SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
CONTINENTAL INVESTMENT CORPORATION
(Name of Issuer)
Common Stock, par value $0.50 per share
(Title of Class of Securities)
211515101
(CUSIP Number)
Stewart Rahr
152-35 10th Avenue
Whitestone, NY 11357
(718) 767-4767
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 19, 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: [ ]
Check the following box if a fee is being paid with the
statement: [ ]
CUSIP No. 211515101
1) Name of Reporting Person Stewart Rahr
S.S. or I.R.S. Identification No. 126 38 8123
of Above Person
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds PF
5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 3(c) [ ]
6) Citizenship or Place of Organization United States
7) Sole Voting Power 1,965,553 shares
8) Shared Voting Power
9) Sole Dispositive Power 1,965,553 shares
10) Shared Dispositive Power
11) Aggregate Amount Beneficially 1,965,553
Owned by Each Reporting Person
12) Check if Aggregate Amount
in Row (11) Excludes Certain Shares [ ]
13) Percent of Class Represented by
Amount in Row (11) 15.61%
14) Type of Reporting Person IN
CUSIP No. 211515101
Item 4. Purpose of the Transaction
The Company's Common Stock was purchased by Stewart
Rahr for investment purposes. Subsequently, following the
substantial and precipitous decline in the market value of the
Company's Common Stock, Mr. Rahr entered into discussions with
members of management of the Company to determine the reasons for
such decline in market value and the nature of the financial and
other difficulties being experienced by the Company. Following
such discussions, on September 2, 1998, Mr. Rahr retained Western
Pacific Consulting Incorporated to provide the services of its
Executive Vice President, Gerald Guterman, to inquire further
into the difficulties at the Company. Mr. Rahr was informed by
Mr. Guterman that Mr. Guterman is an officer of a corporation
that is a holder of Company Common Stock.
On September 11, 1998, Mr. Guterman proposed to Richard
D. Sterritt, Sr. and R. Dale Sterritt, Jr. an agreement pursuant
to which Richard D. Sterritt, Sr. would return, or cause to be
returned, to the Company certain shares of Company Common Stock
previously issued to him and to certain entities; R. Dale
Sterritt, Jr. would cause certain real property to be transferred
to the Company; Richard D. Sterritt, Sr. would cause certain
notes and loans receivable to be cancelled or transferred; R.
Dale Sterritt, Jr. would resign as an officer and director of the
Company; the Company would exchange all shares of Wastemasters,
Inc. which it owns for shares of Company Common Stock owned by
Wastemasters, Inc., and cancel an option to exchange shares of
Company stock for shares of Wastemasters, Inc.; and Richard D.
Sterritt, Sr. and R. Dale Sterritt, Jr. would exchange general
releases with the Company and others, including Mr. Guterman and
Stewart Rahr.
On October 19, 1998 the members of the Board of
Directors of the Company, Messrs. Martin G. Blahitka, Robert D.
Luna and Jeffrey B. Morris (the "Independent Directors") borrowed
an aggregate $32,500 from Stewart Rahr. Messrs. Blahitka and
Luna have been directors of the Company since 1993 and Mr. Morris
has been a director of the Company since 1990. The proceeds of
the borrowing are being used by the Independent Directors to pay
the fees and expenses of counsel that have been incurred by the
Independent Directors in connection with certain legal
proceedings (the "Proceedings") that are pending against the
Independent Directors in connection with their acting as
directors of the Company. Stewart Rahr has agreed to lend the
Independent Directors up to an additional $17,500 for the same
purpose and on the same terms described herein. Pursuant to the
terms of the borrowing, the Independent Directors agreed to repay
the borrowing from any amounts payable to the Independent
Directors as indemnification from the Company in connection with
the Proceedings. The Independent Directors also agreed to use
their best efforts to cause the Company to assume the obligation
to repay the borrowing and to provide collateral security for
such borrowing by granting a security interest in the accounts
receivable of the Company and its wholly-owned subsidiaries. The
Independent Directors will not be personally responsible for the
repayment of the borrowing, provided the foregoing undertakings
of the Independent Directors are performed.
On October 9, 1998, Stewart Rahr commenced an action in
the United States District Court for the Eastern District of New
York against R. Dale Sterritt, Jr. seeking damages and other
relief for alleged violations by Mr. Sterritt of Federal
securities laws.
Stewart Rahr intends continually to review the
Company's business affairs, management, financial position, and
future prospects as well as conditions in the securities markets
and general economic and other conditions. Based on such
evaluation and review, Stewart Rahr will continue to consider and
explore various alternative courses of action with respect to his
interests in the Company as he may deem appropriate in light of
the circumstances existing from time to time. Such alternatives
include, among other things, litigation and other actions, the
purchase of additional shares of Company Common Stock or the sale
of all or a portion of the shares of Company Common Stock owned
by him, in the open market or in privately negotiated
transactions, to one or more purchasers.
Item 5. Material to be Filed as Exhibits
Conformed copy of letter agreement dated October 16,
1998 among Messrs. Blahitka, Luna, Morris and Stewart Rahr.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
October 23, 1998 /s/ Stewart Rahr
Stewart Rahr
Attachment to
Letter Agreement
SECURED DEMAND PROMISSORY NOTE
$50,000 Whitestone, New York
October __, 1998
FOR VALUE RECEIVED, CONTINENTAL INVESTMENT CORPORATION, a
Georgia corporation, CONTINENTAL TECHNOLOGIES, INC., a Delaware
corporation, CONTINENTAL TECHNOLOGIES CORPORATION OF GEORGIA, a
Georgia corporation, FIBER-SEAL FRANCHISE CORPORATION, a Delaware
corporation, and FIBER-SEAL HOLDINGS, INC., a Texas corporation,
(each, a Debtor and collectively, the "Debtors"), hereby jointly
and severally unconditionally promise to pay to the order of
STEWART RAHR, (the "Payee"), at 152-35 Tenth Avenue, Whitestone,
New York 11357, or at such other place as the Payee or any holder
hereof may from time to time designate, upon demand by Payee or
any such holder, the principal sum of FIFTY THOUSAND and 00/100
($50,000.00) DOLLARS in lawful money of the United States of
America and in immediately available funds.
Debtors hereby further promise, jointly and severally, to
pay interest to the order of Payee in like money at said address
or place from the date hereof, on the unpaid principal balance
hereof at a rate prior to an Event of Default (as hereinafter
defined) of ten (10%) percent per annum, and at a rate, upon and
after an Event of Default, of fifteen (15%) percent per annum.
Such interest shall be due and payable in arrears on the first
day of each month until the principal balance hereof shall have
been paid in full.
The indebtedness evidenced by this Note may be prepaid at
any time in whole or in part without premium or penalty.
The obligations of each Debtor under this Note are secured
by the accounts receivable of such Debtor (the collective
accounts receivable of Debtors being hereinafter referred to as
the "Collateral") pursuant and subject to the terms and
conditions of this Note and any agreement, document or instrument
now or at any time hereafter executed and/or delivered in
connection herewith or related hereto.
For purposes hereof, "Event of Default" shall mean (i) the
non-payment of any principal or interest amount when due
hereunder, which shall continue for three (3) business days; (ii)
the appointment of any trustee, receiver, custodian or liquidator
of any part of the assets or properties of, assignment for the
benefit of creditors by, or the commencement of any proceedings
under the United States Bankruptcy Code or any insolvency law by
or against any of the Debtors; (iii) the rendering of a judgment
against any of the Debtors in an amount in excess of $50,000 in
any one case or in excess of $100,000 in the aggregate and the
same shall remain undischarged for a period in excess of thirty
(30) days or execution shall at any time not be effectively
stayed; or (iv) the occurrence of an event of default with
respect to any indebtedness of any of the Debtors for borrowed
money in excess of $50,000.
If any Event of Default shall occur for any reason, then and
in any such event, in addition to all rights and remedies of
Payee under applicable law or otherwise, all such rights and
remedies being cumulative, not exclusive and enforceable alterna-
tively, successively and concurrently, Payee may, at its option,
declare, without notice or demand, any or all of Debtors'
amounts, obligations, liabilities and indebtedness owing to Payee
under this Note, to be due and payable, whereupon the then unpaid
balance hereof, together with all interest accrued thereon, shall
forthwith become immediately due and payable, together with
interest accruing thereafter at the then applicable rate stated
above until the indebtedness evidenced by this Note is paid in
full. The costs and expenses of collection hereof, including, but
not limited to, reasonable attorneys' fees and expenses, shall be
payable by Debtors to Payee in the event Payee so declares any or
all of Debtors' amounts, obligations, liabilities and
indebtedness hereunder to be due and payable pursuant to the
preceding sentence.
Each Debtor hereby (i) waives diligence, demand,
presentment, protest and notice of any kind, (ii) agrees that it
will not be necessary for any holder hereof to first institute
suit in order to enforce payment of this Note and (iii) consents
to any one or more extensions or postponements of time of pay-
ment, release, surrender or substitution of collateral security,
or forbearance or other indulgence, without notice or consent.
The pleading of any statute of limitations as a defense to any
demand against any Debtor is expressly hereby waived.
Payee shall not be required to resort to any Collateral for
payment, but may proceed against any Debtor in such order and
manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise
thereof.
Debtors hereby waive the right to a trial by jury and all
rights of setoff and rights to interpose counterclaims and cross-
claims (other than compulsory counterclaims), in any litigation
or proceeding arising in connection with this Note or the
Collateral. Debtors hereby irrevocably consent to the non-
exclusive jurisdiction of the Supreme Court of the State of New
York and the United States District Court for the Southern
District of New York for all purposes in connection with any
action or proceeding arising out of or relating to this Note or
the Collateral and further consents that any process or notice of
motion or other application to said Courts or judge thereof, or
any notice in connection with any proceeding hereunder may be
served (i) inside or outside the State of New York by registered
or certified mail, return receipt requested, and service or
notice so served shall be deemed complete five (5) business days
after the same shall have been posted or (ii) in such other
manner as may be permissible under the rules of said courts.
This Note and the Collateral shall be governed by and
construed in accordance with the laws of the State of New York
and shall be binding upon the successors and assigns of each
Debtor and inure to the benefit of Payee and his successors,
endorsees, assigns, legal representatives and heirs. If any term
or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions
hereof shall in no way be affected thereby.
This Note may not be changed, modified or terminated orally,
but only by an agreement in writing signed by Debtors and the
Payee or the holder hereof.
Whenever used herein, the term "Debtor" shall be deemed to
include such Debtor's successors and assigns and the term "Payee"
shall be deemed to include Payee's successors, endorsees,
assigns, legal representatives and heirs and any holder hereof.
SECURITY PROVISIONS
1. Definitions. As used herein, the following terms
shall have the respective meanings given to them below:
1.1 Uniform Commercial Code. All terms used herein which
are defined in Article 1 or Article 9 of the New York Uniform
Commercial Code (the "Uniform Commercial Code") shall have the
meanings set forth therein unless otherwise defined in this Note
and all references to the plural herein shall also mean the
singular and all references to the singular shall also mean the
plural.
1.2 Governmental Agency. "Government Agency" shall mean
any nation or government, any province, state, municipality, or
other political subdivision thereof, and any agency or
instrumentality thereof and any corporation or other entity owned
or controlled (through shares or capital ownership or otherwise)
by any of the foregoing.
1.3 Obligations. "Obligations" shall mean all now existing
and hereafter arising obligations, liabilities and indebtedness
of Debtors to Payee of every kind and description, however
evidenced, whether direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary,
liquidated or unliquidated, whether arising before, during or
after the commencement of any case with respect to any Debtor
under the United States Bankruptcy Code or any similar statute,
whether arising under this Note, or by operation of law and
whether incurred by any Debtor as principal, surety, endorser,
guarantor or otherwise.
1.4 Person. "Person" or "persons" shall mean an
individual, a partnership, a limited liability company, a
corporation (including a business trust), a joint stock company,
a trust, an unincorporated association, a joint venture or other
entity or a government or any agency, instrumentality or
political subdivision thereof.
2. Grant of Security Interest. As collateral security for
the prompt and unconditional payment and performance when due of
each and every one of the Obligations, Debtors hereby assign,
pledge, hypothecate, transfer and set over to Payee and grant to
Payee a security interest in and lien upon all of the Collateral.
3. Representations, Warranties, Covenants and Waivers.
Debtors jointly and severally covenant, represent and warrant
with and to Payee (all of such covenants, representations and
warranties being continuing in nature so long as any of the
Obligations are outstanding and being applicable with respect to
any hereafter arising or acquired Collateral) as follows:
3.1 Title to Collateral. The Collateral is directly,
legally and beneficially owned by one or more Debtors free and
clear of all claims, liens, pledges and encumbrances of any kind,
nature or description except in favor of Payee hereunder.
3.2 No Restrictions. The Collateral is not subject to any
restrictions relative to the transfer thereof and each Debtor has
the right to transfer and hypothecate the Collateral owned by it
free and clear of any claims, liens, pledges and encumbrances of
any kind, nature or description, except as otherwise provided
herein.
3.3 Authorization and Consents. The borrowing represented
by this Note, the grant of the security interest provided for
herein, the execution and delivery of this Note and the
performance of Debtors' obligations pursuant hereto have been
duly authorized by the Board of Directors of each Debtor; no
other corporate action on the part of Debtors is required to be
taken in connection therewith. The borrowing represented by this
Note, the grant of the security interest provided for herein, the
execution and delivery of this Note and the performance of
Debtors' obligations pursuant hereto do not, and will not (with
the passage of time or the giving of notice) conflict with,
constitute a default under, or constitute a breach of (i) the
certificate of incorporation or bylaws of any Debtor, (ii) any
agreement, note, indenture, or other commitment of any Debtor, or
(iii) any statue, regulation, rule, permit, license or judgment,
order or decree of any court. The borrowing represented by this
Note, the grant of the security interest provided for herein, the
execution and delivery of this Note and the performance of
Debtors' obligations pursuant hereto requires no consent or
approval of any Governmental Agency, nor any consent or approval
of any other third party.
3.4 Charges and Assessments. Debtors, jointly and
severally, shall pay all charges and assessments of any nature
against the Collateral or with respect thereto prior to said
charges and/or assessments being delinquent.
3.5 Reimbursement of Payee. Debtors, jointly and
severally, shall promptly reimburse Payee on demand, together
with interest at the rate provided in the Note, for any charges,
assessments or expenses paid or incurred by Payee in its
discretion for the protection and preservation and maintenance of
the Collateral and the enforcement of Payee's rights hereunder,
including, without limitation, reasonable attorneys' fees and
legal expenses incurred by Payee in seeking to protect, collect
or enforce its rights in the Collateral or otherwise hereunder.
3.6 Debtor's Receipt of Proceeds. If, after the occurrence
of an Event of Default, during the continuance of such Event of
Default, any Debtor shall receive any proceeds of the Collateral,
such Debtor agrees to accept same as Payee's agent, to hold same
in trust for Payee.
3.7 Restriction on Sale of Collateral. Debtors shall not
directly or indirectly sell, assign, transfer, or otherwise
dispose of the Collateral, nor shall Debtors create, incur or
permit any further claim, lien, pledge or encumbrance of any
kind, nature or description with respect to the Collateral.
3.8 Exercise of Rights. So long as no Event or Default has
occurred, Debtors shall have the right to exercise all rights
with respect to the Collateral, except as expressly prohibited
herein.
3.9 Certain Waivers. Debtors agree that the Collateral,
other collateral, or any other guarantor or endorser may be
released, substituted or added with respect to the Obligations,
in whole or in part, without releasing or otherwise affecting the
liability of any Debtor, the security interests granted hereunder
or this Note, and each Debtor waives, to the extent permissible,
its rights under Section 9-112 and 9-207 of the Uniform
Commercial Code. Payee is entitled to all of the benefits of a
secured party set forth in Section 9-207 of the Uniform
Commercial Code.
4. Events of Default. Any or all Obligations shall become
immediately due and payable, without notice or demand, at the
option of Payee, upon the occurrence of any one or more of Events
of Default.
5. Remedies After Default. Upon or subsequent to the
occurrence of an Event of Default:
5.1 Rights of Ownership. During the continuance of such
Event of Default, and without further notice, Payee, in its
discretion, shall have the exclusive right to exercise all rights
with respect to the Collateral as if Payee were the absolute
owner thereof. However, Payee shall have no duty to exercise any
of the aforesaid rights, privileges or options (all of which are
exercisable in the sole discretion of Payee) and shall not be
responsible for any failure to do so or delay in doing so.
5.2 Disposition of Collateral. In addition to all the
rights and remedies of a secured party under the Uniform
Commercial Code, Payee shall have the right, at any time and
without demand of performance or other demand, advertisement or
notice of any kind to or upon Debtors or any other person (all
and each of which demands, advertisements and/or notices are
hereby expressly waived to the extent permitted by law), to
proceed forthwith to collect, redeem, receive, appropriate, sell,
or otherwise dispose of and deliver the Collateral or any part
thereof in one or more lots at public or private sale or sales at
any exchange, brokers board or elsewhere at such prices and on
such terms as Payee may deem best. The foregoing disposition(s)
may be for cash or on credit or for future delivery without
assumption of any credit risk by Payee, with Payee having the
right to purchase all or any part of said Collateral so sold at
any such sale or sales, public or (if permitted under the Uniform
Commercial Code) private, free of any right or equity of
redemption in Debtors, which right or equity is hereby expressly
waived or released by Debtors. In connection with any sale or
other disposition of the Collateral, Payee is hereby authorized
by Debtors to complete the appropriate instrument(s) of transfer
executed and delivered by Debtors with respect to the Collateral
in such manner as Payee shall deem appropriate to effectuate such
sale or other disposition. All of Payee's rights and remedies,
including, but not limited to, the foregoing, shall be cumulative
and not exclusive and shall be enforceable alternatively,
successively or concurrently, as Payee may deem expedient. The
proceeds of any such collection, redemption, recovery, receipt,
appropriation, realization, sale or other disposition, after
deducting all reasonable costs and expenses of every kind
incurred relative thereto or incidental to the care, safekeeping
or otherwise of any and all Collateral or in any way relating to
the rights of Payee hereunder (including, without limitation,
appraisal, accountants' and attorneys' fees and legal expenses)
shall be applied first to the satisfaction of the Obligations (in
such order as Payee may elect) and then to the payment of any
other amounts required by applicable law, including Section 9-
504(1)(c) of the Uniform Commercial Code, Debtors to be and
remain jointly and severally liable to Payee for any deficiency.
To the extent notice is required to be given by law, Debtors
agree that five (5) business days prior notice by Payee of the
date after which a private sale may take place or a public
auction may be held, is reasonable notification or such matters.
6. Further Assurances. Each Debtor shall, at any time and
from time to time upon the written request of Payee, execute and
deliver such further documents, including but not limited to Form
UCC-1 Financing Statements, or other appropriate instrument of
transfer, in form satisfactory to counsel for Payee, and will
take or cause to be taken such further acts as Payee may request
in order to effect the grant of the security interest in the
Collateral and perfect or continue the perfection of the security
interest in the Collateral, all in conformity with the applicable
law of every jurisdiction which may affect the creation,
preservation, validity or perfection of such security interest.
7. Miscellaneous.
7.1 Duty of Payee. Payee or Payee's agent or bailee shall
have no duty or liability to protect or preserve any rights
pertaining thereto and shall be relieved of all responsibility
for the Collateral upon surrendering it to Debtors or foreclosure
with respect thereto.
IN WITNESS WHEREOF, the undersigned has caused this
Secured Promissory Note to be duly executed and delivered on the
day and year first above written.
CONTINENTAL INVESTMENT CORPORATION
By:_________________________________
Authorized Signatory
CONTINENTAL TECHNOLOGIES, INC.
By:________________________________
Authorized Signatory
CONTINENTAL TECHNOLOGIES CORPORATION
OF GEORGIA
By:________________________________
Authorized Signatory
FIBER-SEAL FRANCHISE CORPORATION
By:________________________________
Authorized Signatory
FIBER-SEAL HOLDINGS, INC.
By:________________________________
Authorized Signatory
Exhibit to Schedule 13D (Amendment No. 6)
October 16, 1998
Mr. Stewart Rahr
15235 Tenth Avenue
Whitestone, New York 11357
Dear Mr. Rahr:
The undersigned individuals ("Borrowers") have heretofore
requested that you lend to Borrowers an aggregate amount of
$50,000 to be used by Borrowers to pay the fees and expenses of
counsel that have been and/or will be incurred by Borrowers in
connection with certain legal proceedings (the "Proceedings")
that are pending against Borrowers in connection with their
acting as directors of Continental Investment Corporation
("Continental").
This is to acknowledge that such loan (the "Loan") has been made
to Borrowers by you and that Borrowers have directed you to
disburse the borrowing proceeds to the attorney escrow account of
John H. Carney, Esq., counsel for the undersigned.
This is also to confirm that in view of Borrowers' belief that
they are entitled to indemnification from Continental for their
expenses incurred in connection with the Proceedings, Borrowers
hereby agree to repay the Loan from any and all amounts paid or
payable to them by virtue of such indemnification right and
hereby assign to you the right to assert any and all claims for,
and to collect, such indemnification and to retain the proceeds
of any such claim up to the amount of the Loan, plus interest
from the date hereof until the date paid at the rate of 10% per
annum.
This is also to confirm that in view of Borrowers' belief that
the best interests of Continental and its stockholders are served
by Borrowers' defense of the Proceedings, Borrowers shall use
their best efforts to cause, as soon as practicable, Continental
to (1) assume the Loan, (2) agree to repay the Loan, together
with interest from the date hereof until the date paid at the
rate of 10% per annum, on your demand, and (3) provide, as
collateral security for the Loan and such interest, a security
interest in all accounts receivable of Continental and its
subsidiaries. The foregoing shall be evidenced by a Secured
Demand Promissory Note in substantially the form attached to this
letter.
You hereby acknowledge that Borrowers shall not be personally
responsible for the repayment of the Loan, provided the
undertakings of Borrowers herein are performed in accordance
herewith.
This letter agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and
supercedes any and all prior agreements, understandings or
commitments with respect to the subject matter hereof.
Very truly yours,
/s/ Martin G. Blahitka
Martin G. Blahitka
/s/ Robert D. Luna
Robert D. Luna
/s/ Jerry B.Morris
Jerry B. Morris
Agreed:
/s/ Stewart Rahr
Stewart Rahr
