SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)
HOSPOSABLE PRODUCTS, INC.
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(Name of Issuer)
Common Stock, Par Value $.01
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(Title of Class of Securities)
441069101
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(CUSIP Number)
Donald C. MacMartin Kenneth E. Adelsberg
G. H. Wood + Wyant Inc. Winthrop, Stimson, Putnam
1475 32nd Avenue & Roberts
Lachine (Quebec) H8T3J1 New York, New York 10004
514-636-9926 212-858-1000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 11, 1996
-------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(b)(3) or (4), check the following: |_|
Check the following box if a fee is being paid with this
Statement: |X|
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
G.H. Wood + Wyant Inc.
(formerly Wyant & Company Limited)
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC; BK
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF 7. SOLE VOTING POWER
SHARES 937,690 shares of Common Stock
BENEFICIALLY ----------------------------------------------
OWED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------------------
9. SOLE DISPOSITIVE POWER
937,690 shares of Common Stock
----------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
937,690 shares of Common Stock
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|_|
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
55.4%
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14. TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James A. Wyant
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|_|
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ------------------------------------------------
9. SOLE DISPOSITIVE POWER
0 (See Items 4 and 5)
------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
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14. TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John Derek Wyant, M.D.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|_|
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY --------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH --------------------------------------------
9. SOLE DISPOSITIVE POWER
0 (See Items 4 and 5)
--------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
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14. TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lynne Emond
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|_|
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH -------------------------------------------
9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
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14. TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gerald W. Wyant
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|_|
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
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NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------------------
9. SOLE DISPOSITIVE POWER
0 (See Items 4 and 5)
----------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
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14. TYPE OF REPORTING PERSON
IN
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Page 6
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AMENDMENT NO. 10
TO
SCHEDULE 13D
The items identified below are amended and restated as set
forth below.
Item 1. Security and Issuer.
This statement relates to the Common Stock, $.01 par value per
share (the "Common Stock"), of Hosposable Products, Inc., a New York corporation
(the "Company"), the principal executive offices of which are located at 100
Readington Road, Somerville, New Jersey 08876.
Item 2. Identity and Background.
This statement is being filed on behalf of the following
corporation and individuals (the "Filing Parties"), which together may
constitute a group pursuant to Rule 13d-5 of the Securities Exchange Act of
1934, as amended (the "Act"):
A. G. H. Wood + Wyant Inc. (formerly Wyant & Company Limited), a
Canadian corporation ("Wyant"). The principal business of Wyant is the
manufacture and distribution of a broad range of industrial and institutional
janitorial products, principally for the maintenance of washrooms, floors,
carpets and general cleaning, including paper hand towels, bathroom tissue,
related sanitary paper products, janitorial chemicals, caretaking supplies and
food service and health care products. Its address is 1475 32nd Avenue, Lachine,
Quebec.
The names, business addresses, and citizenship of the
executive officers and directors of Wyant are set forth on Exhibit B hereto (the
executive officers and directors are referred to herein as the "Directors and
Officers").
B. James A. Wyant. James Wyant, a citizen of Canada, is the Vice
Chairman and a Director of Wyant and his business address is 1475 32nd Avenue,
Lachine, Quebec.
C. John Derek Wyant, M.D. Derek Wyant, a citizen of Canada, is a
Surgeon at Port Arthur Clinic and a Director of Wyant, and his business address
is 194 North Court Street, Thunder Bay North, Ontario.
D. Lynne Emond. Lynne Emond, a citizen of Canada, currently has no
business occupation and her residence is 407 Morningside Crescent, Dollard des
Ormeaux, Quebec.
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E. Gerald W. Wyant. Gerald Wyant, a citizen of Canada, is the Chairman
and a Director of Wyant and his business address is 1475 32nd Avenue, Lachine,
Quebec.
During the last five years, none of the Filing Parties nor any
Directors and Officers of Wyant has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of which proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violations with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Wyant purchased the shares of Common Stock, as described below
in Item 5 herein, with working capital, although a portion of the shares which
were purchased upon exercise of the options described herein were paid out of
bank borrowings pursuant to a long-standing open line of credit between Wyant
and The Bank of Nova Scotia.
James Wyant, Derek Wyant, Lynne Emond and Gerald Wyant will
purchase their respective shares of stock in the Company as set forth in the
Wyant Agreement (as defined below) by exchanging their respective shareholdings
in Wyant.
Item 4. Purpose of Transaction.
Wyant's interest in the Company, through its initial
investment in the Company, was based on a business strategy of pursuing broader
participation in the institutional pulp and paper market. Wyant was attracted to
the Company because of its ability to manufacture and market value added pulp
and tissue based disposable products targeted to niche segments of the growing
health care industry and thereby assure raw material and product availability to
Wyant's salesmen who call upon many of Canada's corporations. The shares of
Common Stock purchased thereafter were in furtherance of the relationships
described in Item 6 below. Upon its acquisition of a majority of the shares of
Common Stock in the Company, Wyant intended to vote all of its shares of Common
Stock which it beneficially owned, directly or indirectly, at the next meeting
of the Company's shareholders such that a majority of the members of the Board
of Directors of the Company would be designees of Wyant. Wyant also sought to
cause, on or about the date of such shareholders meeting, the terms of all of
the members of the Board of Directors of the Company to be for one year and to
delete the provisions in the Company's organization documents related to
staggered terms of the said members of the Board of Directors.
Except as otherwise described below, none of the Filing
Parties has present plans or proposals which relate to, or which
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would result in, any changes specified in clauses (a) through (j) of Item 4 of
Schedule 13D. Each of the Filing Parties reserves the right to adopt, and to
seek to implement, any such plans or proposals that may seem appropriate in the
future. Each of the Filing Parties may also determine to sell its shares of
Common Stock if any such Filing Party deems it to be appropriate based on the
conditions existing at the time.
On June 11, 1996, Wyant made a proposal to the Company with
respect to the proposed purchase by the Company of substantially all of the
operating assets of Wyant (the "Hosposable Transaction"). Under the proposal,
the Company would form a new Canadian subsidiary. This subsidiary would purchase
the business and operating assets and assume the operating liabilities of Wyant
for $4.4 million in cash, 4% cumulative preferred shares of the Canadian
subsidiary having an aggregate liquidation preference of $4.1 million, which
shares of the Canadian subsidiary would be mandatorily redeemable over ten (10)
years and one million preferred shares having an aggregate liquidation
preference of $7.5 million and which shares would be convertible into one
million shares of Company common stock. The total value of the transaction is
estimated to be $16 million. Any profits or losses retained by Wyant from
January 1, 1996 until the closing date will be for the benefit of (or assumed
by) Wyant and will be reflected by adjusting the amount of 4% cumulative
preferred shares issued in the transaction.
Final acceptance of the Hosposable Transaction would be
conditioned, among other things, on the approval of the Board of Directors of
the Company. If the Board of Directors of the Company approves the transaction,
it will be submitted to the shareholders of the Company in accordance with the
applicable rules of the NASD. If the transaction receives all necessary
approvals, it is contemplated that the transaction will close in early January,
1997.
In connection with the Hosposable Transaction, James Wyant,
Derek Wyant, Lynne Emond and Gerald Wyant entered into a Memorandum of Agreement
(the "Wyant Agreement") with Wyant dated as of May 2, 1996, whereby Derek Wyant,
Lynne Emond and Gerald Wyant have agreed, subject to the Hosposable Transaction
being consummated, to exchange their existing stock in Wyant for a combination
of cash, promissory notes or preferred shares of Wyant and shares of the
Company, and Wyant has agreed to acquire the stock of Derek Wyant, Lynne Emond
and Gerald Wyant.
Pursuant to the terms of the Wyant Agreement, in the event the
Hosposable Transaction is completed, then Derek Wyant and Lynne Emond will
exchange, at the time of completion of the Hosposable Transaction, their
shareholdings in Wyant for consideration to each of Derek Wyant and Lynne Emond,
of the aggregate of $1 million in cash, and $1.75 million in preferred shares or
promissory notes of Wyant and 238,000 shares of the Company plus one-twelfth of
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any additional Company shares (or shares exchangeable into Company stock) which
may be received by Wyant or by James Wyant's holding company for value in excess
of the book value of Wyant in the Hosposable Transaction (including any
"earn-out" shares). In addition, Gerald Wyant will exchange his shareholdings in
Wyant for $2.4 million in cash and 146,000 shares of the Company.
To the extent Wyant has any amount in its capital dividend
account, the first $2.4 million in the capital dividend account will be
transferred to Gerald Wyant, with any excess in the capital dividend account to
be divided equally among James Wyant, Derek Wyant and Lynne Emond.
The aforesaid discussion is a summary of only certain
provisions of the Memorandum of Agreement, which is attached as Exhibit C to
this Amendment to Schedule 13D. Such summary is qualified in its entirety by
reference to the Memorandum of Agreement.
Item 5. Interest in Securities of the Issuer.
(a) List of Acquisitions:
1. On April 9, 1990, by entering into the Company Agreement
(as defined below), Wyant agreed to purchase 229,288 shares of Common Stock and
to be granted options to purchase an additional 899,859 shares of Common Stock
of the Company, or 53.1% of the outstanding shares of Common Stock (after giving
effect to the transactions contemplated in the Company Agreement and the
Shareholder Agreement (as defined below)). Pursuant to Rule 13d-4 of the Act,
Wyant disclaimed beneficial ownership, as of such date, of any shares of Common
Stock.
2. On July 10, 1990, Wyant, pursuant to the rights granted
under the Company Agreement, became the direct beneficial owner of a total of
229,288 shares of Common Stock, constituting 13.7% of the then outstanding
Common Stock of the Company. In addition, Wyant was granted options to purchase
up to 899,859 additional shares of Common Stock of the Company.
3. On February 1, 1991, Wyant, by exercise of the
aforementioned options to purchase 443,702 additional shares of Common Stock and
by purchasing 5,000 shares of Common Stock from Leonard Schramm, became the
beneficial owner of a total of 677,990 shares of Common Stock which represented
40.6% of the then outstanding shares of Common Stock of the Company. In
addition, Wyant continued to hold options to purchase 456,157 additional shares
of Common Stock of the Company.
4. On April 5, 1994, after giving effect to the purchase of
97,500 additional shares of Common Stock reflected on Annex A attached hereto,
Wyant became the beneficial owner of a total of 775,490 shares of Common Stock,
constituting 45.9% of the then outstanding shares of Common Stock of the
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Company. In addition, Wyant continued to hold options to purchase up to 456,157
additional shares of Common Stock of the Company.
5. On June 29, 1994, after giving effect to the purchase of
47,400 additional shares of Common Stock as reflected on Annex A attached
hereto, Wyant became the beneficial owner of 822,890 shares of Common Stock,
constituting 48.6% of the then outstanding shares of Common Stock of the
Company. In addition, Wyant continued to hold options to purchase up to 456,157
additional shares of Common Stock of the Company.
6. On August 4, 1994, after giving effect to the purchase of
26,000 additional shares of Common Stock as reflected on Annex A attached
hereto, Wyant became the beneficial owner of 848,890 shares of Common Stock,
constituting 50.2% of the then outstanding shares of Common Stock of the
Company. In addition, Wyant continued to hold options to purchase up to 456,157
additional shares of Common Stock of the Company.
7. On September 29, 1994, after giving effect to the purchase
of 41,600 additional shares of Common Stock as reflected on Annex A attached
hereto, Wyant became the beneficial owner of 890,490 shares of Common Stock,
constituting 52.6% of the then outstanding shares of Common Stock of the
Company. In addition, Wyant continued to hold options to purchase up to 456,157
additional shares of Common Stock of the Company.
8. On October 6, 1994, after giving effect to the purchase of
100 additional shares of Common Stock as reflected on Annex A attached hereto,
Wyant became the beneficial owner of 890,590 shares of Common Stock,
constituting 52.6% of the then outstanding shares of Common Stock of the
Company. In addition, Wyant continued to hold options to purchase up to 456,157
additional shares of Common Stock of the Company.
9. On October 27, 1995, after giving effect to the purchase of
25,600 additional shares of Common Stock as reflected on Annex A attached
hereto, Wyant became the beneficial owner of 916,190 shares of Common Stock,
constituting 54.1% of the then outstanding shares of Common Stock of the
Company.
10. On December 26, 1995, after giving effect to the purchase
of 21,500 additional shares of Common Stock as reflected on Annex A attached
hereto, Wyant became the beneficial owner of 937,690 shares of Common Stock,
constituting 55.4% of the then outstanding shares of Common Stock of the
Company.
As of the close of business on June 11, 1996, Wyant owned a
total of 937,690 shares of Common Stock, which represented 55.4% of the then
issued and outstanding shares of Common Stock of the Company.
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Pursuant to Rule 13d-4 of the Act, each of James Wyant, Derek
Wyant, Lynne Emond and Gerald Wyant disclaims beneficial ownership, as of the
date hereof, of any shares of Common Stock.
(b) Wyant has the sole power, and not the shared power, to
vote or to direct the vote and to discuss or direct the disposition of all
937,690 shares owned by Wyant. Subject to the disclaimer as to beneficial
ownership cited in Item 5(a) above, each of James Wyant, Derek Wyant, Lynne
Emond and Gerald Wyant disclaims any voting power in any shares of Common Stock
of the Company.
(c) There have been no transactions in the Company's Common
Stock that were effected over the past 60 days, other than described in this
Amendment No. 10 to Schedule 13D.
(d) Except as otherwise disclosed herein, with respect to the
937,690 shares of Common Stock held by Wyant, no other person has the right to
receive or the power to direct receipt of dividends from, or the proceeds of the
sale of, such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
On April 9, 1990, the Company entered into a Company Stock
Purchase and Option Agreement (the "Company Agreement") with Wyant, pursuant to
which the Company agreed to issue and sell 229,288 new shares of its Common
Stock to Wyant at $5.75 per share and further agreed to grant Wyant a five-year
option to purchase an additional 456,157 shares of Common Stock at varying
prices but in any event at not less than $7.00 per share. The issuance of the
Common Stock pursuant to the Company Agreement required an increase in the
Company's authorized Common Stock to 3,000,000 shares from the then current
level of 2,000,000 shares, which in turn required the amendment of the Company's
Certificate of Incorporation (the "Amendment"). The transactions contemplated by
the Company Agreement were consummated on July 10, 1990.
The aforesaid discussion is a summary of only certain
provisions of the Company Agreement, which is incorporated by reference in
Exhibit E to this Amendment to Schedule 13D. Such summary is qualified in its
entirety by reference to the Company Agreement.
On April 9, 1990, the Company and Bridgewater Manufacturing
Corp., the Company's wholly owned subsidiary (collectively the "Supplier"),
entered into a Supply Agreement (the "Supply Agreement") with Wyant, pursuant to
which Wyant agreed to purchase from the Company up to 72 hours of production per
week, amounting to the whole or nearly all of the unused production capacity of
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the Company's air-laid fabric production machine, which production represents
the increase in the production of the Supplier's air-laid machine. The term of
the Supply Agreement is effective for a period of 6 years commencing on the
Closing Date (as defined in the Supply Agreement), and shall be extended for
successive renewal terms of 12 months unless notice of intent to terminate is
given by either party to the other at least 6 months prior to the end of the
initial or any renewal term. The Company currently manufactures the air- laid
non-woven fabrics, which have been used both as raw materials by the Company and
also sold to converters who produce a wide range of consumer and industrial
products, mostly for dusting, wiping and cleaning. This increased production was
agreed to be phased in by the Supplier during a 3 to 6 month period following
the Closing Date, and during this phase-in period, Wyant agreed to use its best
efforts to purchase any production, up to 72 hours of production, in excess of
the Supplier's current production level.
Both parties may terminate the Supply Agreement, if, in the
reasonable opinion of such party, the other party will not be able to comply
with the terms of the Supply Agreement and such other party has filed for
bankruptcy, entered into a composition with creditors, had a receiver appointed
or had a bankruptcy proceeding filed against it and such proceeding shall not
have been dismissed within 30 days of such filing. The Supply Agreement may also
be terminated if either party is in material default of any of its respective
conditions or obligations under the Supply Agreement and such conditions or
obligations have not been cured within 30 days after notice of such default. The
transactions contemplated by the Supply Agreement were consummated on the
Closing Date.
On February 27, 1991, the parties entered into an Amendment to
Supply Agreement, pursuant to which the Company was required only to advise
Wyant of the availability of production time on its equipment, to use its best
efforts to meet Wyant's demands for air-laid production time and, if unable to
meet such demands, to use its best efforts to obtain additional equipment to
comply with such demands. In exchange, Wyant provided the Company with a right
of first refusal in respect of all of Wyant's requirements for airlaid product.
The aforesaid discussion is a summary of only certain
provisions of the Supply Agreement, which is incorporated by reference in
Exhibit F to this Amendment to Schedule 13D, and the Amendment to Supply
Agreement, which is attached as Exhibit D to this Amendment to Schedule 13D.
On April 9, 1990, the Company and Wyant entered into a
Marketing and Sales Support Agreement (the "Marketing Agreement") under which
the Company agreed to be paid for providing services based upon and in respect
of its air-laid fabric production and marketing expertise. Wyant requested these
services because of the intricate nature and novelty of the air-laid technology
which
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Wyant was purchasing pursuant to the Supply Agreement. In addition, the Company
agreed to designate Wyant as its exclusive Canadian distributor for 6 years for
all products which are manufactured by the Company for distribution in Canada
(except that Baxter Travenol (Canada) Inc. may continue as the Company's
distributor in Canada) and all products which are specifically manufactured by
the Company pursuant to Wyant's request. Any product manufactured by the Company
at Wyant's request may be sold by the Company in the United States with a 5%
royalty to be paid to Wyant on all such U.S. sales.
The Marketing Agreement commenced on the Closing Date (as
defined in the Marketing Agreement) and terminates 6 years thereafter. In
consideration for the services supplied by the Company to Wyant, Wyant paid to
the Company $100,000 on the Closing Date and agreed to pay $200,000
semi-annually thereafter on June 30 and December 31 of each year in 9
semi-annual payments for a total consideration of $l,900,000.
The aforesaid discussion is a summary of only certain
provisions of the Marketing Agreement, which is incorporated by reference in
Exhibit G to this Amendment to Schedule 13D. Such summary is qualified in its
entirety by reference to the Marketing Agreement.
On April 9, 1990, Wyant and the Company's then Chairman and
President, Leonard Schramm ("Schramm"), entered into a Stock Option Agreement
(the "Shareholder Agreement") whereby Schramm agreed to grant options to Wyant
("Schramm Option Shares") to purchase, at $5.75 per share, 443,702 shares of
Common Stock, which included all 156,702 shares of Common Stock that he owned
and 287,000 shares of Common Stock which he had the option to purchase on the
Company Closing Date (as defined in the Shareholder Agreement). Schramm
exercised these options on the Company Closing Date. In order to provide Schramm
with the funds to exercise the options on the 287,000 shares, Wyant loaned
Schramm the sum of $796,410 on terms set forth in a secured promissory note,
which note was subsequently satisfied in full. The aggregate exercise price
payable by Schramm upon the exercise of his options to purchase such 287,000
shares of Common Stock was $796,410.
The aforesaid discussion is a summary of only certain
provisions of the Shareholder Agreement, which is incorporated by reference in
Exhibit H to this Amendment to Schedule 13D. Such summary is qualified in its
entirety by reference to the Shareholder Agreement.
Item 7. Material to be Filed as Exhibits.
Exhibit A. Joint Filing Agreement, dated June 11, 1996, by and among G.
H. Wood + Wyant Inc., James A. Wyant, John Derek Wyant, M.D.,
Lynne Emond and Gerald W. Wyant.
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Exhibit B. List of Directors and Officers of G. H. Wood + Wyant Inc.
Exhibit C. Memorandum of Agreement, dated May 2, 1996, between John
Derek Wyant, M.D., Lynne Emond, James A. Wyant, Gerald W.
Wyant and G. H. Wood + Wyant Inc.
Exhibit D. Amendment to the Supply Agreement, dated February 27, 1991,
between Hosposable Products, Inc. and G. H. Wood + Wyant Inc.
Exhibit E. Company Stock Purchase and Option Agreement, dated April 9,
1990, between Hosposable Products, Inc. and G. H. Wood +
Wyant Inc. (incorporated by reference from Exhibit II of
Schedule 13D relating to Hosposable Products, Inc. filed on
May 14, 1990 on behalf of G. H. Wood + Wyant Inc.).
Exhibit F. Supply Agreement, dated April 9, 1990, between Hosposable
Products, Inc. and G. H. Wood + Wyant Inc. (incorporated by
reference from Exhibit III of Schedule 13D relating to
Hosposable Products, Inc. filed on May 14, 1990 on behalf of
G. H. Wood + Wyant Inc.).
Exhibit G. Marketing and Sales Support Agreement, dated April 9, 1990,
between Hosposable Products, Inc. and G. H. Wood + Wyant Inc.
(incorporated by reference from Exhibit IV of Schedule 13D
relating to Hosposable Products, Inc. filed on May 14, 1990
on behalf of G. H. Wood + Wyant Inc.).
Exhibit H. Stock Option Agreement, dated April 9, 1990, between Leonard
Schramm and G. H. Wood + Wyant Inc. (incorporated by
reference from Exhibit V of Schedule 13D relating to
Hosposable Products, Inc. filed on May 14, 1990 on behalf of
G. H. Wood + Wyant Inc.).
Page 15
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
G. H. WYANT + WOOD INC.
DATED: June 11, 1996 By: /s/ Donald C. MacMartin
------------------------
Donald C. MacMartin
President
/s/ James A. Wyant
-------------------------
James A. Wyant
/s/ John Derek Wyant, M.D.
-------------------------
John Derek Wyant, M.D.
/s/ Lynne Emond
-------------------------
Lynne Emond
/s/ Gerald W. Wyant
-------------------------
Gerald W. Wyant
Page 16
<PAGE>
ANNEX A
PURCHASE OF COMMON STOCK BY
G. H. WOOD + WYANT INC.
TRANSACTION AMOUNT OF PRICE PER
DATE STOCK SHARE
December 17, 1991 3,000 $5.00
December 20, 1991 3,000 $5.00
September 17, 1992 7,500 $5.00
September 21, 1992 4,000 $5.00
October 5, 1992 2,500 $5.00
October 16, 1992 1,500 $4.75
May 20, 1993 4,000 $4.50
May 24, 1993 6,000 $4.75
November 4, 1993 5,000 $6.75
November 9, 1993 7,000 $6.75
November 11, 1993 5,000 $6.75
November 15, 1993 5,000 $6.75
November 23, 1993 10,000 $6.75
November 24, 1993 5,000 $6.75
November 29, 1993 5,000 $6.75
March 2, 1994 6,000 $6.0625
March 18, 1994 3,000 $6.78125
March 24, 1994 5,000 $6.78125
March 30, 1994 5,000 $6.78125
April 5, 1994 5,000 $6.78125
SUBTOTAL: 97,500
May 20, 1994 15,000 $8.53125
May 27, 1994 3,500 $8.53125
June 9, 1994 3,700 $9.03125
June 17, 1994 4,500 $9.03125
Page 17
<PAGE>
TRANSACTION AMOUNT OF PRICE PER
DATE STOCK SHARE
June 21, 1994 6,700 $9.03125
June 23, 1994 4,000 $9.03125
June 27, 1994 5,000 $9.03125
June 29, 1994 5,000 $9.00
SUBTOTAL: 47,400
June 5, 1994 5,000 $9.03125
July 13, 1994 6,000 $8.866
August 1, 1994 5,000 $8.53125
August 3, 1994 5,000 $7.875
August 4, 1994 5,000 $7.33
SUBTOTAL: 26,000
August 16, 1994 5,000 $7.70
August 26, 1994 3,000 $8.375
September 8, 1994 5,000 $8.8125
September 16, 1994 5,000 $8.875
September 21, 1994 6,000 $8.8125
September 23, 1994 11,000 $8.71875
September 29, 1994 6,600 $8.53125
SUBTOTAL: 41,600
October 6, 1994 100 $8.25
SUBTOTAL: 100
September 26, 1995 2,500 $7.00
October 5, 1995 4,000 $7.50
October 13, 1995 8,000 $8.00
October 26, 1995 6,100 $7.77
October 27, 1995 5,000 $7.75
SUBTOTAL: 25,600
November 3, 1995 5,000 $7.77
November 13, 1995 7,000 $7.78
Page 18
<PAGE>
TRANSACTION AMOUNT OF PRICE PER
DATE STOCK SHARE
December 1, 1995 4,000 $7.38
December 26, 1995 5,500 $7.0625
SUBTOTAL: 21,500
Page 19
<PAGE>
EXHIBIT INDEX
Exhibit A. Joint Filing Agreement, dated June 11, 1996, by and among G.
H. Wood + Wyant Inc., James A. Wyant, John Derek Wyant, M.D.,
Lynne Emond and Gerald W. Wyant.
Exhibit B. List of Directors and Officers of G. H. Wood + Wyant Inc.
Exhibit C. Memorandum of Agreement, dated May 2, 1996, between John
Derek Wyant, M.D., Lynne Emond, James A. Wyant, Gerald W.
Wyant and G. H. Wood + Wyant Inc.
Exhibit D. Amendment to the Supply Agreement, dated February 27, 1991,
between Hosposable Products, Inc. and G. H. Wood + Wyant Inc.
Exhibit E. Company Stock Purchase and Option Agreement, dated April 9,
1990, between Hosposable Products, Inc. and G. H. Wood +
Wyant Inc. (incorporated by reference from Exhibit II of
Schedule 13D relating to Hosposable Products, Inc. filed on
May 14, 1990 on behalf of G. H. Wood + Wyant Inc.).
Exhibit F. Supply Agreement, dated April 9, 1990, between Hosposable
Products, Inc. and G. H. Wood + Wyant Inc. (incorporated by
reference from Exhibit III of Schedule 13D relating to
Hosposable Products, Inc. filed on May 14, 1990 on behalf of
G. H. Wood + Wyant Inc.).
Exhibit G. Marketing and Sales Support Agreement, dated April 9, 1990,
between Hosposable Products, Inc. and G. H. Wood + Wyant Inc.
(incorporated by reference from Exhibit IV of Schedule 13D
relating to Hosposable Products, Inc. filed on May 14, 1990
on behalf of G. H. Wood + Wyant Inc.).
Exhibit H. Stock Option Agreement, dated April 9, 1990, between Leonard
Schramm and G. H. Wood + Wyant Inc. (incorporated by
reference from Exhibit V of Schedule 13D relating to
Hosposable Products, Inc. filed on May 14, 1990 on behalf of
G. H. Wood + Wyant Inc.).
Page 20
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned, and each of them, do hereby agree and consent
to the filing of a single statement on Schedule 13D and amendments thereto, in
accordance with the provisions of Rule 13d-1(f)(1) of the Securities Exchange
Act of 1934.
G. H. WYANT + WOOD INC.
DATED: June 11, 1996 By: /s/ Donald C. MacMartin
---------------------------
Donald C. MacMartin
President
/s/ James A. Wyant
---------------------------
James A. Wyant
/s/ John Derek Wyant, M.D.
---------------------------
John Derek Wyant, M.D.
/s/ Lynne Emond
---------------------------
Lynne Emond
/s/ Gerald W. Wyant
---------------------------
Gerald W. Wyant
Page 21
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
NAME AND BUSINESS POSITION WITH THE PRINCIPAL
ADDRESS COMPANY OCCUPATION CITIZENSHIP
<S> <C> <C> <C>
Gerald W. Wyant Chairman and Director Chairman of G. H. Wood + Canadian
G. H. Wood + Wyant Inc. Wyant Inc.
1475 - 32nd Avenue
Lachine, Quebec
James A. Wyant Vice Chairman and Director Vice Chairman of G. H. Canadian
G. H. Wood + Wyant Inc. Wood + Wyant Inc.
1475 - 32nd Avenue
Lachine, Quebec
Donald C. MacMartin President and Director President of G. H. Wood + Canadian
G. H. Wood + Wyant Inc. Wyant Inc.
1475 - 32nd Avenue
Lachine, Quebec
John Derek Wyant, M.D. Director Surgeon at Fort Arthur Canadian
Port Arthur Clinic Clinic
194 North Court Street
Thunder Bay North, Ont.
J. Maurice Desrosiers Director Canadian
4450 Promenade Paton,
Apartment No. 511
Ile Paton, Laval, Quebec
Richard J. Charles Director Vice President of Paper United States
Paper Converting Machine Co. Inc. Converting Machine Co.
2300 So. Ashland Avenue Inc.
Green Bay, Wisconsin
Bernard Lemaire Director Chairman of Cascades Inc. Canadian
Cascades Inc.
404 Marie-Victorin Blvd.
Kingsey-Falls, Quebec
Lorne C. Webster Director President of Prenor Group Canadian
Prenor Group Ltd. Ltd.
1100 University St.
12th Floor
Montreal, Quebec
John B. Wight, F.C.A. Director Canadian
G. H. Wood + Wyant Inc.
1475 - 32nd Avenue
Lachine, Quebec
</TABLE>
Page 22
<PAGE>
EXHIBIT C
MEMORANDUM OF AGREEMENT ENTERED INTO AS OF THE 2ND DAY OF MAY, 1996
BY AND BETWEEN: DEREK WYANT, hereinafter referred to as "Derek"
AND: LYNNE EMOND, hereinafter referred to a "Lynne"
AND: JIM WYANT, hereinafter referred to as "Jim"
AND: GERALD WYANT, hereinafter referred
to as "Gerald"
AND: G.H. WOOD + WYANT INC., herein represented by Jim Wyant and
hereinafter referred to as the "Company"
WHEREAS Lynne and Derek each own 100 Class "B" preferred shares of the
Company;
WHEREAS Jim owns 100 common shares of the Company;
WHEREAS Gerald owns 100 Class "A" preferred shares of the Company;
WHEREAS the Company is considering approaching Hosposable Products, Inc.
(hereinafter "Hosposable") about selling its assets or transferring control of
the Company to Hosposable in return for, inter alia, shares exchangeable into
Hosposable stock (hereinafter the "Hosposable transaction") although the parties
recognize that no decision has been made until there are discussions with the
Hosposable management and directors regarding its strategic objectives, and
there is no way to predict what the terms or structure of any particular
transaction with Hosposable might be;
WHEREAS if the Hosposable transaction proceeds, Derek, Lynne and Gerald
have agreed to exchange their existing stock in the Company for cash, promissory
notes or preferred shares of the Company and shares of Hosposable, and the
Company has agreed to acquire the stock of Derek, Lynne and Gerald, the whole
under the terms and conditions hereafter mentioned.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. The preamble shall form an integral part hereof:
2. It is agreed that if the Hosposable transaction is completed, then
each of Derek and Lynne will exchange, at the time of completion of the
Hosposable transaction ("Closing"), their shareholdings in the Company, and the
Company shall acquire such shareholdings, the whole for a consideration, payable
to each of Derek and Lynne, of the aggregate of the following:
i)
$1 million cash, payable at the Closing;
ii)
$1,750,000 worth of preferred shares or promissory
notes of the Company, or a combination of both, which
will bear an interest rate (or a dividend rate) of a
minimum of 4% per annum, payable monthly, or such
greater amount as is received by the Company from
Hosposable on the debt or preferred shares the Company
may received on the Hosposable transaction. Such notes
or preferred shares totalling $1,750,000 to each of
Lynne and Derek will be repaid or redeemed over a
maximum period of ten years (i.e. one-tenth of the
capital per year) commencing on the first anniversary
of the Closing. However, should the Company receive an
earlier payment from Hosposable on its balance of sale
or preferred shares from the Hosposable transaction,
then the Company will accelerate the payments to Derek
and Lynne to match its cash receipts from Hosposable.
It is further agreed that Derek and Lynne acting
together can choose whether or not they wish to hold
preferred shares or promissory notes, or a combination
of both, of the Company totalling $1,750,000 as long as
the total amount of interest or dividends paid is as
indicated above and that the rhythm of the payment of
Page 23
<PAGE>
capital is in accordance with the above. The obligation
to pay the dividend on the preferred shares and/or the
interest on the promissory notes and the obligation to
redeem the preferred shares and/or repay the promissory
notes, as aforementioned, shall be secured by a
first-ranking charge on all of the assets and
undertakings of the Company and the assets of any
holding company used by Jim Wyant in structuring the
contemplated transactions. Accordingly, at the option
of either Derek or Lynne, the transaction described in
this paragraph 2 shall be structured in a manner with
the intent that such security may be lawfully granted
and may be lawfully exercisable in circumstances of a
default; such structure may include, without
limitation, the interposition of one or more
subsidiaries of the Company, the acquisition of shares
by each of Derek and Lynne in the applicable
subsidiary, the obligation of the Company to acquire
such shares under certain circumstances and the
securitizing of such obligation by a first-ranking
charge on all of the assets and undertakings of the
Company. The agreements to be executed at Closing shall
provide for appropriate and reasonable covenants,
default and acceleration clauses; and
iii)
238,000 shares of Hosposable plus one-twelfth of any
additional Hosposable shares (or shares exchangeable
into Hosposable stock) which may be received by the
Company or by Jim's holding company for value in excess
of the book value of the Company on the Hosposable
transaction (including any "earn-out shares).
3. It is agreed that if the Hosposable transaction is completed, then
Gerald will exchange his shareholding in the Company for the following:
i) $2.4 million cash; and
ii) 146,000 shares of Hosposable;
To the extent the Company has any amount in its capital dividend account, the
first $2.4 million in the capital divided account will be transferred to Gerald.
Any excess in the capital dividend account remaining shall be divided equally
amount Jim, Derek and Lynne. The parties recognize that this streaming of the
capital dividend account to Gerald may take place regardless of whether or not
there is a completion of the transactions contemplated herein.
4. The parties acknowledge that if the transactions described above
proceeds, each of Derek, Lynne, Gerald and the Company will hold Hosposable
shares. Derek and Lynne agree to transfer the voting rights attached to their
Hosposable shares to a voting trust which would give Jim voting rights over the
said Hosposable shares for a term not exceeding 15 years. On the sixth
anniversary date of the Closing, Lynne and Derek will each receive one-tenth of
their shares out of the voting trust and they will then be free to deal with
these shares as they see fit save and expect that Jim will have a right of first
refusal over such shares. Similarly, every year thereafter (on the anniversary
date of the Closing) an additional 10% of the Hosposable shares will be released
from the voting trust to each of Lynne and Derek subject to the right of first
refusal to Jim contemplated herein. It is further agreed that Jim will have the
power to sell the shares in the voting trust as long as the said shares are sold
on the same terms and conditions as Jim sells Hosposable shares held by either
him (directly or indirectly) or the Company and provided further that such sale
is made at no less than fair market value and otherwise on commercially
reasonable terms. (This obligation on Jim shall also apply to any Hosposable
shares he may wish to sell.) It is agreed that any sale of Hosposable shares
will be done on a one-third, one-third, one-third basis as between Jim (and the
Company), Derek and Lynne until such time as there are no remaining shares of
Derek and Lynne in the voting trust. It is expressly acknowledged that Gerald
will be free to sell his shares of Hosposable as he sees fit and he will not be
subject to the voting trust hereunder. The rights granted to Jim under this
paragraph 4 shall be non-transferable and non-assignable. The voting trust and
the rights granted to Jim under this paragraph shall terminate in the event of
default in the payments contemplated at subsection 2(ii) above, with provision
for a grace period and reinstatement of the voting trust in the event the
default is cured.
5. It is recognized by all of the parties hereto that the contemplated
transactions of Lynne, Derek and Gerald should be done on a tax-effective basis.
It is further acknowledged that the consent of Derek and Lynne to the proposed
transactions has been based on assurances to them that the contemplated
transactions can be structured by using holding companies and, at the corporate
level, should result in no immediate tax to either of them, either as the result
of the transaction described in paragraph 2 hereof (including the receipt of the
Hosposable shares and the shares exchangeable into Hosposable stock as mentioned
in subparagraph (iii) of said paragraph 2) or with respect to any dividends
received by such holding companies on the preferred shares respectively held by
them. Jim undertakes to engage tax counsel immediately after the signing of this
agreement which tax counsel is to determine the tax liability, if any, of Derek
and Lynne to the proposed transactions and shall render a written opinion
thereon. Such tax counsel will fully cooperate with any tax advisors appointed
by Derek or Lynne and will provide full details and explanations on any matters
requested by them. The
Page 24
<PAGE>
opinions of such tax counsel shall be subject to the review and concurrence of
the tax advisors of Lynne and Derek as to the conclusions reached and the
opinions expressed. If it is then determined that there is any tax liability to
them, then Derek and Lynne will be entitled to cancel the transactions
contemplated herein or to reach some other mutually satisfactory arrangement.
6. It is recognized that each of Derek and Lynne will require their own
professional advisers for the transactions contemplated herein and the Company
agrees to pay the reasonable fees and disbursements of such advisers based on
hourly rates, with no premium. Further, if all transactions contemplated herein
close, then an additional $10,000 shall be paid to B.D.O. Dunwoody in
recognition of previous services rendered to the Company and its shareholders.
7. The parties acknowledge that if the Hosposable transaction closes, it
should take place in November or December 1996 and that the transactions of
Derek, Lynne and Gerald are dependent on the Hosposable transaction closing. If
both the Hosposable transaction and the transactions involving Lynne and Derek's
shares do not close by January 31st, 1997 (or such later date as is mutually
acceptable to the parties hereto) for any reason other than the unjustifiable
refusal of Derek and Lynne to sign, then Derek and Lynne will have the right to
cancel this agreement with retroactive effect (save and except the possible
payment of the capital dividend account to Gerald as contemplated by paragraph 3
hereof). The closing of the transaction relating to the sale of the shares of
Derek and Lynne is further conditional upon the negotiation and execution of
agreements in order to give effect to the subject matter hereof, in form and
substance acceptable to the parties, acting reasonably and if the structure of
the Hosposable transaction conforms in essence to that contemplated herein.
8. This agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the Province of
Quebec. All dollar amounts herein are expressed in Canadian dollars.
9. The parties hereto have requested this agreement and all court
proceedings thereto related be drafted in English. Les parties aux presentes ont
demande a ce que ce contrat et toutes procedures y afferentes soient redigees en
anglais.
10. The parties herein agree to keep the contents of this agreement
strictly confidential expect where disclosures are required in conformity with
the securities law of any jurisdiction.
11. It is acknowledged by the parties hereto that Gerald Wyant has
recently suffered a medical setback and may be unable to sign this agreement for
the foreseeable future. Notwithstanding his lack of signature to this agreement,
it shall be binding on Jim, Derek, Lynne and the Company.
12. (a) This agreement may be executed in a number of counterparts, each
of which shall be deemed an original and all of which shall constitute one and
the same agreement;
(b) This agreement may not be amended expect by instrument in writing
signed by all of the parties hereto;
(c) Delivery of an executed copy of this agreement by way of
telecopier facsimile shall constitute valid delivery thereof.
Page 25
<PAGE>
IN WITNESS WHEREOF the parties hereto have signed as of the 2nd day of
May, 1996.
/s/ Derek Wyant
----------------------------
DEREK WYANT
/s/ Lynne Emond
----------------------------
LYNNE EMOND
/s/ Jim Wyant
----------------------------
JIM WYANT
/s/ Gerald Wyant
----------------------------
GERALD WYANT
G.H. WOOD + WYANT INC.
Per:/s/ Jim Wyant
----------------------------
JIM WYANT
Page 26
<PAGE>
EXHIBIT D
AMENDMENT TO SUPPLY AGREEMENT
Amendment to Supply Agreement dated the 27th day of February,
1991 among Hosposable Products, Inc., a New York corporation ("Hosposable") and
Bridgewater Manufacturing Corp., a New Jersey corporation ("Bridgewater";
Hosposable and Bridgewater are collectively referred to herein as "Supplier")
and Wyant & Company Limited, a Canadian corporation ("Purchaser").
WHEREAS, Supplier has agreed to sell to Purchaser 72 hours of
production per week of its air-laid product as per specifications set forth in
the Supply Agreement; and
WHEREAS, Purchaser agreed to purchase 72 hours of production
per week phased in over a three-to-six month period from July 10, 1990; and
WHEREAS, during the phase-in period certain changes were
mutually agreed upon with regard to specifications to meet particular new
product demands; and
WHEREAS, during this phase-in period Supplier has entered into
arrangements which will entail substantial production of air-laid product in
amounts substantially greater than was contemplated on April 9, 1990 when the
Supply Agreement was entered into;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, it is agreed as follows:
FIRST: Supplier will advise Purchaser every two weeks of the
availability of production time on its equipments. Upon notification from
Purchaser, Supplier agrees to make available the aforesaid production capacity
up to but not exceeding 72 hours per week.
In the event that Supplier cannot meet the Purchaser's
requirement of air-laid production time, Supplier agrees to use its best efforts
to attempt to obtain additional equipment in order to comply with Purchaser's
requirements.
SECOND: Purchaser shall be required to provide Supplier with
the right of first refusal on all of its requirement for aid-laid product prior
to placing an order for said product with any other source of supply. Purchaser
shall notify Supplier two weeks prior to its confirmation of a firm order for
the purchase of air-laid equipment in the exact quantity at the exact price with
complete, detailed specifications. Supplier shall have three business days to
either accept or reject the aforesaid order. If Supplier has sufficient
capacity, Supplier shall be required to accept the aforesaid order as submitted.
In the event Supplier shall be unable to fill Purchaser's requirements,
Purchaser shall be free to purchase the air-laid product from the independent
source of supply.
THIRD: Purchaser shall not be required to purchase 72 hours of
product per week of air-laid product from Supplier but in lieu thereof shall
have granted to Supplier the right of first refusal provided above.
All of the other terms and conditions of the Supply Agreement
shall remain in full force and effect.
Page 27
<PAGE>
IN WITNESS WHEREOF, the parties hereunto, intending to be
legally bound, have caused this Amendment to be executed the date and year first
above written.
HOSPOSABLE PRODUCTS, INC.
BY:/s/ Leonard Schramm
------------------------------
Leonard Schramm, President
BRIDGEWATER MANUFACTURING CORP.
BY:/s/ Leonard Schramm
------------------------------
Leonard Schramm, President
WYANT & COMPANY LIMITED
BY:/s/ James A. Wyant
-------------------------------
James A. Wyant, President
Page 28
<PAGE>
