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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
DECORA INDUSTRIES, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
(Title of Class of Securities)
243593100
(CUSIP Number)
Mr. Glenn Krevlin
Cumberland Associates
1114 Avenue of the Americas
New York, New York 10036
(212) 536-9700
(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications)
October 1, 1997
(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 [ ].
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SCHEDULE 13D
CUSIP No. 243593100
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CUMBERLAND ASSOCIATES
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
a[ ]
b[X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC,00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7. SOLE VOTING POWER
2,035,500
NUMBER OF 8. SHARED VOTING POWER
SHARES
BENEFICIALLY 634,000
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 2,035,500
WITH
10. SHARED DISPOSITIVE POWER
634,000
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,669,500
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.3%
14. TYPE OF REPORTING PERSON*
PN, IA
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Item 1. Security and Issuer.
This Amendment No. 1, which is being filed pursuant to Rule
13d-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), amends the Schedule 13D, filed June 20,
1995 (the "Schedule 13D"), of Cumberland Associates, a New York limited
partnership, and relates to the Common Stock, par value $.01 per share (the
"Common Stock" or the "Shares"), of Decora Industries, Inc. (the "Company"),
which has its principal executive offices at One Mill Street, Fort Edward, New
York 12828. Unless otherwise indicated, all capitalized terms used herein but
not defined herein shall have the meanings ascribed to such terms in the
Schedule 13D.
Item 2. Identity and Background.
Item 2 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
This statement is being filed by Cumberland Associates.
Cumberland Associates is a limited partnership organized under the laws of the
State of New York, and is engaged in the business of managing, on a
discretionary basis, eleven securities accounts, the principal one of which is
Cumberland Partners. The address of the principal business and office of
Cumberland Associates is 1114 Avenue of the Americas, New York, New York 10036.
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K. Tucker Andersen, Gary Tynes, Oscar S. Schafer, Bruce G.
Wilcox, Glenn Krevlin, Andrew Wallach and Eleanor Poppe are the general partners
(the "General Partners") of Cumberland Associates. The business address of each
of the General Partners is the same as that of Cumberland Associates. Each of
the General Partners is a citizen of the United States.
Neither Cumberland Associates nor any of the General Partners
have, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), nor has any such person,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person 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 violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
As of the date hereof, Cumberland Associates held and
beneficially owned 2,669,500 shares of Common Stock. The aggregate purchase
price of the Common Stock purchased by Cumberland Associates on behalf of
Cumberland Partners, LongView Partners, LongView B and the other managed
accounts was
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$4,175,913. Of this amount, Cumberland Associates invested approximately
$2,197,275 on behalf of Cumberland Partners, $714,786 on behalf of LongView
Partners, $135,600 on behalf of LongView B and $1,128,252 on behalf of seven of
Cumberland Associates' other account holders. The source of funds for the
purchase of all such Common Stock of Cumberland Associates was a combination of
investment capital contributed by Cumberland Partners, LongView Partners,
LongView B and the seven other managed accounts and margin borrowings through
the margin accounts of the account holders maintained with Morgan Stanley & Co.
Incorporated.
By virtue of Rule 13d-3 under the Exchange Act, each of the
General Partners may be deemed the beneficial owner of all of the Common Stock
purchased by Cumberland Associates on behalf of Cumberland Partners, LongView
Partners, LongView B and the other managed accounts, and therefore each General
Partner may be deemed to have invested the aggregate amount of funds noted
above. None of the General Partners has independently invested any of his or her
funds for the purpose of purchasing the Common Stock.
Item 5. Interest in Securities of the Issuer.
Item 5 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
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As of the date hereof, Cumberland Associates beneficially
owned 2,669,5001 shares of Common Stock representing 7.3%2 of the Common Stock
deemed outstanding on the date hereof.
Set forth in Appendix A attached hereto and incorporated
herein by reference are descriptions of the transactions in the Common Stock
effected by Cumberland Associates within the period beginning 60 days prior to
October 1, 1997 through the date of this filing.
In addition, each of the General Partners may, by virtue of
his position as general partner of Cumberland Associates, be deemed, pursuant to
Rule 13d-3 under the Act, to own beneficially the Common Stock of which
Cumberland Associates would possess beneficial ownership. Other than in their
respective capacities as general partners of Cumberland Associates, none of the
General Partners is the beneficial owner of any Common Stock.
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(1) As to 2,035,500 Shares of which, there is sole voting power and sole
power to dispose or to direct the disposition of such Shares; as to
634,000 Shares of which, there is shared voting power and shared power
to dispose or to direct the disposition of such Shares because the
seven other account holders may be deemed beneficial owners of such
Shares pursuant to Rule 13d-3 under the Act as a result of their right
to terminate their discretionary accounts within a period of 60 days.
(2) Based on the sum of (i) 35,719,390 shares of Common Stock outstanding,
as indicated in the Company's Form 10-Q for the quarter ended June 30,
1997 and (ii) the 937,500 shares of Common Stock acquired by Cumberland
Associates on October 1, 1997.
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Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Item 6 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
Pursuant to management agreements with all of its accounts
except Cumberland Partners, LongView Partners and LongView B, Cumberland
Associates receives (i) an annual management fee from some of its account
holders and (ii) an incentive fee from all of its account holders based, in the
case of some of the account holders, on the net appreciation during the
preceding fiscal or calendar year in the value of the securities in the account
and, in the case of other account holders, on the account's taxable income
during the preceding fiscal or calendar year. In the case of the accounts of
Cumberland Partners, LongView Partners and LongView B, Cumberland Associates
receives an annual management fee from each such account holders which does not
include an incentive fee.
Except as otherwise set forth in this statement, to the best
knowledge of the undersigned, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among or between the
undersigned, the General Partners and any other person with respect to any
securities of the Company, including but not limited to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
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arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Item 7 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
Exhibit 1. Purchaser's Certificate, dated as of September 30,
1997, between Cumberland Associates (on behalf of Cumberland Partners) and the
Company.
Exhibit 2. Purchaser's Certificate, dated as of September 30,
1997, between Cumberland Associates (on behalf of LongView B) and the Company.
Exhibit 3. Purchaser's Certificate, dated as of September 30,
1997, between Cumberland Associates (on behalf of Edwin L. Cox) and the Company.
Exhibit 4. Purchaser's Certificate, dated as of September 30,
1997, between Cumberland Associates (on behalf of Ralco, Inc.) and the Company.
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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.
Date: October 8, 1997
CUMBERLAND ASSOCIATES
By: /s/ Glenn Krevlin
Glenn Krevlin
General Partner
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APPENDIX A*
1. TRANSACTIONS EFFECTED BY CUMBERLAND ASSOCIATES
DATE OF NO. OF UNITS NO. OF UNITS PRICE PER
TRANSACTION PURCHASED SOLD UNIT
----------- ------------ ------------ ---------
10/1/97 685,000 $.80
10/1/97 169,500 $.80
10/1/97 46,000 $.80
10/1/97 37,000 $.80
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* Each of the transactions set forth in this Appendix was a privately negotiated
purchase of Common Stock from the Company pursuant to the Purchaser's
Certificates set forth on Exhibits 1, 2, 3 and 4 hereto.
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1 Purchaser's Certificate, dated as of September 30, 1997,
between Cumberland Associates (on behalf of Cumberland
Partners) and the Company.
2 Purchaser's Certificate, dated as of September 30, 1997,
between Cumberland Associates (on behalf of LongView B) and the
Company.
3 Purchaser's Certificate, dated as of September 30, 1997,
between Cumberland Associates (on behalf of Edwin L. Cox)
and the
Company.
4 Purchaser's Certificate, dated as of September 30,
1997, between Cumberland Associates (on behalf of Ralco,
Inc.) and the Company.
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PURCHASER'S CERTIFICATE
DECORA INDUSTRIES, INC. PERSONAL AND CONFIDENTIAL
1 Mill Street
Fort Edward, New York 12828
Gentlemen:
The undersigned hereby makes application to purchase 685,000 shares of
the common stock of Decora Industries, Inc. (the "Company") for $.80 per share
for a total consideration of $548,000 upon the terms and conditions set forth
herein. The common shares of capital stock of the Company purchased hereunder
shall hereinafter be referred to collectively as the "Securities."
The undersigned understands that it is contemplated that the
Securities will not be registered under the Securities Act of 1933, as amended
(the "Act"), or the state blue sky laws. The undersigned also understands that
in order to assure that the offering (the "Offering") of the Securities will be
exempt from registration under the Act and various state securities laws, each
prospective offeree must have such knowledge and experience in financial and
business matters in order that such offeree is able to evaluate the risks and
merits of an investment in the Securities.
The undersigned understands that the information supplied in this
Certificate will be disclosed to no one other than the officers and directors of
the Company and/or to counsel or accountants for the Company without the
undersigned's consent, or unless it is necessary for the Company to use such
information to support the exemption from registration under the Act to be
claimed for the Offering.
For purposes of this Certificate, the undersigned represents and
warrants that the information supplied herein is true and correct as of a date
immediately prior to the undersigned's purchase of the Securities.
In order to induce the Company to extend an offer to purchase the
Securities to the undersigned as a prospective offeree of the Securities, the
undersigned represents and warrants as follows:
(1) The undersigned is either experienced in or knowledgeable with
regard to the business of the Company, or
1
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either alone or with the undersigned's professional advisers is capable, by
reason of knowledge and experience in financial and business matters in general,
and investments in particular, of evaluating the merits and risks of an
investment in the Securities, and is able to bear the economic risk of the
investment and can otherwise be reasonably assumed to have the capacity to
protect the undersigned's own interests in connection with the investment in the
Securities. A "professional adviser" for purposes of this representation is a
person such as a lawyer, certified accountant, or registered investment adviser
who for a fee customarily makes investment decisions and recommendations relied
upon by other persons and who is unaffiliated with and not compensated by the
Company.
(2) The undersigned is an "accredited investor," as that term is
defined in Rule 501(a) under the Act. Specifically, the undersigned comes within
one of the following categories of accredited investors at the time of the sale
of the Securities to the undersigned (all dollar amounts having reference to
U.S. dollars):
a. Any corporation or partnership, not formed for
the specific purpose of acquiring the securities offered, with
total assets in excess of $5,000,000;
b. Any director, executive officer, or general
partner of the issuer of the securities being offered or sold, or
any director, executive officer, or general partner of a general
partner of that issuer;
c. Any natural person whose individual net worth,
or joint net worth with that person's spouse, at the time of his
purchase exceeds $1,000,000;
d. Any natural person who had an individual income
in excess of $200,000 in each of the two most recent years or
joint income with that person's spouse in excess of $300,000 in
each of those years and has a reasonable expectation of reaching
the same income level in the current year;
e. Any trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) under the Act; and
f. Any entity in which all of the equity owners
are accredited investors.
2
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(3) In evaluating the merits and risks of an investment in the
Securities, the undersigned has not relied upon the Company or the Company's
attorneys or advisers for legal or tax advice, and has, if desired, in all cases
sought the advice of the undersigned's own personal legal counsel and tax
advisers.
(4) The acquisition of the Securities by the undersigned is solely for
the undersigned's own account, for investment, and not with a view to, or to
offer or sell for an issuer in connection with, the distribution of the
Securities, or to participate or have a direct or indirect participation in any
such undertaking, or to participate or have a participation in the direct or
indirect underwriting of any such undertaking. The undersigned has no contract,
arrangement or understanding with the Company or any other person to participate
in the distribution of the Securities.
(5) The offer to sell the Securities was directly communicated to the
undersigned, and the undersigned was able to ask questions of and receive
answers concerning the terms of this transaction. At no time was the undersigned
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
(6) The undersigned has been advised that the Company's authorized
capital stock consists of 45,000,000 shares of Common Stock, par value $.01 per
share, and 5,000,000 shares of Preferred Stock, par value $.01 per share, each
with the following characteristics:
(a) Current Capitalization. Holders of Common Stock are entitled
to one vote, either in person or by proxy, for each share held of record on all
matters submitted to a vote of stockholders. Except as otherwise provided by
law, action can be taken by a majority of shares entitled to vote at a meeting.
Holders of Common Stock are entitled to dividends when and as they may be
declared by the Board of Directors out of funds legally available therefor, and,
in the event of liquidation or dissolution of the Company, are entitled to share
ratably in the assets of the Company remaining after payment of liabilities and
payment in respect of any preferred stock. Holders of Common Stock have no
conversion, preemptive or other subscription rights, and there are no redemption
or sinking fund provisions with respect to the Common Stock. The outstanding
shares of Common Stock of the Company are fully paid and nonassessable.
3
<PAGE>
The 5,000,000 authorized shares of Preferred Stock may be issued
from time to time in one or more series as determined by the Board of Directors
without any approval of stockholders. The Board of Directors has been authorized
to fix the designation, powers, preferences, and rights of the shares of each
such series and any qualifications, limitations or restrictions thereon.
Preferred Stock could be given voting and conversion rights which would dilute
the voting power and equity of holders of Common Stock and could rank prior to
the Common Stock or a newly created series of Preferred Stock with respect to
dividend rights, rights on liquidation or other rights.
(b) Intended Capitalization. Concurrent with the Conny
acquisition, the Company will issue to a lender a Warrant exercisable at $1.00
per share to purchase 17.5% of the Company on a fully diluted basis
(approximately 9,100,000 common shares). Since the Company does not have enough
authorized common shares to permit exercise of such a Warrant, the Company will
issue to the investor a warrant to purchase Series A Convertible Preferred Stock
which together with any warrant for common stock will convert automatically to
Common Stock equal to such 7,500,000 shares of common stock when additional
shares of common stock are authorized by the Company's shareholders.
(7) The undersigned has received and reviewed a copy of the Company's
annual report on Form 10-K for the fiscal year ended March 31, 1997; (b) the
Company's quarterly report on Form 10-Q for the quarter ended June 30, 1997; (c)
the Executive Summary describing the Conny transaction dated as of September 11,
1997 prepared by the Company; and (d) certain projections describing the Conny
transaction attached as Exhibit A. In addition to the foregoing, the undersigned
has had the opportunity to speak directly with officers of the Company
concerning the Company's business plan and operations, and has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.
(8) The undersigned represents and warrants to the Company that the
information contained in this Certificate is accurate, true, and complete, and
understands that an offer of the Securities will not be made to the undersigned
until this Certificate has been reviewed, and only then if the Company has
reasonable grounds to believe and actually believes that the undersigned has
such knowledge and experience in financial and business matters that the
undersigned is able to evaluate the merits and risks of an investment in the
Securities and that the undersigned is able to bear the economic risks of such
investment, and that the sale of Securities to the undersigned
4
<PAGE>
otherwise qualifies for exemption from registration under the Act and
appropriate state securities laws.
(9) The undersigned represents and warrants that it never has been
represented, guaranteed, or warranted to the undersigned by any officer or
director of the Company, their agents or employees or any other person in
connection with the Company, expressly or by implication, any of the following:
(a) The approximate or exact length of time that the undersigned
will be required to remain as the owner of the Securities;
(b) The exact amount of profit and/or amount or type of
consideration, profits or losses (including tax benefits) to be realized, if
any, by the Company;
(c) That the past performance or experience of the officers and
directors of the Company, or any other person connected with the Company can
predict the results of the ownership of the Securities or the overall success of
the Company.
(10) The undersigned represents and warrants that the undersigned has
been advised that:
(a) the sale of the Securities that the undersigned is purchasing
has not been registered under the Act, and the Securities must be held
indefinitely unless a transfer of the Securities is subsequently registered
under the Act or an exemption from such registration is available;
(b) the Securities that the undersigned is acquiring are
"restricted securities" as that term is defined in Rule 144 promulgated under
the Act;
(c) any and all certificates representing the Securities shall
bear an investment legend restricting the transfer of such Securities
(11) If the undersigned is a corporation or partnership, the person
executing this Agreement on behalf of such entity has all right, power and
authority to so execute and deliver this Agreement on behalf of such corporation
or partnership.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer to execute this Certificate effective as of this 30th day of September,
1997.
5
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CUMBERLAND ASSOCIATES
By: /s/ Gary Tynes (General Partner)
Its: (on behalf of Cumberland Partners)
6
<PAGE>
PURCHASER'S CERTIFICATE
DECORA INDUSTRIES, INC. PERSONAL AND CONFIDENTIAL
1 Mill Street
Fort Edward, New York 12828
Gentlemen:
The undersigned hereby makes application to purchase 169,500 shares of
the common stock of Decora Industries, Inc. (the "Company") for $.80 per share
for a total consideration of $135,600 upon the terms and conditions set forth
herein. The common shares of capital stock of the Company purchased hereunder
shall hereinafter be referred to collectively as the "Securities."
The undersigned understands that it is contemplated that the
Securities will not be registered under the Securities Act of 1933, as amended
(the "Act"), or the state blue sky laws. The undersigned also understands that
in order to assure that the offering (the "Offering") of the Securities will be
exempt from registration under the Act and various state securities laws, each
prospective offeree must have such knowledge and experience in financial and
business matters in order that such offeree is able to evaluate the risks and
merits of an investment in the Securities.
The undersigned understands that the information supplied in this
Certificate will be disclosed to no one other than the officers and directors of
the Company and/or to counsel or accountants for the Company without the
undersigned's consent, or unless it is necessary for the Company to use such
information to support the exemption from registration under the Act to be
claimed for the Offering.
For purposes of this Certificate, the undersigned represents and
warrants that the information supplied herein is true and correct as of a date
immediately prior to the undersigned's purchase of the Securities.
In order to induce the Company to extend an offer to purchase the
Securities to the undersigned as a prospective offeree of the Securities, the
undersigned represents and warrants as follows:
(1) The undersigned is either experienced in or knowledgeable with
regard to the business of the Company, or
1
<PAGE>
either alone or with the undersigned's professional advisers is capable, by
reason of knowledge and experience in financial and business matters in general,
and investments in particular, of evaluating the merits and risks of an
investment in the Securities, and is able to bear the economic risk of the
investment and can otherwise be reasonably assumed to have the capacity to
protect the undersigned's own interests in connection with the investment in the
Securities. A "professional adviser" for purposes of this representation is a
person such as a lawyer, certified accountant, or registered investment adviser
who for a fee customarily makes investment decisions and recommendations relied
upon by other persons and who is unaffiliated with and not compensated by the
Company.
(2) The undersigned is an "accredited investor," as that term is
defined in Rule 501(a) under the Act. Specifically, the undersigned comes within
one of the following categories of accredited investors at the time of the sale
of the Securities to the undersigned (all dollar amounts having reference to
U.S. dollars):
a. Any corporation or partnership, not formed for the
specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
b. Any director, executive officer, or general partner of
the issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that
issuer;
c. Any natural person whose individual net worth, or joint
net worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
d. Any natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the
current year;
e. Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the Act; and
f. Any entity in which all of the equity owners are
accredited investors.
2
<PAGE>
(3) In evaluating the merits and risks of an investment in the
Securities, the undersigned has not relied upon the Company or the Company's
attorneys or advisers for legal or tax advice, and has, if desired, in all cases
sought the advice of the undersigned's own personal legal counsel and tax
advisers.
(4) The acquisition of the Securities by the undersigned is solely for
the undersigned's own account, for investment, and not with a view to, or to
offer or sell for an issuer in connection with, the distribution of the
Securities, or to participate or have a direct or indirect participation in any
such undertaking, or to participate or have a participation in the direct or
indirect underwriting of any such undertaking. The undersigned has no contract,
arrangement or understanding with the Company or any other person to participate
in the distribution of the Securities.
(5) The offer to sell the Securities was directly communicated to the
undersigned, and the undersigned was able to ask questions of and receive
answers concerning the terms of this transaction. At no time was the undersigned
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
(6) The undersigned has been advised that the Company's authorized
capital stock consists of 45,000,000 shares of Common Stock, par value $.01 per
share, and 5,000,000 shares of Preferred Stock, par value $.01 per share, each
with the following characteristics:
(a) Current Capitalization. Holders of Common Stock are entitled
to one vote, either in person or by proxy, for each share held of record on all
matters submitted to a vote of stockholders. Except as otherwise provided by
law, action can be taken by a majority of shares entitled to vote at a meeting.
Holders of Common Stock are entitled to dividends when and as they may be
declared by the Board of Directors out of funds legally available therefor, and,
in the event of liquidation or dissolution of the Company, are entitled to share
ratably in the assets of the Company remaining after payment of liabilities and
payment in respect of any preferred stock. Holders of Common Stock have no
conversion, preemptive or other subscription rights, and there are no redemption
or sinking fund provisions with respect to the Common Stock. The outstanding
shares of Common Stock of the Company are fully paid and nonassessable.
3
<PAGE>
The 5,000,000 authorized shares of Preferred Stock may be issued
from time to time in one or more series as determined by the Board of Directors
without any approval of stockholders. The Board of Directors has been authorized
to fix the designation, powers, preferences, and rights of the shares of each
such series and any qualifications, limitations or restrictions thereon.
Preferred Stock could be given voting and conversion rights which would dilute
the voting power and equity of holders of Common Stock and could rank prior to
the Common Stock or a newly created series of Preferred Stock with respect to
dividend rights, rights on liquidation or other rights.
(b) Intended Capitalization. Concurrent with the Conny
acquisition, the Company will issue to a lender a Warrant exercisable at $1.00
per share to purchase 17.5% of the Company on a fully diluted basis
(approximately 9,100,000 common shares). Since the Company does not have enough
authorized common shares to permit exercise of such a Warrant, the Company will
issue to the investor a warrant to purchase Series A Convertible Preferred Stock
which together with any warrant for common stock will convert automatically to
Common Stock equal to such 7,500,000 shares of common stock when additional
shares of common stock are authorized by the Company's shareholders.
(7) The undersigned has received and reviewed a copy of the Company's
annual report on Form 10-K for the fiscal year ended March 31, 1997; (b) the
Company's quarterly report on Form 10-Q for the quarter ended June 30, 1997; (c)
the Executive Summary describing the Conny transaction dated as of September 11,
1997 prepared by the Company; and (d) certain projections describing the Conny
transaction attached as Exhibit A. In addition to the foregoing, the undersigned
has had the opportunity to speak directly with officers of the Company
concerning the Company's business plan and operations, and has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.
(8) The undersigned represents and warrants to the Company that the
information contained in this Certificate is accurate, true, and complete, and
understands that an offer of the Securities will not be made to the undersigned
until this Certificate has been reviewed, and only then if the Company has
reasonable grounds to believe and actually believes that the undersigned has
such knowledge and experience in financial and business matters that the
undersigned is able to evaluate the merits and risks of an investment in the
Securities and that the undersigned is able to bear the economic risks of such
investment, and that the sale of Securities to the undersigned
4
<PAGE>
otherwise qualifies for exemption from registration under the Act and
appropriate state securities laws.
(9) The undersigned represents and warrants that it never has been
represented, guaranteed, or warranted to the undersigned by any officer or
director of the Company, their agents or employees or any other person in
connection with the Company, expressly or by implication, any of the following:
(a) The approximate or exact length of time that the undersigned
will be required to remain as the owner of the Securities;
(b) The exact amount of profit and/or amount or type of
consideration, profits or losses (including tax benefits) to be realized, if
any, by the Company;
(c) That the past performance or experience of the officers and
directors of the Company, or any other person connected with the Company can
predict the results of the ownership of the Securities or the overall success of
the Company.
(10) The undersigned represents and warrants that the undersigned has
been advised that:
(a) the sale of the Securities that the undersigned is purchasing
has not been registered under the Act, and the Securities must be held
indefinitely unless a transfer of the Securities is subsequently registered
under the Act or an exemption from such registration is available;
(b) the Securities that the undersigned is acquiring are
"restricted securities" as that term is defined in Rule 144 promulgated under
the Act;
(c) any and all certificates representing the Securities shall
bear an investment legend restricting the transfer of such Securities
(11) If the undersigned is a corporation or partnership, the person
executing this Agreement on behalf of such entity has all right, power and
authority to so execute and deliver this Agreement on behalf of such corporation
or partnership.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer to execute this Certificate effective as of this 30th day of September,
1997.
5
<PAGE>
CUMBERLAND ASSOCIATES
By: /s/ Gary Tynes (General Partner)
Its: (on behalf of LongView Partners-B)
6
<PAGE>
PURCHASER'S CERTIFICATE
DECORA INDUSTRIES, INC. PERSONAL AND CONFIDENTIAL
1 Mill Street
Fort Edward, New York 12828
Gentlemen:
The undersigned hereby makes application to purchase 46,000 shares of
the common stock of Decora Industries, Inc. (the "Company") for $.80 per share
for a total consideration of $36,800 upon the terms and conditions set forth
herein. The common shares of capital stock of the Company purchased hereunder
shall hereinafter be referred to collectively as the "Securities."
The undersigned understands that it is contemplated that the
Securities will not be registered under the Securities Act of 1933, as amended
(the "Act"), or the state blue sky laws. The undersigned also understands that
in order to assure that the offering (the "Offering") of the Securities will be
exempt from registration under the Act and various state securities laws, each
prospective offeree must have such knowledge and experience in financial and
business matters in order that such offeree is able to evaluate the risks and
merits of an investment in the Securities.
The undersigned understands that the information supplied in this
Certificate will be disclosed to no one other than the officers and directors of
the Company and/or to counsel or accountants for the Company without the
undersigned's consent, or unless it is necessary for the Company to use such
information to support the exemption from registration under the Act to be
claimed for the Offering.
For purposes of this Certificate, the undersigned represents and
warrants that the information supplied herein is true and correct as of a date
immediately prior to the undersigned's purchase of the Securities.
In order to induce the Company to extend an offer to purchase the
Securities to the undersigned as a prospective offeree of the Securities, the
undersigned represents and warrants as follows:
(1) The undersigned is either experienced in or knowledgeable with
regard to the business of the Company, or
1
<PAGE>
either alone or with the undersigned's professional advisers is capable, by
reason of knowledge and experience in financial and business matters in general,
and investments in particular, of evaluating the merits and risks of an
investment in the Securities, and is able to bear the economic risk of the
investment and can otherwise be reasonably assumed to have the capacity to
protect the undersigned's own interests in connection with the investment in the
Securities. A "professional adviser" for purposes of this representation is a
person such as a lawyer, certified accountant, or registered investment adviser
who for a fee customarily makes investment decisions and recommendations relied
upon by other persons and who is unaffiliated with and not compensated by the
Company.
(2) The undersigned is an "accredited investor," as that term is
defined in Rule 501(a) under the Act. Specifically, the undersigned comes within
one of the following categories of accredited investors at the time of the sale
of the Securities to the undersigned (all dollar amounts having reference to
U.S. dollars):
a. Any corporation or partnership, not formed for the
specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
b. Any director, executive officer, or general partner of
the issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that
issuer;
c. Any natural person whose individual net worth, or joint
net worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
d. Any natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the
current year;
e. Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the Act; and
f. Any entity in which all of the equity owners are
accredited investors.
2
<PAGE>
(3) In evaluating the merits and risks of an investment in the
Securities, the undersigned has not relied upon the Company or the Company's
attorneys or advisers for legal or tax advice, and has, if desired, in all cases
sought the advice of the undersigned's own personal legal counsel and tax
advisers.
(4) The acquisition of the Securities by the undersigned is solely for
the undersigned's own account, for investment, and not with a view to, or to
offer or sell for an issuer in connection with, the distribution of the
Securities, or to participate or have a direct or indirect participation in any
such undertaking, or to participate or have a participation in the direct or
indirect underwriting of any such undertaking. The undersigned has no contract,
arrangement or understanding with the Company or any other person to participate
in the distribution of the Securities.
(5) The offer to sell the Securities was directly communicated to the
undersigned, and the undersigned was able to ask questions of and receive
answers concerning the terms of this transaction. At no time was the undersigned
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
(6) The undersigned has been advised that the Company's authorized
capital stock consists of 45,000,000 shares of Common Stock, par value $.01 per
share, and 5,000,000 shares of Preferred Stock, par value $.01 per share, each
with the following characteristics:
(a) Current Capitalization. Holders of Common Stock are entitled
to one vote, either in person or by proxy, for each share held of record on all
matters submitted to a vote of stockholders. Except as otherwise provided by
law, action can be taken by a majority of shares entitled to vote at a meeting.
Holders of Common Stock are entitled to dividends when and as they may be
declared by the Board of Directors out of funds legally available therefor, and,
in the event of liquidation or dissolution of the Company, are entitled to share
ratably in the assets of the Company remaining after payment of liabilities and
payment in respect of any preferred stock. Holders of Common Stock have no
conversion, preemptive or other subscription rights, and there are no redemption
or sinking fund provisions with respect to the Common Stock. The outstanding
shares of Common Stock of the Company are fully paid and nonassessable.
3
<PAGE>
The 5,000,000 authorized shares of Preferred Stock may be issued
from time to time in one or more series as determined by the Board of Directors
without any approval of stockholders. The Board of Directors has been authorized
to fix the designation, powers, preferences, and rights of the shares of each
such series and any qualifications, limitations or restrictions thereon.
Preferred Stock could be given voting and conversion rights which would dilute
the voting power and equity of holders of Common Stock and could rank prior to
the Common Stock or a newly created series of Preferred Stock with respect to
dividend rights, rights on liquidation or other rights.
(b) Intended Capitalization. Concurrent with the Conny
acquisition, the Company will issue to a lender a Warrant exercisable at $1.00
per share to purchase 17.5% of the Company on a fully diluted basis
(approximately 9,100,000 common shares). Since the Company does not have enough
authorized common shares to permit exercise of such a Warrant, the Company will
issue to the investor a warrant to purchase Series A Convertible Preferred Stock
which together with any warrant for common stock will convert automatically to
Common Stock equal to such 7,500,000 shares of common stock when additional
shares of common stock are authorized by the Company's shareholders.
(7) The undersigned has received and reviewed a copy of the Company's
annual report on Form 10-K for the fiscal year ended March 31, 1997; (b) the
Company's quarterly report on Form 10-Q for the quarter ended June 30, 1997; (c)
the Executive Summary describing the Conny transaction dated as of September 11,
1997 prepared by the Company; and (d) certain projections describing the Conny
transaction attached as Exhibit A. In addition to the foregoing, the undersigned
has had the opportunity to speak directly with officers of the Company
concerning the Company's business plan and operations, and has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.
(8) The undersigned represents and warrants to the Company that the
information contained in this Certificate is accurate, true, and complete, and
understands that an offer of the Securities will not be made to the undersigned
until this Certificate has been reviewed, and only then if the Company has
reasonable grounds to believe and actually believes that the undersigned has
such knowledge and experience in financial and business matters that the
undersigned is able to evaluate the merits and risks of an investment in the
Securities and that the undersigned is able to bear the economic risks of such
investment, and that the sale of Securities to the undersigned
4
<PAGE>
otherwise qualifies for exemption from registration under the Act and
appropriate state securities laws.
(9) The undersigned represents and warrants that it never has been
represented, guaranteed, or warranted to the undersigned by any officer or
director of the Company, their agents or employees or any other person in
connection with the Company, expressly or by implication, any of the following:
(a) The approximate or exact length of time that the undersigned
will be required to remain as the owner of the Securities;
(b) The exact amount of profit and/or amount or type of
consideration, profits or losses (including tax benefits) to be realized, if
any, by the Company;
(c) That the past performance or experience of the officers and
directors of the Company, or any other person connected with the Company can
predict the results of the ownership of the Securities or the overall success of
the Company.
(10) The undersigned represents and warrants that the undersigned has
been advised that:
(a) the sale of the Securities that the undersigned is purchasing
has not been registered under the Act, and the Securities must be held
indefinitely unless a transfer of the Securities is subsequently registered
under the Act or an exemption from such registration is available;
(b) the Securities that the undersigned is acquiring are
"restricted securities" as that term is defined in Rule 144 promulgated under
the Act;
(c) any and all certificates representing the Securities shall
bear an investment legend restricting the transfer of such Securities
(11) If the undersigned is a corporation or partnership, the person
executing this Agreement on behalf of such entity has all right, power and
authority to so execute and deliver this Agreement on behalf of such corporation
or partnership.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer to execute this Certificate effective as of this 30th day of September,
1997.
5
<PAGE>
CUMBERLAND ASSOCIATES
By: /s/ Gary Tynes (General Partner)
Its: (on behalf of Edwin L. Cox)
6
<PAGE>
PURCHASER'S CERTIFICATE
DECORA INDUSTRIES, INC. PERSONAL AND CONFIDENTIAL
1 Mill Street
Fort Edward, New York 12828
Gentlemen:
The undersigned hereby makes application to purchase 37,000 shares of
the common stock of Decora Industries, Inc. (the "Company") for $.80 per share
for a total consideration of $29,600 upon the terms and conditions set forth
herein. The common shares of capital stock of the Company purchased hereunder
shall hereinafter be referred to collectively as the "Securities."
The undersigned understands that it is contemplated that the
Securities will not be registered under the Securities Act of 1933, as amended
(the "Act"), or the state blue sky laws. The undersigned also understands that
in order to assure that the offering (the "Offering") of the Securities will be
exempt from registration under the Act and various state securities laws, each
prospective offeree must have such knowledge and experience in financial and
business matters in order that such offeree is able to evaluate the risks and
merits of an investment in the Securities.
The undersigned understands that the information supplied in this
Certificate will be disclosed to no one other than the officers and directors of
the Company and/or to counsel or accountants for the Company without the
undersigned's consent, or unless it is necessary for the Company to use such
information to support the exemption from registration under the Act to be
claimed for the Offering.
For purposes of this Certificate, the undersigned represents and
warrants that the information supplied herein is true and correct as of a date
immediately prior to the undersigned's purchase of the Securities.
In order to induce the Company to extend an offer to purchase the
Securities to the undersigned as a prospective offeree of the Securities, the
undersigned represents and warrants as follows:
(1) The undersigned is either experienced in or knowledgeable with
regard to the business of the Company, or
1
<PAGE>
either alone or with the undersigned's professional advisers is capable, by
reason of knowledge and experience in financial and business matters in general,
and investments in particular, of evaluating the merits and risks of an
investment in the Securities, and is able to bear the economic risk of the
investment and can otherwise be reasonably assumed to have the capacity to
protect the undersigned's own interests in connection with the investment in the
Securities. A "professional adviser" for purposes of this representation is a
person such as a lawyer, certified accountant, or registered investment adviser
who for a fee customarily makes investment decisions and recommendations relied
upon by other persons and who is unaffiliated with and not compensated by the
Company.
(2) The undersigned is an "accredited investor," as that term is
defined in Rule 501(a) under the Act. Specifically, the undersigned comes within
one of the following categories of accredited investors at the time of the sale
of the Securities to the undersigned (all dollar amounts having reference to
U.S. dollars):
a. Any corporation or partnership, not formed for the
specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
b. Any director, executive officer, or general partner of
the issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that
issuer;
c. Any natural person whose individual net worth, or joint
net worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
d. Any natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the
current year;
e. Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the Act; and
f. Any entity in which all of the equity owners are
accredited investors.
2
<PAGE>
(3) In evaluating the merits and risks of an investment in the
Securities, the undersigned has not relied upon the Company or the Company's
attorneys or advisers for legal or tax advice, and has, if desired, in all cases
sought the advice of the undersigned's own personal legal counsel and tax
advisers.
(4) The acquisition of the Securities by the undersigned is solely for
the undersigned's own account, for investment, and not with a view to, or to
offer or sell for an issuer in connection with, the distribution of the
Securities, or to participate or have a direct or indirect participation in any
such undertaking, or to participate or have a participation in the direct or
indirect underwriting of any such undertaking. The undersigned has no contract,
arrangement or understanding with the Company or any other person to participate
in the distribution of the Securities.
(5) The offer to sell the Securities was directly communicated to the
undersigned, and the undersigned was able to ask questions of and receive
answers concerning the terms of this transaction. At no time was the undersigned
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.
(6) The undersigned has been advised that the Company's authorized
capital stock consists of 45,000,000 shares of Common Stock, par value $.01 per
share, and 5,000,000 shares of Preferred Stock, par value $.01 per share, each
with the following characteristics:
(a) Current Capitalization. Holders of Common Stock are entitled
to one vote, either in person or by proxy, for each share held of record on all
matters submitted to a vote of stockholders. Except as otherwise provided by
law, action can be taken by a majority of shares entitled to vote at a meeting.
Holders of Common Stock are entitled to dividends when and as they may be
declared by the Board of Directors out of funds legally available therefor, and,
in the event of liquidation or dissolution of the Company, are entitled to share
ratably in the assets of the Company remaining after payment of liabilities and
payment in respect of any preferred stock. Holders of Common Stock have no
conversion, preemptive or other subscription rights, and there are no redemption
or sinking fund provisions with respect to the Common Stock. The outstanding
shares of Common Stock of the Company are fully paid and nonassessable.
3
<PAGE>
The 5,000,000 authorized shares of Preferred Stock may be issued from
time to time in one or more series as determined by the Board of Directors
without any approval of stockholders. The Board of Directors has been authorized
to fix the designation, powers, preferences, and rights of the shares of each
such series and any qualifications, limitations or restrictions thereon.
Preferred Stock could be given voting and conversion rights which would dilute
the voting power and equity of holders of Common Stock and could rank prior to
the Common Stock or a newly created series of Preferred Stock with respect to
dividend rights, rights on liquidation or other rights.
(b) Intended Capitalization. Concurrent with the Conny
acquisition, the Company will issue to a lender a Warrant exercisable at $1.00
per share to purchase 17.5% of the Company on a fully diluted basis
(approximately 9,100,000 common shares). Since the Company does not have enough
authorized common shares to permit exercise of such a Warrant, the Company will
issue to the investor a warrant to purchase Series A Convertible Preferred Stock
which together with any warrant for common stock will convert automatically to
Common Stock equal to such 7,500,000 shares of common stock when additional
shares of common stock are authorized by the Company's shareholders.
(7) The undersigned has received and reviewed a copy of the Company's
annual report on Form 10-K for the fiscal year ended March 31, 1997; (b) the
Company's quarterly report on Form 10-Q for the quarter ended June 30, 1997; (c)
the Executive Summary describing the Conny transaction dated as of September 11,
1997 prepared by the Company; and (d) certain projections describing the Conny
transaction attached as Exhibit A. In addition to the foregoing, the undersigned
has had the opportunity to speak directly with officers of the Company
concerning the Company's business plan and operations, and has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.
(8) The undersigned represents and warrants to the Company
that the information contained in this Certificate is accurate, true, and
complete, and understands that an offer of the Securities will not be made to
the undersigned until this Certificate has been reviewed, and only then if the
Company has reasonable grounds to believe and actually believes that the
undersigned has such knowledge and experience in financial and business matters
that the undersigned is able to evaluate the merits and risks of an investment
in the Securities and that the undersigned is able to bear the economic risks of
such investment, and that the sale of Securities to the undersigned
4
<PAGE>
otherwise qualifies for exemption from registration under the Act and
appropriate state securities laws.
(9) The undersigned represents and warrants that it never has been
represented, guaranteed, or warranted to the undersigned by any officer or
director of the Company, their agents or employees or any other person in
connection with the Company, expressly or by implication, any of the following:
(a) The approximate or exact length of time that the undersigned
will be required to remain as the owner of the Securities;
(b) The exact amount of profit and/or amount or type of
consideration, profits or losses (including tax benefits) to be realized, if
any, by the Company;
(c) That the past performance or experience of the officers and
directors of the Company, or any other person connected with the Company can
predict the results of the ownership of the Securities or the overall success of
the Company.
(10) The undersigned represents and warrants that the undersigned has
been advised that:
(a) the sale of the Securities that the undersigned is purchasing
has not been registered under the Act, and the Securities must be held
indefinitely unless a transfer of the Securities is subsequently registered
under the Act or an exemption from such registration is available;
(b) the Securities that the undersigned is acquiring are
"restricted securities" as that term is defined in Rule 144 promulgated under
the Act;
(c) any and all certificates representing the Securities shall
bear an investment legend restricting the transfer of such Securities
(11) If the undersigned is a corporation or partnership, the person
executing this Agreement on behalf of such entity has all right, power and
authority to so execute and deliver this Agreement on behalf of such corporation
or partnership.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer to execute this Certificate effective as of this 30th day of September,
1997.
5
<PAGE>
CUMBERLAND ASSOCIATES
By: /s/ Gary Tynes (General Partner)
Its: (on behalf of Ralco, Inc.)
6
