of Ron Artzer, Rob Hanlon, Jim Harder, Mike Kilbane, Dana Case or Dick DeCoste. "Non-Union Employees" shall mean those employees of Seller whose terms of employment are not governed by the Collective Bargaining Agreement. 29 "Occupational Safety and Health Law" means any legal requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, including the Occupational Safety and Health Act, and any program, whether governmental or private designed to provide safe and healthful working conditions. "Other Transfer Documents" shall have the meaning ascribed to such term in Section 3.3(b) hereof. "Outside Date" shall have the meaning ascribed to such term in Section 3.2 hereof. "Parent" shall have the meaning ascribed to such term in the preamble to this Agreement. "Permits" shall have the meaning ascribed to such term in Section 5.16 hereof. "Personal Property" shall have the meaning ascribed to such term in Section 1.1(d) hereof. "Petition Date" shall have the meaning ascribed to such term in the recitals to this Agreement. "Plan" shall have the meaning ascribed to such term in Section 9.1(f) hereof. "Postpetition Expense Payment" shall have the meaning ascribed to it in Section 2.4 hereof. "Procedures Order" shall have the meaning ascribed to such term in Section 8.6(a) hereof. "Proceeding" shall mean any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, judicial, or investigative, whether formal or informal, and whether public or private) commenced, brought, conducted, or before, or otherwise involving any Governmental Authority. "Purchase Price" shall have the meaning ascribed to such term in Section 2.1 hereof. "Real Property" shall have the meaning ascribed to such term in Section 1.1(a) hereof. "Real Property Leases" shall have the meaning ascribed to such term in Section 1.1(b)(i) hereof. "Receivables" shall have the meaning ascribed to such term in Section 1.1(g) hereof. "Release" shall mean the spilling, leaking, disposing, discharging, emitting, depositing, ejecting, leaching, escaping or any other release or threatened release, however defined, whether intentional or unintentional, of any Hazardous Material. "Sale Motion" shall have the meaning ascribed to such term in Section 8.6(b) hereof. 30 "Sale Procedure Motion" shall have the meaning ascribed to such term in Section 8.6(a) hereof. "Seller" shall have the meaning ascribed to such term in the preamble to this Agreement. "Seller Default Termination" shall have the meaning ascribed to such term in Section 2.6 hereof. "Survey" shall have the meaning ascribed to such term in Section 4.3(c) hereof. "Title Policy" shall have the meaning ascribed to such term in Section 4.3(c) hereof. "Transferred Employees" shall have the meaning ascribed to such term in Section 9.1(a) hereof. "Unaudited Balance Sheets" shall have the meaning ascribed to such term in Section 5.5(a) hereof. "Unaudited Financial Statements" shall have the meaning ascribed to such term in Section 5.5(a) hereof. "Union" shall mean Decora Local Union No. 1-0013, Paper, Allied Industrial and Chemical & Energy Workers International Union, AFL-CIO. "Union Employees" shall mean those employees of Seller whose terms of employment are governed by the Collective Bargaining Agreement. 31 IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the day and year first above written. PLIANT CORPORATION /s/ ------------------------------------------------- Name: Brian E. Johnson Its: Executive Vice President & Chief Financial Officer PLIANT INVESTMENT, INC. /s/ ------------------------------------------------ Name: Brian E. Johnson Its: Executive Vice President DECORA INDUSTRIES, INC. /s/ ---------------------------------------------- Name: Ronald A. Artzer Its: Chief Executive Officer DECORA, INCORPORATED /s/ ---------------------------------------------- Name: Ronald A. Artzer Its: Chief Executive Officer EX-2.2 4 y61088exv2w2.txt AMENDMENT TO ASSET PURCHASE AGREEMENT EXHIBIT 2.2 EXECUTION COPY AMENDMENT TO ASSET PURCHASE AGREEMENT This Amendment to Asset Purchase Agreement (this "Agreement") is dated this 29th day of March, 2002 by and between Pliant Corporation, a Utah corporation ("Parent"), and Pliant Investment, Inc., a Utah corporation and wholly-owned subsidiary of Parent ("Buyer"), on the one hand, and Decora Industries, Inc., a Delaware corporation, and its operating subsidiary, Decora, Incorporated, a Delaware corporation (collectively, "Seller"), on the other hand. RECITALS A. Reference is hereby made to that certain Asset Purchase Agreement dated as of December 31, 2001, by and between Parent, Buyer and Seller (the "Asset Purchase Agreement"); B. The parties to the Asset Purchase Agreement wish to amend and restate certain provisions of the Asset Purchase Agreement; NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1. Amendments. 1.1 Section 2.1 of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 2.1 Purchase Price and Acceptance of Consideration. Upon the terms and subject to the conditions of this Agreement, at Closing, the Buyer shall assume the Assumed Liabilities and pay to the Seller in immediately available funds the sum of (a) all amounts outstanding under the Seller's debtor-in-possession credit facilities (not to exceed, in any event, $15,500,000), as of the Closing Date, as identified on Schedule 2.1 (the "DIP Loan Amount"), and (b) the Postpetition Expense Payment, described in Section 2.4 (such assumption and payments, collectively, the "Purchase Price"). In no event shall the DIP Loan Amount and the Postpetition Expense Payment exceed, in the aggregate, $17,300,000. The Seller accepts, and hereby agrees that, the payment of the Purchase Price as provided for in this Article II constitutes payment in full and is the sole consideration for the sale, transfer, conveyance, assignment and delivery of the Acquired Assets to the Buyer by the Seller and for all of the other agreements of the Seller provided for in this Agreement." 1.2 Section 2.2(a) of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(a) all amounts outstanding as of the Closing Date with respect to the postpetition trade accounts payable identified on Schedule 2.2(a), representing amounts due and owing on account of trade accounts payable first arising on or after the Petition Date (in the amount, as of March 21, 2002, of $5,864,327.42), including the Raw Materials Purchases;" 1.3 Section 3.2 of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 3.2. Closing Date. The Closing shall be held within five (5) Business Days after satisfaction or waiver of the conditions to Closing contained in Section 4, but in no event later than April 24, 2002 (the "Outside Date"). In the event the conditions to Closing have not been satisfied or waived on or before the Outside Date, then any party who is not in material default hereunder may terminate this Agreement by delivering to the other party written notice of termination." 1.4 Section 4.1(b) of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(b) No claim, suit, action or proceeding shall be pending or threatened before any court, tribunal or Governmental Authority, or otherwise, (i) seeking or threatening to restrain the consummation of the transactions contemplated by this Agreement, (ii) seeking to obtain damages against any of the parties in respect of the consummation of the transactions contemplated by this Agreement, including, without limitation, any claims of Vy Capital LLC or its affiliates (except to the extent barred or otherwise enjoined by the Approval Order), (iii) involving a claim that the consummation of the transactions contemplated by this Agreement would result in the violation of any law, decree or regulation or any Governmental Authority having appropriate jurisdiction, or (iv) involving a claim that the consummation of the transactions contemplated by this Agreement would violate or conflict with or constitute a default or accelerate maturity, performance or payment under any agreement, instrument or writing of any nature to which Seller or its assets or properties may be bound" 1.5 Section 4.1(c) of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in fully with the following: "(c) the Bankruptcy Court shall have entered the Procedures Order in accordance with Section 8.6(a) below, the Approval Order in accordance with Section 8.6(b) below and the Purchase Order in accordance with Section 8.6(c) below, and neither the Approval Order nor the Purchase Order shall have been stayed, modified, amended, dissolved, revoked or rescinded in any material way, as of the Closing Date; and" 2 1.6 Section 4.2(a) of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(a) all of the representations and warranties of Buyer contained in Section 6 that are qualified by materiality shall be true and correct on the Closing Date and those not so qualified by materiality shall be true and correct as of the Closing Date in all material respects, all covenants and obligations to be performed by Buyer on or prior to the Closing Date shall have been performed in all material respects, and Buyer shall have certified the foregoing to Seller in writing." 1.7 Sections 4.3(a), (d) and (e) of the Asset Purchase Agreement are hereby amended by deleting each in its entirety and replacing it in full with the following : "(a) all of the representations and warranties of Seller contained in Section 5 that are qualified by materiality shall be true and correct on the Closing Date and those not so qualified shall be true and correct as of the Closing Date in all material respects, all covenants and obligations to be performed by Seller on or prior to the Closing Date shall have been performed in all material respects, and Seller shall have certified the foregoing to Buyer in writing." "(d) Seller shall have delivered to Buyer appropriate evidence of all necessary corporate action by Seller in connection with the transactions contemplated herein, including, without limitation: (i) certified copies of resolutions duly adopted by Seller's directors, approving the transactions contemplated herein and authorizing the execution, delivery, and performance by Seller of this Agreement; and (ii) a certificate as to the incumbency of officers of Seller executing this Agreement and any instrument or other document delivered in connection with the transactions contemplated herein;" "(e) Seller shall have removed the drums and containers described in Section 1.2(m); and" 1.8 Section 4.3 of the Asset Purchase Agreement is hereby amended by inserting the following Section 4.3(f): "(f) The DIP Loan Amount and the Postpetition Expense Payment shall not exceed, in the aggregate, $17,300,000." 1.9 Section 4.4 of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "4.4. Termination. (a) Termination Events. Notwithstanding anything to the contrary contained in this Agreement, this Agreement may be terminated and the purchase and sale of the 3 Acquired Assets and the other transactions contemplated by this Agreement abandoned at any time prior to the Closing: (i) by mutual written consent of Seller and Buyer; (ii) by Seller or Buyer, if any of the conditions set forth in Section 4.1 shall not have been satisfied by the Outside Date or shall have become incapable of fulfillment by the Outside Date, and shall not have been waived; (iii) by Seller, if any of the conditions set forth in Section 4.2 shall not have been satisfied by the Outside Date or shall have become incapable of fulfillment by the Outside Date, and shall not have been waived by Seller; (iv) by Buyer, if any of the conditions set forth in Section 4.3 shall not have been satisfied by the Outside Date or shall have become incapable of fulfillment by the Outside Date, and shall not have been waived by Buyer; (v) by Buyer if the Closing does not occur on or prior to the Outside Date; or (vi) by Seller if the Closing does not occur on or prior to the Outside Date. provided, however, that the party seeking termination pursuant to clause (ii), (iii), (iv), (v) or (vi) is not then in breach in any material respect of any of its representations, warranties, covenants, or agreements contained in this Agreement. (b) Notice. In the event of termination by Seller or Buyer pursuant to Section 4.4(a), written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated, without further action by any party, and without further liability to either party, except as set forth in Section 2.6. (c) Effect of Termination. If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in Section 4.4(b), then in any such event this Agreement shall become null and void and of no further force and effect, except for the provisions of (a) Section 2.6 relating to the Deposit and Seller's liquidated damages, (b) Section 10.11 relating to finder's and broker's fees, (c) Section 10.12 relating to certain fees and expenses, and (d) this Section 4.4." 1.10 Section 5.17 of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 5.17 Post-Petition Trade Accounts Payable. Each item set forth on Schedule 2.2(a), including the Raw Material Purchases, represents a bona fide trade account 4 payable of Seller first incurred by Seller in the ordinary course of business on or after the Petition Date, and Schedule 2.2(a) reflects the true and correct amount owed by Seller for all trade accounts payable, individually, and in the aggregate, as of October 31, 2001 and as of the Closing Date (with respect to a revised version of such Schedule delivered as of the Closing Date)." 1.11 Section 8.6(b) of the Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(b) Bankruptcy Court's Approval of Sale. Promptly after the date hereof, Seller shall file a motion with the Bankruptcy Court (the "Sale Motion") requesting entry of an order (the "Approval Order"), in form and substance reasonably acceptable to Buyer, which, among other things, (i) approves the sale of the Acquired Assets to Buyer on the terms and conditions set forth in this Agreement (or such higher and better terms and conditions offered at the Auction) and authorizes the Seller to proceed with this transaction or such higher and better transaction, (ii) includes specific findings that (A) this Agreement was proposed and negotiated by Buyer and Seller in good faith and at arm's length, (B) Buyer is a good faith purchaser of the Acquired Assets under Section 363(m) of the Bankruptcy Code, (C) the provisions of Section 363(n) of the Bankruptcy Code have not been violated, and (D) no term, condition or provision of the Letter from Vy Capital, LLC to Seller dated October 15, 2001 (the "Vy Letter"), is binding upon or enforceable against the Seller and that neither Seller nor Buyer has violated any term, condition or provision of the Vy Letter, or incurred any liability to Vy Capital, LLC, on account of the Vy Letter or the sale of the Acquired Assets to Buyer, (iii) authorizes and directs the Seller to sell the Acquired Assets to Buyer pursuant to this Agreement and Section 363 of the Bankruptcy Code, free and clear of all liens, claims, interests, liabilities and encumbrances other than the Assumed Liabilities, (iv) authorizes and directs Seller to assume and assign the pre-Petition Date Assumed Contracts to Buyer pursuant to Section 365 of the Bankruptcy Code and pay all cure amounts payable to the counterparties to the Assumed Contracts as a condition to such assumption and assignment, (v) authorizes and directs the Seller to execute, deliver, perform under, consummate and implement this Agreement, together with all additional instruments and documents that may be reasonably necessary or desirable to implement the foregoing, (vi) decrees that no term, condition or provision of the Vy Letter is binding upon or enforceable against the Seller and that neither Seller nor Buyer has violated any term, condition or provision of the Vy Letter, or incurred any liability to Vy Capital, LLC, on account of the Vy Letter or the sale of the Acquired Assets to Buyer, (vii) permanently enjoins Vy Capital, LLC from asserting against Seller or Buyer any claim arising from the Vy Letter or on account of the sale of the Acquired Assets to Buyer, and (viii) permanently enjoins each and every holder of a lien, claim or interest that is not an Assumed Liability from commencing, continuing or otherwise pursuing or enforcing any remedy, claim or cause of action against Buyer relative to such lien, claim or interest. Following the filing of the Sale Motion, Seller shall use reasonable efforts to obtain entry of the Approval Order. Both Buyer's and Seller's obligations to consummate the transactions contemplated herein which Buyer and Seller may hereafter enter into shall be 5 expressly conditioned upon the Bankruptcy Court's entry of the Approval Order incorporating each of the terms set forth in this Section 8.6(b)." 1.12 Section 8.6 of the Asset Purchase Agreement is hereby amended by adding the following new Section 8.6(c): "(c) Raw Material Purchases. Promptly after the date hereof, Seller shall file a motion with the Bankruptcy Court requesting, and shall use its reasonable efforts to seek, entry of an order (the "Purchase Order") that, among other things, (i) makes specific findings that (A) the Raw Materials Purchases were purchased by Seller and sold by Buyer in the ordinary course within the meaning of Section 364 of the Bankruptcy Code, constitute valid trade payables of Seller, and were actual and necessary costs of preserving and administering Seller's estates within the meaning of Section 503(b) of the Bankruptcy Code, or, alternatively, (B) (1) Seller had a critical need for the credit extended by Parent for the acquisition of raw materials; the Raw Material Purchases were necessary to avoid any immediate and irreparable harm to Seller and their estates; Seller was unable to find any entity willing to provide credit on terms more favorable than those proposed by Parent, the terms and conditions relating to the credit extended by Parent are and were reasonable under the circumstances; Seller and Parent reasonably believed that the transactions giving rise to the Raw Materials Purchases were accomplished in the ordinary course; the purchases of the Raw Material Purchases materially benefited Seller's estates; and sufficient and adequate cause exists to approve retroactively Parent's extending credit for, and Seller's acquisition of, the Raw Material Purchases; (2) Parent acted in good faith in agreeing to extend credit for the Raw Material Purchases acquisitions and that any credit used to acquire the Raw Material Purchases shall be deemed to have been extended in good faith within the meaning of Section 364(e) of the Bankruptcy Code; and (3) all sums owing to Parent in connection with the Raw Materials Purchases constitute allowed administrative expenses of Seller and their estates under Section 503(b) of the Bankruptcy Code; (ii) allows all sums owing to Parent in connection with the Raw Material Purchases as an administrative claim under Section 503(b) of the Bankruptcy Code and grants such expenses an administrative priority equivalent in priority to a claim under Section 507(a)(1) of the Bankruptcy Code, (iii) authorizes and directs the payment of any sums owing to Parent in connection with the Raw Material Purchases, without further court order, on the earlier of (A) any termination of this Agreement or (B) when otherwise payable, and (iv) authorizes the set off any sums owing in connection with the Raw Material Purchases against any obligations arising in connection with this Agreement, including, without limitation, the Purchase Price and the Deposit. Parent's and Buyer's respective obligations to proceed under the terms of this Agreement and to consummate the transactions contemplated herein are expressly conditioned upon the Bankruptcy Court's entry of the Purchase Order, in form and substance acceptable to Parent and Buyer." 1.13 Article XI of the Asset Purchase Agreement is hereby amended by adding the following definition: "Raw Material Purchases" shall mean all postpetition purchases of raw materials from 6 Parent as more fully described in the purchase orders attached hereto as Schedule 1.13." SECTION 2. Miscellaneous. 2.1 Defined Terms. All capitalized and undefined terms used herein shall have the meanings ascribed to such terms in the Asset Purchase Agreement. 2.2 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. 2.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to the choice of law principles thereof. 2.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that the Buyer, so long as the Buyer remains liable for its obligations under the Asset Purchase Agreement, may transfer any of its rights or obligations hereunder to any of its affiliates. 2.5 Confirmation of the Asset Purchase Agreement. Except as expressly modified hereby, the Asset Purchase Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. [signature page follows] 7 IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Asset Purchase Agreement as of the day and year first above written. PLIANT CORPORATION /s/ ----------------------------------------------- By: Brian E. Johnson Title: Executive Vice President & Chief Financial Officer PLIANT INVESTMENT, INC. /s/ ----------------------------------------------- By: Brian E. Johnson Title: Executive Vice President DECORA INDUSTRIES, INC. /s/ ----------------------------------------------- By: Ronald A. Artzer Title: Chief Executive Officer DECORA, INCORPORATED /s/ ----------------------------------------------- By: Ronald A. Artzer Title: Chief Executive Officer 8 EX-2.3 5 y61088exv2w3.txt AMENDMENT TO ASSET PURCHASE AGREEMENT EXHIBIT 2.3 SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT This Second Amendment to Asset Purchase Agreement (this "Agreement") is dated this 26th day of April, 2002 by and between Pliant Corporation, a Utah corporation ("Parent"), and Pliant Investment, Inc., a Utah corporation and wholly-owned subsidiary of Parent ("Buyer"), on the one hand, and Decora Industries, Inc., a Delaware corporation, and its operating subsidiary, Decora, Incorporated, a Delaware corporation (collectively, "Seller"), on the other hand. RECITALS A. Reference is hereby made to that certain Asset Purchase Agreement dated as of December 31, 2001, by and between Parent, Buyer and Seller (the "Original Agreement") as amended by that certain Amendment to Asset Purchase Agreement dated March 29, 2002, by and between Parent, Buyer and Seller, and together with the Original Agreement (the "Amended Asset Purchase Agreement"); B. The parties to the Amended Asset Purchase Agreement wish to amend and restate certain provisions of the Amended Asset Purchase Agreement; NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and subject to approval by the Bankruptcy Court, the parties hereto agree as follows: SECTION 1. Amendments. 1.1 Section 2.1 of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 2.1 Purchase Price and Acceptance of Consideration. Upon the terms and subject to the conditions of this Agreement, at Closing, the Buyer shall assume the Assumed Liabilities and pay to the Seller in immediately available funds the sum of (a) all amounts outstanding under the Seller's debtor-in-possession credit facilities (not to exceed, in any event, $15,299,772), as of the Closing Date, as identified on Schedule 2.1 (the "DIP Loan Amount"), and (b) the Postpetition Expense Payment, described in Section 2.4 (such assumption and payments, collectively, the "Purchase Price"). In no event shall the DIP Loan Amount and the Postpetition Expense Payment exceed, in the aggregate, $18,099,772. The Seller accepts, and hereby agrees that, the payment of the Purchase Price as provided for in this Article II constitutes payment in full and is the sole consideration for the sale, transfer, conveyance, assignment and delivery of the Acquired Assets to the Buyer by the Seller and for all of the other agreements of the Seller provided for in this Agreement." 1.2 Section 2.2(a) of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(a) all amounts outstanding as of the Closing Date with respect to the postpetition trade accounts payable identified on Schedule 2.2(a) (excluding all amounts owed for Raw Material Purchases) representing amounts due and owing on account of trade accounts payable first arising on or after the Petition Date (in the amount, as of April 16, 2002, of $4,128,755); provided, however, if Buyer and Seller consummate the Closing, the postpetition trade accounts payable included in the Assumed Liabilities under this Section 2.2(a) and the Purchase Price shall be increased by the amount of the Raw Material Purchases." 1.3 Section 2.4 of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 2.4. Postpetition Expense Payment. On the closing Date, the Buyer shall (i) cause to be transferred to the Seller by wire transfer of immediately available funds an amount attributed to the additional assumed liabilities as of the Closing Date identified on an unitemized statement which Seller shall submit to Buyer no less than two (2) Business Days prior to the Closing; provided, that, in no event, shall such amount be in excess of $1,800,000 and (ii) cause to be transferred to the Seller by wire transfer of immediately available funds, in addition to any other consideration to be paid for the Acquired Assets, the sum of $1,000,000, for allocation and distribution in accordance with the priorities established by the Bankruptcy Code, except as otherwise authorized under a confirmed plan of reorganization, or agreed upon by the Debtors and the Committee and approved by the Bankruptcy Court, for the benefit of unsecured creditors in the Case; provided, that, upon making such payment, Buyer shall have no further liability to any party on account of the allocation or distribution of that payment (such payments under (i) and (ii) above being collectively, the Postpetition Expense Payment.)" 1.4 Section 3.2 of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 3.2. Closing Date. The Closing shall be held within five (5) Business Days after satisfaction or waiver of the conditions to Closing contained in Section 4, but in no event later than May 23, 2002 (the "Outside Date")." 1.5 Section 4.1(c) of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(c) the Bankruptcy Court shall have entered the Procedures Order in accordance with Section 8.6(a) below and the Approval Order in accordance with Section 8.6(b) below, and the Approval Order shall not have been stayed, modified, amended, dissolved, revoked or rescinded in any material way, as of the Closing Date; and" 2 1.6 Section 4.3 of the Amended Asset Purchase Agreement is hereby amended by inserting the following Section 4.3(f): "(f) The DIP Loan Amount and the Postpetition Expense Payment shall not exceed, in the aggregate, $18,099,772." 1.7 Section 5.17 of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "Section 5.17 Post-Petition Trade Accounts Payable. Each item set forth on Schedule 2.2(a) represents a bona fide trade account payable of Seller first incurred by Seller in the ordinary course of business on or after the Petition Date, and Schedule 2.2(a) reflects the true and correct amount owed by Seller for all trade accounts payable, individually, and in the aggregate, as of October 31, 2001 and as of the Closing Date (with respect to a revised version of such Schedule delivered as of the Closing Date)." 1.8 Section 8.6(c) of the Amended Asset Purchase Agreement is hereby amended by deleting it in its entirety and replacing it in full with the following: "(c) Raw Material Purchases. Promptly after the date hereof, Seller shall move the Bankruptcy Court for, and shall use its reasonable efforts to seek, entry of an order granting the relief sought by Debtors under their "Motion for Order, under 11 U.S.C. Sections 105 and 364, Approving and Extending Purchase Order Program with Pliant Corporation Nunc Pro Tunc to January 1, 2002" (the "Motion"); provided, however, that the Seller shall amend the relief sought under the Motion to request the entry of an order allowing the Raw Material Purchases as a general unsecured, non-priority claim against the Seller and their estates." SECTION 2. Miscellaneous. 2.1 Defined Terms. All capitalized and undefined terms used herein shall have the meanings ascribed to such terms in the Amended Asset Purchase Agreement. 2.2 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. 2.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to the choice of law principles thereof. 2.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that the Buyer, so long as the Buyer remains liable for its obligations under the Amended Asset 3 Purchase Agreement, may transfer any of its rights or obligations hereunder to any of its affiliates. 2.5 Confirmation of the Amended Asset Purchase Agreement. Except as expressly modified hereby, the Amended Asset Purchase Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. [signature page follows] 4 IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Asset Purchase Agreement as of the day and year first above written. PLIANT CORPORATION /s/ ------------------------------------------------- By: Brian E. Johnson Title: Executive Vice President & Chief Financial Officer PLIANT INVESTMENT, INC. /s/ ------------------------------------------------- By: Brian E. Johnson Title: Executive Vice President DECORA INDUSTRIES, INC. /s/ ------------------------------------------------- By: Ronald A. Artzer Title: Chief Executive Officer DECORA, INCORPORATED /s/ ------------------------------------------------- By: Ronald A. Artzer Title: Chief Executive Officer 5 EX-2.4 6 y61088exv2w4.txt ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT EXHIBIT 2.4 ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT This Assignment, Assumption and Consent Agreement ("Agreement") is made and entered into as of the 13th day of May, 2002, between Decora Industries, Inc., a Delaware corporation ("Decora Industries"), and its operating subsidiary, Decora, Incorporated, a Delaware corporation ("Decora," and collectively with Decora Industries, the "Seller"), Pliant Corporation, a Utah corporation ("Pliant"), Pliant Investment, Inc., a Utah corporation ("PI"), and Pliant Solutions Corporation, a Utah corporation ("PSC"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto under the Purchase Agreement (as defined below). W I T N E S S E T H: WHEREAS, the Seller, Pliant and PI are parties to a certain Asset Purchase Agreement dated as of December 31, 2001, as amended by an Amendment to Asset Purchase Agreement dated March 29, 2002, and as further amended by a Second Amendment to Asset Purchase Agreement dated April 26, 2002 (as so amended, the "Purchase Agreement"); and WHEREAS, PI desires to assign its rights under the Purchase Agreement to PSC, PSC is willing to accept such assignment and to assume and discharge PI's duties and obligations under the Purchase Agreement, and the Seller is willing to consent to such assignment and assumption, in each case, on the terms and conditions set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Assignment. Effective as of the date hereof (the "Effective Date"), PI hereby assigns, transfers, and conveys to PSC all of PI's right, title and interest in and to the Purchase Agreement, including, without limitation, any deposits, prepayments, claims and rights that may have been earned or have accrued prior to the Effective Date. 2. Assumption. PSC hereby accepts such assignment and assumes and agrees to pay, perform and fully discharge all of PI's obligations and duties under the Purchase Agreement from and after the Effective Date. PSC agrees that the Seller is an intended beneficiary of such assumption and may directly enforce the assumption against PSC. 3. Consent. In consideration of the assumption under Section 2 of this Agreement, the Seller agrees and consents to the assignment of PI's rights under the Purchase Agreement to PSC and further agrees that PI is released from all of its obligations to the Seller under the Purchase Agreement. 4. Confirmation. Pliant hereby confirms its obligations with respect to PSC under Section 10.21 of the Purchase Agreement. 5. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute a single agreement. [EXECUTION PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. DECORA INDUSTRIES, INC. /s/ ----------------------------------------------- By: Ronald A. Artzer Title: President and Chief Executive Officer DECORA, INCORPORATED /s/ ----------------------------------------------- By: Ronald A. Artzer Title: President and Chief Executive Officer PLIANT CORPORATION /s/ ----------------------------------------------- By: Jack E. Knott Title: President PLIANT INVESTMENT, INC. /s/ ----------------------------------------------- By: Jack E. Knott Title: President PLIANT SOLUTIONS CORPORATION /s/ ----------------------------------------------- By: Jack E. Knott Title: President EX-2.5 7 y61088exv2w5.txt AMENDMENT TO ASSET PURCHASE AGREEMENT EXHIBIT 2.5 THIRD AMENDMENT TO ASSET PURCHASE AGREEMENT This Third Amendment to Asset Purchase Agreement (this "Agreement") is dated this 20th day of May 2002 by and between Pliant Corporation, a Utah corporation ("Parent"), and Pliant Solutions Corporation, a Utah corporation and wholly-owned subsidiary of Parent ("Buyer"), on the one hand, and Decora Industries, Inc., a Delaware corporation, and its operating subsidiary, Decora, Incorporated, a Delaware corporation (collectively, "Seller"), on the other hand. RECITALS A. Reference is hereby made to that certain Asset Purchase Agreement dated as of December 31, 2001, by and between Parent, Buyer and Seller, as amended (the "Asset Purchase Agreement"); B. The parties to the Asset Purchase Agreement wish to further amend and restate certain provisions of the Asset Purchase Agreement; NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1. Amendments. 1.1 Assumed Contracts. Schedule 1.1(b)(ii) to the Asset Purchase Agreement is amended by deleting such Schedule and inserting in lieu thereof Schedule 1.1(b)(ii) hereto. 1.2 Intangible Property. Schedule 1.1(e) to the Asset Purchase Agreement is hereby amended by deleting such Schedule and inserting in lieu thereof Schedule 1.1(e) hereto. 1.3 DIP Loan Amount. Schedule 2.1 to the Asset Purchase Agreement is hereby amended by deleting such Schedule and inserting in lieu thereof Schedule 2.1 attached hereto. 1.4 Post-Petition Accounts Payable. Schedule 2.2(a) to the Asset Purchase Agreement is hereby amended by deleting such Schedule and inserting in lieu thereof Schedule 2.2(a) attached hereto. 1.5 Postpetition Expense Payment. Schedule 2.4 attached hereto sets forth the Postpetition Expense Payment. 1.6 Transferred Employees. Schedule 9.1(a) to the Asset Purchase Agreement is hereby amended by deleting such Schedule and inserting in lieu thereof Schedule 9.1(a) attached hereto. 1.7 Article 1 of the Asset Purchase Agreement is hereby amended by adding the following new Section 1.4: "1.4 Assumption and Assignment Motion. Promptly after the Closing Date, the Seller shall file with the Bankruptcy Court, and seek entry of an order granting, a motion to assume and assign to the Buyer any Assumed Contract that was not assumed and assigned under the Approval Order (as defined below), including, without limitation, (i) the Plastico y Derivados C.A. license agreement, (ii) the Sinteticos S.A. license, and (iii) the Vulcan Material Plastico S.A. license." 1.8 Section 1.1 of the Asset Purchase Agreement is hereby amended by adding the following to the last sentence of Section 1.1(b): "Notwithstanding the foregoing, the parties acknowledge and agree that Buyer shall have the right to amend Schedule 1.1(b)(ii) to exclude the License Agreement between Utilitech/Decora and John R. Smith dated August 9, 1991, from and after the Closing Date for a period of time not to exceed twenty (20) days, whereupon such item shall not be an Assumed Contract." SECTION 2. Miscellaneous. 2.1 Defined Terms. All capitalized and undefined terms used herein shall have the meanings ascribed to such terms in the Asset Purchase Agreement 2.2 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. 2.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to the choice of law principles thereof. 2.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that the Buyer, so long as the Buyer remains liable for its obligations under the Asset Purchase Agreement, may transfer any of its rights or obligations hereunder to any of its affiliates. 2 2.5 Confirmation of the Asset Purchase Agreement. Except as expressly modified hereby, the Asset Purchase Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. [signature page follows] 3 IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to Asset Purchase Agreement as of the day and year first above written. PLIANT CORPORATION /s/ ----------------------------------------------- By: Jack E. Knott Title: President PLIANT SOLUTIONS CORPORATION /s/ ----------------------------------------------- By: Jack E. Knott Title: President DECORA INDUSTRIES, INC. /s/ ----------------------------------------------- By: Ronald A. Artzer Title: President and Chief Executive Officer DECORA, INCORPORATED /s/ ----------------------------------------------- By: Ronald A. Artzer Title: President and Chief Executive Officer [Signature Page to Third Amendment to Asset Purchase Agreement] S-1 EX-2.6 8 y61088exv2w6.txt ORDER EXHIBIT 2.6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Case No. 00-4459 and 00-4460 (JJF) Chapter 11 DECORA INDUSTRIES, INC. and DECORA, INCORPORATED, (Jointly Administered) Debtors. - -------------------------------------------------------------------------------- ORDER PURSUANT TO SECTIONS 105(a), 363, 365, AND 1146 OF THE BANKRUPTCY CODE: (A) AUTHORIZING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS' ASSETS TO PLIANT INVESTMENT, INC. OR ITS DESIGNEE FREE AND CLEAR OF LIENS, CLAIMS, INTERESTS AND ENCUMBRANCES SUBJECT TO HIGHER AND BETTER OFFERS; (B) APPROVING TUE ASSET PURCHASE AGREEMENT; (C) APPROVING THE ASSUMPTION AND ASSIGNMENT OF SUBSTANTIALLY ALL OF THE DEBTORS' EXECUTORY CONTRACTS AND UNEXPIRED LEASES; AND (D) GRANTING RELATED RELIEF THIS MATTER CAME BEFORE THE COURT on May 14, 2002 at 4:00 p.m. (the "Sale Hearing") on the Motion for Order Pursuant to Section 105(a), 363, 365 and 1146 of the Bankruptcy Code: (A) Authorizing the Sale of Substantially all of the Debtors' Assets to Pliant Investment, Inc. (or its designee) Free and Clear of Liens, Claims, Interests and Encumbrances Subject to Higher and Bettor Offers; (B) Approving the Asset Purchase Agreement; (C) Approving the Assumption and Assignment of Substantially All of the Debtors' Executory Contracts and Unexpired Leases; and (D) Granting Related Relief (the "Motion") filed by the above-captioned debtors and debtors-in-possession (together, the "Debtors") in these chapter 11 cases (the "Cases"), and Motion for Order Approving Amendment to Asset Purchase Agreement By and Between Pliant Corporation and Decora Industries, Inc. (the "Amendment Motion"), together with the Motion (the "Amendment Motion", together with the Motion, the "Motions"). NOW, THEREFORE, the Court having considered the Motion and the testimony of Ron Artzer, Andrew J. Torgove and Geff Perera in support thereof; the Debtors' oral report at the Sale Hearing regarding the results of the auction (the "Auction") of substantially all of their assets in accordance with the Bidding Procedures (as defined below) approved by this Court's Order entered on January 3, 2002 (the "Procedures Order") with respect to the Debtors' Amended Motion for Order Authorizing and Approving the Bidding Procedures and Other Bidding Protections in Connection with the Proposed Sale of All or Substantially All of the Debtors' Assets to Pliant Corporation Pursuant to Sections 363, 503 and 105 of the Bankruptcy Code; the Assignment, Assumption and Consent Agreement dated as of May 13, 2002 (the "Assignment Agreement"), under which Pliant Investment, Inc., assigned all of its right, title and interest as "Buyer" under the Asset Purchase Agreement (as defined below) to its affiliate, Pliant Solutions Corporation (the "Purchaser"); the Debtors' request that the Court approve the sale to the Debtors' assets specified in that certain Asset Purchase Agreement, dated as of December 31, 2001 as amended by that certain Amended Asset Purchase Agreement dated March 29, 2002, and the Second Amendment to Asset Purchase Agreement dated April 26, 2002, true and correct copies of which are attached hereto as Exhibit A (as so amended and as hereafter amended, the "Asset Purchase Agreement"(1)) to the Purchaser, pursuant to which the Debtors have agreed to (i) assume, assign and sell to the Purchaser, pursuant to section 365 of title 11 of the United States Code (11 U.S.C. Sections 101 et seq., the "Bankruptcy Code"), the executory contracts and real property leases (the "Assigned Contracts") listed on a notice (the "Contract Notice") to be filed with the Court within ten (10) days of entry hereof, and (ii) sell to the Purchaser, pursuant to section 363(b) of the Bankruptcy Code, all of the assets of the Debtors identified in Section 1.1 of the Asset Purchase Agreement (the "Assets" and including the Assigned Contracts, the "Sale Assets"), as such transactions (collectively, the "Sale") are more fully set forth in the Asset Purchase Agreement; the evidence proffered or adduced at, memoranda and objections, if any, including the Committee's withdrawal of its objection to the Motion, subject to the terms and conditions identified in the letter agreements among and between the Debtors, Pliant, and the Committee dated as of April 24, 2002 (the "Letter Agreements"), filed in connection with, and - ---------------------- (1) All capitalized terms used herein without definition shall have the meanings provided in the Asset Purchase Agreement. 2 arguments of counsel made at, the Sale Hearing; and upon the entire record of the Sale Hearing and the Cases; and good cause and adequate notice appearing therefore, IT IS HEREBY FOUND THAT: A. The Court has jurisdiction over the Motions pursuant to 28 U.S.C. Sections 157 and 1334, and this matter is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2)(A) and (N). Venue of the Cases and the Motion in this district is proper under 28 U.S.C. Sections 1408 and 1409. B. The statutory predicates for the relief sought in the Motions are sections 105(a), 363(b), (f), (m) and (n) , 365, and 1146(c) of the Bankruptcy Code, and Rules 2002, 6004, 6006 and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). C. The bidding procedures approved in the Procedures Order (the "Bidding Procedures") have been fully complied with in all material respects. D. Proper, timely, adequate and sufficient notice of the Motions, the Auction, the Sale Hearing, the Sale and the assumption and assignment of the Assigned Contracts and the other transactions contemplated by the Asset Purchase Agreement has been provided in accordance with sections 102(1), 105(a), 363 and 365 of the Bankruptcy Code and Rules 2002, 6004, 6006 and 9014 of the Bankruptcy Rules and in compliance with the Bidding Procedures, such notice was good and sufficient, and appropriate under the particular circumstances, and no other or further notice of the Motion, the Auction, the Sale Hearing, the Sale and the assumption and assignment of Assigned Contracts and other transactions contemplated by the Asset Purchase Agreement or the entry of this Sale Order, is required. E. A reasonable opportunity to object or be heard with respect to the Motions and the relief requested therein has been afforded to all interested persons and entities, including (i) the Office of the United States Trustee for the District of Delaware; (ii) the Official Committee of Creditors Holding Unsecured Claims (the "Committee"); (iii) all parties asserting liens, claims, encumbrances or other interests of any kind or nature whatsoever (collectively, "Interests") in or on the Sale Assets; (iv) all parties to the Assigned Contracts; (v) all known 3 creditors, and equity security holders, including the list of creditors holding the twenty largest unsecured claims; (vi) all entities known to have expressed an interest in potentially acquiring Debtors' assets including, without limitation, Vy Capital; (vii) the Internal Revenue Service and all appropriate federal, state and local taxing authorities; (viii) the Pension Benefit Guaranty Corporation; (ix) counsel for the Purchaser; and (x) all other entities that had filed requests for notices pursuant to Bankruptcy Rule 2002. F. Ableco Finance LLC and The CIT Group/Business Credit, Inc., the Debtors' post-petition secured lenders (collectively, the "DIP Lender"), consent to the sale of, and the release of their liens and security interests in, the Assets on the terms and conditions set forth herein conditioned on the repayment in full of all the outstanding obligations under the Debtors' post-petition debtor-in-possession financing facility with the DIP lender (the "Post-Petition Credit Facility") approved by order dated December 21, 2000 (the "Final DIP Financing Order") is amended by that order dated on or about December 5, 2001 (the "Amended DIP Financing Order"). G. The Debtors have marketed the Sale Assets and conducted the sale process in compliance with the Bidding Procedures, the Orders of this Court, including, without limitation, the Procedures Order, and the requirements of applicable law. H. The Debtors have full corporate power and authority to execute the Asset Purchase Agreement and all other documents contemplated thereby, and the sale of the Sale Assets and assumption and assignment of the Assigned Contracts has been duly and validly authorized by all necessary corporate action of the Debtors. The Debtors have all the corporate power and authority to consummate the transactions contemplated the Asset Purchase Agreement. I. No consents or approvals, other than those expressly provided for in the Asset Purchase Agreement, are required for the Debtors to consummate the Sale and the assumption and assignment of the Assigned Contracts. 4 J. The Asset Purchase Agreement, including, without limitation, the assumption and assignment of the Assigned Contracts, reflects the exercise of the Debtors' sound business judgment. K. Approval at this time of the Asset Purchase Agreement and consummation of the Sale and the assumption and assignment of the Assigned Contracts and other transactions contemplated thereby is in the best interests of the Debtors, their creditors, their estates, and other parties in interest. L. The Debtors have demonstrated both (i) good, sufficient, and sound business purpose and justification; and (ii) compelling circumstances for the Sale and the assumption and assignment of the Assigned Contracts and other transactions contemplated thereby pursuant to section 363(b) of the Bankruptcy Code without the filing and confirmation of a plan of reorganization or liquidation in the Cases, including, without limitation, that (a) the Debtors have been incurring, are incurring, and are projected to continue to incur substantial operating losses; (b) the Debtors are unable to obtain sufficient financing to continue their operations on a stand-alone basis; (c) the value of the Debtors is placed at risk by their current financial condition; (d) the Purchaser is a financially healthy purchaser that made a substantial offer to acquire certain of the Debtors' assets; (e) the Debtors and their financial advisor, Houlihan Lokey Howard and & Zukin, diligently and in good faith, marketed the Sale Assets to secure the highest and best offer; and (f) the auction process proposed by the Debtors, approved by the Court in the Procedures Order and required by section 363 of the Bankruptcy Code has permitted the Purchaser's offer to be fairly tested against other offers and has resulted in the highest arid best offer for the sale of those assets. M. The Asset Purchase Agreement was negotiated, proposed and entered into by the Debtors and the Purchaser without collusion, in good faith, and from arm's-length bargaining positions. Neither the Debtors nor the Purchaser has engaged in any conduct that 5 would cause or permit the Asset Purchase Agreement to be avoided under section 363(n) of the Bankruptcy Code. N. The Purchaser is a good faith purchaser within the meaning of section 363(m) of the Bankruptcy Code and, as such, .is entitled to all of the protections afforded thereby. The Purchaser will be acting in good faith within the meaning of section 363(m) of the Bankruptcy Code in closing the transactions contemplated by the Asset Purchase Agreement at all times after the entry of this Sale Order. Accordingly, the reversal or modification on appeal of the authorization provided herein to consummate the Sale shall not affect the validity of the Sale to the Purchaser, unless such authorization is duly stayed pending such appeal. O. The terms and conditions of the Asset Purchase Agreement and the Purchase Price to be provided by the Purchaser pursuant to the Asset Purchase Agreement (i) are fair and reasonable, (ii) represent the highest or otherwise best offer for the Sale Assets and (iii) constitute reasonably equivalent value and fair consideration under the Bankruptcy Code and other applicable law. P. The Sale and the assumption and assignment of the Assigned Contracts and other transactions contemplated by the Asset Purchase Agreement must be approved and consummated promptly in order to preserve the value of the Sale Assets. Q. The transfer of the Assets and the assignment of the Assigned Contracts pursuant to the Asset Purchase Agreement upon the Closing will (i) be legal, valid, and effective transfers of property of the Debtors' estates to the Purchaser, and (ii) vest the Purchaser with good title to the Assets and the Assigned Contracts, free and clear of all Interests (other than the Assumed Liabilities.) R. All amounts, if any, to he paid by the Debtors pursuant to the Asset Purchase Agreement constitute administrative expenses under sections 503(b) and 507(a) (1) of the Bankruptcy Code and are due and payable if and when the Debtors' obligations arise under the Asset Purchase Agreement without further order of the Court. 6 S. All of the provisions of this Sale Order are nonseverable and mutually dependent. T. The Purchaser would not have entered into the Asset Purchase Agreement and would not consummate the Sale and the assumption and assignment of Assigned Contracts and other transactions contemplated thereby, thus adversely affecting the Debtors, their estates, and their creditors, if the Sale of the Sale Assets to the Purchaser and the assignment of the Assigned Contracts to the Purchaser were not free and clear of all Interests (other than Assumed Liabilities), or if the Purchaser would, or in the future could, be liable for any Interests (other than Assumed Liabilities). U. The Debtors may sell the Sale Assets free and clear of all Interests (other than Assumed Liabilities) of any kind or nature whatsoever because, in each case, one or more of the standards set forth in sections 363(f) (1)-(5) of the Bankruptcy Code has been satisfied. Those (i) holders of Interests in the Sale Assets and (ii) non-Debtor parties to Assigned Contracts who did not object, or who withdrew their objections, to the Sale and the assumption and assignment of Assigned Contracts, and other transactions contemplated thereby or the Motion are deemed to have consented pursuant to sections 363(f)(2) and 365 of the Bankruptcy Code. Those (i) holders of Interests in the Sale Assets and (ii) non-Debtor parties to Assigned Contracts who did object to the Motion fall within one or more of the other subsections of sections 363(f) and 365 of the Bankruptcy Code and are adequately protected by having their interests attributed to the net ;proceeds of the property against or in which they claim an Interest. V. Consummation of the Sale, including, without limitation, the transfer of the Assets to the Purchaser, the hiring by the Purchaser or its affiliates of employees of the Debtors, and the assumption and assignment to the Purchaser of the Assigned Contracts, will not subject the Purchaser to any liabilities of any kind or nature whatsoever (other than the Assumed Liabilities and liabilities to the Debtors under the express terms of the Asset Purchase Agreement) existing as of the date hereof or hereafter arising, of or against the Debtors, any 7 affiliate of the Debtors, or any other person, by reason of the operation of the Business prior to the Closing or by reason of such transfer, hiring or assignment, based, in whole or in part, directly or indirectly on any theory of law or equity, including without limitation, any theory of antitrust or successor or transferee liability. W. The Sale of the Sale Assets to the Purchaser is a prerequisite to the Debtors' ability to confirm and consummate a plan of reorganization or liquidation. The Sale is a sale in contemplation of a plan and, accordingly, a transfer pursuant to section 1146(c) of the Bankruptcy Code, which shall not be taxed under any law imposing a stamp, transfer, recording or similar tax. X. The Debtors have demonstrated that (i) it is an exercise of their sound business judgment to assume and assign the Assigned Contracts to the Purchaser in connection with the consummation of the Sale; and (ii) the assumption and assignment of the Assigned Contracts, and other transactions contemplated by the Asset Purchase Agreement, and the relief requested in the Motion, including approval of the Asset Purchase Agreement, the Sale and the assumption and assignment of the Assigned Contracts, and other transactions contemplated by the Asset Purchase Agreement, is in the best interests of the Debtors, their estates, and their creditors. The Assigned Contracts being assigned to the Purchaser are an integral part of the assets being purchased by the Purchaser and, accordingly, such assumption and assignment of the Assigned Contracts, is reasonable, enhances the value of the Debtors' estates, and does not: constitute unfair discrimination. Y. The cure amounts in respect to the Assigned Contracts( the "Cure Amounts"), if any, are the sole amounts necessary to cure all defaults, and to pay all established actual pecuniary losses that have resulted from such defaults under the Assigned Contracts within the meaning of, respectively, sections 365(b) (1) (A) and 365(b) (1) (B) of the Bankruptcy Code. 8 Z. The Purchaser has provided adequate assurance of the Purchaser's future performance of and under the Assigned Contracts within the meaning of sections 365(b) (1) (C) and (f) (2) (B) of the Bankruptcy Code. AA. No defaults exist in the Debtors' performance under the Assigned Contracts as of the date of this Sale Order other than the failure to pay amounts equal to the Cure Amounts set forth in the Contract Notice. BB. Decora signed a Letter of Intent, dated October 15, 2001 (the Vy Capital Letter"), with Vy Capital, LLC ("Vy Capital"), which (i) contained Vy Capital's non-binding proposal to acquire all or substantially all of the Debtors' assets and (ii) provided for an exclusivity period to permit Vy Capital to perform due diligence and negotiate the proposed acquisition (the "Exclusivity Rights"). CC. This Court has not conducted a hearing with respect to, and has not entered an order approving, the Vy Capital Letter or the Exclusivity Rights, and no motion is presently on file seeking such approval. DD. Proper, timely, adequate and sufficient notice of the Motion, the Bidding Procedures and this Sale Order has been provided to Vy Capital and such notice was good and sufficient, and appropriate under the particular circumstances to apprise Vy Capital of the pendency of the Sale Hearing, the Auction, the relief sought by the Motion and set forth in this Sale Order and the opportunity to object thereto, and no other or further notice is required. Vy Capital has not objected to the Motion or the relief set forth in this Sale Order. NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: General Provisions 1. The Motions shall be, and hereby are, granted, as further described herein. 9 2. All objections, if any, to the Motions or to the relief requested therein that have not been withdrawn, waived, or settled, and all reservations of rights included therein, are hereby overruled on the merits. 3. The Letter Agreements are hereby approved and the Debtors and the Committee are authorized to perform their respective obligations thereunder without further Court order. 4. The Assignment Agreement is hereby approved and the parties thereto, including the Debtors and the Purchaser, are authorized to perform their respective obligations thereunder without further court order. Approval of the Asset Purchase Agreement 5. The terms and conditions and transactions contemplated by the Asset Purchase Agreement between the Debtors and the Purchaser are hereby approved in all respects, and the closing under the Asset Purchase Agreement (the "Closing") and the assumption and assignment of the Assigned Contracts are hereby approved, authorized and directed under sections 105(a), 363(b) and 365 of the Bankruptcy Code. 6. Pursuant to sections 363(b) and 365 of the Bankruptcy Code, the Debtors are hereby authorized, directed and empowered to fully assume, perform under, consummate and implement the Asset Purchase Agreement, together with all additional instruments and documents that may be reasonably necessary or desirable to implement the Asset Purchase Agreement and the transactions contemplated thereby, and to take all further actions as may reasonably be requested by the Purchaser for the purpose of assigning, transferring, granting, conveying and conferring to the Purchaser, or reducing to possession, any or all of the Sale Assets, or as may be necessary or appropriate to the performance of the Debtors' obligations as contemplated by the Asset Purchase Agreement. 10 Transfer of Sale Assets 7. Pursuant to sections 105(a) and 363(f) of the Bankruptcy Code, upon the Closing, the Sale Assets shall be transferred to the Purchaser, free and clear of all Interests; provided, however, that the Purchaser shall remain liable for the Assumed Liabilities as provided in the Asset Purchase Agreement. 8. The lien rights, if any, of the Bank of Now York ("BNY"), as indenture successor trustee to U.S. Trust Company of New York, under documents including the indenture dated as of April 29, l998, and the Order of this Court dated March 9, 2001, continue to be preserved so that they attach to the Debtors' Cash and the proceeds of sale. The debtor, the Committee arid BNY have agreed that the status of such liens, if any, will be adjudicated or settled at a mutually agreeable date or by subsequent order of court. 9. Immediately upon receipt of the Purchase Price on the Closing Date, the Debtors shall deliver to the DIP Lender funds in an amount set forth in a payoff letter to be agreed upon by the Debtors and the DIP Lender as sufficient to satisfy in full the Debtors' outstanding secured indebtedness to the DIP Lender (not to exceed $15,299,772) under the Post-Petition Credit Facility (the "Pay-Off Amount"). 10. The DIP Lender shall reserve from the Pay-Off Amount funds in an amount equal to the balance remaining on the Professional Expense Cap (as defined in the Final DIP Financing Order and as further amended in the Amended Financing Order) as reduced pursuant to the terms of the final DIP Financing Order and the Amended Financing Order. 11. Except as expressly permitted by the Asset Purchase Agreement with respect to the Assumed Liabilities, all persons and entities, including, but not limited to, all debt security holders, equity security holders, governmental, tax, and regulatory authorities, lenders, trade creditors, unsecured creditors and other creditors, holding Interests against or in the Debtors or the Sale Assets (whether legal or equitable, secured or unsecured, matured or 11 unmatured, contingent or non-contingent, senior or subordinated), arising under or cut of, in connection with, or in any way relating to, the Debtor, the Sale Assets, the operation of the Business prior to the Closing Date, or the transfer of the Sale Assets or the assumption and assignment of the Assigned Contracts to the Purchaser are forever barred, estopped, and permanently enjoined from asserting such Interests against the Purchaser, its successors or assigns, its property or interests in the Sale Assets. 12. The transfer of the Sale Assets to the Purchaser pursuant to the Asset Purchase Agreement constitutes a legal, valid and effective transfer of the Sale Assets, and, except as provided in the Asset Purchase Agreement with respect to any Assumed Liabilities, vests or will vest the Purchaser with all right, title, and interest of the Debtors in and to the Sale Assets free and clear of Interests under section 363(f) of the Bankruptcy Code. 13. The transfer of the Sale Assets pursuant to the Sale is not subject to taxation under any federal, state, local, municipal or other law imposing or purporting to impose a stamp, transfer, recording, sale or any other similar tax on any of the Debtors' transfers or sales of real estate, personal property or other assets owned by it in accordance with sections 1146(c) and 105(a) of the Bankruptcy Code. Assumption and Assignment to the Purchaser of Assigned Contracts 14. The Debtors' assumption and assignment to the Purchaser, and the Purchaser's assumption, of the Assigned Contracts, in each case on the terms set forth in the Asset Purchase Agreement and herein, is approved and the requirements of section 365(b) (1) and 365(f) of the Bankruptcy Code with respect thereto are deemed satisfied. The Debtors are hereby authorized and directed, in accordance with sections 105(a) and 365 of the Bankruptcy Code, and subject to the terms of the Asset Purchase Agreement, to (i) assume and assign to the Purchaser each of the Assigned Contracts identified on the Contract Notice, pursuant to the provisions of section 365 of the Bankruptcy Code, in each case, free and clear of all Interests (other titan the Assumed Liabilities), and (ii) execute and deliver to the Purchaser such 12 documents or other instruments as may be necessary to assign and transfer such Assigned Contracts to the Purchaser. Notwithstanding the foregoing, upon notice to the Debtors and the non-Debtor party to any agreement or lease with any of the Debtors, the Purchaser shall have the right to remove any agreement or lease from the Contract Notice at any time prior to the Closing. Any agreement or lease removed from the Contract Notice pursuant to the preceding sentence shall no longer be deemed to be an "Assigned Contract" hereunder and such agreement or lease shall not be assigned, transferred or conveyed to, or otherwise assumed by, the Purchaser as part of the Assets, the Purchaser shall have no liability with respect to such agreement or lease, and the Debtors shall remain solely and completely liable for all obligations or liabilities, if any, arising under such agreement or lease. 15. Neither the Debtors nor the Purchaser shall have any obligation to make any true-up or other payments arising out of any post-Closing order, law or regulation that purports to increase charges under any of the Assigned Contracts for any pre-Closing period. 16. No claim of any kind asserted by the Debtors at any time against any party to an Assigned Contract shall (a) entitle such party to assert, as against the Purchaser, any claim, counterclaim, defense, credit or offset, or (b) affect or impair in any respect the obligations of such party to the Purchaser under such Assigned Contract. 17. The Assigned Contracts listed on the Contract Notice shall, upon assignment to the Purchaser, be deemed to be valid and binding and in full force and effect and enforceable in accordance with their respective terms, without giving effect to any oral or written amendment, waiver, supplement or other modification thereto not reflected on the Contract Notice and notwithstanding any provision in any such Assigned Contract (including those of the type described in sections 365(b) (2) and (f) of the Bankruptcy Code) that prohibits, restricts, or conditions such assignment or transfer and, pursuant to section 365(k) of the Bankruptcy Code, the Debtors shall be relieved from any liability for failure on the part of the Purchaser to perform any Assigned Liability. 13 18. Pursuant to the terms of the Asset Purchase Agreement and consistent with the requirements of the Bankruptcy Code, the Debtors are hereby obligated, authorized, empowered and directed to pay the Cure Amounts, if any, in respect of the assumption, assignment and sale to the Purchaser of the Assigned Contracts being assigned to the Purchaser, by paying all Cure Amounts prior to, concurrently with or as soon as reasonably practicable after the Closing or as otherwise ordered by the Court. 19. All defaults or other obligations of the Debtors under the Assigned Contracts, including, without limitation, any obligations on account of credits or offsets, arising or accruing prior to the date of the closing (without giving effect to any acceleration clauses or any default provisions of the kind specified in section 365(b) (2) of the Bankruptcy Code) shall be deemed cured upon payment by the Debtors at or before the Closing of the Sale and the assumption and assignment of Assigned Contracts and other transactions contemplated thereby, or as soon thereafter as practicable, of the Cure Amounts set forth on Contract Notice. 20. Except for the Debtors' obligation to pay the Cure amounts, each non-Debtor party to an Assigned Contract is hereby forever barred, estopped and permanently enjoined from asserting against the Debtors or the Purchaser, or the property of any of them, any default existing as of the Closing Date or any counterclaim, defense, setoff, credit or any other claim asserted or assertable against the Debtors. 21. Each non-Debtor party to an Assigned Contracts is hereby forever barred, estopped and permanently enjoined from asserting against the Purchaser, its successors or assigns, its property or interests or any of the Sale Assets any default existing as of the Closing Date or any counterclaim, defense, setoff, credit or any other claim asserted or assertable against the Debtors 22. The failure of the Debtors or the Purchaser to enforce at any time one or more of the terms or conditions of any Assigned Contract shall not be a waiver of any such terms 14 or conditions, or of tire Debtors' and the Purchaser's rights to enforce every term and condition of the Assigned Contracts 23. The Debtors may, without further order from the Court, reject any of their executory contracts or real property leases that are not Assigned Contracts by filing and serving notice thereof. Additional Provisions 24. On the Closing Date of the Sale and other transactions contemplated by the Asset Purchase Agreement, each of the Debtors' creditors is authorized and directed to execute such documents and take all other actions as may be necessary to release its Interests (other than the Assumed Liabilities), against the Sale Assets, as such Interests may have been recorded or may otherwise exist. 25. This Sale Order (a) is and shall be effective as a determination that, on the Closing Date, all interests (other than the Assumed Liabilities) existing as to the Sale Assets prior to the Closing have been unconditionally released, discharged and terminated, and that the conveyance of the Sale Assets described herein have been effected, and (b) in and shall be binding upon and shall govern the acts of all entities, including, without limitation, all filing agents, filing officers, filing agents, title companies, recorders of mortgages recorders of deeds, registrars of deeds, registrars of patents, trademarks or other intellectual property, administrative agencies, governmental departments, secretaries of state, federal, state, and local officials, and all other persons and entities who may he required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any of the Sale Assets. 26. Each and every federal, state, and local governmental agency or department is hereby directed to accept any and all documents and instruments necessary or appropriate to consummate the transactions contemplated by the Asset Purchase Agreement. 15 27. If any person or entity that has filed financing statements, mortgages, mechanic's liens, lis pendens, or other documents or agreements evidencing Interests (other than the Assumed Liabilities) in the Sale Assets shall not have delivered to the Debtors prior to the Closing Date, in proper form for filing and executed by the appropriate parties, termination statements, instruments of satisfaction, releases of all such Interests that the person or entity has with respect to the Sale Assets or otherwise, then (a) the Debtors are hereby authorized and directed to execute and file such statements, instruments, releases and other documents on behalf of the person or entity with respect to the Sale Assets and (b) the Purchaser is hereby authorized (i) to execute and file termination statements, instruments of satisfaction, releases or other documents evidencing the release of any Interests (other than the Assumed Liabilities) and (ii) to file, register, or otherwise record a certified copy of this Sale Order, which, once filed, registered, or otherwise recorded, shall constitute conclusive evidence of the release of all Interests of any kind of nature whatsoever (other than the Assumed Liabilities) in the Sale Assets. 28. All entities who are presently, or on the Closing Date may be, in possession of some or all of the Sale Assets are hereby directed to surrender possession of said Sale Assets to the Purchaser on the Closing Date. 29. Except as provided in the Asset Purchase Agreement with respect to Assumed Liabilities, the Purchaser is not assuming nor shall it in any way whatsoever be liable or responsible, as a successor or otherwise, for any liabilities, debts, commitments or obligations (whether known or unknown, disclosed or undisclosed, absolute, contingent, inchoate, fixed or otherwise) of the Debtors or any liabilities, debts, commitments or obligations in any way whatsoever relating to or arising from the Sale Assets or the Debtors' operations or use of the Sale Assets on or prior to the Closing Date or any such liabilities, debts, commitments or obligations that in any way whatsoever relate to periods on or prior to the Closing Date or are to be observed, paid, discharged or performed on or prior to the Closing Date (in each case, 16 including any liabilities that result from, relate to or arise out of tort or other product liability claims), or any liabilities calculable by reference to the Debtors or their assets or operations, or relating to continuing conditions existing on or prior to the Closing Date, which liabilities, debts, commitments and obligations are hereby extinguished insofar as they may give rise to successor liability, without regard to whether the claimant asserting any such liabilities, debts, commitments or obligations has delivered to the Purchaser a release thereof. Without limiting the generality of the foregoing, except as expressly provided in the Asset Purchase Agreement, the Purchaser shall not be liable or responsible, as a successor or otherwise, for the Debtors' liabilities, debts, commitments or obligations, whether calculable by reference to the Debtors or their assets or operations, arising on or prior to the Closing and under or in connection with (i) any employment or labor agreements, consulting agreements, severance arrangements, change-in-control agreements or other similar agreement to which either of the Debtors is a party, (ii) any pension, welfare, compensation or other employee benefit plans, agreements, practices and programs, including, without limitation, any pension plan of the Debtors, (iii) the cessation of the Debtors' operations, dismissal of employees, or termination of employment or labor agreements or pension, welfare, compensation or other employee benefit plans, agreements, practices and programs, obligations that might otherwise arise from or pursuant to the Employee Retirement Income Security Act of 1974, as amended, the Fair Labor Standard Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination and Employment Act of 1967, the Federal Rehabilitation Act of 1973, the National Labor Relations Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA, or the Worker Adjustment and Retraining Notification Act, (iv) workmen's compensation, occupational disease or unemployment or temporary disability insurance claims, (v) environmental liabilities, debts, claims or obligations arising from conditions first existing on or prior to the Closing (including, without limitation, the presence of hazardous, toxic, polluting, or contaminating substances or wastes), which may be asserted on any basis, including, without limitation, under the Comprehensive Environmental Response, 17 Compensation and Liability Act, 42 U.S.C. Section 9801 et. seq., (vi) any hulk sales or similar law, (vii) any liabilities, debts, commitments or obligations of, or required to be paid by, the Debtors for any taxes of any kind for any period, (viii) any litigation, and (ix) any products liability or similar claims, whether pursuant to any state or federal laws or otherwise. The foregoing recitation of specific agreements, plans or statutes is not intended, and shall not be construed, to limit the generality of the categories of liabilities, debts, commitments or obligations referred to therein. 39. Under no circumstances shall the Purchaser be deemed a successor of or to the Debtors for any interest against or in the Debtors or the Sale Assets of any kind or nature whatsoever. Except as provided in the Asset Purchase Agreement with respect to Assumed Liabilities, no person or entity, including, without limitation, any federal, state or local governmental agency, department or instrumentality, shall assert by suit or otherwise against the Purchaser or its successors in interest any claim that they had, have or may have against the Debtors, or any liability, debt or obligation relating to or arising from the Sale Assets, or the Debtors' operations or use of the Sale Assets, including, without limitation, any liabilities calculable by reference to the Debtors or their assets or operations, and all persons and entities are hereby enjoined from asserting against the Purchaser in any way any such claims, liabilities, debts or obligations. Following the Closing Date, no holder of an interest in the Debtors shall interfere with the Purchaser's title to or use and enjoyment of the Sale Assets based on or related to such interest, or arty actions that the Debtors may take in the Cases. 31. All amounts, if any, to be paid by the Debtors and any amounts that become payable by the Debtors pursuant to the Asset Purchase Agreement or any of the documents delivered by the Debtors pursuant to or in connection with the Asset Purchase Agreement shall (a) constitute administrative expenses of the Debtors' estates under sections 503(b) and 507(a) (1) of the Bankruptcy Code and (b) be due and paid by the Debtors in the time and manner as provided in the Asset Purchase Agreement, without further order of this Court. 18 32. This Court retains jurisdiction (i) to enforce and implement the terms and provisions of the Asset Purchase Agreement, all amendments thereto, any waivers and consents thereunder, and each of the agreements executed in connection therewith; (ii) to compel delivery of the Sale Assets to the Purchaser and the performance of Debtors' obligations under the Asset Purchase Agreement; (iii) to compel delivery of the Purchase Price under the Asset Purchase Agreement; (iv) to compel payment of the Cure Amounts; (v) to resolve any disputes, controversies or claims arising out of or relating to the Asset Purchase Agreement; (vi) to protect the Purchaser against (a) any liabilities not expressly assumed as part of the Assumed Liabilities or (b) any Interests in the Debtor or the Sale Assets (which by this Sale Order attach to the proceeds of the Sale) and (vii) to interpret, implement, and enforce the provisions of this Sale Order. 33. In the absence of a stay pending appeal, if the Purchaser and the Debtors elect to close under the Asset Purchase Agreement at any time after entry of this Sale Order, then, with respect to the Sale and the assumption and assignment of the Assigned Contracts and other transactions contemplated by the Asset Purchase Agreement approved and authorized herein, the Purchaser, as a purchaser in good faith, shall be entitled to the protections of 363(m) of the Bankruptcy Code if this Sale Order or any authorization contained herein is reversed or modified on appeal. 34. The terms and provisions of the Asset Purchase Agreement, together with the terms and provisions of this Sale Order, shall he binding in all respects upon, and shall inure to the benefit of the Debtors, their estates and creditors, the Purchaser, and their respective affiliates, successors and assigns, and shall be binding in all respects upon any affected third parties, including, but not limited to, all non-Debtor parties to the Assigned Contracts listed on the Contract Notice to be assigned to the Purchaser pursuant to the Asset Purchase Agreement, and all persons asserting a claim against or Interest in the Debtors' estates or any of the Sale Assets to be sold to the Purchaser pursuant to the Asset Purchase Agreement. The Asset 19 Purchase Agreement and the Sale shall be specifically performable and enforceable against and binding upon, and not subject to rejection or avoidance by, the Debtors or any chapter 7 or chapter 11 trustee of the Debtors and their respective estates. 35. The failure specifically to include any particular provisions of the Asset Purchase Agreement, or any document, instrument or agreement entered into in connection therewith, in this Sale Order shall not diminish or impair the effectiveness of such provisions, it being the intent of the Court that the Asset Purchase Agreement be authorized and approved in its entirety. To the extent of any inconsistency between the provisions of the Asset Purchase Agreement, any other documents to be executed in connection with the Sale and this Sale Order, the provisions of this Sale Order shall govern. 36. The Asset Purchase Agreement and any related agreements, documents or other instruments may be modified, amended or supplemented by the parties thereto in accordance with the terms thereof without further order of the Court, provided that any such modification, amendment or supplement is not material. 37. This Court hereby orders that the ten-day stays provided for in Bankruptcy Rules 6004(g) and 6006(d) shall not be in effect with respect to the Sale and the assumption and assignment of Assigned Contracts and other transactions contemplated thereby, and thus this Sale Order shall be effective and enforceable immediately upon entry. Any party objecting to this Sale Order must exercise due diligence in filing an appeal and pursuing a stay or risk its appeal being foreclosed as moot in the event the Purchaser and the Debtors elect to close prior to the conclusion of the period in which an appeal of the Sale Order can be asserted. 38. The provisions of this Sale Order are nonseverable and mutually dependent. Nothing contained in any plan(s) of reorganization or liquidation confirmed in these Cases or any order of this Court confirming such plan(s) shall conflict with or derogate from the provisions of the Asset Purchase Agreement or the terms of this Sale Order. 20 39. None of the terms, conditions or provisions of the Vy Capital Letter, including, without limitation, the Exclusivity Rights, is or has been binding upon or enforceable against the Debtors. Dated: May 17, 2002. Joseph J. Farnan ---------------------------- UNITED STATES DISTRICT JUDGE 21 EX-99.1 9 y61088exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [PLIANT LOGO] For Immediate Release PLIANT CORPORATION ACQUIRES MANUFACTURER OF CON-TACT(R) BRAND PREEMINENT SUPPLIER OF DECORATIVE COVERINGS SCHAUMBURG, IL - May 21, 2002 - Pliant Corporation today announced it has completed the acquisition of substantially all of the assets of Decora, Incorporated and Decora Industries, Inc. (together referred to as "Decora"), maker of Con-Tact(R) Brand products. The approximately $18 million acquisition was finalized yesterday. The Decora assets will be operated as part of Pliant Solutions Corporation, a subsidiary of Pliant Corporation. Con-Tact(R) Brand is one of the leading self-adhesive consumer surface-covering products with a 75% share in the adhesive category and a 60% share in the overall decorative-covering category. Included in the acquired assets was a line of specialty industrial products that utilize proprietary pressure-sensitive, self-adhesive release and protective coatings technologies. "It's an ideal match," said Richard P. Durham, Pliant's Chairman and Chief Executive Officer. "We've acquired a world-class brand - with more than 85% consumer awareness of Con-Tact(R) products - which complements our stable of companies and is part of our continued growth strategy." "Pliant already has been a great partner - supplying us with film products - for many years," added former Decora Chief Executive Officer and newly named President of Pliant Solutions Corporation, Ronald A. Artzer. "Their significant technological capabilities, along with manufacturing and financing resources, will allow us to enhance that partnership and be an enormous boon to helping the Con-Tact(R) Brand reach its full potential in the consumer and trade marketplace." Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Company operates 27 manufacturing and research and development facilities around the world, and employs approximately 3,700 people. # # # FOR FURTHER INFORMATION: PLIANT CORPORATION Margaret MacBeth Communications Manager Office: (847) 969-3336 Mobile: (847) 226-5919 GOLIN / HARRIS Lori Conlin Office: (312)783-4357 -----END PRIVACY-ENHANCED MESSAGE-----