2
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
-------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-4684
----------------------------------------
Blessings Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-5566477
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Enterprise Drive, Newport News, VA 23603
(Address of principal executive offices)
(Zip Code)
804 887 2100
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of May 1, 1996
- ----- -----------------------------
Common stock, $.71 par value 10,162,704
<PAGE>
BLESSINGS CORPORATION
INDEX
PAGE NUMBER
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
March 31, 1996 and December 30, 1995 1
Consolidated Condensed Statements of
Earnings - quarters ended March 31, 1996
and April 22, 1995 2
Consolidated Condensed Statements of
Cash Flows - quarters ended March 31, 1996
and April 22, 1995 3
Notes to Consolidated Condensed
Financial Statements 4
Review by Independent Certified
Public Accountants 7
Independent Accountants' Report 8
Letter in Lieu of Consent of
Independent Public Accounts 9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10
PART II: OTHER INFORMATION
Item 2. Changes in Securities 12
Item 6. Exhibits and Reports on Form 8-K 12
-13-
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
BLESSINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
March 31, 1996 December 30, 1995*
-------------- ------------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current Assets:
Cash & cash equivalents $ 16,078,200 $ 3,316,900
Accounts receivable less allowance for
doubtful accounts of $1,215,300 &
$1,172,600 21,248,900 21,134,500
Inventories 11,228,000 9,439,100
Prepaid deferred taxes 878,200 878,200
Prepaid expenses 1,054,400 943,400
------------ ------------
Total Current Assets 50,487,700 35,712,100
------------ ------------
Property, plant and equipment less
accumulated depreciation & amortization
of $37,399,700 & $34,996,500 70,379,300 69,148,100
Goodwill net of accumulated amortization
of $1,864,300 and $1,599,300 24,641,000 24,906,000
Deferred taxes 4,403,600 4,429,200
Other assets 2,033,500 1,898,800
------------ ------------
Total Assets $151,945,100 $136,094,200
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY Current Liabilities:
Accounts payable and accrued expenses $ 17,015,600 $ 16,284,700
Income taxes payable 1,949,700 701,200
Current installments on long-term debt 4,412,000 7,477,500
------------ ------------
Total Current Liabilities 23,377,300 24,463,400
------------ ------------
Long-term debt 37,216,200 23,747,400
Deferred taxes on income 7,718,100 7,134,700
Deferred supplemental pension liability 2,043,300 1,769,700
Minority interest 9,012,500 8,094,600
Shareholders' Equity:
Common stock 7,252,500 7,252,500
Additional paid in capital 6,009,200 6,174,900
Translation loss (6,032,300) (6,070,800)
Retained earnings 65,902,600 64,678,300
------------ ------------
73,132,000 72,034,900
Common stock in treasury at cost (554,300) (1,150,500)
------------ ------------
Total Shareholders' Equity 72,577,700 70,884,400
------------ ------------
Total Liabilities and Shareholders'
Equity $151,945,100 $136,094,200
============ ============
See Independent Accountants' Review Report and Notes to Consolidated Condensed
Financial Statements.
*The balance sheet at December 30, 1995 has been taken from audited Financial
Statements at that date, and condensed.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BLESSINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
3 Months Ended 16 Weeks Ended
March 31, 1996 April 22, 1995
-------------- ---------------
<S> <C> <C>
Net sales $ 39,533,300 $ 45,056,600
------------- ------------
Cost of sales 26,337,600 30,940,400
Selling, general and administrative 6,600,300 6,913,700
Foreign exchange loss 42,600 2,962,700
Interest & dividends - net 721,800 631,900
------------- -------------
Total costs and expenses 33,702,300 41,448,700
------------- -------------
Earnings from operations before provision for taxes on
income and minority interest 5,831,000 3,607,900
------------- -------------
Taxes on income
Current 2,128,800 1,563,600
Deferred 590,300 27,200
------------- -------------
Total taxes 2,719,100 1,590,800
Minority interest in net income of subsidiary 875,200 95,900
------------- -------------
Net Earnings $ 2,236,700 $ 1,921,200
============= ==============
Average number of shares of common
stock outstanding 10,139,754 10,205,588
============= =============
Common stock outstanding at close of period 10,171,154 10,206,338
============= =============
Net earnings per share $ .22 $ .19
============= =============
Dividends per share $ .10 $ .10
============= =============
See accompanying Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BLESSINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
3 Months Ended 16 Weeks Ended
March 31, 1996 April 22, 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings from operations $ 2,236,700 $ 1,921,200
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,302,700 2,373,500
Amortization - goodwill 265,100 265,000
Amortization - other 5,000 7,900
Minority interest in net income of con-
solidated subsidiary 875,200 95,900
Provision for losses on accounts receivable 90,000 117,800
(Gain) loss on sale of assets (19,000) (5,900)
Change in assets and liabilities:
(Increase) decrease in accounts receivable (150,500) 2,294,700
(Increase) decrease in inventories (1,774,500) 390,200
(Increase) decrease in prepaid expenses (110,400) 346,200
Increase (decrease) in accounts payable
& accrued expenses 701,900 (3,074,000)
Increase (decrease) in taxes on income 1,313,500 339,300
Increase (decrease) in deferred taxes
on income 556,400 27,200
(Increase) decrease in other assets (132,700) (207,700)
Increase (decrease) in other liabilities 270,400 (6,500)
------------ ------------
Net cash provided by operating activities 6,429,800 4,884,800
------------ ------------
Cash flows from investing activities:
Proceeds from disposition of fixed assets 23,700 25,200
Capital expenditures (3,466,900) (2,861,000)
------------ ------------
Net cash required by investing activities (3,443,200) (2,835,800)
------------ ------------
Cash flows from financing activities:
Reduction of long-term debt (11,735,000) (2,942,600)
Proceeds from issuance of long-term debt 20,000,000
Proceeds from issuance of short-term debt 2,078,200
Issuance of common stock under stock
option plan -- 30,800
Issuance and acquisition of treasury stock
- net 430,500 66,500
Dividends paid (1,012,400) (1,020,600)
------------ ------------
Net cash required by financing activities 9,761,300 (3,865,900)
------------ ------------
Effect of exchange rate changes on cash 13,400 (1,415,600)
------------ ------------
Net incr. (decr.) in cash and cash equivalents 12,761,300 (3,232,500)
Cash and cash equivalents at beginning of year 3,316,900 6,975,800
------------ ------------
Cash and cash equivalents at end of period $ 16,078,200 $ 3,743,300
============ ============
See Independent Accountants' Review Report and Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
BLESSINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(See Independent Accountants' Report)
1. The consolidated condensed balance sheet as of March 31, 1996,
the consolidated condensed statements of earnings for the thirteen
week periods ended March 31, 1996, and the sixteen week periods ended
April 22, 1995, and the consolidated condensed statements of cash
flows for the same periods then ended have been prepared by the
company without audit. The consolidated financial statements include
Nacional de Envases, S.A. de C.V. (NEPSA), the company's 0% owned
Mexican subsidiary. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary to present
fairly the financial position, results of operations and cash flows
at March 31, 1996, and for all periods presented have been made. The
company considers all highlyliquid debt instruments purchased with
a maturity of three months or less to be cash equivalents. For
accounting policies, see Notes to Consolidated Financial Statements
in the company's Annual Report to Shareholders for the fiscal year
ended December 30, 1995.
2. Effective with the beginning of the current year, the company changed
its accounting periods from four weeks to one month each with the
fiscal year now being a calendar year. Accordingly, under the new
calendar year, the company's quarters are each comprised of three
calendar months of thirteen weeks each ending March 31, June 30,
September 30, and December 31. Formerly, the company's first quarter
was comprised of sixteen weeks, and the remaining three quarters were
each comprised of twelve weeks. Therefore, the quarter ending April
22, 1995 consisted of sixteen weeks compared to the quarter ending
March 31, 1996 which is comprised of thirteen weeks. Due to the rel-
ative similarity of the two quarters in 1995 and 1996 last year's first
quarter was not recast.
3. The company translates foreign currency financial statements by
translating balance sheet accounts at the current exchange rate and
income statement accounts at the average exchange rate for the quarter.
Translation gains and losses are recorded in shareholders' equity, and
transaction gains and losses are reflected in income.
4. The results of operations for the three months ended March 31, 1996
are not necessarily indicative of the results to be expected for the
full year.
<PAGE>
5. Inventories March 31, 1996 December 30, 1995
-------------- -----------------
Raw Materials $ 7,246,000 $ 6,377,600
Finished Goods 3,982,000 3,061,500
------------ ------------
$ 11,228,000 $ 9,439,100
============ ============
Inventories are stated at the lower of cost or market. The cost of
inventories is determined by the first-in, first-out method (FIFO).
<TABLE>
<CAPTION>
6. Long-term debt:
March 31, 1996 December 30, 1995
-------------- -----------------
<S> <C> <C>
Long-term debt consists of the following:
Georgia Loan $ -- $ 2,250,000
Virginia Loan -- 2,700,000
6.55% Note due 2002 10,000,000 --
7.22% Note due 2008 10,000,000 --
NEPSA Credit Agreement 19,531,300 20,312,500
Revolving Credit -- 3,000,000
Mexico Bank Loans 2,096,900 2,962,400
------------- -------------
$ 41,628,200 $ 31,224,900
Less installments due within one year
4,412,000 7,477,500
------------- -------------
Due after one year $ 37,216,200 $ 23,747,400
============= =============
</TABLE>
<TABLE>
<CAPTION>
For further details, see Note 6 of the Annual Report to Shareholders
for the fiscal year ended December 30, 1995.
7. Shareholders' Equity
During the three months ended March 31, 1996, shareholders' equity
increased as follows:
<S> <C>
Net earnings $ 2,236,700
Dividends declared (1,012,400)
Issuance of common stock under stock option plan
--
Issuance and acquisition of treasury stock - net
430,500
Translation gain 38,500
Total increase in shareholders' equity
$ 1,693,300
</TABLE>
<TABLE>
<CAPTION>
8. Interest and Dividends - Net
3 Months Ended 16 Weeks Ended
March 31, 1996 April 22, 1995
-------------- --------------
<S> <C> <C>
Interest expense $ 988,100 $ 811,400
Interest income (260,700) (179,500)
Dividend income (5,600) --
----------- -----------
Total interest and dividends - net
$ 721,800 $ 631,900
=========== ===========
</TABLE>
9. During the three month period ending March 31, 1996, the effective tax
rate was 46.6% compared to a rate of 44.0% during the sixteen week
period ending April 22, 1995. Income taxes have been computed based on
the estimated annual effective tax rate.
10. The purchase of NEPSA on July 5, 1994, resulted in $26,505,300 of
goodwill. This amount will be amortized on a straight-line basis over
its estimated life of 25 years.
11. Cash payments for interest and income taxes were:
3 Months Ended 16 Weeks Ended
March 31, 1996 April 22, 1995
-------------- --------------
Interest $ 735,600 $ 868,900
Income tax $ 944,200 $ 1,358,000
<PAGE>
REVIEW BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Consolidated Condensed Financial Statements as of March 31, 1996 and for the
three month periods ended March 31, 1996 and the sixteen week periods ended
April 22, 1995 have been reviewed prior to filing by Deloitte & Touche LLP,
Independent Certified Public Accountants, in accordance with established
professional standards and procedures for such a review.
The report of Deloitte & Touche LLP commenting upon their review is included as
Part I - Exhibit 1.
<PAGE>
Independent Accountants' Report
To the Board of Directors
Blessings Corporation
Newport News, Virginia
We have reviewed the accompanying consolidated condensed balance sheet of
Blessings Corporation and subsidiaries as of March 31, 1996, and the related
consolidated condensed statements of earnings and cash flows for the three
months ended March 31, 1996 and the sixteen weeks ended April 22, 1995. These
financial statements are the responsibility of the Corporation's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated condensed financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Blessings Corporation and
subsidiaries as of December 30, 1995, and the related consolidated statements of
earnings, shareholders' equity, and cash flows for the year then ended (not
presented herein) and in our report dated February 20, 1996 we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated condensed balance
sheet as of December 30, 1995 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which is has been derived.
Deloitte & Touche LLP
Richmond, Virginia
April 23, 1996
<PAGE>
April 23, 1996
Board of Directors
Blessings Corporation
Newport News, Virginia
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Blessings Corporation and subsidiaries for the three months ended
March 31, 1996 and the sixteen weeks ended April 22, 1995, as indicated in our
report dated April 23, 1996; because we did not perform an audit, we expressed
no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, is
incorporated by reference in the Registration Statement (Post-Effective
Amendment Number 11 to Form S-8 on Form S-3).
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act, is not considered a part of the Registration Statement
prepared or certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte & Touche, LLP
Richmond, Virginia
<PAGE>
<TABLE>
<CAPTION>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY:
The following table set forth for the period indicated 1) the amounts
and percentages which certain items reflected in the financial data bear to net
sales of the Company and 2) the percentage increase (decrease) of such items as
compared to the indicated prior period:
Relationship to Net Sales Percent
Period Ended Increase/(Decrease)
3 Months Ended 16 Weeks Ended
March 31, 1996 Percent April 22, 1995 Percent 1996/1995
-------------- ------- -------------- ------- ---------
<S> <C> <C> <C> <C> <C>
Net Sales $39,533,300 100.0 $45,056,600 100.0 (12.3)
Cost of sales 26,337,600 66.6 30,940,400 68.7 (14.9)
-------------- ------- -------------- ------
Gross margin 13,195,700 33.4 14,116,200 31.3 (6.5)
Other costs and
expenses 7,364,700 18.6 10,508,300 23.3 (29.9)
-------------- ------- -------------- ------
Earnings from operations
before taxes on income
and minority interest 5,831,000 14.7 3,607,900 8.0 61.6
Taxes on income 2,719,100 6.9 1,590,800 3.5 70.9
--------------- ------- -------------- ------
Minority interest in net
income of subsidiary 875,200 2.2 95,900 .2 N/A
--------------- ------- -------------- ------
Net earnings $2,236,700 5.7 $1,921,200 4.3 16.4
=============== ======= ============== ====== =====
</TABLE>
<PAGE>
RESULTS OF OPERATIONS:
Net Sales:
Net sales decreased during the 13 weeks ending March 31, 1996 when
compared to the 16 weeks ending April 22, 1995 by 12.3%. Effective at the
beginning of the current year, the company modified its quarterly reporting
periods to now be comprised of three calendar months with 13 weeks each. In
prior fiscal years, including fiscal year 1995, the company's first quarter was
comprised of 16 weeks with each of the three subsequent quarters comprised of 12
weeks each. Consequently, sales volume in 1996 increased by approximately 2%
when compared to the first quarter of 1995 recast to 13 weeks.
Operating Costs and Expenses:
Gross margin improved by 2.1 percentage points compared to the first
quarter of 1995. The improved margin was the result of lower polyolefin costs in
1996 and improved performance at the company's 60% owned Mexican subsidiary,
NEPSA. During the first quarter of 1995, disruptions in Mexico following the
devaluation of the peso materially affected NEPSA's performance. In addition,
other costs and expenses were down by 29.9% during the first quarter of 1996
when compared to the same quarter in 1995 due to the adverse affects of the peso
devaluation resulting in a $2,962,700 foreign exchange loss in the first quarter
of 1995. With relative stability of the peso during the first quarter of 1996,
the foreign exchange loss was limited to $42,600.
Taxes on Income:
The effective tax rate for the first quarter ended March 31, 1996 was
46.6%, up from the 44.0% for the first quarter of 1995. The increase was
primarily the result of a higher effective tax rate associated with NEPSA and
the improved earnings from that subsidiary in 1996.
Liquidity and Capital Resources:
As of March 31, 1996, the company had working capital of $27,110,400
compared to $11,248,700 at year-end, an increase of $15,861,700. The ratio of
current assets to current liabilities at the end of the quarter was 2.2 to 1 and
at year-end was 1.5 to 1. The increase in working capital was the result of the
company entering into two $10,000,000 long-term notes in connection with a Note
Purchase Agreement closed on February 2, 1996 with a major insurance company.
Part of the proceeds were used to repay existing debt leaving approximately
$12,500,000 to be used to finance major capital projects. During the quarter,
the company obtained an additional $3 million short-term credit line from a
major financial institution. The company was not utilizing any of its $25
million revolving credit line or $10 million short-term credit at the end of the
quarter.
PART II. OTHER INFORMATION
Item 2. CHANGES IN SECURITIES
Long-term debt agreements contain various restrictive
covenants limiting the incurrence of additional indebtedness,
mergers and acquisitions. The agreements also include
quarterly tests relating to the maintenance of net worth and
cash flow.
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Number
2 Stock Purchase Agreement by and Among Manuel
Villarreal Castaneda, et al, as Sellers, and
Blessings Corporation, as Purchaser, dated June 30,
1994; filed with the Commission as an Exhibit to Form
8-K filed July 8, 1994, such Exhibit is incorporated
herein by reference.
3(i) Certificate of Incorporation of Blessings Corporation
with all Amendments through Amendment dated December
15, 1994; filed with the commission as an Exhibit to
Form 10K for the year ended December 31, 1994, such
Exhibit is incorporated herein by reference.
3(ii) Bylaws of Blessings Corporation as amended through
July 8, 1993; filed with the Commission as an Exhibit
to Form S-8 Registration Statement filed October 15,
1993, such Exhibit is incorporated herein by
reference.
4 Not applicable
10(a) Blessings Corporation Cost Recovery Supplemental
Retirement Income Plan; filed with the commission as
an Exhibit to Form 10K for the year ended December
31, 1994, such Exhibit is incorporated herein by
reference.
10(b) Blessings Corporation 1991 Stock Option Plan; filed
with the Commission as an Exhibit to Form S-8
Registration Statement filed July 15, 1991, such
Exhibit is incorporated herein by reference.
10(c) Blessings Corporation 1993 Incentive Plan; filed with
the Commission as an Exhibit to Form S-8 Registration
Statement filed October 15, 1993, such Exhibit is
incorporated herein by reference.
10(d) 1993 Restricted Stock Plan for Non-Employee and
Certain Other Directors of Blessings Corporation;
filed with the Commission as an Exhibit to Form S-8
Registration Statement filed October 17, 1994, such
Exhibit is incorporated herein by reference.
10(e) Blessings Corporation 1993 Restricted Stock Plan for
Key Employee; filed with the Commission as an Exhibit
to Form S-8 Registration Statement filed October 17,
1994, such Exhibit is incorporated herein by
reference.
10(f) Term Loan Agreement dated August 18, 1994, between
Chase Manhattan Bank, N.A. and First Fidelity Bank,
N.A., New Jersey; filed with the commission as an
Exhibit to Form 10K for the year ended December 31,
1994, such Exhibit is incorporated herein by
reference.
10(g) Revolving Credit Agreement dated October 16, 1995,
between Wachovia Bank of Georgia, N.A. and First
Fidelity Bank, N.A., New Jersey; filed with the
commission as an Exhibit to Form 10K for the year
ended December 30, 1995, such Exhibit is incorporated
herein by reference.
10(i)NotePurchase Agreement dated February 2, 1996, between
Principal Mutual Life Insurance Company, filed with
the commission as an Exhibit to Form 10Q for the
quarter ended March 31, 1996, such Exhibit is
incorporated herein by reference.
11 Not required - explanation of earnings per share
computation is contained in Notes to Consolidated
Financial Statements
15 A report by Independent Certified Public Accountants
filed in Part I.
18 Not applicable
19 Not applicable
22 Not applicable
23 Not applicable
(b) Reports on Form 8-K: Registrant filed one Current Report
on Form 8-K, dated February 8, 1996 relating to the change of the company's
accounting periods from four weeks to one month each with the fiscal year
coinciding with the calendar year.
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this to be signed on its behalf by the undersigned
thereunto duly authorized.
BLESSINGS CORPORATION
DATED: May 10, 1996 /s/Wayne A. Durboraw
Wayne A. Durboraw, Controller
DATED: May 10, 1996 /s/James P. Luke
James P. Luke, Executive Vice President
(Principal Financial Officer)
BLESSINGS CORPORATION
$10,000,000
7.22% Senior Notes, Series A
Due January 30, 2008
$10,000,000
6.55% Senior Notes, Series B
Due January 30, 2002
--------
NOTE PURCHASE AGREEMENT
---------
Dated as of January 15, 1996
===========================================================================
PPN: Series A: 093532 A* 0
Series B: 093532 A@ 8
<PAGE>
===========================================================================
===========================================================================
TABLE OF CONTENTS
Section Page
1. AUTHORIZATION OF NOTES........................................1
2. SALE AND PURCHASE OF NOTES....................................1
3. CLOSING.......................................................1
4. CONDITIONS TO CLOSING.........................................2
4.1. Representations and Warranties.........................2
4.2. Performance; No Default................................2
4.3. Compliance Certificates................................2
4.4. Opinions of Counsel....................................3
4.5. Purchase Permitted By Applicable Law, etc..............3
4.6. Payment of Special Counsel Fees........................3
4.7. Private Placement Number...............................3
4.8. Changes in Corporate Structure.........................3
4.9. Proceedings and Documents..............................4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................4
5.1. Organization; Power and Authority......................4
5.2. Authorization, etc.....................................4
5.3. Disclosure.............................................4
5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.............................................5
5.5. Financial Statements...................................6
5.6. Compliance with Laws, Other Instruments, etc...........6
5.7. Governmental Authorizations, etc ......................6
5.8. Litigation; Observance of Agreements, Statutes
and Orders.............................................6
5.9. Taxes..................................................7
5.10. Title to Property; Leases..............................7
5.11. Licenses, Permits, etc.................................7
5.12. Compliance with ERISA..................................8
5.13. Private Offering by the Company........................9
5.14. Use of Proceeds; Margin Regulations....................9
5.15. Existing Indebtedness; Future Liens....................9
5.16. Foreign Assets Control Regulations, etc...............10
5.17. Status under Certain Statutes.........................10
5.18. Environmental Matters.................................10
6. REPRESENTATIONS OF THE PURCHASER.............................11
6.1. Purchase for Investment...............................11
6.2. Source of Funds.......................................11
7. INFORMATION AS TO COMPANY....................................12
7.1. Financial and Business Information....................12
7.2. Officer's Certificate.................................15
7.3. Inspection............................................16
PREPAYMENT OF THE NOTES......................................16
8.1. Required Prepayments..................................16
8.2. Optional Prepayments with Make-Whole Amount...........18
8.3. Allocation of Partial Prepayments.....................18
8.4. Maturity; Surrender, etc..............................18
8.5. Purchase of Notes.....................................19
8.6. Make-Whole Amount.....................................19
9. AFFIRMATIVE COVENANTS........................................20
9.1. Compliance with Law...................................20
9.2. Insurance.............................................21
9.3. Maintenance of Properties.............................21
9.4. Payment of Taxes and Claims...........................21
9.5. Corporate Existence, etc..............................21
9.6. Maintenance of Records................................22
<PAGE>
10. NEGATIVE COVENANTS...........................................22
10.1. Transactions with Affiliates..........................22
10.2. Merger, Consolidation, etc............................22
10.3. Liens.................................................23
10.4. Adjusted Consolidated Net Worth.......................24
10.5. Ratio of Funded Debt to Cash Flow.....................24
10.6. Ratio of Funded Debt to Total Capitalization..........25
10.7. Funded Debt of Subsidiaries...........................25
10.8. Sale of Assets........................................25
10.9. Disposition of Stock of Subsidiaries..................25
10.10. Restricted Investments................................26
10.11. Nature of Business....................................26
11. EVENTS OF DEFAULT............................................26
12. REMEDIES ON DEFAULT, ETC.....................................28
12.1. Acceleration..........................................28
12.2. Other Remedies........................................29
12.3. Rescission............................................29
12.4. No Waivers or Election of Remedies, Expenses, etc.....30
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES................30
13.1. Registration of Notes.................................30
13.2. Transfer and Exchange of Notes........................30
13.3. Replacement of Notes..................................31
14. PAYMENTS ON NOTES............................................31
14.1. Place of Payment......................................31
14.2. Home Office Payment...................................31
15. EXPENSES, ETC................................................32
15.1. Transaction Expenses..................................32
15.2. Survival..............................................32
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT....................................................33
17. AMENDMENT AND WAIVER.........................................33
17.1. Requirements..........................................33
17.2. Solicitation of Holders of Notes......................33
17.3. Binding Effect, etc...................................34
17.4. Notes held by Company, etc............................34
18. NOTICES......................................................34
19. REPRODUCTION OF DOCUMENTS....................................35
20. CONFIDENTIAL INFORMATION.....................................35
21. SUBSTITUTION OF PURCHASER....................................36
22. MISCELLANEOUS................................................37
22.1. Successors and Assigns................................37
22.2. Payments Due on Non-Business Days.....................37
22.3. Severability..........................................37
22.4. Construction..........................................37
22.5. Counterparts..........................................37
22.6. Governing Law.........................................37
22.7. Accounting Principles.................................38
22.8. Valuation Principles..................................38
23. ADDITIONAL SERIES OF NOTES...................................38
23.1. Issuance of Additional Series of Notes................38
23.2. Conditions to Additional Series of Notes..............39
<PAGE>
SCHEDULE A -- Information Relating to Purchaser
SCHEDULE B -- Defined Terms
SCHEDULE 5.4 -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 10.3 -- Liens
SCHEDULE 10.10 -- Restricted Investments
EXHIBIT 1-A -- Form of 7.22% Senior Note, Series A
EXHIBIT 1-B -- Form of 6.55% Senior Note, Series B
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for
the Company and Special Counsel for the
Mexican Companies
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the
Purchaser
EXHIBIT 23.2 -- Form of Terms Agreement
<PAGE>
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12
BLESSINGS CORPORATION
200 Enterprise Drive
Newport News, VA 23603
7.22% Senior Notes, Series A, due January 30, 2008 6.55%
Senior Notes, Series B, due January 30, 2002
Dated as of January 15, 1996
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Ladies and Gentlemen:
BLESSINGS CORPORATION, a Delaware corporation
(the "Company"), agrees with you as follows:
1.AUTHORIZATION OF NOTES.NOTES
The Company has authorized the issue and sale of $10,000,000
aggregate principal amount of its 7.22% Senior Notes, Series A, due January 30,
2008 (the "Series A Notes") and $10,000,000 aggregate principal amount of its
6.55% Senior Notes, Series B, due January 30, 2002 (the "Series B Notes"). The
Series A Notes and Series B Notes are collectively referred to as the "Notes",
such term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement (the "Agreement"). The Notes shall be substantially
in the forms set out in Exhibits 1-A and 1-B, with such changes therefrom, if
any, as may be approved by you and the Company. Certain capitalized terms used
in this Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement. You are hereinafter referred to as the "Purchaser."
2.SALE AND PURCHASE OF NOTES.NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the Company, at
the Closing provided for in Section 3, Notes in the principal amount specified
opposite your name in Schedule A at the purchase price of 100% of the principal
amount thereof.
3.CLOSING.OSING.
The sale and purchase of the Notes to be purchased by you shall
occur at the offices of Gardner, Carton & Douglas, Quaker Tower, Suite 3400, 321
North Clark Street, Chicago, Illinois 60610-4795, at 9:00 a.m., Chicago time, at
a closing (the "Closing") on January 23, 1996 or on such other Business Day
thereafter on or prior to January 30, 1996 as may be agreed upon by the Company
and you. At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note (or such greater number of Notes
in denominations of at least $1,000,000 as you may request) dated the date of
the Closing and registered in your name (or in the name of your nominee),
against delivery by you to the Company or its order of immediately available
funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
0201010725 at Chase Manhattan Bank, New York, ABA number 021000021. If at the
Closing the Company shall fail to tender such Notes to you as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to your satisfaction, you shall, at your election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
you may have by reason of such failure or such nonfulfillment.
4.CONDITIONS TO CLOSING.OSING.
Your obligation to purchase and pay for the Notes to be sold to
you at the Closing is subject to the fulfillment to your satisfaction, prior to
or at the Closing, of the following conditions:
4.1.Representations and Warranties.ies
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the Closing.
4.2.Performance; No Default.ult
The Company shall have performed and complied with all agreements
and conditions contained in this Agreement required to be performed or complied
with by it prior to or at the Closing and after giving effect to the issue and
sale of the Notes (and the application of the proceeds thereof as contemplated
by Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
this Agreement, had it been in effect since such date.
4.3.Compliance Certificates.tes
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreement.
4.4.Opinions of Counsel.sel
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from Patten, Wornom &
Watkins, L.C., special counsel for the Company, and Baker & McKenzie, special
counsel for the Mexican Companies, covering the matters set forth in Exhibit
4.4(a) and covering such other matters incident to the transactions contemplated
hereby as you or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you) and (b) from Gardner,
Carton & Douglas, your special counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.4(b) and covering such other
matters incident to such transactions as you may reasonably request.
4.5.Purchase Permitted By Applicable Law, etc.etc
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.6.Payment of Special Counsel Fees.ees
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the fees, charges and disbursements of
your special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.7.Private Placement Number.ber
A Private Placement number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
the Notes.
4.8.Changes in Corporate Structure.ure
The Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.
4.9.Proceedings and Documents.nts
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
5.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.MPANY
The Company represents and warrants to you that:
5.1.Organization; Power and Authority.ity
The Company is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes and to perform the provisions hereof and
thereof.
5.2.Authorization, etc.etc
This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5.3.Disclosure.ure
The Company, through its agents, SPP Hambro & Co. and First
Fidelity Bank, N.A., has delivered to you a copy of a Confidential Direct
Placement Memorandum, dated December 1995 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Subsidiaries. This Agreement, the Memorandum, the
documents, certificates or other writings delivered to you by or on behalf of
the Company in connection with the transactions contemplated hereby and the
financial statements listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum,
or in one of the documents, certificates or other writings identified therein,
or in the financial statements listed in Schedule 5.5, since December 31, 1994,
there has been no change in the financial condition, operations, business,
properties or prospects of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents, certificates and
other writings delivered to you by or on behalf of the Company specifically for
use in connection with the transactions contemplated hereby.
5.4.Organization and Ownership of Shares of Subsidiaries; Affiliates.tes
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
5.5.Financial Statements.nts
The Company has delivered to the Purchaser copies of the
financial statements of the Company and its Subsidiaries listed on Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6.Compliance with Laws, Other Instruments, etc.etc
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.
5.7.Governmental Authorizations, etc .tc .
No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by the Company of this Agreement or the
Notes.
5.8.Litigation; Observance of Agreements, Statutes and Orders.ers
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
5.9.Taxes.xes
The Company and its Subsidiaries have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended December 28, 1991.
5.10.Title to Property; Leases.es
The Company and its Subsidiaries have good and sufficient title
to their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been acquired by
the Company or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear of
Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and effect
in all material respects.
5.11.Licenses, Permits, etc.tc
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of
others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or any
of its Subsidiaries.
5.12.Compliance with ERISA.SA
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and the terms "current value"
and "present value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of your representation in
Section 6.2 as to the sources of the funds used to pay the purchase price of the
Notes to be purchased by you.
5.13.Private Offering by the Company.ny
Neither the Company nor anyone acting on its behalf has offered
the Notes or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect thereof
with, any person other than you and not more than 57 other Institutional
Investors, each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.
5.14.Use of Proceeds; Margin Regulations.ns
The Company will apply the proceeds of the sale of the Notes as
set forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). The Company and its Subsidiaries do not currently own, nor do they
have any present intention to acquire, margin stock. As used in this Section,
the terms "margin stock" and "purpose of buying or carrying" shall have the
meanings assigned to them in said Regulation G.
5.15.Existing Indebtedness; Future Liens.ns
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of December 31, 1995, since which date there has been no
Material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition exists
with respect to any Indebtedness of the Company or any Subsidiary that would
permit (or that with notice or the lapse of time, or both, would permit) one or
more Persons to cause such Indebtedness to become due and payable before its
stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor
any Subsidiary has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its property, whether now
owned or hereafter acquired, to be subject to a Lien.
5.16.Foreign Assets Control Regulations, etc.tc
Neither the sale of the Notes by the Company hereunder nor its
use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17.Status under Certain Statutes.es
Neither the Company nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
5.18.Environmental Matters.rs
Neither the Company nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to
real properties now or formerly owned, leased or operated by any
of them or to other assets or their use, except, in each case,
such as could not reasonably be expected to result in a Material
Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them and has not disposed of
any Hazardous Materials in a manner contrary to any Environmental
Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries are
in compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
6.REPRESENTATIONS OF THE PURCHASER.HASER
6.1.Purchase for Investment.ent
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
6.2.Source of Funds.nds
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) if you are an insurance company, the Source does not include
assets allocated to any separate account maintained by you in which any
employee benefit plan (or its related trust) has any interest, other
than a separate account that is maintained solely in connection with
your fixed contractual obligations under which the amounts payable, or
credited, to such plan and to any participant or beneficiary of such
plan (including any annuitant) are not affected in any manner by the
investment performance of the separate account; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption ("PTE")
90-1 (issued January 29, 1990), or (ii) a bank collective investment
fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and,
except as you have disclosed to the Company in writing pursuant to this
paragraph (b), no employee benefit plan or group of plans maintained by
the same employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or
collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of
the QPAM Exemption), no employee benefit plan's assets that are included
in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or
by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by
such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by
the QPAM (applying the definition of "control" in Section V(e) of the
QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to
the Company in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing
pursuant to this paragraph (e);
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA: or
(g) if you are an insurance company and the Source includes
assets of your general account, (i) your purchase of Notes is entitled to the
exemption afforded by PTE 95-60 (issued July 12, 1995), provided the Company is
not an affiliate (within the meaning of Section v(a) of PTE 95-60) of you, or
(ii) there is no Plan with respect to which the assets of your general account's
reserves (as determined under Section 807(d) of the Code) for all contracts held
by or on behalf of such Plan and all other Plans maintained by the same employer
or its affiliates (as so defined) or by the same employee organization exceeds
10% of the liabilities of your general account.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
7.INFORMATION AS TO COMPANY.MPANY
7.1.Financial and Business Informationtion
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), duplicate
copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with
such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a). Concurrently with the delivery of
such financial statements the Company shall provide each such holder
with sufficient information regarding each outstanding interest rate
swap or similar obligation (whether speculative or for hedging purposes)
to permit such holder to reasonably assess such swap or similar
obligation;
(b) Annual Statements -- within 105 days after the end of
each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied
(A) by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they
have reviewed this Agreement and stating further whether, in
making their audit, they have become aware of any condition or
event that then constitutes a Default or an Event of Default,
and, if they are aware that any such condition or event then
exists, specifying the nature and period of the existence thereof
(it being understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in accordance
with generally accepted auditing standards or did not make such
an audit),
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant
to Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in
clause (B) above, shall be deemed to satisfy the requirements of this
Section (b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in Section
11(f), a written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to take with
respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived pursuant
to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably
be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or any
of its Subsidiaries or relating to the ability of the Company to perform
its obligations hereunder and under the Notes as from time to time may
be reasonably requested by any such holder of Notes.
7.2.Officer's Certificate.ate
Each set of financial statements delivered to a holder of Notes
pursuant to Section (a) or Section (b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3 through Section 10.10
hereof, inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature
and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
7.3.Inspection.ion
The Company shall permit the representatives of each holder of
Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing;
and
(b) Default -- if a Default or Event of Default then exists, at
the expense of the Company to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be
requested.
8.PREPAYMENT OF THE NOTES NOTES
8.1.Required Prepayments.nts
(a) Mandatory Prepayments. On (i) January 30, 2004 and on each
January 30 thereafter to and including January 30, 2007 the Company will prepay
$2,000,000 principal amount (or such lesser principal amount as shall then be
outstanding) of the Series A Notes, and (ii) on January 30, 2000 and on each
January 30 thereafter to and including January 30, 2001, the Company will prepay
$3,333,333 principal amount (or such lesser principal amount as shall then be
outstanding) of the Series B Notes, in each case at 100% of the principal amount
prepaid and without payment of the Make-Whole Amount or any premium; provided
that upon any partial prepayment of the Notes pursuant to Section 8.1(b) or
Section 8.2 or purchase of the Notes permitted by Section 8.5 the principal
amount of each required prepayment of the Notes becoming due under this Section
8.1(a) on and after the date of such prepayment or purchase shall be reduced in
the same proportion as the aggregate unpaid principal amount of the Notes is
reduced as a result of such prepayment or purchase.
(b) Change of Control Prepayments. In the event of either (x) a
Change of Control, or (y) the obtaining of knowledge of a Control Event by any
Responsible Officer, then the Company shall, within three Business Days of the
occurrence of either of such events give written notice of such Change of
Control or Control Event to each holder of the Notes. In the event of a Change
of Control, such written notice shall contain, and such written notice shall
constitute, an irrevocable offer to prepay all, but not less than all, of the
Notes held by such holder on a date specified in such notice (the "Control
Prepayment Date") that is not less than 30 days and not more than 45 days after
the date of such notice. If the Control Prepayment Date shall not be specified
in such notice, the Control Prepayment Date shall be the 30th day after the date
of such notice.
(i) Officer's Certificate and Notice. Each offer to
prepay the Notes pursuant to this Section 8.1(b) will be
accompanied by an officer's certificate, executed by a Senior
Financial Officer and dated the date of such offer, specifying
(A) the Control Prepayment Date; (B) the principal amount of each
Note offered to be prepaid; (C) the interest to be paid on each
such Note, accrued to the Control Prepayment Date; (D) the date
by which any holder of a Note that wishes to accept such offer
must deliver notice thereof to the Company which shall be not
later than 10 calendar days prior to the Control Prepayment Date;
(E) the nature, in reasonable detail, and date of the Change in
Control; and (F) that the conditions of this Section 8.1(b) have
been fulfilled. In addition, the Company shall give written
notice to each holder of a Note, not earlier than seven calendar
days prior to the Control Prepayment Date, of those holders who
have given notices of acceptance of the Company's offer, and the
principal amount of Notes held by each.
(ii) Acceptance and Revocation. To accept such offered
prepayment, a holder of Notes shall cause a written notice of
such acceptance to be delivered to the Company not later than 10
calendar days prior to the Control Prepayment Date. After receipt
of the notice from the Company of those holders of the Notes
accepting the offer of prepayment, any holder may change its
response to the Company's offer by written notice to such effect
delivered to the Company not less than three calendar days prior
to the Control Prepayment Date.
(iii) Payment. Upon receipt by the Company of any
non-revoked notice of acceptance from any holder within the
required time period, the aggregate principal amount of Notes
held by such holder shall become due and payable on the Control
Prepayment Date. Such prepayment shall be at 100% of the
principal amount of such Notes, together with interest on the
Notes accrued to the Control Prepayment Date.
8.2.Optional Prepayments with Make-Whole Amount.unt
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
amount not less than $1,000,000 in the case of a partial prepayment, at 100% of
the principal amount so prepaid, plus the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Company will give
each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer as to the estimated Make-Whole
Amount due in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
8.3.Allocation of Partial Prepayments.nts
In the case of a partial prepayment of the Notes of a series
pursuant to Section 8.1(a), the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes of such series at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment. In the case of a partial
prepayment of the Notes pursuant to Section 8.2, the principal amount of the
Notes to be prepaid shall be allocated among the Notes pro rata in proportion to
the aggregate unpaid principal amounts thereof.
8.4.Maturity; Surrender, etc.etc
In the case of each prepayment of Notes pursuant to this Section
8, the principal amount of each Note to be prepaid shall mature and become due
and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued to such date and the applicable Make-Whole Amount,
if any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5.Purchase of Notes.tes
The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.6.Make-Whole Amount.unt
The term "Make-Whole Amount" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has become
or is declared to be immediately due and payable pursuant to Section
12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal,
on the display designated as "Page 500" on the Telerate Access Service
(or such other display as may replace Page 500 on Telerate Access
Service) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such time
or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal,
in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded "on the run" U.S. Treasury security with the time to
maturity closest to and greater than the Remaining Average Life and (2)
the actively traded U.S. Treasury security with the time to maturity
closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9.AFFIRMATIVE COVENANTS.NANTS
The Company covenants that so long as any of the Notes are
outstanding:
9.1.Compliance with Law.Law
The Company will and will cause each Subsidiary to comply with
all laws, ordinances or governmental rules or regulations to which each of them
is subject, including, without limitation, Environmental Laws, and will obtain
and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.2.Insurance.nce
The Company will and will cause each Subsidiary to maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and risks, of such
types, on such terms and in such amounts (including deductibles, co-insurance
and self-insurance, if adequate reserves are maintained with respect thereto) as
is customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated.
9.3.Maintenance of Properties.ies
The Company will and will cause each Subsidiary to maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
9.4.Payment of Taxes and Claims.ims
The Company will and will cause each Subsidiary to file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
9.5.Corporate Existence, etc.etc
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.2 and 10.8, the Company
will at all times preserve and keep in full force and effect the corporate
existence of each Subsidiary (unless merged into the Company or a Subsidiary)
and all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.
9.6.Maintenance of Records.rds
The Company will, and will cause each Subsidiary to, keep at all
times proper books of record and account in which full, true and correct entries
will be made of all dealings or transactions of or in relation to the business
and affairs of the Company or such Subsidiary, in accordance with GAAP
consistently applied throughout the period involved (except for such changes as
are disclosed in the financial statements or in the notes thereto and concurred
in by the Company's independent certified public accountants), and the Company
will, and will cause each such Subsidiary to, provide reasonable protection
against loss or damage to such books of record and account.
10.NEGATIVE COVENANTS.ANTS
The Company covenants that so long as any of the Notes are
outstanding:
10.1.Transactions with Affiliates.es
The Company will not and will not permit any Subsidiary to enter
into directly or indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
10.2.Merger, Consolidation, etc.tc
The Company will not, and will not permit any Subsidiary to,
consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person unless:
(a) in the case of the Company, the successor formed by such
consolidation or the survivor of such merger or the Person that acquires
by conveyance, transfer or lease substantially all of the assets of the
Company as an entirety, as the case may be, shall be a solvent
corporation organized and existing under the laws of the United States
or any State thereof (including the District of Columbia), and, if the
Company is not such corporation, (i) such corporation shall have
executed and delivered to each holder of any Notes its assumption of the
due and punctual performance and observance of each covenant and
condition of this Agreement and the Notes and (ii) shall have caused to
be delivered to each holder of any Notes an opinion of nationally
recognized independent counsel, or other independent counsel reasonably
satisfactory to the Required Holders, to the effect that all agreements
or instruments effecting such assumption are enforceable in accordance
with their terms and comply with the terms hereof; or
(b) in the case of a Subsidiary, (i) the successor formed by such
consolidation or the survivor of such merger or the Person that acquires
by conveyance, transfer or lease substantially all of the assets of such
Subsidiary as an entirety, as the case may be, shall be the Company, or
(ii) such merger is with any one or more other Wholly-Owned
Subsidiaries; and
(c) immediately after giving effect to such transaction described
in paragraph (a) or (b) above, no Default or Event of Default shall have
occurred and be continuing.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.
10.3.Liens.ns
The Company will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to be created, assumed or incurred or to exist any Lien
upon any assets, now owned or hereafter acquired by the Company or any such
Subsidiary, except for:
(a) Liens securing Indebtedness existing on the date of Closing
which are listed in Schedule 10.3 and renewals, extensions and
replacements of any such Liens, provided that, at the time of such
renewal, extensions or replacements of any such Lien, the principal
amount of Indebtedness secured by such Lien is not increased and such
Lien does not extend to any other property of the Company or any
Subsidiary;
(b) Liens for taxes, assessments, governmental charges, levies or
claims not then due and delinquent or the validity of which is being
contested in good faith and as to which the Company has established
adequate reserves on its books in accordance with GAAP;
(c) Liens arising in connection with court proceedings, provided
the execution of such Liens is effectively stayed, such Liens are being
contested in good faith by appropriate proceedings and the Company has
established adequate reserves therefor on its books in accordance with
GAAP;
(d) Liens arising in the ordinary course of business or
incidental to the ownership of property or assets and not incurred in
connection with the borrowing of money (including, but not limited to,
encumbrances in the nature of zoning restrictions, easements, rights and
restrictions of record on the use of real property, defects in title and
landlord's, lessor's, mechanics' and materialmen's liens) that in the
aggregate do not materially impair the use of the property or assets
subject thereto in the business of the Company and its Subsidiaries
taken as a whole or the value of such property or assets for purposes of
such business;
(e) Liens securing Indebtedness of a Subsidiary to the
Company or to another Wholly-Owned Subsidiary;
(f) Liens on property (i) of the Company or any Subsidiary which
are created, incurred or assumed contemporaneously with or within 180
days after the acquisition or construction of such property by the
Company or any Subsidiary to secure the purchase price or cost of
construction thereof; (ii) existing at the time of its acquisition by
the Company or a Subsidiary, whether or not the Indebtedness secured
thereby is assumed by the Company or such Subsidiary; or (iii) on
property of a corporation at the time of its merger into or
consolidation with, or the acquisition of its capital stock by, the
Company; provided, that at the time such Liens are created, incurred or
assumed, or at the time such property is acquired or such corporation is
merged, consolidated or its capital stock acquired, the principal amount
of Indebtedness secured thereby does not exceed the fair market value of
such property and any improvements thereon and such Liens do not extend
to any other property of the Company or any Subsidiary; and
(g) Liens securing Indebtedness not otherwise permitted by
clauses (a) through (f) above incurred subsequent to the Closing Date to
secure Indebtedness, provided that at the time of incurring such
additional Indebtedness and after giving effect thereto and to the
application of the proceeds therefrom, (i) the sum (without duplication)
of outstanding (A) Funded Debt of Subsidiaries (other than Funded Debt
owed to the Company or a Wholly-Owned Subsidiary), and (B) Indebtedness
of the Company or any Subsidiary secured by Liens permitted by this
Section 10.3(g) does not exceed 15% of Adjusted Consolidated Net Worth.
10.4.Adjusted Consolidated Net Worth.th.
The Company will not permit its Adjusted Consolidated Net Worth
at any time to be less than (a) $60,000,000 plus (b) 50% of Consolidated Net
Income (without reduction for a net deficit) for each fiscal quarter ending
after December 31, 1995.
10.5.Ratio of Funded Debt to Cash Flow.ow.
The Company will not permit the ratio of Consolidated Funded Debt
as of the end of any fiscal quarter ending after December 31, 1995 to
Consolidated Cash Flow for the 12 months ending as of the end of such quarter to
exceed 3.5 to 1.00.
10.6.Ratio of Funded Debt to Total Capitalization.on.
The Company will not permit Consolidated Funded Debt to exceed
55% of Consolidated Total Capitalization at any time.
10.7.Funded Debt of Subsidiaries.es.
The Company will not permit any Subsidiary to incur any Funded
Debt unless, after giving effect thereto and to the application of the proceeds
thereof, (i) the Company would be in compliance with Section 10.6, and (ii) the
sum (without duplication) of outstanding (A) Funded Debt of Subsidiaries (other
than Funded Debt owed by a Subsidiary to the Company or a Wholly-Owned
Subsidiary) and (B) Indebtedness of the Company or any Subsidiary secured by
Liens permitted by Section 10.3(g) does not exceed 15% of Adjusted Consolidated
Net Worth.
10.8.Sale of Assets.ts.
The Company will not, and will not permit any Subsidiary to sell,
lease, transfer or otherwise dispose of, including by way of merger
(collectively a "Disposition"), other than in the ordinary course of business,
any assets, including capital stock of Subsidiaries, in one or a series of
transactions, to any Person other than Dispositions by a Subsidiary to the
Company or a Wholly-Owned Subsidiary, if, after giving effect to such
Disposition and all prior Dispositions since the date of Closing, the aggregate
net book value of assets subject to Dispositions would exceed, on a cumulative
basis, 25% of Consolidated Total Assets as of the end of the immediately
preceding fiscal year or (iii) if a Default or Event of Default exists or would
exist after giving effect thereto. Notwithstanding the foregoing, the Company or
a Subsidiary may make a Disposition and the net book value of the assets subject
to such Disposition shall not be subject to or included in the foregoing
limitations and computations if the proceeds from such Disposition are (y)
reinvested in productive assets of a similar nature of the Company within 180
days following such disposition or (z) applied to the repayment of outstanding
senior Indebtedness including the Notes (pro rata based upon the outstanding
principal thereof) equal in principal amount to the proceeds from such
Disposition. Such prepayment of the Notes shall be in the form of an offer to
prepay pursuant to Section 8.2 with the Make-Whole Amount. To the extent the
holders of the Notes decline such offer, the proceeds shall be applied to the
payment of other senior Indebtedness. If proceeds of a Disposition are to be
reinvested as permitted by clause (y) of the preceding sentence, such proceeds
shall be deposited in escrow until so reinvested.
10.9.Disposition of Stock of Subsidiaries.es.
Subject to the last sentence of this Section, the Company will
not permit any Subsidiary to issue its capital stock, or any warrants, rights or
options to purchase, or securities convertible into or exchangeable for, such
capital stock, to any person other than the Company or a Wholly-Owned
Subsidiary. The Company will not, and will not permit any Subsidiary to, sell,
transfer or otherwise dispose of (other than to the Company or a Wholly-Owned
Subsidiary) any capital stock (including any warrants, rights or options to
purchase, or securities convertible into or exchangeable for, capital stock) or
Indebtedness of any Subsidiary, unless:
(a) simultaneously therewith all Investments in such Subsidiary owned by
the Company and every other Subsidiary are disposed of as an entirety;
(b) such Subsidiary does not have any continuing Investment in the Company
or any other Subsidiary not being simultaneously disposed of; and
(c) such sale, transfer or other disposition is permitted by Section 10.8.
Notwithstanding the foregoing, the Company may reduce its ownership of capital
stock in NEPSA to not less than a majority of the outstanding voting shares of
such capital stock through either the issuance of capital stock by NEPSA or the
sale of capital stock by the Company or a Wholly-Owned Subsidiary, provided that
the Company's ownership of such shares is either direct or through a
Wholly-Owned Subsidiary.
10.10.Restricted Investments.s.
The Company will not permit outstanding Restricted Investments
during any fiscal quarter to exceed 15% of Adjusted Consolidated Net Worth as of
the end of the immediately preceding fiscal quarter and will not, and will not
permit any Subsidiary to make, any Restricted Investment if there exists or
would exist after giving effect thereto a Default or Event of Default.
10.11.Nature of Business.s.
The Company will not, and will not permit any Subsidiary to,
engage in any business if, as a result thereof, the business then to be
conducted by the Company and its Subsidiaries taken as a whole, would be
materially different than that described in the Memorandum.
11.EVENTS OF DEFAULT.AULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Sections 7.1(d) or 10.2 through
10.10; or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days; or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this Agreement
or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as principal
or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $3,000,000
beyond any period of grace provided with respect thereto, or (ii) the
Company or any Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness in an
aggregate outstanding principal amount of at least $3,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared, due and payable before
its stated maturity or before its regularly scheduled dates of payment,
or (iii) as a consequence of the occurrence or continuation of any event
or condition (other than the passage of time or the right of the holder
of Indebtedness to convert such Indebtedness into equity interests), (x)
the Company or any Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount
of at least $3,000,000, or (y) one or more Persons have the right to
require the Company or any Subsidiary so to purchase or repay such
Indebtedness; or
(g) the Company or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it
of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its Subsidiaries, or
any such petition shall be filed against the Company or any of its
Subsidiaries and such petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $2,000,000 are rendered against one or more of
the Company and its Subsidiaries and which judgments are not, within 45
days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 45 days after the expiration of such stay;
or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (iii) there
shall have been an increase in the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, (iv) the
Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be
expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12.REMEDIES ON DEFAULT, ETC. ETC
12.1.Acceleration.on
(a) If an Event of Default with respect to the Company described
in paragraph (g) or (h) of Section 11 (other than an Event of Default described
in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is continuing,
any holder or holders of more than 50% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2.Other Remedies.es
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
12.3.Rescission.on
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 51%
in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4.No Waivers or Election of Remedies, Expenses, etc.tc
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.OTES
13.1.Registration of Notes.es
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2.Transfer and Exchange of Notes.es
Upon surrender of any Note at the principal executive office of
the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1-A or 1-B,
as appropriate. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $1,000,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $1,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.
13.3.Replacement of Notes.es
Upon receipt by the Company of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note which is an Institutional Investor, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14.PAYMENTS ON NOTES.OTES
14.1.Place of Payment.nt
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
in Newport News, Virginia at the principal executive office of the Company. The
Company may at any time, by notice to each holder of a Note, change the place of
payment of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in such jurisdiction.
14.2.Home Office Payment.nt
So long as you or your nominee shall be the holder of any Note,
and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.
15.EXPENSES, ETC. ETC
15.1.Transaction Expenses.es
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or other
counsel) incurred by you and each holder of a Note in connection with such
transactions and in connection with any amendments, waivers or consents under or
in respect of this Agreement or the Notes (whether or not such amendment, waiver
or consent becomes effective), including, without limitation: (a) the reasonable
costs and expenses incurred in enforcing or defending (or determining whether or
how to enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or by reason of
being a holder of any Note, and (b) the reasonable costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any work-out
or restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save you and each other holder of a Note harmless
from, all claims in respect of any fees, costs or expenses if any, of brokers
and finders (other than those retained by you).
15.2.Survival.al
The obligations of the Company under this Section 15 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
16.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall survive
the execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
17.AMENDMENT AND WAIVER.IVER
17.1.Requirements.ts
This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.
17.2.Solicitation of Holders of Notes.es
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes. Any consent made by a holder of
Notes that has transferred or has agreed to transfer its Notes to the Company,
any Subsidiary, or any Affiliate thereof and has provided or has agreed to
provide such written consent as a condition to such transfer shall be void and
of no force and effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that would not have
been or would not be so effected or granted but for such consent (and the
consents of all other holders of Notes that were acquired under the same or
similar conditions) shall be void and of no force and effect retroactive to the
date such amendment or waiver initially took or takes effect, except solely as
to such holder.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
17.3.Binding Effect, etc.tc
Any amendment or waiver consented to as provided in this Section
17 applies equally to all holders of Notes and is binding upon them and upon
each future holder of any Note and upon the Company without regard to whether
such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
17.4.Notes held by Company, etc.tc
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18.NOTICES.ICES
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified for
such communications in Schedule A, or at such other address as you or it shall
have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of Chief Financial Officer, or
at such other address as the Company shall have specified to the holder
of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19.REPRODUCTION OF DOCUMENTS.ENTS
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20.CONFIDENTIAL INFORMATION.TION
For the purposes of this Section 20, "Confidential Information"
means information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or (d) constitutes financial statements delivered to
you under Section 7.1 that are otherwise publicly available. You will maintain
the confidentiality of such Confidential Information in accordance with your
current practice or your policies and procedures from time to time in effect to
protect confidential information of third parties delivered to you, provided
that you may deliver or disclose Confidential Information to (i) your directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein, (v) any
Person from which you offer to purchase any security of the Company, (vi) any
federal or state regulatory authority having jurisdiction over you, (vii) the
National Association of Insurance Commissioners or any similar organization, or
any nationally recognized rating agency that requires access to information
about your investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to you, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which you are a party or (z) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
21.SUBSTITUTION OF PURCHASER.ASER
You shall have the right to substitute any one of your Affiliates
as the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22.MISCELLANEOUS.EOUS
22.1.Successors and Assigns.ns
All covenants and other agreements contained in this Agreement by
or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
22.2.Payments Due on Non-Business Days.ys
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
22.3.Severability.ty
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4.Construction.on
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
22.5.Counterparts.ts
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6.Governing Law.aw
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of Illinois excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
.2.7.Accounting Principlesles
Where the character or amount of any asset or liability or item
of income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, except where such
principles are inconsistent with the requirements of this Agreement.
22.8.Valuation Principles.es
Except where indicated expressly to the contrary by the use of
terms such as "fair value," "fair market value" or "market value," each asset,
each liability and each capital item of any Person, and any quantity derivable
by a computation involving any of such assets, liabilities or capital items,
shall be taken at the net book value thereof for all purposes of this Agreement.
"Net book value" with respect to any asset, liability or capital item of any
Person shall mean the amount at which the same is recorded or, in accordance
with GAAP should have been recorded, in the books of account of such Person, as
reduced by any reserves which have been or, in accordance with GAAP should have
been, set aside with respect thereto, but in every case (whether or not
permitted in accordance with GAAP) without giving effect to any write-up,
write-down or write-off (other than any write-down or write-off the entire
amount of which was charged to Consolidated Net Income or to a reserve which was
a charge to Consolidated Net Income) relating thereto which was made after the
date of this Agreement.
23. ADDITIONAL SERIES OF NOTES
23.1.Issuance of Additional Series of Notes.es.
The Company may, from time to time, issue and sell additional
series of its unsecured promissory notes (each additional series being
designated by the next succeeding letter of the alphabet following designation
of the immediately preceding series) to one or more additional purchasers (which
may include the Purchaser if such Purchaser shall in its sole discretion consent
thereto) and may, in connection with the documentation of such additional
series, incorporate by reference all of or certain of the provisions of this
Agreement; provided, however, that such incorporation by reference shall not
dilute or otherwise affect the relative priority or other rights of the
Purchaser of the Notes hereunder or any subsequent series of notes, including,
without limitation, the percentages of the Notes required to approve an
amendment to this Agreement or to effect a waiver pursuant to Section 17.1 or
the percentages of the Notes required to accelerate the maturity of the Notes or
to rescind such an acceleration of the maturity of the Notes pursuant to
Sections 12.1 and 12.3. This Section 23 does not in any manner obligate the
Purchaser or the holders of the Notes to purchase or agree to purchase
additional series of the Company's unsecured promissory notes now or at any time
in the future.
23.2.Conditions to Additional Series of Notes.es.
The Company may (but shall not be required to) at any time, or
from time to time, offer to the Purchaser an opportunity to purchase additional
promissory notes. At such time the Company shall provide such offeree with
additional information regarding the terms of such additional promissory notes,
the timing of the offering and whatever additional information as the Purchaser
may request. If the Purchaser fails to respond to such an offer, it shall be
deemed to have rejected the Company's offer. The Purchaser shall have no
obligation to make any such additional purchase, and may reject such offers at
its sole discretion. In the event that the Company and the Purchaser shall
mutually agree to such an additional purchase, the issuance of each such
additional series of promissory notes shall occur upon the execution by the
Company and the Purchaser of a terms agreement substantially in the form of
Exhibit 23.2, appropriately completed, and satisfaction by the Company of all of
the conditions to closing and funding set forth in Section 4, with such changes
as shall be appropriate to such additional series of promissory notes, and the
delivery of such additional closing documents and opinions the Purchaser shall
request.
* * * * *
<PAGE>
If you are in agreement with the foregoing, please sign the form
of agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.
Very truly yours,
BLESSINGS CORPORATION
By: /s/ James P. Luke
______________________________________
Title:Executive Vice Presiddent, Chief
Financial Officer
The foregoing is hereby
agreed to as of the
date thereof.
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Jon C. Heiny
___________________________________
Its: Counsel
By: /s/ Christopher J. Henderson
___________________________________
Its: Counsel
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1
Schedule A
Schedule A
SCHEDULE A
INFORMATION RELATING TO PURCHASER
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
Series A Series B
PRINCIPAL MUTUAL LIFE $6,000,000 $10,000,000
INSURANCE COMPANY
(1) All payments by wire transfer of immediately available funds to:
Norwest Bank Iowa, N.A.
7th & Walnut Streets
Des Moines, Iowa 50309
ABA# 073 000 228
For credit to Principal Mutual Life Insurance Company, Account No. 014752
Reference: OBI*07*S*60658@ (with respect to the $6,000,000 Series A Note)
OBI*07*S*60659@ (with respect to the $10,000,000 Series B Note)
(2) All notices of payments and written confirmations of such wire transfers:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting and Treasury - Securities
Reference: Bond No. 1-B-60658 (with respect to the $6,000,000 Series A Note)
Bond No. 1-B-60659 (with respect to the $10,000,000 Series B Note)
Telecopy: (515) 248-2643
Confirmation: (515) 248-8301
(3) All other communications:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department - Securities Division
Reference: Bond No. 1-B-60658 (with respect to the $6,000,000 Series A Note)
Bond No. 1-B-60659 (with respect to the $10,000,000 Series B Note)
Telecopy: (515) 248-2490
Confirmation: (515) 248-3495
Tax ID #42-0127290
<PAGE>
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1
Schedule A
Schedule A
SCHEDULE A
INFORMATION RELATING TO PURCHASER
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
Series A Series B
PRINCIPAL MUTUAL LIFE $4,000,000
INSURANCE COMPANY
(1) All payments by wire transfer of immediately available funds to:
Norwest Bank Iowa, N.A.
7th & Walnut Streets
Des Moines, Iowa 50309
ABA# 073 000 228
For credit to Principal Mutual Life Insurance Company, Separate
Account No. 032395
Reference: OBI*07*S*60658@
(2) All notices of payments and written confirmations of such wire transfers:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting and Treasury - Securities
Reference: Bond No. 16-B-60658
Telecopy: (515) 248-2643
Confirmation: (515) 248-8301
(3) All other communications:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department - Securities Division
Reference: Bond No. 16-B-60658
Telecopy: (515) 248-2490
Confirmation: (515) 248-3495
Tax ID #42-0127290
<PAGE>
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9
Schedule B
Schedule B
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:
"Adjusted Consolidated Net Worth" means Consolidated
Net Worth plus $6,078,873.
"Affiliate" means, at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Business Day" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (b) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in Chicago, Illinois or New York City
are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which
the lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"Change of Control" means the acquisition through purchase or
otherwise by any Person (other than Williamson-Dickie Manufacturing Company), or
group of Persons (other than a group of Persons which includes those persons
listed as "executive officers" in the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 filed with the Securities and Exchange
Commission) acting in concert, directly or indirectly, in one or more
transactions, of beneficial ownership or control of securities representing more
than 50% of the combined voting power of the Company's Voting Stock (including
the agreement to act in concert by Persons who beneficially own or control
securities representing more than 50% of the combined voting power of the
Company's Voting Stock).
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"Company" means Blessings Corporation, a Delaware corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Cash Flow" means, for any period, Consolidated Net
Income for such period, plus, to the extent deducted in calculating Consolidated
Net Income, (i) interest expense, including imputed interest in respect of
Capital Leases, amortization of debt discount and expense, fees and commissions
for letters of credit and bankers' acceptances and the net interest costs of
interest rate swaps and hedges, (ii) depreciation and amortization expense, and
(iii) taxes actually paid, in each case determined in accordance with GAAP.
"Consolidated Funded Debt" means Funded Debt of the Company and
its Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income
(or deficit) of the Company and its Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP, but excluding in any event (a) net
earnings and losses of any Subsidiary accrued prior to the date it became a
Subsidiary; (b) net earnings and losses of any Person (other than a Subsidiary),
substantially all the assets of which have been acquired in any manner, realized
by such other Person prior to the date of such acquisition; (c) net earnings and
losses of any Person (other than a Subsidiary) with which the Company or a
Subsidiary shall have consolidated or which shall have merged into or with the
Company or a Subsidiary prior to the date of such consolidation or merger; (d)
net earnings of any business entity (other than a Subsidiary) in which the
Company or any Subsidiary has an ownership interest unless such net earnings
shall have actually been received by the Company or such Restricted Subsidiary
in the form of cash distributions; (e) extraordinary, unusual or nonrecurring
gains or losses; (f) earnings resulting from any reappraisal, revaluation or
write-up of assets; and (g) any gain or loss (net of any tax effect) resulting
from the sale of capital assets other than in the ordinary course of business.
"Consolidated Net Worth" means total stockholders' equity of the
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Total Assets" means the total assets of the Company
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Total Capitalization" means the sum of
Adjusted Consolidated Net Worth and Consolidated Funded Debt.
"Control Event" means (i) the entering into by the Company or any
Subsidiary or Affiliate of any letter of intent with respect to any proposed
transaction or event or series of transactions or events that, individually or
in the aggregate, could reasonably be expected to result in a Change of Control,
or (ii) the execution of any written agreement that, when fully performed by the
parties thereto, would result in a Change of Control.
"Default" means an event or condition the occurrence or existence
of which would, with the lapse of time or the giving of notice or both, become
an Event of Default.
"Default Rate" means that rate of interest that is 2.0% per annum
above the rate of interest stated in clause (a) of the first paragraph of the
Series A Notes or Series B Notes, as appropriate.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Funded Debt" means as of any date of determination, all
Indebtedness properly classified as long-term debt in accordance with GAAP,
including (i) Indebtedness which by its terms matures more than one year from
the date of creation (including any portion thereof payable within a year), (ii)
Indebtedness outstanding under a revolving credit or similar agreement providing
for borrowings (and renewals and extensions thereof) over a period of more than
one year notwithstanding that any such Indebtedness may be payable within one
year after the creation thereof, and (iii) the principal portion of obligations
under Capital Leases; provided, however, that for purposes of clause (ii), only
the minimum daily average amount of such Indebtedness outstanding during a
period of 45 consecutive days during the 12 months ending on such date of
determination shall be deemed to be Funded Debt.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to,any such government.
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital
or other balance sheet condition or any income statement condition of
any other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 13.1.
"Indebtedness" with respect to any Person means, at
any time, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (f) hereof.
Indebtedness shall not be deemed to include unfunded benefit liabilities of the
Company or any Subsidiary under any Plan. Indebtedness of any Person shall
include all obligations of such Person of the character described in clauses (a)
through (g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"Institutional Investor" means (a) any original purchaser of a
Note, (b) any holder of a Note holding more than 5% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Investments" means all investments made, in cash or by delivery
of property, directly or indirectly, by any Person, in any other Person, whether
by acquisition of shares of capital stock, indebtedness or other obligations or
securities or by loan, advance, capital contribution or otherwise; provided,
however, that "Investments" shall not mean or include investments in property to
be used or consumed in the ordinary course of business.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets, properties, or prospects of
the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes, or (c)
the validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Mexican Companies" means Aspen Industrial, S.A. de
C.V., Nacional de Envases Plasticos, S.A. de C.V., Hermes Industrial,
S.A. de C.V., Plastihul, S.A. de C.V., Mexicana de Tintas, S.A. de C.V., and
Servicios Profesionales Vigo, S.C.
"Moody's" means Moody's Investor Services, Inc.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NEPSA" means Nacional de Envases Plasticos, S.A. de C.V.,
and its associated companies.
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may have
any liability.
"Preferred Stock" means any class of capital stock of a
corporation that is preferred over any other class of capital stock of such
corporation as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such corporation.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"QPAM Exemption" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least
66-2/3% in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Restricted Investment" means any Investment of the
Company and its Subsidiaries other than:
(a) Investments in Subsidiaries;
(b) Investments in a Person which, as a result thereof,
becomes a Subsidiary;
(c) Investments in (i) commercial paper maturing in 270 days or
less from the date of issuance which is rated A-1 or better by S&P or
P-1 by Moody's, (ii) certificates of deposit or banker's acceptances
maturing within one year from the date of issuance of commercial banks
located in the United States of America having combined capital, surplus
and undivided profits of at least $100,000,000, which are rated A or
better by S&P or Moody's, (C) obligations of or fully guaranteed by the
United States of America or an agency thereof maturing within one year
from the date of issuance, (D) tax-exempt floating rate tender option
bonds backed by a letter of credit issued by a commercial bank rated AA
or better by S&P or Aa or better by Moody's, and (E) money market
preferred stock rated A or better by S&P or Moody's which must be
redeemed by the issuer within two years from the date of acquisition;
(d) loans by the Company made to its employees not to
exceed $2,000,000 in the aggregate; and
(e) Investments as of the date of this Agreement which
are listed in the attached Schedule 10.10.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint
venture if more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries or such Person and one or more
of its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Swaps" means, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency; provided, however, that "Swaps" shall not mean or
include any interest rate swap entered into solely for the purpose of hedging
such Person's exposure to interest rate risks on outstanding Indebtedness and
involving a notional amount not greater in principal amount than the outstanding
principal amount of the Indebtedness to which it relates, and provided further,
that the amount of any liability in respect of an interest rate swap that must
be included as a liability in such Person's balance sheet in accordance with
GAAP shall be deemed to be a Swap. For the purposes of this Agreement, the
amount of the obligation under any Swap shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement relating
to such Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary 100%
of all of the equity interests (except directors' qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company's
other Wholly-Owned Subsidiaries at such time.
<PAGE>
========================================================================
========================================================================
1
Schedule 5.4
Schedule 5.4
SCHEDULE 5.4
SUBSIDIARIES OF THE COMPANY
AND OWNERSHIP OF SUBSIDIARY STOCK
Name of Company State (Country) of Percentage of Voting
Incorporation Securities Owned
_____________________ __________________ ____________________
Edison Plastics Delaware 100%
International, Inc.
Edison Exports, Inc. Jamaica 100%
FSC Limited
ASPEN Industrial, Mexico 100%
S.A. de C.V.
Nacional de Envases Mexico 60%
Plasticos, S.A. de C.V.
(NEPSA)
<PAGE>
========================================================================
Exhibit
========================================================================
1
Schedule 5.5
Schedule 5.5
SCHEDULE 5.5
FINANCIAL STATEMENTS
1. Annual report for the fiscal years ended on or about December 31, 1994
and December 31, 1993
2. Unaudited financial statements (Form 10-Q) for the forty week period
ended on August 7, 1995 and August 8, 1994
3. Form 10K for the fiscal year ended on December 31, 1994
<PAGE>
========================================================================
========================================================================
Schedule 5.14
SCHEDULE 5.14
USE OF PROCEEDS
Sources
Proceeds $20,000,000
Total Sources $20,000,000
Uses
Debt Repayment
Line of Credit $4,000,000
VA Mortgage 2,400,000
GA Mortgage 2,000,000
Total Debt $8,400,000
Capital Expenditures $11,600,000
Total Uses $20,000,000
<PAGE>
==========================================================================
==========================================================================
Schedule 5.15
SCHEDULE 5.15
EXISTING INDEBTEDNESS*
Chase Manhattan Credit Agreement due 2002 -- Term Loan $20,312,500
Revolving Credit Agreement with Wachovia as Agent 25,000,000
NEPSA Equipment Loan Due 7/6/97 191,235
NEPSA Equipment Loan Due 10/15/96 147,640
NEPSA Equipment Loan Due 11/26/97 666,144
NEPSA Equipment Loan Due 1/31/98 571,862
NEPSA Unsecured Term Loan Due 1/31/98 394,737
NEPSA Secured Term Loan Due 1/31/98 990,790
* Excludes existing debt that will be repaid from the proceeds of the Note
Purchase.
<PAGE>
========================================================================
========================================================================
Schedule 10.3
SCHEDULE 10.3
LIENS*
Collateral Secured Party Debtor Balance
Equipment-Engraving Bancomer NEPSA $191,235
System
Equipment-Engraving Banamex NEPSA 147,640
System
Equipment-Bielloflex Soditic Finance NEPSA 666,144
Tona Limited
Equipment-Turrent Bancomer NEPSA 571,862
Winder
Equipment - Turrent Bancomer NEPSA 990,790
Winder
* Existing domestic liens will be terminated as the proceeds of the Note
Purchase will be used to repay the associated indebtedness.
<PAGE>
=========================================================================
=========================================================================
Schedule 10.10
SCHEDULE 10.10
RESTRICTED INVESTMENTS
-None-
<PAGE>
=========================================================================
=========================================================================
2
Exhibit 1-A
Exhibit 1-A
EXHIBIT 1-A
[FORM OF NOTE]
BLESSINGS CORPORATION
7.22% SENIOR NOTE, SERIES A
DUE JANUARY 30, 2008
No. AR-[__] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, BLESSINGS CORPORATION
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to [ ], or registered
assigns, the principal sum of [ ] DOLLARS on January 30, 2008, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 7.22% per annum from the date hereof,
payable semiannually, on January 30 and July 30 in each year, commencing with
July 30, 1996, until the principal hereof shall have become due and payable, and
(b) to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at the rate of 9.22% per annum.
Payments of principal of, interest on and any Make-Whole Amount
with respect to this Note are to be made in lawful money of the United States of
America at the Company's office in Newport News, Virginia or at such other place
as the Company shall have designated by written notice to the holder of this
Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of January 15,
1996 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the Purchaser named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representations set forth in
Section 6 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the
dates and in the amounts specified in the Note Purchase Agreement. This Note is
also subject to optional prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
If an Event of Default, as defined in the Note Purchase
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of Illinois excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
BLESSINGS CORPORATION
By:
Title:
<PAGE>
=========================================================================
=========================================================================
2
Exhibit 1-B
Exhibit 1-B
EXHIBIT 1-B
[FORM OF NOTE]
BLESSINGS CORPORATION
6.55% SENIOR NOTE, SERIES B
DUE JANUARY 30, 2002
No. BR- [__] [Date]
$[_______] PPN[______________]
FOR VALUE RECEIVED, the undersigned, BLESSINGS CORPORATION
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to [ ], or registered
assigns, the principal sum of [ ] DOLLARS on January 30, 2002, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.55% per annum from the date hereof,
payable semiannually, on January 30 and July 30 in each year, commencing with
July 30, 1996, until the principal hereof shall have become due and payable, and
(b) to the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at the rate of 8.55% per annum.
Payments of principal of, interest on and any Make-Whole Amount
with respect to this Note are to be made in lawful money of the United States of
America at the Company's office in Newport News, Virginia or at such other place
as the Company shall have designated by written notice to the holder of this
Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of January 15,
1996 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the Purchaser named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representations set forth in
Section 6 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the
dates and in the amounts specified in the Note Purchase Agreement. This Note is
also subject to optional prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
If an Event of Default, as defined in the Note Purchase
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of Illinois excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
BLESSINGS CORPORATION
By:
Title:
<PAGE>
=========================================================================
=========================================================================
2
Exhibit 4.4(a)
Exhibit 4.4(a)
EXHIBIT 4.4(a)
FORM OF OPINION OF SPECIAL COUNSEL TO
THE COMPANY AND THE MEXICAN COMPANIES
The opinions of special counsel for the Company and special counsel for
the Mexican Companies shall be to the effect that:
1. Each of the Company and each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and each has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and, in the case of the Company, to enter into and perform the
Agreement and to issue and sell the Notes.
2. Each of the Company and each Subsidiary is duly qualified or licensed
and in good standing as a foreign corporation authorized to do business in each
jurisdiction where the nature of its business or the character of its properties
makes such qualification or licensing necessary, except where such failure to be
so qualified or licensed would not have a Material Adverse Effect.
3. The Agreement and the Notes have been duly authorized by proper
corporate action on the part of the Company, have been duly executed and
delivered by an authorized officer of the Company, and constitute the legal,
valid and binding agreements of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.
4. The offering, sale and delivery of the Notes do not require the
registration of the Notes under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
5. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Company of the Agreement or the lawful offering, issuance
and sale by the Company of the Notes, and no designation, filing, declaration,
registration and/or qualification with any governmental authority is required in
connection with the offer, issuance and sale of the Notes by the Company.
6. The issuance and sale of the Notes by the Company, compliance with
the terms and provisions of the Notes and the Agreement, and the execution and
delivery of the Agreement will not conflict with, or result in any breach or
violation of any of the provisions of, or constitute a default under, or result
in the creation or imposition of any Lien upon the property of the Company or
any Subsidiary pursuant to the provisions of (i) the Certificate of
Incorporation or By-laws of the Company or any Subsidiary, (ii) any loan
agreement to which the Company or any Subsidiary is a party or by which any of
them or their property is bound, (iii) any other agreement or instrument under
which the Company or any Subsidiary is a party or by which any of them or their
property is bound or may be affected, (iv) any law (including usury laws) or
regulation applicable to the Company, or (v) any order, writ, injunction or
decree of any court or governmental authority applicable to the Company.
7. There are no actions, suits or proceedings pending or, to the best of
such counsel's knowledge, threatened against, or affecting the Company or any
Subsidiary, at law or in equity or before or by any Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which are likely to have a Material
Adverse Effect.
8. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and are owned of record by the Company.
9. Neither the Company nor any Subsidiary is: (i) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended,
(ii) a "public utility" as defined in the Federal Power Act, as amended, or
(iii) an "investment company" or an "affiliated person" thereof or an
"affiliated person" of any such "affiliated person," as such terms are defined
in the Investment Company Act of 1940, as amended.
10. The issuance of the Notes and the use of the proceeds of the sale of
the Notes do not violate or conflict with Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
The opinion of counsel for the Company shall cover such other matters
relating to the sale of the Notes as the Purchaser may reasonably request. With
respect to matters of fact on which such opinion is based, such counsel shall be
entitled to rely on appropriate certificates of public officials and officers of
the Company and with respect to matters governed by the laws of any jurisdiction
other than the United States of America and the General Corporation Law of the
State of Delaware, such counsel may rely upon the opinions of counsel deemed
(and stated in their opinion to be deemed) by them to be competent and reliable.
<PAGE>
=========================================================================
=========================================================================
1
Exhibit 4.4(b)
Exhibit 4.4(b)
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASER
The opinion of Gardner, Carton & Douglas, special counsel for the
Purchaser, shall be to the effect that:
1. The Company is a corporation organized and validly existing in good
standing under the laws of the State of Delaware, with all requisite corporate
power and authority to enter into the Agreement and to issue and sell the Notes.
2. The Agreement and the Notes have been duly authorized by proper
corporate action on the part of the Company, have been duly executed and
delivered by an authorized officer of the Company, and constitute the legal,
valid and binding agreements of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.
3. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes do not require the registration of the
Notes under the Securities Act of 1933, as amended, nor the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
4. The issuance and sale of the Notes and compliance with the terms and
provisions of the Notes and the Agreement will not conflict with or result in
any breach of any of the provisions of the Certificate of Incorporation or
By-laws of the Company.
5. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental body, Federal or
state, is necessary in connection with the execution and delivery of the Note
Agreement or the Notes.
The opinion of Gardner, Carton & Douglas also shall state that the legal opinion
of _______________, counsel for the Company, delivered to you pursuant to the
Agreement, is satisfactory in form and scope to Gardner, Carton & Douglas, and,
in its opinion, the Purchaser and it are justified in relying thereon and shall
cover such other matters relating to the sale of the Notes and the execution and
delivery of the Agreement as the Purchaser may reasonably request.
<PAGE>
=========================================================================
=========================================================================
3
Exhibit 23.2
EXHIBIT 23.2
FORM OF TERMS AGREEMENT
THIS TERMS AGREEMENT is made and entered into as of this _________ day
of _______________, ____ (this "Terms Agreement") by and among Blessings
Corporation., a Delaware corporation (the "Company"), and the Purchasers listed
on Schedule A hereto (the "Purchasers");
R E C I T A L S
A. The Company has entered into a Note Purchase Agreement (the "Note
Agreement"), dated as of January 15, 1996, with each of the Purchasers listed on
Schedule A thereto; and
B. The Company desires to issue and sell, and the Purchasers desire to
purchase, an additional series of unsecured promissory notes (Series __) in
accordance with the terms specified below;
NOW, THEREFORE, subject to compliance with all of the conditions to
closing and funding set forth in Section 4 of the Note Agreement, with such
changes as shall be appropriate to such additional series of notes, and the
delivery of such additional closing documents and opinions as the Purchasers or
their counsel may request, the parties signatory hereto agree as follows:
1. Authorization of Notes. The Company has authorized the issuance and
sale of $____________ aggregate principal amount of its _____% Senior Notes,
Series ___ (the "Notes"), to be dated the date of issue, to bear interest from
such date at the rate of ___% per annum, payable ___________________ on
_________, __ and _________, __ in each year (commencing _____________, ___) and
at maturity and to bear interest on overdue principal (including any overdue
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the rate of ___% per
annum, whether by acceleration or otherwise, until paid. The Notes will mature
on _____________, 19__ (the "Maturity Date") and will be substantially in the
form of Exhibit 1-A to the Note Agreement, with such changes therein as are
required to reflect the terms of the Notes specified above. The term "Notes" as
used herein shall include any and all of the Notes delivered pursuant to this
Terms Agreement and each such Note delivered in substitution or exchange
therefor.
2. Sale and Purchase. The Company will issue and sell to the Purchasers,
and the Purchasers will purchase from the Company on the Closing Date (as
hereinafter defined), Notes in the aggregate principal amount set forth opposite
their respective names on the attached Schedule A at a price of 100% of the
principal amount thereof.
3. Closing. Delivery of the Notes will be made at the offices of
_______________________ against payment therefor in Federal funds or other funds
in U.S. dollars immediately available at _______________, ABA. No. __________,
for deposit in the Company's Account No. __________, in the amount of the
purchase price not later than ____________, _____________ time, on ___________,
19__ or such earlier or later date (but in any event not later than
____________, 19__) as the Company and the Purchasers may mutually agree upon
(the "Closing Date").
4. Use of Proceeds. The proceeds from the sale of the Notes
will be used to -----------------------.
5. Payment and Prepayment of the Notes. The Company shall pay the Notes
in accordance with the repayment provisions set forth in Schedule A hereto. In
addition, unless otherwise specified in Schedule A, the Notes shall be subject
to mandatory and optional prepayment in accordance with the optional and
mandatory prepayment provisions of Sections 8.1 and 8.2 of the Note Agreement,
and each reference to "Notes" therein shall be deemed to refer to the Notes
issued pursuant to this Terms Agreement.
6. Compliance With Note Agreement. Except to the extent in conflict with
any of the provisions of this Terms Agreement, the Company agrees to comply with
each of the covenants, agreements and other provisions of the Note Agreement,
which covenants, agreements and other provisions, together with the related
definitions of terms used therein and the exhibits referred to therein, are
hereby incorporated by reference into this Terms Agreement with the same effect
as if such covenants, agreements and provisions were set forth in full herein,
except that all references to "Purchasers" therein shall be deemed to refer to
the Purchasers hereunder and all references to "Notes" therein shall be deemed
to refer to the Notes issued pursuant to this Terms Agreement. Any amendment,
supplement, modification, change or waiver of any of the covenants, agreements
or provisions of the Note Agreement, or any of the definitions of terms used
therein or exhibits referred to therein, shall not have any force and effect
under this Terms Agreement unless the holders of not less than 66-2/3% of the
principal amount of the Notes outstanding hereunder shall have consented in
writing to such amendment, supplement, modification, change or waiver.
[Add any additional provisions to reflect
particular agreements between the parties]
<PAGE>
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Terms Agreement to be executed and delivered by their respective officer or
officers thereunto duly authorized.
COMPANY: BLESSINGS CORPORATION
By:
Title:
PURCHASERS:
By:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 16,078,200
<SECURITIES> 0
<RECEIVABLES> 22,464,200
<ALLOWANCES> 1,215,300
<INVENTORY> 11,228,000
<CURRENT-ASSETS> 50,487,700
<PP&E> 107,779,000
<DEPRECIATION> 37,399,700
<TOTAL-ASSETS> 151,945,100
<CURRENT-LIABILITIES> 23,377,300
<BONDS> 37,216,200
0
0
<COMMON> 7,252,500
<OTHER-SE> 65,325,200
<TOTAL-LIABILITY-AND-EQUITY> 151,945,100
<SALES> 39,533,300
<TOTAL-REVENUES> 39,533,300
<CGS> 26,337,600
<TOTAL-COSTS> 33,702,300
<OTHER-EXPENSES> 7,364,700
<LOSS-PROVISION> 1,215,300
<INTEREST-EXPENSE> 988,100
<INCOME-PRETAX> 5,831,000
<INCOME-TAX> 2,719,100
<INCOME-CONTINUING> 2,236,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,236,700
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
