SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
____________________________
Date of Report (Date of earliest event reported): February 10, 1998
____________________________
BLESSINGS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
1-04684 13-5566477
(Commission File Number) (I.R.S. Employer Identification No.)
200 Enterprise Drive
Newport News, VA 23603
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (757) 887-2100
N.A.
(Former name of former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On February 9, 1998, Blessings Corporation (the "Company") acquired the
remaining 40% of the outstanding common stock of its Mexican subsidiary,
Nacional de Envases Plasticos, S.A. de C.V., and its associated companies
collectively known as NEPSA for $18,500,000. The Company entered into a Term
Loan agreement with a major lending institution to finance the purchase.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
(i) Combined Balance Sheet at December 31, 1997, and independent
auditor's report of Nacional de Envases Plasticos, S.A. de C.V., and affiliates
and the related combined statement of earnings, shareholders' equity and changes
in financial position for each of the three years in the period ending December
31, 1997, are currently not available and will be filed no later than
April 10, 1998.
(b) Pro forma financial information
(i) It is impracticable to provide pro forma financial information
as required by this Item 7 with the filing of this Form 8-K. Such statements
will be filed not later than April 10, 1998.
(c) Exhibits
10.1 Press Release dated February 10, 1998.
10.2 NEPSA Stock Purchase Agreement dated January 30, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BLESSINGS CORPORATION
Date: February ___, 1998 By:/s/ James P. Luke
_____________________________________________
James P. Luke, Executive Vice President
(Principal Financial Officer)
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Exhibit 10.1
Contact: James P. Luke
Executive Vice President
Chief Financial Officer
FOR IMMEDIATE RELEASE
BLESSINGS COMPLETES ACQUISITION OF MEXICAN SUBSIDIARY
NEWPORT NEWS, VIRGINIA, FEBRUARY 10, 1998. Blessings Corporation (AMEX
Symbol BCO) announced today that it had acquired the remaining 40% of its
Mexican subsidiary, Nacional de Envases Plasticos, S. A. de C. V. (NEPSA) at a
closing held in Mexico City on February 9, 1998.
Dr. Elwood M. Miller, President and CEO of Blessings stated that, "We
are very pleased with our 100% ownership of NEPSA. Despite the difficulties
which the Mexican economy has experienced during the past several years, NEPSA
has not only remained profitable but has been a material contributor to
Blessings' consolidated financial results. In fiscal year 1997, with its
ownership of NEPSA at 60%, Blessings had net earnings of $8,192,000 or $0.81 per
share. Had Blessings owned 100% of NEPSA in 1997, net earnings would have been
$10,455,300 or $1.03 per share".
Dr. Miller concluded by noting that, "NEPSA is a recognized leader in
the manufacture of printed and converted flexible packaging products in Mexico
and is actively expanding its market base throughout Latin America as well as
into the United States. NEPSA will make an enhanced contribution to Blessings in
1998 because of our 100% ownership, but more importantly because of the
recovering Mexican economy and NEPSA's growing position in developing new
markets."
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Exhibit 10.2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated January 30, 1998 by and among
Messrs. Manuel Villarreal Castaneda, Maria Teresa Gomez Gordillo, Jose Manuel
Villarreal Gomez Gordillo, Jorge Villarreal Gomez Gordillo, Adriana Villarreal
Gomez Gordillo, Maria Teresa Villarreal Gomez Gordillo, Martha Priscilla
Villarreal Gomez Gordillo, Guadalupe Gomez Gordillo Morales and Jorge Villarreal
Dominguez, residing at the addresses noted below their respective signature to
this Agreement (collectively referred to as the "Sellers"); and Blessings
Corporation, a Delaware corporation with its principal place of business at One
Crossroads Drive, Bedminster NJ 07921, U.S.A. ("BLESSINGS") and its wholly owned
subsidiary, Aspen Industrial, S.A. de C.V. with its principal place of business
at Calzada de las Armas No. 12, Fracc. Industrial Las Armas, 54080 Tlalnepantla,
Estado de Mexico, Mexico ("ASPEN") (collectively referred to as the "Buyer").
WITNESSETH
WHEREAS, the Sellers, the Companies, as hereinafter defined, and the
Buyer entered into an Stock Purchase Agreement dated June 30, 1994 by means of
which ASPEN acquired from the Sellers sixty percent (60%) of the authorized,
issued and outstanding shares of stock and other ownership interests of the
Companies as hereinafter defined;
WHEREAS, subject to the terms and conditions of this Agreement, the
Sellers desire to sell and transfer to the Buyer, the remaining forty percent
(40%) of the authorized, issued and outstanding shares of stock and other
ownership interests of the Companies, and the Buyer agrees to such sale and
transfer;
NOW THEREFORE, in consideration of the representations, warranties,
mutual covenants and agreements contained herein, plus other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions.
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As used in this Agreement and, unless the context requires otherwise,
in each other agreement, document or instrument delivered under or in connection
with the Agreement:
(a) "Agreement" means this Stock Purchase Agreement, together with all
exhibits and schedules thereto.
(b) "The Buyer" means Aspen Industrial, S.A. de C.V. ("ASPEN") buying
all of the shares of the Companies, except for one of each share of the
Companies and, its parent company, Blessings Corporation ("BLESSINGS") buying
the remaining share of each of the Companies, except for one (1) quota share of
VIGO, which will be acquired by Blessings or any of its designees..
(c) "Companies" means Nacional de Envases Plasticos, S.A. de C.V.,
("NEPSA"), Hermes Industrial, S.A. de C.V. ("HERMES"), Mexicana de Tintas, S.A.
de C.V. ("MEXICANA"), Plastihul, S.A. de C.V. ("PLASTIHUL") and Servicios
Profesionales Vigo, S.C. ("VIGO").
(d) "Dollars" means the currency of the United States of America.
(e) "Environmental Laws" means and includes all statutes, regulations,
orders and directives of Mexican Federal, state or local government or
governmental authorities regulating or concerning protection of the environment
existing and in force on the Closing Date.
(f) "Environmental Liabilities" means claims, demands, orders, suits,
obligations or liabilities (including the cost of any compliance or remedial
actions) that are related to Environmental Matters and based upon Environmental
Laws.
(g) "Escrow Fund" means 200,000 shares of common stock of BLESSINGS
("Blessings Common Stock") held by Sellers and 50% of the Shares, except for
VIGO Shares.
(h) "Hazardous Substances" means any hazardous or toxic substances,
materials or wastes that are regulated, or form the basis of liability under,
any Environmental Laws.
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(i) "Indemnity Escrow Agreement" means the Indemnity Escrow Agreement
executed by and among the Sellers, the Buyer and Bancomer, S.A., as escrow
agent, on June 30,1994, as amended as of the same date.
(j) "New Indemnity Escrow Agreement" means the Escrow Agreement to be
executed by and among Sellers, Buyers and __________ in the form provided in
Exhibit "D".
(k) "Sellers" means Manuel Villarreal Castaneda, Maria Teresa Gomez
Gordillo, Jose Manuel Villarreal Gomez Gordillo, Jorge Villarreal Gomez
Gordillo, Adriana Villarreal Gomez Gordillo, Maria Teresa Villarreal Gomez
Gordillo, Martha Priscilla Villarreal Gomez Gordillo, Guadalupe Gomez Gordillo
Morales and Jorge Villarreal Dominguez.
(l) "Sellers' Related Parties" means any corporation, partnership or
other entity in which any of the Sellers is a shareholder, partner, officer,
director, employee or has an interest or any member of Sellers' immediate
family.
(m) "Shares" means collectively the authorized, issued and outstanding
shares and other ownership interest, which represent forty percent (40%) of the
capital stock of each of the Companies, as listed in Schedule 1 (m) hereto,
currently owned by the Sellers.
(n) "1994 Agreement" means the Stock Purchase Agreement entered into by
and among the Sellers, the Buyer and the Companies on June 30, 1994 regarding
the acquisition of sixty percent (60%) of the authorized, issued and outstanding
shares of stock and other ownership interests of the Companies.
2. Shares to be Purchased by the Buyer.
Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties contained herein, on the Closing Date
(as defined in Section 4 below), the Sellers shall transfer to ASPEN and
BLESSINGS, in the manner set for in Section 1 b) of this Agreement, collectively
referred to as to the Buyer good and marketable title to the Shares free and
clear of all restrictions, options, rights of third parties, liens and
encumbrances of any kind, and the Buyer shall purchase from the Sellers the
Shares at a price equal to the Purchase Price.
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3. Purchase Price and Payment.
(a) Purchase Price. The total purchase price ("Purchase Price") for the
Shares is Dollars $18,500,000.00 (Eighteen Million Five Hundred Thousand 00/100
U.S.), distributed in the amounts and to the respective Seller, as indicated in
Exhibit "A", provided however, that the distribution of the Purchase Price
corresponding to the Shares held by Jorge Villarreal Dominguez will be effected
different in the terms and conditions as set forth in Exhibit "A-1".
(b) Guarantee Deposit. The Sellers recognize and acknowledge that as a
consequence of the execution of the Letter of Intent by and among the Sellers
and the Buyer on October 20, 1997, Mr. Manuel Villarreal Castaneda has received
a check in the total Dollar amount of $200,000.00 (Two Hundred Thousand 00/100
U.S.) (the "Guarantee Deposit"), as a guarantee for the execution of this
Agreement and have agreed that such amount shall be allocated as part of the
Purchase Price to be paid to Mr. Manuel Villarreal Castaneda.
(c) Payment of Purchase Price. On the Closing Date, and in reliance
upon the representations, warranties and agreements of the Sellers, Buyer shall
pay to each of Sellers through a wire transfer in immediately available funds to
the bank account and/or bank accounts designated by each of the Sellers in
Exhibit "B", an amount in Dollars equal to such Sellers' pro-rata share of the
Purchase Price, less the Guarantee Deposit (the "Closing Payment"). On the
Closing Date, and in accordance to article 103 of the Mexican Income Tax Law,
the Buyer shall withhold 20% of the Closing Payment, unless each of the Sellers
delivers to the Buyer a written notification stating that each of them shall
make an estimated payment in a percentage less than 20% of the Purchase Price in
the format similar to Exhibit "C", and that each of the Sellers shall comply
with all of the obligations and filings provided for in Articles 103 of the
Mexican Income Tax Law and 126 of its Regulations. Accordingly, the Sellers
shall grant an indemnity in favor of the Buyer to hold the Buyer harmless from
any liability arising from the non-compliance by the Sellers of the above
mentioned obligations and filings, in the form attached hereto as Exhibit "C".
4. Closing.
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Unless otherwise agreed upon by the parties, the closing ("Closing") of
the transactions contemplated herein shall occur at the offices of Baker &
McKenzie, S.C. located at set forth in Section 14, on February 9, 1998 at 11:00
am, or at such other time or place as the Sellers and the Buyer may agree
("Closing Date").
5. Conditions Precedent to Closing:
The transaction contemplated by this Agreement shall be consummated if
the following conditions have been meet:
(a) The Buyer shall have obtained the authorization of Mexican Federal
Competition Commission ("Comision Federal de Competencia") to carry out the
transaction contemplated in this Agreement in the terms and conditions
acceptable to Buyer. Accordingly, the parties agree that in the event Mexican
Federal Competition Commission does not authorize the execution of the
transaction contemplated by this Agreement or, gives its authorization on terms
not acceptable to Buyer, as reasonable determined by the Buyer, this Agreement
shall be terminated without any liability for any of the parties and Mr. Manuel
Villarreal Castaneda shall return within five (5) working days to Buyer the
Guarantee Deposit in the Dollar amount of $200,000.00 (Two Hundred Thousand
00/100).
(b) The Buyer shall have secured and have available at Closing
sufficient financing from a lending institution chosen by the Buyer in order to
consummate the purchase of Sellers' Shares contemplated by this Agreement. The
Buyer agrees to use its best efforts to obtain such financing.
(c) The Sellers and the Buyer shall have taken all legal steps required
to cancel upon Closing the Indemnity Escrow Agreement in order to: (i) release
from the Escrow Fund all of the Escrowed Shares and; (ii) and to execute the New
Indemnity Escrow Agreement which shall have the amount of $100,000.00 (One
Hundred Thousand Dollars 00/100) as escrow fund.
(d) The Sellers and ASPEN shall cause each of the Companies to hold an
Ordinary Shareholders Meeting in order to adopt the following resolutions: (i)
approve the execution, delivery and performance of the transaction contemplated
by this Agreement; (ii) waiver of the respective right of first refusal in the
terms of the current By-laws of each of the Companies and; (ii) waiver of the
Sellers' Put Option
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Rights and the Buyer's Call Option Rights contained in the By-laws of each of
the Companies, as well as in Sections 12 and 13, respectively, of the 1994
Agreement.
(e) No event as described in Section 9 (h) shall have occurred
If one or more of the conditions described above are not meet within
(50) fifty days from the date hereof, this Agreement shall be terminated
immediately without any liability for any of the parties, and Mr. Manuel
Villarreal Castaneda shall return within five (5) working days to Buyer the
Guarantee Deposit in the Dollar amount of $200,000.00 (Two Hundred Thousand
00/100).
6. Deliveries by the Sellers at Closing.
Upon Closing, the Sellers shall deliver to the Buyer the following:
(a) Third Party Consents. Except for the third party consents described
in Schedule 6 (a), the Sellers shall have obtained and delivered to the Buyer
all necessary consents and approvals of third parties or governmental
authorities to permit the Buyer to acquire the Shares.
(b) Marital Property Releases and Special Powers of Attorney. The
Sellers shall deliver marital property waivers and releases and special powers
of attorney executed by each spouse of each of the Sellers, as applicable, in
the form attached hereto as Exhibit "E".
(c) General Release. Except for the obligations contained in the
Agreements described in Exhibit "F", the Sellers shall grant and deliver in
favor of the Buyer and the Companies a general waiver and release of all claims,
liens, losses or expenses, etc. that they may have as shareholders and/or
partners, directors, officers, employees, consultants, providers of services or
any other relationship they may have with each of the Companies, in the form
attached hereto as Exhibit "G".
(d) Stock Certificates. Subject to the cancellation of the Indemnity
Escrow Agreement, the stock certificates representing the Shares, validly
issued, subscribed and paid in full, free and clear of all liens, restrictions,
options, rights of first refusal, or encumbrances whatsoever, duly endorsed in
ownership to the Buyer.
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(e) New Indemnity Escrow Agreement. The Sellers shall deliver to the
escrow agent pursuant to the New Indemnity Escrow Agreement the Dollar amount of
$100,000.00 (One Hundred Thousand Dollars 00/100) as escrow fund.
(f) Non-Competition Agreements. The Sellers shall enter into and
deliver the Non-Competition Agreements, in the form attached hereto as Exhibit
"H" and "H- 1".
(g) Ending of Employment Agreements. (i) Mr. Manuel Villarreal
Castaneda shall deliver proper documentation evidencing ending of his Employment
Agreement with NEPSA, as described in Exhibit "I-1"; (ii) Mr. Jose Manuel
Villarreal Gomez Gordillo shall deliver proper documentation evidencing ending
of his Employment Agreement with HERMES, as described in Exhibit "I-2" and;
(iii) Mr. Jorge Villareal Gomez Gordillo shall deliver proper documentation
evidencing ending of his Employment Agreement with HERMES and NEPSA, as of March
31, 1997, as described in Exhibit "I-3".
(h) New Employment Agreements. Messrs. Jose Manuel Villarreal Gomez
Gordillo and Jorge Villarreal Dominguez shall enter into and deliver new
Employment Agreements with NEPSA, in the form attached hereto as Exhibit "I".
(i) Opinion of Counsel. Sellers shall deliver a written opinion from
counsel for Sellers, dated as of the Closing Date, addressed to Buyer and
satisfactory to Buyer and its counsel in form and substance as provided in
Exhibit "J".
7. Deliveries by Buyer at Closing.
Upon the Closing, the Buyer shall delivered to the Sellers the
following:
(a) Resolutions. The Buyer shall deliver certified copies of the
resolutions adopted by the Board of Directors of BLESSINGS and by the
shareholders of ASPEN causing the Buyer to execute, deliver and perform this
Agreement and the other transactions contemplated hereby, which certification
shall recite that such resolutions have not been subsequently amended, modified
or rescinded and are in full force and effect.
(b) New Indemnity Escrow Agreement. The Buyer shall deliver to the
escrow agent pursuant to the New Indemnity Escrow Agreement the Dollar amount
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of $100,000.00 (One Hundred Thousand Dollars 00/100) as escrow fund.
(c) Payment of the Purchase Price. The payment of the Purchase Price
and all other documents required to be delivered by the Buyer at or prior to the
Closing pursuant to this Agreement.
8. Confidentiality.
The parties shall hold and shall cause their respective officers,
directors, employees, accountants, agents, consultants and advisors to hold in
strict confidence, unless compelled by judicial or administrative process to
disclose or, in the opinion of their respective counsel, by other requirements
of law, all documents and information, furnished to each other in connection
with the transactions contemplated by this Agreement, except to the extent that
such information can be shown to have been (i) previously known by the party or
parties to which it was furnished (provided that such information is not subject
to another confidentiality agreement or other obligation of secrecy owed by the
party or parties providing such information), (ii) in the public domain through
no fault of the party or parties to which it was furnished, or (iii) later
lawfully acquired from other sources by the party or parties to which it was
furnished (provided that such sources are not known by such party or parties to
be bound by a confidentiality agreement or other obligation of secrecy to the
disclosing party or parties or another party). The parties shall not release or
disclose information referred to herein to any other person or entity, except
their respective auditors, attorneys and other advisors with a need to know in
connection with this Agreement and the transactions contemplated hereby.
Additionally, the Sellers agree that following the Closing, Sellers shall keep
confidential and shall not disclose to any person, corporation, firm or entity
any information, documents and/or materials, either directly or indirectly,
concerning the customers, suppliers, price lists, catalogs, products,
operations, sales techniques or any other confidential information, documents
and/or material relating to any of the Companies, except to the extent
disclosure of any such information is required by law, authorized by Buyer or
reasonably occurs in connection with disputes over the terms of this Agreement
or is or becomes generally known to the public other than as a result of a
disclosure by any of the Sellers or their representative(s).
9. Representations and Warranties of the Sellers.
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The Sellers, jointly and severally, represent and warrant to the Buyer
as follows, and acknowledge that the Buyer is relying upon such representations
and warranties in connection with the entering of this Agreement and the other
agreements and transactions contemplated hereby.
(a) The Shares. Subject to the cancellation of the Indemnity Escrow
Agreement, the forty percent (40%) of the authorized capital stock of the
Companies consists of the number of shares of common stock, with their
respective par value and other characteristics, as set forth in Schedule 9 (a)
and constitutes forty percent (40%) of the authorized issued, subscribed and
paid capital stock of the Companies. The Shares have been duly and validly
issued and are outstanding and held of record by the persons listed in Schedule
9 (a), are fully paid and non-assessable and are owned directly and beneficially
by such holders, free and clear of all charges, options, third party rights,
restrictions, liens and encumbrances whatsoever. There are no other shares of
capital stock of the Companies owned by each of the Sellers, except as described
in Schedule 1 (m).
(b) Authorization. Each of the Sellers have the capacity to enter into
this Agreement and to be bound in accordance with its terms, and no individual
or corporate act is necessary for the due, valid and binding authorization and
execution by the Sellers of this Agreement or the consummation of the
transactions contemplated hereby, except for the Ordinary Shareholder Meeting to
be held by each of the Companies pursuant to Section 5 (d) of this Agreement.
This Agreement and the other agreements contemplated hereby constitute valid and
binding obligations of the Sellers, enforceable in accordance with their terms.
(c) Conflicts; Approvals. The execution, delivery and performance of
this Agreement and the other agreements contemplated hereby by the Sellers, and
the consummation of the transactions contemplated hereby and thereby do not and
shall not:
(i) require any authorization, consent, approval, exemption or other
action by any individual, spouse, court, governmental body, or other party,
except as provided in Schedule 9(c); or
(ii) conflict with or result in a breach of, constitute a default
under, or result in a violation of any contract, indenture, mortgage, lease,
loan agreement or other
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agreement or instrument or any or license, order, arbitration, award, judgment,
decree, rule, regulation, law by which any of the Sellers or to the Sellers'
best knowledge the Companies are bound.
(d) No Obligation to Sell the Shares. None of the Sellers have any
obligation, absolute or contingent, to any person or entity other than the
Buyer, to sell, encumber or otherwise transfer all or any portion of the Shares.
(e) Environmental Matters.
(i) Except as set forth in Schedule 9 (e), Manuel Villarreal Castaneda
and Jose Manuel Villarreal Gomez Gordillo represent and warrant that from June
30, 1994 until the Closing Date they have not received and they are not aware of
any notice, citation, demand, claim, complaint, or other directive, whether by
any environmental authority or third party, whereby each of the Companies (1) is
not and has not been in material compliance with all applicable Environmental
Laws, (2) has not obtained, and is not in compliance with, all permits and
licenses required by Environmental Laws, including any required permits or
licenses regulating the release, storage, treatment, transportation, or disposal
of Hazardous Substances.
(ii) Except as set forth in Schedule 9 (e), Manuel Villarreal Castaneda
and Jose Manuel Villarreal Gomez Gordillo represent and warrant that from June
30, 1994 until the Closing Date they have not received and they are not aware of
any notice, citation, demand, claim, complaint, or other directive, whether by
any environmental authority or third party, whereby each of the Companies have
disposed Hazardous Substances on any of the premises on which their businesses
are or have been conducted and, that any other person has made such disposal.
(iii) Pursuant to the covenant provided in section 8 (b) of the 1994
Agreement, the Sellers warranty that the remedial actions and the installation
of the equipment and systems referred to in sections 8(b)(i) and (ii) of the
above mentioned agreement were completed to the extent required to comply with
the applicable law and, to the Sellers' best knowledge, those equipments and
systems are functioning according to their specifications and purposes.
(f) No Broker. The Sellers have not used a broker in connection with
the transactions contemplated by this Agreement, and there are no claims for
brokerage commissions, finders' fees or similar compensation in connection with
the transactions
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contemplated by this Agreement based on any arrangement or agreement by or on
behalf of the Sellers.
(g) Transactions with the Sellers' Related Parties. Except as disclosed
on Schedule 9 (g) (the transactions so disclosed being hereinafter referred to
as "Permitted Related Sellers' Transactions"), no Sellers' Related Party has:
(i) any contractual or other claims, express or implied, or of any
kind whatsoever against the Companies;
(ii) any interest in any property or assets used by the Companies
in its businesses; or
(iii) engaged in any other transaction with the Companies.
(h) Lease Agreements. Maria Teresa Gomez Gordillo, Jose Manuel
Villarreal Gomez Gordillo, Jorge Villarreal Gomez Gordillo, Maria Teresa
Villarreal Gomez Gordillo, Martha Priscilla Villarreal Gomez Gordillo, Adriana
Villarreal Gomez Gordillo, personally, and Jorge Villarreal Dominguez in his
capacity of legal representative of Lumamicar, S.A., in their capacity of
lessors, represent and warrant, except as described in Schedule 9(h) that to the
best of their knowledge that from June 30, 1994 until the Closing Date they have
not received and they are not aware of the following:
(i) any notice, citation, demand, claim ,complaint, or other directive,
whether by any environmental authority or third party, whereby the premises
leased to NEPSA, HERMES and MEXICANA have violated or do not comply with any
Environmental Law and/or any license, permit, authorization, etc. required
according to such Environmental Laws or have caused any damages to the
environment or any third party;
(ii) any environmental audit or inspection by any environmental
authority and, to the best of their knowledge, no environmental authority is
planning to carry out such audit or inspection; and
(iii) any soil contamination resulting from the release of any kind of
substances, including Hazardous Substances.
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The representations and warranties of the Sellers made herein, both
individually and considered as a whole shall survive the transfer of the Shares
and shall be true and correct in all material respects at and as of the Closing
Date.
10. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Sellers as follows, and
acknowledges that the Sellers are relying upon such representations and
warranties in connection with the entering of this Agreement and the other
agreements and transactions contemplated hereby.
(a) Corporate Powers and Authority. ASPEN is a corporation duly
organized, validly existing under the laws of the United Mexican States, and
BLESSINGS is a corporation duly organized, validly existing under the laws of
Delaware, United States of America. The Buyer has full corporate power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
(b) Authorization. The execution, delivery and performance by the Buyer
of this Agreement and the other agreements contemplated hereby have been duly
authorized by the Buyer. This Agreement and the other agreements contemplated
hereby constitutes a valid and binding obligation of the Buyer, enforceable in
accordance with their terms, except to the extent such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting the enforcement of creditor's rights.
(c) No Broker. The Buyer has not used a broker in connection with the
transactions contemplated by this Agreement, and there are no claims for
brokerage commissions, finders' fees or similar compensation in connection with
the transactions contemplated by this Agreement based on any arrangement or
agreement by or on behalf of the Buyer.
The representations and warranties of the Buyer made herein, both
individually and considered as a whole, shall be true and correct in all
material respects at and as of the Closing Date.
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11. Survival of Certain Obligations.
(a) 1994 Agreement. The parties recognize and ratify that
notwithstanding the execution of this Agreement, the representations, warranties
and environmental indemnification obligations made by or assumed by the Sellers
under Sections 3 (n), 8 (c)(i) (b), 8 (c) (i) (c) and 8 (c) (i) (d) of the 1994
Agreement, shall survive the execution of this Agreement and shall continue to
bind the Sellers until the expiration of the survival period provided in
Sections 8 (e) (iii) and 22 of the 1994 Agreement.
The parties also recognize and ratify that notwithstanding the
execution of this Agreement, the obligations assumed by the Buyer under Sections
2 (d) and 8 (c)(ii) of the 1994 Stock Purchase Agreement shall survive the
execution of this Agreement and shall continue to bind the Buyer until their
expiration.
(b) The parties recognize and ratify that notwithstanding the execution
of this Agreement, the rights, obligations and covenants contained in the Lease
Agreements described in Schedule 9(g), shall survive the execution of this
Agreement and shall continue to bind their respective parties until the
termination of such Lease Agreements, as provided in Section 2 of such Lease
Agreements.
(c) The parties recognize and ratify that notwithstanding the execution
of this Agreement, the rights, obligations and covenants contained in the
Non-Competition Agreements, shall survive the execution of this Agreement and
shall continue to bind their respective parties until the termination of the
Non-Competition Agreements, as provided in Section 1 of such Non-Competition
Agreements.
12. Indemnification.
(a) Indemnification by The Sellers. The Sellers, jointly and severally,
shall irrevocably indemnify and defend the Buyer, each of their affiliates,
successors and assigns and each of their officers, directors, employees, and
agents (collectively referred to as "Indemnitees"), and hold them harmless from
and against, and shall pay or reimburse Indemnitees, in respect of, 100% of any
loss, liability, claim, action, suit, proceeding, assessment, judgment, damage
or expense (including without limitation reasonable legal expenses and costs)
(collectively referred to as "Indemnification Liabilities") which Indemnitees
may suffer, sustain or become subject to (either directly or indirectly, through
loss, liability, damage or expense which the Companies
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suffer, sustain, or become subject to) as the result of: (i) any
misrepresentation or incompleteness or inadequacy of or breach of, any
representation, warranty, covenant, or agreement by any of the Sellers contained
in this Agreement or any related document or schedule or Exhibit hereto; (ii)
any breach by any of the Sellers of the confidentiality covenant set forth in
Section 8 hereof and; (iii) any breach by any of the Sellers of the
Non-Competition Agreements attached hereto as Exhibit "H" and "H-1".
Likewise, the Sellers, jointly and severally, shall irrevocably
indemnify and defend the Indemnitees, and hold them harmless from and against,
and shall pay or reimburse Indemnitees, in respect of, 40% of any
Indemnification Liabilities which Indemnitees may suffer, sustain or become
subject to (either directly or indirectly, through loss, liability, damage or
expense which the Companies suffer, sustain, or become subject to) as the result
of any claims, liabilities or obligations whatsoever, whether arising on or
after June 30, 1994 until the Closing Date, whether know or unknown, fixed or
contingent, choate or inchoate to the extent relating to the Companies, their
businesses or assets. The parties agree that this Sellers indemnification does
not intend to limit, restrict, narrow, impede, hamper, nullify, void, rescind or
revoke any Sellers' indemnification obligations contained in the 1994 Agreement.
(b) Indemnification Notification. Promptly upon receipt of notice of
any third party claim, demand or assessment or the commencement of any suit,
action or proceeding in respect of which indemnity may be sought pursuant to
this Section 12, the applicable Indemnitee(s) shall notify the Sellers thereof
within sufficient time to respond to such claim or answer or otherwise plead in
such action. The Sellers shall assume the defense, conduct or settlement of any
such claim or action, with counsel satisfactory to the applicable Indemnitee(s),
provided however that in such event the applicable Indemnitee(s) may elect to
participate, at the Sellers' expense, in the defense of such claim or action,
and, in no event may the Sellers, without the prior written consent of the
applicable Indemnitee(s), compromise or settle any issue or claim which may have
a material adverse effect on the Companies or any applicable Indemnitee(s) or
any of their affiliates for periods ending after the Closing Date. The
applicable Indemnitee(s) shall make available to the Sellers and their counsel
and accountants, at reasonable times and for reasonable periods, during normal
business hours, all books and records relating to any such suit, action or
proceeding, and shall render such other assistance to the Sellers as is
reasonably required in order to ensure prompt and adequate prosecution of the
defense of any such action, and the Sellers
<PAGE>
shall reimburse the applicable Indemnitee(s) for any expenses incurred in
connection with such assistance.
(c) Limitations on Sellers' indemnification obligations. The
indemnification obligations set forth in this Section 12 shall apply and relate
only to (i) the extent that the aggregate dollar amount for all claims for
indemnity hereunder by Purchaser exceeds ONE HUNDRED THOUSAND U.S. DOLLARS
($100,000.00) provided, however, that in no event shall the aggregate of such
claims exceed TWO MILLION U.S. DOLLARS ($2,000,000.00) (the "Limitation Amount")
and (ii) those claims of which the Sellers receive written notice from the
Indemnitees in compliance with Section 12(b) prior to the expiration of the
survival period as specified in Section 13.
13. Survival of Representations, Warranties. The representations and warranties
shall be deemed to have been made at and as of the date hereof and as of the
Closing Date and shall survive for a period of two years from the Closing Date.
Any claim or cause of action based upon a breach of any representation or
warranty or covenant shall survive the Closing Date for a period of two (2)
years (regardless of the applicable period of statutes of limitation for such
claim or cause of action).
14. Miscellaneous.
(a) Notices. Except as otherwise expressly set forth in this Agreement,
all notices, demands and other communications to be given or delivered under
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally, or by documented courier delivery service, or sent by
facsimile with verbal or written confirmation receipt. Notices, demands and
communications shall, unless other address is specified in writing, be sent to
the address indicated below:
If to The Sellers, to:
Ing. Manuel Villarreal Castaneda
Rivera de Cupia 110-24
Lomas de Chapultepec
11000 Mexico D.F.
Mexico
<PAGE>
with a copy to:
Lic. Vicente Morayta
Monte Libano No. 235-2o. Piso
Col. Lomas de Chapultepec
11000 Mexico D.F.
Mexico
If to the Buyer, to:
Blessings Corporation
230 Enterprise Drive
Newport News, Virginia 23603
Attention: Mr. Elwood M. Miller
with copies to:
Baker & McKenzie, S.C.
Blvd. Manuel Avila Camacho No. 1-12o. Piso
11000 Mexico D.F.
Mexico
Attention: Lic. Jorge Pelaez Bolanos
Kurzman, Karelsen & Frank, LPP
230 Park Avenue
New York, N.Y. 10169
U.S.A.
Attention: Joseph F. Seminara, Esq.
If to the Companies, to:
Ing. Jose Manuel Villarreal Gomez Gordillo
Montana No.176
Fracc. Industrial La Perla
53340 Naucalpan, Edo. de Mexico
Mexico
(b) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. If any provision of this Agreement is held to be prohibited by
or invalid under applicable law, such provision(s) shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision(s) or the remaining
<PAGE>
provisions of this Agreement.
(c) Complete Agreement. This document and the documents referred to
herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.
(e) Language. The parties agree that this Agreement shall be translated
into Spanish within thirty (30) days after the Closing Date, as necessary for
government filings and similar purposes, be translated into Spanish, but that as
between the parties hereto, the English version of this Agreement shall for all
intents and purposes be controlling. In the event an official Spanish version is
required for any purpose the parties agree the translation into Spanish which
will be prepared shall be used.
(f) Governing Law and Dispute Resolution. This Agreement shall be
governed by and construed in accordance with the laws of the Republic of Mexico.
(i) Any dispute, claim or controversy arising out of or relating of
this Agreement, or the interpretation or breach hereof, shall be
referred to arbitration under the rules of the American Arbitration
association, to the extent such rules are not inconsistent with this
paragraph (i). Judgment upon the award of he arbitrators may be entered
in any court having jurisdiction thereof or such court may be asked to
judicially confirm the award and order its enforcement, as the case may
be. The demand for arbitration shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen, and in
any event shall not be made after the date when institution of legal or
equitable proceedings, based on such claim, dispute or other matter in
question, would be barred by the applicable statute of limitations;
(ii) The arbitration panel shall consist of three arbitrators, one of
whom shall be appointed by each party hereto. The two arbitrators thus
appointed shall choose the third arbitrator; provided, however, that if
the two arbitrators are unable to agree on the appointment of the third
arbitrator, either arbitrator may petition the American Arbitration
Association to make the appointment;
<PAGE>
(iii) The place of arbitration shall be in Mexico City;
(iv) Each of the parties hereby waives personal demand for arbitration
and consents that it may be made in writing, in accordance with the
notice provisions set forth in Section 14(a), and may demand so made
shall be deemed completed on the tenth business day after such demand
is deposited in the mail. Nothing herein shall affect the right to
demand arbitration in any other manner permitted by law.
(v) Any judicial proceeding brought in aid of arbitration with respect
to this Agreement shall be brought in Mexico City, Mexico. Each of the
parties hereto (a) accepts, generally and unconditionally, the
exclusive jurisdiction of such court and any related appellate court,
and irrevocably waives any objection it may now or hereafter have as to
the venue of any such suit, action or proceeding brought in such a
court or that such court is an inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
THE BUYER:
Blessings Corporation Aspen Industrial, S.A. de C.V.
By:___________________________ By:____________________________
Name: Name:
THE SELLERS:
___________________________ ___________________________________
Manuel Villarreal Castaneda Maria Teresa Gomez Gordillo Morales
<PAGE>
_____________________________________ _______________________________
Jose Manuel Villarreal Gomez Gordillo Jorge Villarreal Gomez Gordillo
_________________________________ ______________________________________
Adriana Villarreal Gomez Gordillo Maria Teresa Villarreal Gomez Gordillo
__________________________________________ ________________________________
Martha Priscilla Villarreal Gomez Gordillo Guadalupe Gomez Gordillo Morales
__________________________
Jorge Villarreal Dominguez
