SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
CHEM INTERNATIONAL, INC.
(Name of Issuer)
Common Stock, $.002 Par Value Per Share
(Title of Class of Securities)
163527203
(CUSIP Number)
Michael J. Nita
Shanley & Fisher, P.C.
131 Madison Avenue
Morristown, New Jersey 07962-1979
(973) 285-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 12, 1998
(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 box:
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
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1 NAME(S) OF REPORTING PERSON(S)
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
E. Gerald Kay
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or (e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF (7) SOLE VOTING POWER . . . . . . . . . . .2,737,978
SHARES
BENEFICIALLY (8) SHARED VOTING POWER . . . . . . . . . . . . . .0
OWNED BY
EACH (9) SOLE DISPOSITIVE POWER. . . . . . . . .2,737,978
REPORTING
PERSON (10) SHARED DISPOSITIVE POWER. . . . . . . . . . . .0
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,737,978 (includes presently exercisable stock options to purchase
100,000 shares)
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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 IN ROW (11)
Approximately 51.9%*
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14 TYPE OF REPORTING PERSON
IN
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* Based on 5,178,300 shares of Common Stock of the Issuer outstanding on January
13, 1998 and assuming reporting person exercised all stock options presently
exercisable or exercisable within sixty days to purchase 100,000 shares.
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Item 1. Security and Issuer
The securities to which this statement relates are shares of common
stock, par value $.002 per share (the "Common Stock"), of Chem International,
Inc. a Delaware corporation (the "Issuer").
The principal executive offices of the Issuer are located at 201
Route 22, Hillside, New Jersey 07205.
Item 2. Identity and Background
Mr. Kay is currently employed as the President, Chairman of the
Board, Chief Executive Officer and a Director of the Issuer. Mr. Kay's business
address is c/o Chem International, Inc., 201 Route 22, Hillside, New Jersey
07205.
During the last five years, Mr. Kay has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in 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 violation with respect to such laws.
Mr. Kay is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration
Mr. Kay owns a general partnership interest in Gerob Realty
Partnership, a New Jersey general partnership ("Gerob"). Mr. Kay is also the
sole general partner of Gerob Associates, L.P., a New Jersey limited
partnership, which owns the other general partnership interest in Gerob.
Pursuant to a Stock Sale Agreement dated as of January 12, 1998,
between the Issuer and Gerob, Gerob purchased, in a private transaction, 843,300
shares of Common Stock (the "Shares") from the Issuer. The Issuer's sale of the
Shares was in consideration of: (i) satisfaction of the aggregate amount of
$297,000 owed by the Issuer to Gerob representing rent past due and payable by
the Issuer to Gerob for the period December 1, 1994 to December 31, 1997 for the
Issuer's rental of the premises at 201 Route 22, Hillside, New Jersey under the
Lease dated December 1, 1994, as renewed annually, (the "Lease") by and between
the Issuer, as lessee, and Gerob, as lessor and (ii) satisfaction in full of the
amount of $276,443.92 payable under the Promissory Note dated August 15, 1997
(the "Note") made by the Issuer in favor of Gerob.
Item 4. Purpose of Transaction
The purpose of the acquisition of the Common Stock by Gerob was the
satisfaction of the Issuer's outstanding debt to Gerob under the Lease and the
Note, as more fully described in Item 3 above. Gerob agreed to accept the Shares
in lieu of cash.
Item 5. Interest in Securities of the Issuer
(a) The Reporting Person is the beneficial owner of 2,737,978 shares
of Common Stock, which represents approximately 51.9% of the Issuer's
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Common Stock outstanding as of January 13, 1998, assuming the Reporting Person's
exercise of all outstanding stock options presently exercisable or exercisable
within sixty days to purchase 100,000 shares. The shares beneficially owned by
the Reporting Person include: (i) 843,300 shares owned by Gerob for which the
Reporting Person exercises sole voting and investment authority, and (ii)
presently exercisable options to purchase 100,000 shares of Common Stock, which
options were granted under the Issuer's Stock Option Plan.
(b) Number of shares of Common Stock as to which the Reporting
Person has:
(i) Sole power to vote or direct the vote: 2,737,978
(ii) Shared power to direct the vote: 0
(iii) Sole power to dispose or to direct the disposition:
2,737,978
(iv) Shared power to dispose or to direct the disposition:
0
(c) Except as described in this Statement of this Schedule 13D, the
Reporting Person had no transactions in Common Stock of the Issuer during the
last 60 days.
(d) Other than the interests of the limited partners of Gerob
Associates, L.P. (the other general partner of Gerob) to receive a distribution
of any dividends of the Issuer received by Gerob or the proceeds of any sale of
Common Stock owned by Gerob, the Reporting Person has the sole right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Common Stock beneficially owned by him.
(e) N/A
Item 6. Contracts, Arrangement, Understandings or Relationships
With Respect to Securities of The Issuer
As the Reporting Person is a general partner of Gerob and is the
sole general partner of Gerob Associates, L.P. (the other general partner of
Gerob), the Reporting Person has the legal right to direct the voting and
investment of the shares of Common Stock owned by Gerob.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Stock Sale Agreement, dated as of January 12, 1998 by
and between
Chem International, Inc. and Gerob Realty Partnership.
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SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: January 14, 1998
/s/ E. Gerald Kay
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E. Gerald Kay
The original statement shall be signed by each person on whose
behalf the statement is filed or his authorized representative. If the statement
is signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for his purpose which
is already on file with the Commission may be incorporated by reference. The
name of any title of each person who signed this statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact
constitute federal criminal violations. (see 18 U.S.C. 1001).
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INDEX TO EXHIBITS
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Exhibit Number Description
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1 Stock Sale Agreement dated as of January 12, 1998 by and
between Chem International, Inc. and Gerob Realty
Partnership.
487040
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EXHIBIT 1
Stock Sale Agreement
This Stock Sale Agreement is made as of the 12th day of January, 1998 by and
between Chem International, Inc. a Delaware corporation (the "Company"), and
Gerob Realty Partnership, a New Jersey general partnership (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Company desires to sell to Purchaser, and Purchaser desires to
purchase from Company, 843,300 shares (the "Shares") of the common stock, $.002
par value (the "Common Stock") of the Company, all on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the premises and material representations,
warranties and covenants contained herein, the parties agree as follows:
1. Sale of Shares. As of the Closing Date (the date hereof) and subject to all
other terms and conditions of the Agreement, the Company shall issue and sell
the Shares to Purchaser.
2. Payment of Purchase Price. The Company's performance of this Agreement is in
consideration of the following: (i) satisfaction of the aggregate amount of
$297,000 owed by the Company to Purchaser representing rent past due and payable
by the Company to the Purchaser for the period December 1, 1994 to December 31,
1997 for the Company's rental of the premises at 201 Route 22, Hillside, New
Jersey under the Lease dated December 31, 1994, as renewed annually, by and
between the Company, as lessee, and Purchaser, as lessor, and (ii) satisfaction
in full of the amount of $276,443.92 payable under the Promissory Note dated
August 15, 1997 (the "Note") made by the Company in favor of Purchaser.
3. Purchase Price per Share. The purchase price per share of Common Stock is
sixty-eight cents ($.68), which is an agreed upon value being $.03 higher than
the average of the closing price for a share of Common Stock as quoted on the
Nasdaq SmallCap Market for the five business days immediately preceding the
Closing Date.
4. Closing Documentation. As of the Closing Date, the Company shall forward a
letter of instruction to Continental Stock Transfer & Trust Company, its
transfer agent, to issue a stock certificate representing the Shares in the name
of and to the Purchaser.
5. Purchaser's Closing Documentation. As of the Closing Date, Purchaser shall
deliver the Note marked "paid in full" to the Company.
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6. Representations and Warranties of the Company. The Company hereby represents
and warrants as follows:
(a) The Company has the legal capacity to execute and deliver this
Agreement and perform the transactions contemplated hereby.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of
the Company, enforceable in accordance with its terms.
(c) The Shares, when issued for the consideration set forth herein,
will be duly authorized, validly issued and nonassessable.
(d) The Shares are not subject to any lien, restriction,
stockholder's agreement, standstill agreement or similar agreement
or restrictions, except for restrictions on resale which may be
imposed on Purchaser under the Securities Act of 1933, as amended
(the "Securities Act").
(e) There has not been any material adverse change in the business,
operations, assets or financial condition of the Company from that
set forth in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1997 and the Company's Quarterly Report
on Form 10-QSB for the fiscal quarter ended September 30, 1997.
7. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants:
(a) Purchaser has the legal capacity to execute and deliver this
Agreement and to consummate the transactions described herein. This
Agreement constitutes the legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms.
(b) No consent of any person is required for the execution, delivery
and performance of this Agreement by Purchaser.
(c) Purchaser is acquiring the Shares solely for its own account for
investment and not with a view to resale or distribution thereof, in
whole or part.
(d) Purchaser understands that the Shares have not been registered
under the Securities Act or any state securities law, and that the
offering and sale of the Shares by the Company to such Purchaser is
intended to be exempt from registration under Section 4(2) of the
Securities Act and the provisions of Rule 506 of Regulation D
promulgated thereunder, based in part upon the representations and
warranties of Purchaser hereunder.
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EXHIBIT 1
(e) Purchaser understands that the Shares may not be sold,
hypothecated or otherwise disposed of unless subsequently registered
under the Securities Act and applicable state securities laws or
pursuant to an exemption from such registration.
(f) Purchaser did not become aware of the offer of the Shares
through or as a result of any form of general solicitation or
general advertising, including, without limitation, any article,
notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or
radio.
(g) The managing general partner of Purchaser has such knowledge and
experience in business and financial matters that he is capable of
evaluating the merits and risk of the purchase of the Shares and
make an informed investment decision with respect thereto.
(h) The Purchaser acknowledges that all documents, filings, records
and books pertaining to the Company have been made available for
inspection by it.
(i) Neither the Securities and Exchange Commission or any state
securities commission has approved or recommended the Shares.
(j) Purchaser is an accredited investor (as such term is defined in
Rule 501 of Regulation D under the Securities Act).
8. Conditions to the Obligations of Each Party under this Agreement. The
respective obligations of each party under this Agreement shall be subject to
the satisfaction at the Closing Date that no orders, decrees or rulings issued
by any court of competent jurisdiction, nor any rule, regulation or order
entered, promulgated or enacted by any governmental, regulatory or
administrative agency nor any suit, action or other proceeding would prevent the
consummation of the transactions as contemplated hereby.
9. Fees and Expenses. Each of the parties hereto shall be responsible for their
own expenses incurred in connection with the transactions contemplated hereby.
Each party hereby represents that no person or entity is entitled to receive any
brokerage or finder's fee or other fees in connection with this Agreement or the
transactions contemplated hereby. Each party shall indemnify the other and hold
the other party harmless from and against any claims for such fees as a result
of any agreement or understanding between such indemnifying party and any third
party.
10. Survival of Certain Representations and Warranties. The
representations and warranties of the parties in this Agreement and
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in any instrument delivered pursuant hereto shall survive the
Closing.
11. Entire Agreement. This Agreement and the agreements and documents executed
and/or delivered at the Closing in connection herewith constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter hereof. No representation,
warranty, inducement or statement of intention has been made by any party that
is not embodied in this Agreement or such other documents, and none of the
parties shall be bound by, or be liable for, any alleged representation,
warranty, inducement or statement of intention not embodied herein or therein.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to
principles of conflict of interest.
13. Binding Effect, Benefits. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective permitted successors and
assigns. Notwith-standing anything contained in this Agreement to the contrary,
nothing in this Agreement, express or implied, is intended to confer on any
person other than the parties hereto or their respective permitted successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
14. Assignability. Neither this Agreement nor any of the parties' rights
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto.
15. Amendments. This Agreement may be modified, amended or supplemented at any
time by mutual agreement of the parties. Without limiting the generality of the
foregoing, this Agreement may only be amended, varied or supplemented by an
instrument in writing, signed by the parties hereto.
16. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
executed and delivered as of the date hereinabove set forth.
COMPANY:
Chem International, Inc.
By: /s/ Eric Friedman, Vice President
---------------------------------
Eric Friedman, Vice President
4
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EXHIBIT 1
PURCHASER:
Gerob Realty Partnership
By: /s/ E. Gerald Kay
---------------------------------
E. Gerald Kay, General Partner
486641
5
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