As filed with the Securities and Exchange Commission on June , 1996
-
Registration Statement No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
______________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
______________________
CPAC, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 2364 Leicester Road 16-0961040
(State or other juris- Leicester, New York 14481 (I.R.S. Employer
diction of incorpora- (716)382-3223 Identification No.)
tion or organization)
(Address, including zip code, and
telephone number, including area code,
of registrant's principal executive offices)
______________________
ROBERT OPPENHEIMER, Secretary
CHAMBERLAIN, D'AMANDA,
OPPENHEIMER & GREENFIELD
1600 Crossroads Office Building
Rochester, New York 14614
(716) 232-3730
______________________
(Name, address, including zip code, and
telephone number, including area code,
of registrant's principal executive offices)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO TIME
AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box. [ ]
Page 1 of 58 Pages
Exhibit Index appears on Page16.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum Amount
Title of Each Amount Offering Aggregate of Regis-
Class of Securities to be Price Per Offering tration
to be Registered Registered1 Share2 Price2 Fee2
_____________________________________________________________________________
Common Stock,
$.01 Par Value 1,875,000 $10.75 $20,156,250 $6,950.43
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
1
Also registered herunder pursuant to Rule 416(a) are an indeterminate
number of shares of Common Stock which may be issued pursuant to stock splits or
stock dividends. The amount registered reflects the distribution of one (1)
additional share of Common Stock for each four (4) shares of Common Stock to
shareholders of record on May 3, 1996 as the result of a stock split approved by
the Company's Board of Directors on April 17, 1996.
2
Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and based upon prices on the Nasdaq National Market on June 14,
1996. The average of the high and low prices reported as of June14, 1996, based
upon a high bid price of $11 and low bid price of $10.50, was $10.75. The total
offering price for 1,875,000 shares was
$20,156,250. Based upon the statutory formula contained in Section 6 (b), the
Registration Fee is $6,950.43.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWfUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE , 1996
CPAC, INC.
1,875,000 COMMON SHARES
(PAR VALUE, $.01 PER SHARE)
This Prospectus ("Prospectus") relates to 1,875,000 shares (the `Shares'') of
common stock, $.0l par value per share ("Common Stock"), of CPAC, Inc. , a New
York corporation (the "Company"). The Shares may be offered by certain
shareholders of the Company (the `Selling Shareholders'' ) from time to time in
transactions in the over-the-counter market, in negotiated transactions or a
combination of such methods of sale at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. On June 14, 1996, the average of the high and low bid prices per share
of the Common Stock on the National Market System, as reported by the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ") was
$10.75. The Selling Shareholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts or commissions from the Selling
Shareholders and/or the purchasers of the Shares for whom such broker-dealers
may act as agents or to whom they sell as principals, or both. See "Selling
Shareholders" and `Manner of Distribution".
All of the Shares offered hereunder are to be sold by the Selling Shareholders.
None of the proceeds from the sale of the Shares by the Selling Shareholders
will be received by the Company. The Company has agreed to bear all expenses
(other than discounts or commissions) in connection with the registration and
sale of the Shares being offered by the Selling Shareholders. The Company has
agreed to indemnify the Selling Shareholders against certain liabilities,
including certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1996.
----------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files Annual, Quarterly and Current Reports (on Forms 10-K, 10-Q and
8-K, respectively), proxy statements utilized in the solicitation of
shareholders as well as other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company under the Exchange Act can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's Regional
Office at 7 World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission, Washington D.C. at prescribed rates. The Common Stock of the
Company is traded on the NASDAQ National Market System. Reports and other
information concerning the Company may be inspected at the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with any amendments thereto, the "Registration Statement") filed with
the Commission under the Securities Act relating to the Shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which have been omitted in accordance with the rules and regulations of the
Commission. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to such copy of such contract or other document filed as an
exhibit to the Registration Statement, each statement being qualified in all
respects by such reference and the exhibits and schedules thereto. For further
information regarding the Company and the Shares offered hereby, reference is
hereby made to such Registration Statement and such exhibits and schedules,
which may be inspected without charge at the office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of which may be obtained,
from the Commission upon payment of the fees prescribed by the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
In accordance with the requirements of the Exchange Act, the Company
periodically files certain reports and other information with the Commission.
The following documents filed with the Commission are hereby incorporated in
this Prospectus by reference:
1. The Company's Annual Report on Form 10-K/A for the fiscal year ended March
31, 1996;
2. The description of the Company's Common Stock contained in Item 12 of the
Company's Registration Statement on Form S-18, dated March 30, 1981, (No. 2-
70719-NY).
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the Shares shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge to each person to whom this Prospectus
is delivered, upon the written or oral request of any such person, a copy of any
or all of the documents incorporated by reference into this Prospectus, other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference herein other than as exhibits to such documents. Such
requests should be addressed to CPAC, Inc., 2364 Leicester Road, Leicester, New
York 14481, Attention: Wendy F. Clay, Vice-President of Administration.(716-382-
3223).
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or the
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make an offer or
solicitation. Except where otherwise indicated, this Prospectus speaks as of the
effective date of the Registration Statement. The delivery of this Prospectus
shall not, under any circumstances, create any implication that there has been
no change in the affairs of the Company since the date hereof.
THE COMPANY
The Company is a leader in the production of specialty chemicals used in the
imaging industry and cleaning and personal care markets. The Company
manufactures and markets cleaning and personal care products for household and
commercial use through its Fuller Brush subsidiary. The Company also produces
processing chemicals and pollution control equipment for the global imaging
market. The Company's Common Stock is traded over the NASDAQ National Market
System under the ticket symbol `CPAK''.
The Company's subsidiaries and divisions are:
CLEANING AND PERSONAL CARE
THE FULLER BRUSH COMPANY STANLEY HOME PRODUCTS
One Fuller Way 50 Payson Avenue
Great Bend, KS 67503 Easthampton, MA 01027
IMAGING
ALLIED DIAGNOSTIC IMAGING RESOURCES, INC. CPAC EUROPE, N.V.
5440 Oakbrook Parkway Industriepark Klein Gent
Norcross, GA 30093 2200 Herentals, Belgium
PRS, INC. CHIMIFOTO ORNANO
2364 Leicester Road CPAC Italia, S.r.l.
Leicester, NY 14481 Via Bolzano 29
20127 Milano, Italy
TREBLA CHEMICAL CO. CPAC EQUIPMENT DIVISION
8417 Chapin Industrial Drive 2364 Leicester Road
St. Louis, MO 63114 Leicester, New York 14481
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares offered
hereby.
SELLING SHAREHOLDERS
On April 17, 1996, the Company's Board of Directors voted to issue one(1)
additional share for each four(4) shares of the Company's Common Stock issued as
of May 3, 1996. The distribution date for such stock split was May 15, 1996. The
Shares offered for sale by this Prospectus include those issued as a result of
the stock split.
The following table shows the names of the Selling Shareholders and the number
of Shares being offered by them. To the best of the Company's knowledge,
assuming all of the Shares being offered hereby are sold and no Selling
Shareholder chooses to acquire additional Common Stock during the offering
period, the only Selling Shareholders who will own any shares of Common Stock
after completion of the offering is Cook & Cie, S. A. Such shareholder will own
117,577 shares, or 1.6%, of the issued and outstanding shares of Common Stock.
Selling Shareholders Number of Shares Owned and Being Offered
American Diversified Services, Inc. 31,250
Bear, Stearns, Custodian for Jill W. Lampe, IRA l2,500
Chilton International 40,625
Chilton Investment Partners, L.P. 40,625
Chilton Opportunity Trust 12,500
Cook & Cie S.A. 253,750
CPAC Investors, L.L.C. 1,250,000
DLJSC as Custodian for Rosa Sheehan IRA 2,500
DLJSC as Custodian for Joseph E. Sheehan IRA 12,500
Cathy M. Fine 15,625
Hambros Bank Ltd. 62,500
The Henley Group Ltd. 31,250
Steven Lampe 12,500
Anthony W. Roberts 37,500
Joseph E. Sheehan 12,500
Joseph E. Sheehan III Trust 12,500
Zita M. Sheehan Trust 12,500
William J. Vanden Heuvel 6,250
Ralph Worthington 4th - IRA 15,625
_________
TOTAL 1,875,000
All of the Shares being offered by the Selling Shareholders were acquired by
them from the Company in three private placements, the first closing on
September 25, 1995, the second closing on October 4, 1995, and the third
placement closing on December 28, 1995. The total number of Shares sold in the
three placements was 1,500,000 and this number has been increased to 1,875,000
as the result of the stock split distributed to shareholders on May 15, 1996.
The purchase price for each placement was $11.00 per share. In the subscription
agreements executed in connection with the placements (`Subscription
Agreements'), the Company granted demand registration rights to the private
placement purchasers and agreed to bear all expenses (other than commissions and
discounts of underwriters, dealers or agents) in connection with the
registration and sale of the Shares being offered by the Selling Shareholders.
See `Manner of Distribution''.
On April 29 and May 24, 1996, the holders of all 1,875,000 placement Shares
requested, in writing, that the Company use its best efforts to effectuate a
registration of such Shares for resale under the Securities Act. In the light
of this request and in accordance with the Subscription Agreements, the Company
has filed with the Securities and Exchange Commission a Registration Statement
with respect to the resale of the Shares from time to time in the over-the-
counter market or in privately negotiated transactions and has agreed to prepare
and file such amendments and supplements to the Registration Statement as may be
necessary to keep the Registration Statement effective until all of the Shares
offered hereby have been sold pursuant hereto. This Prospectus forms a part of
the Registration Statement.
Except for J. E. Sheehan & Company, Inc., none of the Selling Shareholders has
held any position or office or has had any other material relationship in the
past three years with the Company. 54.1486% of one of the Selling Shareholders,
CPAC Investors, L.L.C., is owned by The Relatasi Trust. A beneficiary of The
Relatasi Trust, S. Daniel Abraham, owns directly 312,500 shares of the Company's
Common Stock. Such shares were included in a registration statement filed by the
Company which became effective October 28, 1992 and which, as amended, remains
in effect.
J. E. Sheehan & Company, Inc. was the principal underwriter for the Company's
initial public offering of its Common Stock in March,1981 and during the past
three years has served as the Company's investment banker. J. E. Sheehan &
Company, Inc. acted as the placement agent on behalf of the Company in
connection with the sale of the Shares to the Selling Shareholders. In
consideration of the services provided by J. E. Sheehan & Company, Inc., as
placement agent, the Company paid J. E. Sheehan & Company, Inc. a fee of 6% of
the gross purchase price of the Shares sold by the Company to the Selling
Shareholders and 50,000 stock options with an exercise price of $ 11.60 per
share (as adjusted for anti-dilution provisions in stock option agreement).
Concurrently with the filing of this Registration Statement, the Company is
filing a separate registration statement on Form S-2 to register the 50,000
option shares above, as well as to register for resale an additional 48,048
option shares owned by J. E. Sheehan & Company, Inc., as adjusted for the May
15, 1996 stock split distribution.
MANNER OF DISTRIBUTION
The Shares covered hereby may be offered and sold from time to time by the
Selling Shareholders. The Selling Shareholders will act independently of the
Company and may act independently of each other in making decisions with respect
to the timing, manner and size of each sale. Such sales may be made in the
over-the-counter market or otherwise, at prices related to the then current
market price or in negotiated transactions, including one or more of the
following methods: (a) purchases by a broker-dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (b) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (c) block trades in which the broker-dealer so engaged will attempt to sell
the Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction. The Company has been advised by the
Selling Shareholders that they have not made any arrangements relating to the
distribution of the Shares covered by this Prospectus. In effecting sales,
broker-dealers engaged by the Selling Shareholders may arrange for other broker-
dealers to participate. Broker-dealers may receive commissions or discounts
from Selling Shareholders in amounts to be negotiated. J. E. Sheehan & Company,
Inc. may participate in the distribution of the Shares in any of the capacities
described above, except as prohibited under Rules 10b-6 and 10b-7 under the
Exchange Act, as described below. The Subscription Agreements provide that the
Company shall indemnify the Selling Shareholders for losses, claims and
liabilities arising out of or which are based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement or this
Prospectus or an omission or alleged omission of a material fact in violation of
federal or applicable state securities laws, except in certain circumstances.
Each of the Selling Shareholders have agreed to indemnify the Company, its
officers and directors for any liabilities under the Securities Act insofar as
such liabilities result from any untrue statement in the Registration Statement
in reliance on information provided to the Company from the Selling Shareholders
in writing specifically for use in the Registration Statements.
In offering the Shares covered hereby, the Selling Shareholders and any broker-
dealers and any other participating broker-dealers who execute sales for the
Selling Shareholders may be deemed to be `underwriters'' within the meaning of
the Securities Act in connection with such sales, and any profits realized by
the Selling Shareholders and the compensation of such broker-dealer may be
deemed to be underwriting discounts and commissions. In addition, any Shares
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus. None of the Shares
covered by this Prospectus presently qualify for sale pursuant to Rule 144.
The Company has advised each of the Selling Shareholders that during such time
as he may be engaged in a distribution of Shares covered hereby, he is required
to comply with Rules l0b-6 and l0b-7 under the Exchange Act as described below
and, in connection therewith, that he may not engage in any stabilization
activity in connection with the Company's Common Stock, is required to furnish
to each purchaser and/or broker-dealer through which Shares covered hereby may
be offered copies of this Prospectus, and may not bid for or purchase any
securities of the Company or attempt to induce any person to purchase any
securities of the Company except as permitted under the Exchange Act. Each of
the Selling Shareholders has agreed to inform the Company when the distribution
of his Shares is completed.
Rule l0b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule l0b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
This offering will terminate on the date on which all Shares offered hereby have
been sold by the Selling Shareholders.
In order to comply with certain states' securities laws, if applicable, the
Shares offered hereby will be sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, the Shares may not be sold in
certain states unless they have been registered or qualified for sale in such
state or an exemption from regulation or qualification is available and is
complied with. Pursuant to the terms of the Subscription Agreements, the
Company intends to use its best efforts to register or qualify the Shares for
resale or to seek an exemption from registration or qualification in any state
required in order to facilitate as to a particular sale, the resale of the
Shares by the Selling Shareholders.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 10,000,000 shares of
Common Stock, $.0l par value per share. On June 14, 1996 there were issued and
outstanding 7,344,003 shares of Common Stock. The general terms governing the
Common Stock are summarized below. A more complete description of the Common
Stock is contained in the Company's Registration Statement filed in connection
with the Company's initial public offering on Form S-18, dated March 30, 1981.
On April 17, 1996, the Company's Board of Directors voted to amend the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock by 10,000,000 shares to 20,000,000 authorized shares. Under
applicable provisions of the Business Corporation Law of New York State and the
governing corporate provisions of the NASD, shareholder approval of the
amendment is required by a majority vote of shares present, either in person or
by proxy, at a duly called meeting of shareholders. The Board authorized
management to present the proposal for shareholder approval at the annual
meeting of shareholders to be held on August 7, 1996.
At its April 17, 1996 meeting, the Board also voted to split the Company's
Common Stock on a basis of one (1) additional share of Common Stock for each
four (4) shares of Common Stock issued. The record date for such stock split
was May 3, 1996 and the number of Shares being offered pursuant to this
Prospectus includes the Shares newly issued as a result of the split. The
distribution date for such stock split was May 15, 1996.
At its April 17, 1996 meeting, the Board also voted to increase the number of
shares of Common Stock reserved for issuance under its Executive Long-Term Stock
Investment Plan by 600,000 shares, that is from 350,000 to 950,000 shares.
Under applicable provisions of the Business Corporation Law of New York State
and certain rules pertaining to the qualification of stock option plans
promulgated under the Internal Revenue Code and by the Commission, shareholder
approval of the proposal is required by a majority vote of shares present,
either in person or by proxy, at a duly called meeting of shareholders. The
Board authorized management to present the proposal for shareholder approval at
the annual meeting of shareholders to be held on August 7, 1996.
At its meeting held on June 5, 1996, the Board approved a Non-Employee
Directors' Stock Option Plan whereby members of the Board of Directors who are
not current or former employees of the Company or any of its subsidiaries will
receive a one-time grant of a stock option for 10,000 shares and an annual grant
of a stock option for 3,000 shares of Company's Common Stock. The exercise
price is equal to the fair market value of the Company's Common Stock on the
date of grant. Under applicable provisions of the Business Corporation Law of
New York State and the governing corporate provisions of the NASD, shareholder
approval of the proposal is required by a majority vote of shares present,
either in person or by proxy, at a duly called meeting of shareholders. The
Board authorized management to present the proposal for shareholder approval at
the annual meeting of shareholders to be held on August 7, 1996.
Common Stock
The Shares being offered pursuant to this Prospectus are 1,875,000 Shares of the
Company's Common Stock. Holders of shares of Common Stock are entitled to one
vote per share on all matters to be voted on by shareholders and are not
entitled to cumulative voting in the election of directors, which means that the
holders of a majority of the shares voting for the election of directors can
elect all the directors then standing for election, if they choose to do so.
The holders of Common Stock are entitled to share ratably in such dividends as
may be declared on shares of Common Stock from time to time by the Board of
Directors, in its discretion from funds legally available therefor. The holders
of shares of Common Stock are entitled to share prorata in distributions to
shareholders upon liquidation of the Company. Holders of shares of Common Stock
have no preemptive or other subscription or conversion rights and there are no
redemption provisions with respect to such shares.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the Company
by Chamberlain, D'Amanda, Oppenheimer & Greenfield.
EXPERTS
The consolidated balance sheets as of March 31, 1996 and 1995 and the
consolidated statements of operations, changes in shareholders' equity and cash
flows for each of the three years in the period ended March 31, 1996
incorporated by reference in this Prospectus from CPAC, Inc.'s Form 10-K/A for
the period ended March 31, 1996, have been incorporated herein in reliance on
the report of Coopers & Lybrand, independent accountants, given on the authority
of that firm as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
A reasonable estimate of the costs to be incurred in connection with this
Registration Statement and Prospectus, to be borne entirely by the Registrant,
is as follows:
Securities and Exchange Commission Registration Fee $6,950.43
Accounting Fees and Expenses 2,000.00
Legal Fees and Expenses 3,000.00
Printing and Publication 5,000.00
Miscellaneous 5,000.00
__________
TOTAL $21,950.43
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The New York Business Corporation Law, under which the Company is organized, was
amended in 1986 to allow corporations to provide for indemnification beyond that
provided in the statute itself. Pursuant to this statutory authority, the Board
of Directors adopted an amendment to the Company's By-Laws to broaden the
indemnification provisions thereof consistent with the changes in the Business
Corporation Law. The current indemnification provisions, found in Article X of
the Company's amended By-Laws, are as follows:
Subject only to the exception that no indemnification may be made to or on
behalf of any director or officer if a judgment or other final adjudication
adverse to the director or officer that establishes that his acts were committed
in bad faith or were the result of active and deliberate dishonesty and were
material to the cause of action so adjudicated, or that he personally gained in
fact a financial profit or other advantage to which he was not legally entitled,
the Company shall indemnify any person who was or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the fact
that he is or was a director, officer, employee or agent of the Company, or is
or was serving at the request of the Company as a director, officer, employee or
agent of another company, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, to the fullest extent under the circumstances
permitted by the Sections 721-726 of said Business Corporation Law. Such
indemnification (unless ordered by a court) shall be made as authorized in a
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because there is no
judgment or other final adjudication adverse to the director or officer that
establishes that his acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so
adjudicated, or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled. Such determination shall be
made (1) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit, or proceeding, or (2) if
such quorum is not obtainable, or even if obtainable a quorum of disinterested
directors so directs, (a) by independent legal counsel in a written opinion that
indemnification is proper, or (b) by the stockholders. The foregoing right of
indemnification shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
Section 5(g)(2) of the Form of the Subscription Agreement filed as Exhibit 4.1
and the Subscription Agreements dated September 25 and December 28, 1995 filed
as Exhibits 4.2 and 4.3 to this Registration Statement provide for the
indemnification of the Company, its directors and officers, and any controlling
person of the Company (within the meaning of the Securities Act) by each Selling
Shareholder against any losses, claims, damages, liabilities and expenses
resulting from any untrue statement of material fact contained in the
Registration Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or omission is contained in any information or
affidavit so furnished by such Selling Shareholder. The obligation to indemnify
is several, not joint and several, among the Selling Shareholders and the
liability of each Selling Shareholder is in proportion to and limited to the net
amount received by each Selling Shareholder from the sale of the Shares pursuant
to this Registration Statement.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to officers, directors or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
ITEM 16. EXHIBITS
The following exhibits have been filed (except where otherwise indicated) as
part of this Registration Statement:
EXHIBIT NUMBER EXHIBIT
4.1 Form of Subscription Agreement dated
September 28, 1995, between CPAC, Inc. and each
purchaser of Common Stock utilized in connection
with the private placement which closed on
October 4, 1995.
4.2 Subscription Agreement dated September 22, 1995,
between CPAC, Inc. and CPAC Investors, L.LC.
4.3 Subscription Agreement dated December 28, 1995
between CPAC, Inc. and CPAC Investors, L.L.C.
5 Opinion of Chamberlain, D'Amanda, Oppenheimer &
Greenfield
23.1 Consent of Coopers & Lybrand L.L.P
23.2 Consent of Chamberlain, D'Amanda, Oppenheimer &
Greenfield (contained in Exhibit 5 hereto)
24 Powers of Attorney relating to subsequent amendments
(included on the signature page of this Registration
Statement)
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act, of
1934 and further, hereby undertakes to deliver or cause to be delivered to each
person to whom the Prospectus is sent or given, the latest quarterly report of
the Registrant that is specifically incorporated by reference in the Prospectus
to provide interim financial information required to be presented by Article 3
of Regulation S-X.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant, or otherwise, the Securities and Exchange Commission has informed
the Registrant that such indemnification is against public policy as expressed
in the Act and is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will submit to a
court of appropriate jurisdiction the question of whether such indemnification
by itself is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, at the City of Rochester, State of New York, on this day of
June , 1996.
CPAC, INC.
By: __________________________________
Thomas N. Hendrickson, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on June , 1996 by the following persons in
the capacities indicated. Each person whose signature appears below constitutes
and appoints Robert Oppenheimer and Richard B. Sullivan, and each of them
individually, his true and lawful attorney-in-fact and agent, with full power of
substitution and revocation, for him and in his name, place and stead, in any
and all capabilities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, may lawfully do or cause to be done by virtue hereof.
NAME CAPACITY
President, Chief Executive Officer,
Treasurer and Director
___________________________ (Principal Executive Officer)
Thomas N. Hendrickson
___________________________ Senior Vice President and Director
Robert C. Isaacs
___________________________ Secretary and Director
Robert Oppenheimer
___________________________ Director
Seldon T. James, Jr.
___________________________ Director
John C. Burton
Chief Financial Officer (Principal
Financial and
___________________________ Accounting Officer)
Thomas J. Weldgen
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OR EXHIBIT PAGE
4.1 Form of Subscription Agreement dated September 28, 17
1995, between CPAC, Inc. and each purchaser of Common
Stock utilized in connection with the private placement
which closed on October 4, 1995.
4.2 Subscription Agreement dated September 22, 1995 between 33
CPAC, Inc. and CPAC Investors, L.LC. .
4.3 Subscription Agreement dated December 28, 1995, 45
between CPAC, Inc. and CPAC Investors, L.L.C.
5 Opinion of Chamberlain, D'Amanda, Oppenheimer & 57
Greenfield
23.1 Consent of Coopers & Lybrand L.L.P 58
23.2 Consent of Chamberlain, D'Amanda, Oppenheimer & 57
Greenfield (contained in Exhibit 5 hereto)
24 Powers of Attorney relating to subsequent amendments 15
(included on the signature page of this
Registration Statement)
EXHIBIT 4.1
September 28, 1995
Board of Directors
CPAC, Inc.
2364 Leicester Road
Leicester, New York 14481
Re: Subscription to Purchase _________ Shares of CPAC, Inc. Common Stock,
$.01 par value per share
Gentlemen:
(1) Subscription:
The Purchaser hereby subscribes to purchase _________ shares of the
$.01 par value common stock of CPAC, Inc. ("Shares") at $11.00 per Share and
hereby tenders payment for the subscribed for number of Shares by certified
check, bank draft or Federal Funds wire transfer made payable to CPAC, Inc. (the
"Company") in the amount of $________. In connection with this subscription, the
Purchaser hereby executes this Subscription Agreement and hereby acknowledges
that the Purchaser and/or the Purchaser's authorized representatives have
received, read, reviewed, understand and are familiar with:
(i)the Company's Annual Report (Form 10-K) filed with the Securities
and Exchange Commission for the fiscal year ended March 31, 1995;
(ii)the Company's Annual Report and Definitive Proxy Statement
distributed to shareholders in connection with the annual meeting
of shareholders held August 9, 1995;
(iii)Quarterly Report (Form 10-Q) filed with the Securities and Exchange
Commission for the quarter ended June 30, 1995;
The Purchaser further acknowledges that, except as set forth in such
reports, proxy statement, documents and other information made available by the
Company as described above, no representations or warranties have been made to
the Purchaser, or to the Purchaser's authorized representatives by the Company,
or by any person acting on behalf of the Company, with respect to the offer or
sale of the Shares and/or the economic, tax, or any other aspects or
consequences of a purchase of the Shares and/or the investment made thereby.
Further, the Purchaser has not relied upon any information concerning the
Company, written or oral, other than that contained in the aforementioned
reports, proxy statements, documents, or other information.
The Purchaser hereby acknowledges that the Purchaser and/or the
Purchaser's authorized representatives have had an opportunity to ask questions
of, and receive answers from persons acting on behalf of the Company to verify
the accuracy and completeness of the information set forth in such reports,
proxy statement, documents, and other information prior to sale and the
Purchaser hereby acknowledges that the Purchaser and/or the Purchaser's
authorized representatives have not requested the Company to provide any
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy and
completeness of the information made available.
(2) Purchaser's Representations and Warranties:
The Purchaser further represents and warrants to the Company:
(a)The Shares are being issued to the Purchaser by the Company for
investment only, for the Purchaser's own account, and are not being
purchased by the Purchaser with a view to distribution of such
Shares, or for the offer and/or sale in connection with any
distribution thereof. The Purchaser is not participating, directly
or indirectly, in an underwriting of the Shares or in any similar
undertaking. The Purchaser has no present plans to enter into any
contract, undertaking, agreement or arrangement which would entail
an underwriting of such Shares or any similar distribution thereof;
(b)The Purchaser is an "accredited investor" as that term is defined
in Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission, in that
(i) the undersigned is a natural person whose net worth or
joint net worth, taking the Purchaser's spouse into consideration, at the time
of the Purchaser's purchase of these Shares herein, exceeds One Million Dollars
($1,000,000), or
(ii) the undersigned is a natural person whose income in each of
the last two years exceeded Two Hundred Thousand Dollars ($200,000) (Three
Hundred Thousand Dollars [$300,000] joint income taking the Purchaser's spouse
into consideration) and the undersigned has a reasonable expectation of reaching
the same income level in this current year; or
(iii)as otherwise defined in Regulation D.
(c)The Purchaser understands that there is no guarantee of profits or
against loss as a result of purchasing the Shares and the Purchaser
hereby states that the Purchaser can afford a complete loss of the
investment in such Shares. The Purchaser further warrants that the
Purchaser's present financial condition is such that the Purchaser
has no present or perceived future need to dispose of any portion
of the Shares to satisfy any existing or contemplated undertaking,
obligation, need or indebtedness. Consequently, the Purchaser
represents that the Purchaser has sufficient liquid assets to pay
the full purchase price of the Shares, has adequate means for
providing for the Purchaser's current needs and possible
contingencies and has no current need to liquidate any of the
Purchaser's investment in the Company.
(d)The Purchaser has been represented by such legal counsel and other
advisors, each of whom has been personally selected by the
Purchaser, as the Purchaser has found necessary to consult,
concerning the purchase of the Shares, and such representation has
included an examination of applicable documents and an analysis of
all relevant tax, financial, recording and securities law aspects
of an investment in the Shares. The Purchaser, the Purchaser's
counsel, advisors, and such other persons with whom the Purchaser
has found it necessary or advisable to consult, have represented to
the Purchaser that they have knowledge or experience in business
and financial matters to evaluate the information set forth in the
aforementioned reports, proxy statement, documents and other
information made available by the Company, the risks associated
with this investment, and to make an informed investment decision
with respect hereto. To the extent that the Purchaser has found it
necessary to consult with any such counsel and/or advisors
concerning the purchase of the Shares, the Purchaser has relied
upon their advice and counsel in making such investment decision.
(e)The Purchaser is a resident of the jurisdiction set forth below the
Purchaser's name on the signature page of this Subscription
Agreement.
(3) Company's Representations and Warranties
The Company represents and warrants to the Purchaser:
(a)the information contained in the reports, proxy statement,
documents and other information made available by the Company as
described in paragraph (1) of this Subscription Agreement contain
no untrue statements of material fact or omit to state a material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading;
(b)as of the date of the execution of this Subscription Agreement and
closing of the Subscription, there have been no material, adverse
changes in the Company's operations or financial condition since
the applicable dates of the aforementioned reports, proxy
statement, documents, and other information distributed by the
Company.
(4) Securities Law Restrictions on Transfers
The Purchaser understands that the offer and/or sale of the Shares to the
Purchaser is not required to be registered under the Securities Act of 1933 (the
"1933 Act") by reason of a specific exemption for the offer and sale of the
Shares under the provisions of Regulation D promulgated by the Securities and
Exchange Commission. The Purchaser further understands that, except as provided
in paragraph (5) below, the Company has not agreed to register the Shares for
distribution and/or resale in accordance with the provisions of the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), or to register the Shares
for distribution and/or resale under any applicable state securities laws.
Hence, it is the Purchaser's understanding that by virtue of the provisions of
certain rules respecting "restricted securities" promulgated under such federal
and/or state laws, unless such secondary distribution and/or resale is
registered as provided in paragraph (5) below, the Shares which the Purchaser is
purchasing by virtue of this Subscription Agreement must be held indefinitely
and may not be sold, transferred, pledged, hypothecated or otherwise encumbered
for value, unless and until such secondary distribution and/or resale is
subsequently registered under such federal and/or state securities laws or
unless an exemption from registration is available, in which case the Purchaser
still may be limited as to the amount of the Shares that may be sold,
transferred, pledged and/or encumbered for value.
The Purchaser, therefore, agrees that any certificates evidencing the
Shares received by the Purchaser by virtue of this Subscription Agreement shall
be stamped or otherwise imprinted with a conspicuous legend to give notice of
the securities law transfer restrictions set forth herein and the Purchaser
acknowledges that the Company may cause stop transfer orders to be placed on the
Purchaser's account. The legend shall be in substantially the following form:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE COMMON SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE
WITH ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND IS IN COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS.
(5) Registration Rights
(a) Registration Rights; Requests for Registration.
(1) The Purchaser understands that the Company is offering,
concurrently with its sale to the Purchaser, up to Five Hundred Thousand
(500,000) Shares of its $.01 par value common stock (including the Shares
subscribed for by the Purchaser) to other "accredited investors" in a private
placement of such stock who shall be granted registration rights which are, in
substance, identical to those granted to Purchaser by this Section (5). The
holders of a majority of the aggregate number of shares actually sold in such
offering ("Registerable Shares") shall be entitled at any time after the
expiration of the six month period immediately following September 30, 1995 to
make a written request that the Company register for resale under the 1933 Act,
all or any number of the Registerable Shares, provided that with respect to any
such request, the Company shall not be required by the registration rights
granted under this section (5) to file a Registration Statement or cause a filed
Registration Statement to become effective if such filing, in compliance with
and pursuant to the regulations and rules contained in Regulation S-X dealing
with the age of financial statements at the effective date of a registration
statement, would require the Company to include in such Registration Statement
audited financial statements of the Company which, but for such request, would
not otherwise have been required, in compliance with such applicable rules and
regulations, to have been furnished by the Company in the normal course of its
business and operations.
Within 30 days after receipt of any such request, the Company
will give written notice of such request to all other holders of Registerable
Shares and will include in such registration all Registerable Shares with
respect to which the Company has received written requests for inclusion therein
within 15 days after the Company's notice is mailed. The registration requested
pursuant to this paragraph (5)(a)(1) is referred to herein as the "Demand
Registration".
For purposes of this right to demand registration, a registration
will not count as the Demand Registration until (i) it has become effective and
(ii) the holders of the Registerable Shares are able to sell the Registerable
Shares requested to be included in such registration. The Demand Registration
shall be made on a short registration form (on Form S-3 or any similar short
registration form) whenever the Company is permitted under applicable rules
promulgated by the Securities and Exchange Commission to use such short form.
(2) Whenever the Company proposes to register (either on its
own behalf or on behalf of holders of its equity securities other than the
holders of Registerable Shares in their capacity as holders of the Registerable
Shares) any of its equity securities under the 1933 Act (other than pursuant to
the Demand Registration or registration of equity securities to be sold under
one or more of the Company's employee benefit plans on Form S-8), and the
registration form to be used may be used for a registration of the Registerable
Shares, the Company will give prompt written notice to all holders of the
Registerable Shares of its intention to effect such a registration and will
include in such registration all Registerable Shares with respect to which the
Company has received written request by the holders thereof for inclusion
therein within 15 days after the mailing of the Company's notice. Any
registrations requested pursuant to this paragraph (5)(a)(2) are referred to
herein as "Piggyback Registrations".
(b) The Demand Registration
(1) Priority of Demand Registration
The Company will not include in the Demand Registration any other
of its equity securities without the written consent of the holders of a
majority of the Registerable Shares requesting such registration. If a Demand
Registration is an underwritten offering, and the managing underwriters of such
offering advise the Company in writing that, in their opinion, the number of
Registerable Shares and other equity securities to be included exceeds the
number of Registerable Shares and other equity securities which can be sold in
such offering, the Company will include in such registration prior to the
inclusion of any other of the Company's equity securities, the number of
Registerable Shares requested to be included which in the opinion of such
underwriters can be sold, pro rata among the respective holders based on a
fraction, with respect to each holder, the numerator of which is the number of
Registerable Shares requested to be sold by such holder, and the denominator of
which is the number of Registerable Shares requested to be included in such
Demand Registration by all holders of the Registerable Shares.
(2) Restrictions on Demand Registration.
The Company will not be obligated to effect more than two Demand
Registrations and shall be so obligated only if the holders of the majority of
the Registerable Shares so request such registration. Further, the Company will
not be obligated to effect the Demand Registration within three months after the
effective date of a registration in which the holders of the Registerable Shares
exercised their "piggyback registration" rights pursuant to paragraph (5)(a)(2)
hereof.
(3) Selection of Underwriters
The Company shall have the exclusive right to select the
underwriter(s), including the exclusive right to designate the managing
underwriter(s), with respect to the Demand Registration offering. Nothing
herein shall prevent the holders of the Registerable Shares who have requested
the Demand Registration from submitting a recommendation(s) with respect to any
underwriters and/or managing underwriters.
(4) Expenses of the Demand Registration
The Company shall pay all expenses incident to the Demand
Registration, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Company
in connection with the Demand Registration. The holders of the Registerable
Shares requesting the Demand Registration will be required to pay their pro rata
share of any underwriter and/or brokerage commissions, attributable to the
inclusion of the Registerable Shares in the Demand Registration.
(c) Piggyback Registration.
(1) Priority on Primary Registrations.
If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that, in their opinion, the number of equity securities
requested to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration (i) the
equity securities the Company proposes to sell, (ii) the Registerable Shares
requested to be included in such Piggyback Registration, pro rata among the
holders of such Registerable Shares based upon a fraction, with respect to each
holder, the numerator of which is the number of Registerable Shares requested to
be sold by such holder, and the denominator of which is the total number of
Registerable Shares requested to be included in such Piggyback Registration by
all holders of the Registerable Shares and (iii) any other equity securities
requested to be included in such registration.
(2) Priority on Secondary Registrations.
If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's equity securities (other than
holders of the Registerable Shares in their capacity as holders of the
Registerable Shares), and the managing underwriters advise the Company in
writing that, in their opinion, the number of equity securities requested to be
included in such registration exceeds the number which can be sold in such
offering, the Company will include in such registration (i) the equity
securities to be sold in the secondary offering by the holders of the Company's
equity securities, (ii) the Registerable Shares requested to be included in such
Piggyback Registration, pro rata among the holders thereof based upon a
fraction, with respect to each holder, the numerator of which is the number of
Registerable Shares requested to be sold by such holder, and the denominator of
which is the number of Registerable Shares requested to be included in such
Piggyback Registration by all holders of Registerable Shares, and (iii) any
other equity securities requested to be included in such registration.
(3) Expenses of Piggyback Registrations
The Company shall pay all expenses incident to the Piggyback
Registration, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent, certified public accountants, underwriters
(excluding discounts and commissions) and any other persons retained by the
Company in connection with such Piggyback Registrations. The holders of the
Registerable Shares requesting the Piggyback Registration will be required to
pay their pro rata share of any underwriter and/or brokerage commissions
attributable to the inclusion of the Registerable Shares in the Piggyback
Registration.
(d) Other Registrations
If the Company has previously filed a registration statement with
respect to the Registerable Shares pursuant to a Demand Registration or pursuant
to a Piggyback Registration and if such previous registration has not been
withdrawn or abandoned, the Company will not file or cause to be effective any
other registration statement with respect to any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the 1933 Act (except with respect to securities to be sold
under other demand registration rights granted to one or more accredited
investors or under any of the Company's employee benefit plans registered on
Form S-8), whether on its own behalf or at the request of any holder or holders
of such securities, until a period of at least six months has elapsed from the
effective date of such previous Demand or Piggyback Registration.
(e) Holdback Agreement.
(1) Each holder of Registerable Shares agrees not to effect any
public sale or distribution of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to and the ninety day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten Registration),
unless the underwriters managing the registered Demand or Piggyback public
offering otherwise agree. This restriction shall not apply in the case of
Registerable Shares which have been registered previously in either the Demand
or a Piggyback Registration.
(2) The Company agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the ninety day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or with respect to sales of its securities
under any employee benefit plan pursuant to registration on Form S-8), unless
the underwriters managing the registered Demand or Piggyback public offering
otherwise agree.
(f) Scope of Registration Rights; Registration Procedures.
The Company's registration obligations under this Subscription
Agreement are "best efforts" obligations only. Whenever the holders of
Registerable Shares have requested that any Registerable Shares be registered
(either Demand or Piggyback), the Company will use its best efforts to effect
the registration and the sale of such Registerable Shares with the intended
method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
(1) Prepare and file with the Securities and Exchange
Commission a registration statement (which shall be, to the extent the Company
is permitted to do so under applicable rules promulgated by the Securities and
Exchange Commission, a short-form registration statement) with respect to such
Registerable Shares and use its best efforts to cause such registration
statement to become effective;
(2) Prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective under Rule 415 promulgated by the Securities
and Exchange Commission and comply with the provisions of the 1933 Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended method of
distribution by the sellers thereof set forth in such registration statement;
(3) Furnish to each seller of the Registerable Shares such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus, if any) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registerable
Shares owned by such seller;
(4) Use its best efforts to register or qualify such
Registerable Shares in such jurisdictions as any seller reasonably requests and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registerable Shares owned by such seller provided that the
Company will not be required to
(i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subparagraph;
(ii) subject itself to taxation in any jurisdiction where
it would not otherwise be subject to taxation but for this subparagraph;
(iii) consent to general service of process in any
jurisdiction where it would not otherwise be subject to process but for
this subparagraph;
(5) notify each seller of such Registerable Shares, at any time
when a prospectus relating thereto is required to be delivered under the 1933
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, and, at the request of
any such seller, the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registerable Shares, such prospectus will not contain an untrue statement of
material fact or omit to state any fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading;
(6) enter into any such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of the Registerable Shares being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
registered Registerable Shares;
(7) make available for inspection by any seller of the
Registerable Shares, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement.
(g) Indemnification.
(1) The Company agrees to indemnify, to the extent permitted by
law, each holder of the Registerable Shares, its officers and directors and each
person who controls such holder (within the meaning of the 1933 Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue statement
of material fact contained in any registration statement, prospectus or
preliminary prospectus or any amendment thereto or supplement thereto or any
omission of a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading except insofar as the same are caused by or contained
in any information furnished in writing to the Company by such holder expressly
for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments of supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same;
(2) In connection with any registration statement in which a
holder of Registerable Shares is participating, each such holder will furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify the Company, its
directors and officers and each person who controls the Company (within the
meaning of the 1933 Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any statement
thereof or supplement thereto or any omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder; provided that the obligation
to indemnify as set forth herein will be several, not joint and several, among
such holders of Registerable Shares and the liability of each such holder of
Registerable Shares will be in proportion to and limited to the net amount
received by such holder from the sale of the Registerable Shares pursuant to
such registration statement;
(3) Any person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party
of any claim with respect to which such person seeks indemnification, and
(ii) unless in such indemnified party's reasonable
judgment, a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent, but
such consent will not be unreasonably withheld. An indemnifying party
who is not entitled to or elects not to assume the defense of the claim,
will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim unless in the reasonable judgment of any
indemnified party, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect
to such claim.
(6) Notices
Any notices or other communication required or permitted herein shall be
sufficiently given if sent by registered or certified mail, postage prepaid,
return receipt requested, and if to the Company, to the address set forth above,
and if to the Purchaser, to the address set forth below the Purchaser's
signature hereto, or to such other addresses as the Company or the Purchaser
shall designate to the other by notice in writing.
(7) Successors and Assigns
This subscription for Shares and Subscription Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and to the successors
and assigns of the Company and to the personal and legal representatives of the
Purchaser, and to the extent applicable, his spouse and children.
(8) Applicable Law
Except when an interpretation of federal and/or state securities laws is
necessary or such law governs, this Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
(9) Certification with Respect to Federal Dividend and Interest Payments;
Back-up Withholding
Under penalties of perjury, the Purchaser hereby certified to the Company
as follows:
(a) The number shown below is the Purchaser's Social
Security or other taxpayer identification number and such number is the
Purchaser's correct taxpayer identification number; and
(b) the Purchaser is not subject to back-up withholding
either because the Purchaser has not been notified by the Internal
Revenue Service that the Purchaser is subject to back-up withholding as a
result of failure to report all interest or dividends, or the Internal
Revenue Service has notified the Purchaser that the Purchaser is no
longer subject to back-up withholding.
IN WITNESS WHEREOF, the Purchaser has executed and delivered this
Subscription Agreement as of this ________ day of September, 1995.
Subscription: ___________ (________) Shares of the $.01 par value common
stock of CPAC, Inc. at $11.00 per Share.
_______________________________ _____________________________________
Signature of Subscriber Residence and/or Business Address
_______________________________ _____________________________________
Typed or Printed Name City State Zip
_______________________________
Social Security or Tax
Identification No. of Subscriber
ACCEPTED:
CPAC, INC.
Dated: ________________________ By: ________________________________
Thomas N. Hendrickson
President and Chief Executive
Officer
AMENDMENT NO. 1 TO SUBSCRIPTION AGREEMENT
WHEREAS,____________________(the "Purchaser") has entered into a
Subscription Agreement ("Subscription Agreement") subscribing for the purchase
of _____________ shares of the $.01 par value common stock of CPAC, Inc. (the
"Company") at a purchase price of $11.00 per common share; and
WHEREAS, Purchaser understands that the Company has consummated a sale of
one million (1,000,000) shares of its $.01 par value common stock to an
accredited investor ("Accredited Investor") at $11.00 per common share; and
WHEREAS, such Accredited Investor was granted demand registration rights
having priority to those granted to the Purchaser in the limited circumstances
of an underwritten offering; and
WHEREAS, the Purchaser has agreed to accept subordination in the
application of the demand registration rights granted to the Purchaser in the
Subscription Agreement in the limited circumstances of an underwritten offering.
NOW THEREFORE, it is agreed that the Subscription Agreement is hereby
amended to reflect such subordination and as amended remains in full force and
effect:
1. Section 5(a) of the Subscription Agreement is hereby amended, and
as amended, shall read as follows:
(5) Registration Rights
(a) Registration Rights; Requests for Registration.
(1) The Purchaser understands that the Company is offering,
concurrently with its sale to the Purchaser, up to Five Hundred Thousand
(500,000) Shares of its $.01 par value common stock (including the Shares
subscribed for by the Purchaser) to other "accredited investors" in a private
placement of such stock who shall be granted registration rights which are, in
substance, identical to those granted to Purchaser by this Section (5). The
holders of a majority of the aggregate number of shares actually sold in such
offering ("Registerable Shares") shall be entitled at any time after the
expiration of the six month period immediately following September 30, 1995 to
make a written request that the Company register for resale under the 1933 Act,
all or any number of the Registerable Shares, provided that with respect to any
such request, the Company shall not be required by the registration rights
granted under this section (5) to file a Registration Statement or cause a filed
Registration Statement to become effective if such filing, in compliance with
and pursuant to the regulations and rules contained in Regulation S-X dealing
with the age of financial statements at the effective date of a registration
statement, would require the Company to include in such Registration Statement
audited financial statements of the Company which, but for such request, would
not otherwise have been required, in compliance with such applicable rules and
regulations, to have been furnished by the Company in the normal course of its
business and operations.
Within 30 days after receipt of any such request, the Company
will give written notice of such request to all other holders of Registerable
Shares and will include in such registration all Registerable Shares with
respect to which the Company has received written requests for inclusion therein
within 15 days after the Company's notice is mailed. The registration requested
pursuant to this paragraph (5)(a)(1) is referred to herein as the "Demand
Registration".
For purposes of this right to demand registration, a registration
will not count as the Demand Registration until (i) it has become effective and
(ii) the holders of the Registerable Shares are able to sell the Registerable
Shares requested to be included in such registration. The Demand Registration
shall be made on a short registration form (on Form S-3 or any similar short
registration form) whenever the Company is permitted under applicable rules
promulgated by the Securities and Exchange Commission to use such short form.
Within 30 days after receipt of the request set forth above, the
Company will give written notice of such request to the Accredited Investor and
will include in such registration all shares with respect to which the Company
has received a written request for inclusion therein from such Accredited
Investor within 15 days after the Company's notice is mailed.
(2) Whenever the Company proposes to register (either on its
own behalf or on behalf of holders of its equity securities other than the
holders of Registerable Shares in their capacity as holders of the Registerable
Shares) any of its equity securities under the 1933 Act including the shares
sold to the Accredited Investor (other than pursuant to registrations of equity
securities to be sold under one or more of the Company's employee benefit plans
on Form S-8), and the registration form to be used may be used for a
registration of the Registerable Shares, the Company will give prompt written
notice to all holders of the Registerable Shares of its intention to effect such
a registration and will include in such registration all Registerable Shares
with respect to which the Company has received written request by the holders
thereof for inclusion therein within 30 days after the mailing of the Company's
notice. Any registrations requested pursuant to this paragraph (5)(a)(2) are
referred to herein as "Piggyback Registrations".
2. Section 5(b) of the Subscription Agreement is hereby amended, and
as amended, shall read as follows:
(b) The Demand Registration
(1) Priority of Demand Registration
The Company will not include in the Demand Registration any
other of its equity securities without the written consent of the holders of a
majority of the Registerable Shares requesting such registration. If a Demand
Registration is an underwritten offering, and the managing underwriters of such
offering advise the Company in writing that, in their opinion, the number of
Registerable Shares, the shares requested to be included by the Accredited
Investor and other equity securities to be included, exceeds the number of
Registerable Shares, the shares requested to be included by the Accredited
Investor and other equity securities which can be sold in such offering, the
Company will include in such registration prior to the inclusion of the
Registerable Shares and any other of the Company's equity securities, the shares
requested to be sold by the Accredited Investor without regard to the inclusion
of any Registerable Shares and/or other equity securities. If in the opinion of
the managing underwriters a number of Registerable Shares requested to be
included in such registration can be sold, such Registerable Shares shall be
included, pro rata among the respective holders based on a fraction, with
respect to each holder, the numerator of which is the number of Registerable
Shares requested to be sold by such holder, and the denominator of which is the
number of Registerable Shares requested to be included in such Demand
Registration by all holders of the Registerable Shares.
(2) Restrictions on Demand Registration.
The Company will not be obligated to effect more than two
Demand Registrations and shall be so obligated only if the holders of the
majority of the Registerable Shares so request such registration. Further, the
Company will not be obligated to effect the Demand Registration within three
months after the effective date of a registration in which the holders of the
Registerable Shares exercised their "piggyback registration" rights pursuant to
paragraph (5)(a)(2) hereof.
(3) Selection of Underwriters
The Company shall have the exclusive right to select the
underwriter(s), including the exclusive right to designate the managing
underwriter(s), with respect to the Demand Registration offering. Nothing
herein shall prevent the holders of the Registerable Shares who have requested
the Demand Registration from submitting a recommendation(s) with respect to any
underwriters and/or managing underwriters.
(4) Expenses of the Demand Registration
The Company shall pay all expenses incident to the Demand
Registration, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Company
in connection with the Demand Registration. The holders of the Registerable
Shares requesting the Demand Registration will be required to pay their pro rata
share of any underwriter and/or brokerage commissions, attributable to the
inclusion of the Registerable Shares in the Demand Registration.
3. Section 5(c) of the Subscription Agreement is hereby amended, and
as amended, shall read as follows:
(c) Piggyback Registration.
(1) Priority on Primary Registrations.
If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that, in their opinion, the number of equity securities
requested to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration (i) the
equity securities the Company proposes to sell, (ii) the Accredited Investor's
shares and the Registerable Shares requested to be included in such Piggyback
Registration, pro rata among the holders thereof based upon a fraction, with
respect to each holder, the numerator of which is the number of the shares
requested to be sold by such holder, and the denominator of which is the total
number of the Accredited Investor's and the Registerable Shares requested to be
included in such Piggyback Registration by the Accredited Investor and all
holders of the Registerable Shares and (iii) any other equity securities
requested to be included in such registration.
(2) Priority on Secondary Registrations.
If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's equity securities (other than
the Accredited Investor and the holders of the Registerable Shares in their
capacity as holders of the Registerable Shares), and the managing underwriters
advise the Company in writing that, in their opinion, the number of equity
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company will include in such
registration (i) the equity securities to be sold in the secondary offering by
the holders of the Company's equity securities, (ii) the Accredited Investor's
and the Registerable Shares requested to be included in such Piggyback
Registration, pro rata among the holders thereof based upon a fraction, with
respect to each holder, the numerator of which is the number of shares requested
to be sold by such holder, and the denominator of which is the total number of
the Accredited Investor's and the Registerable Shares requested to be included
in such Piggyback Registration by the Accredited Investor and by all holders of
Registerable Shares, and (iii) any other equity securities requested to be
included in such registration.
(3) Expenses of Piggyback Registrations
The Company shall pay all expenses incident to the
Piggyback Registration, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, and fees and disbursements
of counsel for the Company and all independent, certified public accountants,
underwriters (excluding discounts and commissions) and any other persons
retained by the Company in connection with such Piggyback Registrations. The
holders of the Registerable Shares requesting the Piggyback Registration will be
required to pay their pro rata share of any underwriter and/or brokerage
commissions attributable to the inclusion of the Registerable Shares in the
Piggyback Registration.
IN WITNESS WHEREOF, the Purchaser has executed and delivered this
Amendment No. 1 to the Subscription Agreement as of this ___ day of September,
1995.
________________________________ _____________________________________
Signature of Subscriber Residence and/or Business Address
________________________________ _____________________________________
Typed or Printed Name City State Zip
________________________________
Social Security or Tax
Identification No. of Subscriber
ACCEPTED:
CPAC, INC.
Dated:__________________________ By: _____________________________________
Thomas N. Hendrickson
President and Chief Executive
Officer
EXHIBIT 4.2
September 22, 1995
Board of Directors
CPAC, Inc.
2364 Leicester Road
Leicester, New York 14481
Re: Subscription to Purchase 1,000,000 Shares of CPAC, Inc. Common Stock,
$.01 par value per share
Gentlemen:
(1) Subscription:
The Purchaser, CPAC Investors, L.L.C., a limited liability company
organized under the laws of the State of Delaware (the "Purchaser"), hereby
subscribes to purchase 1,000,000 shares ("Shares") of the $.01 par value common
stock of CPAC, Inc. at $11.00 per Share and hereby tenders payment for the
subscribed number of Shares by certified check, bank draft or Federal Funds wire
transfer made payable to CPAC, Inc. (the "Company") in the amount of
$11,000,000. In connection with this subscription, the Purchaser hereby
executes this Subscription Agreement and hereby acknowledges that the Purchaser
and/or the Purchaser's authorized representatives have received from the Company
or its counsel, read, reviewed, understand and are familiar with:
(i)the Company's Annual Report (Form 10-K), as well as any amendments
thereof, filed with the Securities and Exchange Commission for the
fiscal years ended March 31, 1992 through and including 1995;
(ii)the Company's annual reports and definitive proxy statements
distributed to shareholders in connection with the annual meeting
of shareholders held in August 1992 through and including 1995;
(iii)Quarterly Reports (Form 10-Q) filed with the Securities and
Exchange Commission for the quarters ended June 30, 1992 through
and including June 30, 1995;
(iv)Current Reports (Form 8-K, and any amendments thereto) filed with
the Securities and Exchange Commission for reportable events taking
place on October 13, 1994 and January 16, 1995;
(v)Copies of the Company's Certificate of Incorporation, all
amendments thereto and the Company's By-Laws and all amendments
thereto;
(vi)The Closing Books maintained by the Company with respect to the
acquisition of The Fuller Brush Company on October 13, 1994 as well
as copies of certain documentation detailing the environmental
problems associated with the Company's acquisition of the Great
Bend facility and arrangements for the remediation thereof;
(vii)Material contracts executed in connection with the Company's
licensing arrangement with Stanhome, Inc.;
(viii)The responses of Company counsel to the Company's request to
provide the Company's independent auditors with certain information
in connection with the preparation of the Company's audited
financial statements for the fiscal years ended March 31, 1992
through and including 1995; and
(ix)Certain information, both oral and written, with respect to
developments pertaining to the Company's ongoing operations.
The Purchaser further acknowledges that, except as set forth in such
reports, proxy statements, documents and other information made available by the
Company as described above as well as those representations made by the Company
herein and in the Stock Purchase Agreement between S. Daniel Abraham and the
Company dated as of September 15, 1995, no representations or warranties have
been made to the Purchaser, or to the Purchaser's authorized representatives by
the Company, or by any person acting on behalf of the Company, with respect to
the offer or sale of the Shares and/or the economic, tax, or any other aspects
or consequences of a purchase of the Shares and/or the investment made thereby.
Further, the Purchaser has not relied upon any information concerning the
Company, written or oral, other than that contained in the aforementioned
reports, proxy statements, documents, or other information.
The Purchaser hereby acknowledges that the Purchaser and/or the
Purchaser's authorized representatives have had an opportunity to ask questions
of, and receive answers from persons acting on behalf of the Company to verify
the accuracy and completeness of the information set forth in such reports,
proxy statements, documents, and other information prior to sale and the
Purchaser hereby acknowledges that the Purchaser and/or the Purchaser's
authorized representatives have not requested the Company to provide any
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy and
completeness of the information made available.
(2) Purchaser's Representations and Warranties:
The Purchaser further represents and warrants to the Company:
(a)The Shares are being issued to the Purchaser by the Company for
investment only, for the Purchaser's own account, and are not being
purchased by the Purchaser with a view to distribution of such
Shares, or for the offer and/or sale in connection with any
distribution thereof. The Purchaser is not participating, directly
or indirectly, in an underwriting of the Shares or in any similar
undertaking. The Purchaser has no present plans to enter into any
contract, undertaking, agreement or arrangement which would entail
an underwriting of such Shares or any similar distribution thereof;
(b)The Purchaser is an "accredited investor" as that term is defined
in Rule 501 of Regulation D, promulgated by the Securities and
Exchange Commission.
(c)The Purchaser understands that there is no guarantee of profits or
against loss as a result of purchasing the Shares and the Purchaser
hereby states that the Purchaser can afford a complete loss of the
investment in such Shares. The Purchaser further warrants that the
Purchaser's present financial condition is such that the Purchaser
has no present or perceived future need to dispose of any portion
of the Shares to satisfy any existing or contemplated undertaking,
obligation, need or indebtedness. Consequently, the Purchaser
represents that the Purchaser has sufficient liquid assets to pay
the full purchase price of the Shares, has adequate means for
providing for the Purchaser's current needs and possible
contingencies and has no current need to liquidate any of the
Purchaser's investment in the Company.
(d)The Purchaser has been represented by such legal counsel and other
advisors, each of whom has been personally selected by the
Purchaser, as the Purchaser has found necessary to consult,
concerning the purchase of the Shares, and such representation has
included an examination of applicable documents and an analysis of
all relevant tax, financial and securities law aspects of an
investment in the Shares. The Purchaser, the Purchaser's counsel,
advisors, and such other persons with whom the Purchaser has found
it necessary or advisable to consult, have represented to the
Purchaser that they have knowledge or experience in business and
financial matters to evaluate the information set forth in the
aforementioned reports, press releases and/or other public
information statements issued by the Company, the risks associated
with this investment, and to make an informed investment decision
with respect hereto. To the extent that the Purchaser has found it
necessary to consult with any such counsel and/or advisors
concerning the purchase of the Shares, the Purchaser has relied
upon their advice and counsel in making such investment decision.
(e)The Purchaser is a limited liability company organized under the
laws of the State of Delaware.
(3) Company's Representations and Warranties
The Company represents and warrants to the Purchaser:
(a)the information contained in the reports, proxy statements,
documents and other information made available by the Company as
described in paragraph (1) of this Subscription Agreement contain
no untrue statements of material fact or omit to state a material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading;
(b)as of the date of the execution of this Subscription Agreement and
closing of the Subscription, there have been no material, adverse
changes in the Company's assets, prospects, operations or financial
condition since the applicable dates of the aforementioned reports,
proxy statements, documents, and other information distributed by
the Company.
(4) Securities Law Restrictions on Transfers
The Purchaser understands that the offer and/or sale of the Shares to the
Purchaser is not required to be registered under the Securities Act of 1933 (the
"1933 Act") by reason of a specific exemption for the offer and sale of the
Shares under the provisions of Regulation D promulgated by the Securities and
Exchange Commission. The Purchaser further understands that, except as provided
in paragraph (5) below, the Company has not agreed to register the Shares for
distribution and/or resale in accordance with the provisions of the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), or to register the Shares
for distribution and/or resale under any applicable state securities laws.
Hence, it is the Purchaser's understanding that by virtue of the provisions of
certain rules respecting "restricted securities" promulgated under such federal
and/or state laws, unless such secondary distribution and/or resale is
registered as provided in paragraph (5) below, the Shares which the Purchaser is
purchasing by virtue of this Subscription Agreement must be held indefinitely
and may not be sold, transferred, pledged, hypothecated or otherwise encumbered
for value, unless and until such secondary distribution and/or resale is
subsequently registered under such federal and/or state securities laws or
unless an exemption from registration is available, in which case the Purchaser
still may be limited as to the amount of the Shares that may be sold,
transferred, pledged and/or encumbered for value.
The Purchaser, therefore, agrees that any certificates evidencing the
Shares received by the Purchaser by virtue of this Subscription Agreement shall
be stamped or otherwise imprinted with a conspicuous legend to give notice of
the securities law transfer restrictions set forth herein and the Purchaser
acknowledges that the Company may cause stop transfer orders to be placed on the
Purchaser's account. The legend shall be in substantially the following form:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE COMMON SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE
WITH ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND IS IN COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS.
(5) Registration Rights
(a) Registration Rights; Requests for Registration.
(1) The Purchaser shall be entitled at any time after the
expiration of the six month period immediately following September 30, 1995 to
make a written request that the Company register for resale under the 1933 Act,
all or any number of the Shares, provided that with respect to any such request,
the Company shall not be required by the registration rights granted under this
Section (5) to file a Registration Statement or cause a filed Registration
Statement to become effective if such filing, in compliance with and pursuant to
the regulations and rules contained in Regulation S-X dealing with the age of
financial statements at the effective date of a registration statement, would
require the Company to include in such Registration Statement audited financial
statements of the Company which, but for such request, would not otherwise have
been required, in compliance with such applicable rules and regulations, to have
been furnished by the Company in the normal course of its business and
operations. Any registration requested pursuant to this paragraph (5)(a)(1) is
referred to herein as the "Demand Registration".
The Purchaser understands that the Company is offering,
concurrently with its sale to the Purchaser, up to Five Hundred Thousand
(500,000) of its $.01 par value common stock to other "accredited investors" in
a private placement of such stock. The Purchaser further understands that any
such other investors shall be granted rights which, if a majority of the
aggregate number of those shares sold so request, would enable the holders
thereof to request registration of their shares (the "Registerable Shares").
Within thirty days after receipt of the Purchaser's registration request, the
Company will give written notice of such request to all the holders of
Registerable Shares and will include in such registration all Registerable
Shares with respect to which the Company has received written requests for
inclusion therein within 15 days after the Company's notice is mailed.
For purposes of the Purchaser's right to demand registration, a
registration will not count as a Demand Registration until (i) it has become
effective and (ii) the Purchaser is able to sell the Shares requested to be
included in such registration. Any Demand Registration shall be made on a short
registration form (on Form S-3 or any similar short registration form) whenever
the Company is permitted under applicable rules promulgated by the Securities
and Exchange Commission to use such short form.
(2) Whenever the Company proposes to register (either on its
own behalf or on behalf of holders of its equity securities other than the
Shares) any of its equity securities under the 1933 Act including the
Registerable Shares (other than pursuant to the registrations of equity
securities to be sold under one or more of the Company's employee benefit plans
on Form S-8), and the registration form to be used may be used for a
registration of the Shares, the Company will give prompt written notice to
Purchaser and to the holders of the Registerable Shares of its intention to
effect such a registration and will include in such registration, the
Purchaser's and all Registerable Shares with respect to which the Company has
received written request by the Purchaser and by the holders of the Registerable
Shares for inclusion therein within 30 days after the mailing of the Company's
notice. Any registrations requested pursuant to this paragraph (5)(a)(2) are
referred to herein as "Piggyback Registrations".
(b) The Demand Registration
(1) Priority of Demand Registration
The Company will not include in the Demand Registration any
other of its equity securities without the written consent of the Purchaser. If
a Demand Registration is an underwritten offering, and the managing underwriters
of such offering advise the Company in writing that, in their opinion, the
number of the Shares, the Registerable Shares and other equity securities to be
included exceeds the number of the Shares, Registerable Shares and other equity
securities which can be sold in such offering, the Company will include in such
registration prior to the inclusion of the Registerable Shares and any other of
the Company's equity securities, the Shares without regard to the inclusion of
any Registerable Shares and/or other equity securities. If in the opinion of
the managing underwriters a number of Registerable Shares requested to be
included in such registration can be sold (in addition to all of the Shares
requested to be sold), such Registerable Shares shall be included pro rata among
the respective holders thereof based on a fraction, with respect to each holder,
the numerator of which is the number of Registerable Shares requested to be sold
by such holder, and the denominator of which is the number of Registerable
Shares requested to be included in such Demand Registration by all holders of
the Registerable Shares.
(2) Restrictions on Demand Registration.
The Company will not be obligated to effect more than two
Demand Registrations. Further, the Company will not be obligated to effect any
Demand Registration within three months after the effective date of a
registration in which the Purchaser exercised its "piggyback registration"
rights pursuant to paragraph (5)(a)(2) hereof and all of the Shares requested by
the Purchaser to be included in the registration were so included.
(3) Selection of Underwriters
The Company shall have the exclusive right to select the
underwriter(s), including the exclusive right to designate the managing
underwriter(s), with respect to any Demand Registration offering, provided that
such selection is acceptable to the Purchaser, which acceptance shall not be
unreasonably withheld.
(4) Expenses of the Demand Registration
The Company shall pay all expenses incident to any Demand
Registration, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Company
in connection with any Demand Registration. The Purchaser will be required to
pay its pro rata share of any underwriter and/or brokerage commissions
attributable to the inclusion of the Shares in the Demand Registration.
(c) Piggyback Registration.
(1) Priority on Primary Registrations.
If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that, in their opinion, the number of equity securities
requested to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration (i) the
equity securities the Company proposes to sell, (ii) the Shares and the
Registerable Shares requested to be included in such Piggyback Registration, pro
rata among the holders thereof, based upon a fraction, with respect to each
holder, the numerator of which is the number of shares requested to be sold by
such holder, and the denominator of which is the total number of the Purchaser's
and the Registerable Shares requested to be included in such Piggyback
Registration by the Purchaser and by all holders of the Registerable Shares and
(iii) any other equity securities requested to be included in such registration.
(2) Priority on Secondary Registrations.
If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's equity securities (other than
the Purchaser or the holders of the Registerable Shares in their capacity as the
Purchaser or as holders of the Registerable Shares), and the managing
underwriters advise the Company in writing that, in their opinion, the number of
equity securities requested to be included in such registration exceeds the
number which can be sold in such offering, the Company will include in such
registration (i) the equity securities to be sold in the secondary offering by
the holders of the Company's equity securities requesting such registration,
(ii) the Purchaser's Shares and the Registerable Shares requested to be included
in such Piggyback Registration, pro rata among the holders thereof based upon a
fraction, with respect to each holder, the numerator of which is the number of
shares requested to be sold by such holder and the denominator of which is the
total number of the Purchaser's and the Registerable Shares requested to be
included in such Piggyback Registration by the Purchaser and by all holders of
Registerable Shares, and (iii) any other equity securities requested to be
included in such registration.
(3) Expenses of Piggyback Registrations
The Company shall pay all expenses incident to the
Piggyback Registration, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, and fees and disbursements
of counsel for the Company and all independent, certified public accountants,
underwriters (excluding discounts and commissions) and any other persons
retained by the Company in connection with such Piggyback Registrations. The
Purchaser will be required to pay its pro rata share of any underwriter and/or
brokerage commissions attributable to the inclusion of the Shares in the
Piggyback Registration.
(d) Other Registrations
If the Company has previously filed a registration statement with
respect to the Shares pursuant to a Demand Registration and if such previous
registration has not been withdrawn or abandoned, the Company will not file or
cause to be effective any other registration statement with respect to any of
its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the 1933 Act (except with respect to
securities to be sold under any of the Company's employee benefit plans
registered on Form S-8), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least six months has
elapsed from the effective date of such previous Demand Registration.
(e) Holdback Agreement.
(1) Provided the Company, its Directors and its Officers agrees
as provided in Section 5(e)(2) below, the Purchaser agrees not to effect any
public sale or distribution of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to and the ninety day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten Registration),
unless the underwriters managing the registered Demand or Piggyback public
offering otherwise agree. This restriction shall not apply in the case of the
Shares which have been registered previously in either the Demand or a Piggyback
Registration.
(2) The Company agrees, and shall cause its Directors and
Officers to agree, not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and the ninety day period
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration or with respect to sales of its securities under any employee
benefit plan pursuant to registration on Form S-8), unless the underwriters
managing the registered Demand or Piggyback public offering otherwise agree.
(f) Scope of Registration Rights; Registration Procedures.
The Company's registration obligations under this Subscription
Agreement are "best efforts" obligations only. Whenever the Purchaser has
requested that any Shares be registered (either Demand or Piggyback), the
Company will use its best efforts to effect the registration and the sale of
such Shares with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:
(1) Prepare and file with the Securities and Exchange
Commission a registration statement (which shall be, to the extent the Company
is permitted to do so under applicable rules promulgated by the Securities and
Exchange Commission, a short-form registration statement) with respect to such
Shares and use its best efforts to cause such registration statement to become
effective;
(2) Prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective as permitted by Rule 415 promulgated by the
Securities and Exchange Commission and comply with the provisions of the 1933
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended method
of distribution by the sellers thereof set forth in such registration statement;
(3) Furnish to each Purchaser such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus,
if any) and such other documents as such Purchaser may reasonably request in
order to facilitate the disposition of the Shares, including copies of any legal
opinions and other "comfort" letters that counsel may prepare in connection with
the registration of such Shares;
(4) Use its best efforts to register or qualify such Shares in
such jurisdictions as any Purchaser reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Purchaser to consummate the disposition in such jurisdictions of the Shares
provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
subparagraph;
(ii) subject itself to taxation in any jurisdiction where
it would not otherwise be subject to taxation but for this subparagraph;
(iii) consent to general service of process in any
jurisdiction where it would not otherwise be subject to process but for
this subparagraph;
(5) notify the Purchaser at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, and, at the request of the
Purchaser, the Company will prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Shares, such
prospectus will not contain an untrue statement of material fact or omit to
state any fact necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading;
(6) enter into any such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Purchaser or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such registered Shares;
(7) make available for inspection by any Purchaser, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement and cause the Company's attorneys
and accountants to deliver legal opinions and comfort letters to the Purchaser
which have been delivered in connection therewith.
(g) Indemnification.
(1) The Company agrees to indemnify and hold harmless, to the
extent permitted by law, the Purchaser, each underwriter of such Shares, its
members and managers and each person who controls such person or entity (within
the meaning of the 1933 Act) against all losses, claims, damages, liabilities
and expenses which arise out of or are based on any untrue statement or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereto or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading or in violation of
the 1933 Act or Blue Sky laws except insofar as the same are caused by or
contained in any information furnished in writing to the Company by such holder
expressly for use therein or by such holders' failure to deliver a copy of the
registration statement or prospectus or any amendments of supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same;
(2) In connection with any registration statement in which the
Purchaser is participating, the Purchaser will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the 1933 Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any statement thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading or in violation of
the 1933 Act or Blue Sky laws, but only to the extent that such alleged untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder; provided that the obligation to indemnify as set
forth herein will be several, not joint and several, among such holders of
Shares and the liability of each such holder of Shares will be in proportion to
and limited to the net amount received by such holder from the sale of the
Shares pursuant to such registration statement;
(3) Any person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party
of any claim with respect to which such person seeks indemnification,
provided, however, that the failure to give such notice will not relieve
the indemnified party of any liability hereunder, and
(ii) unless in such indemnified party's reasonable
judgment, a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent, but
such consent will not be unreasonably withheld. An indemnifying party
who is not entitled to or elects not to assume the defense of the claim,
will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim unless in the reasonable judgment of any
indemnified party, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect
to such claim.
(6) Company's Right of First Refusal
The Purchaser agrees that if the Purchaser desires to sell Shares
representing 7.5 percent or more of the Company's issued and outstanding common
stock to the same purchaser or to any affiliated group of purchasers within the
meaning of Section 13 of the 1934 Act, in one or more related privately
negotiated transactions, the Purchaser shall first offer the Shares constituting
such percentage for sale to the Company to be purchased by the Company. Every
such offer to sell any or all of the Shares and the price of the Shares to the
Company, shall be set forth in writing. Such price shall reflect a bona fide
offer to the Purchaser (which offer shall be affirmed in writing by the
Purchaser and/or its counsel, to the reasonable satisfaction of the Company).
The Company shall have the right, within twenty-four (24) hours after the
receipt by it of such written offer by the Purchaser, to purchase the Shares
offered for sale by the Purchaser. Such purchase shall be made by the Company
by its tendering the full purchase price for the Shares for which the written
offer is received by means of a certified check, bank draft made payable to the
Purchaser, or by federal funds wire transfer to the Purchaser or to its
designee. Payment shall be made to the Purchaser or to its designee within
twenty (20) days after the receipt of the written offer by the Purchaser to sell
the Shares.
It is expressly agreed that if the Company shall have refused in writing,
or shall have failed to accept the offer by the Purchaser for it to purchase all
of the Shares offered for sale within the twenty-four hour period above
specified, then all such non-accepted Shares of the Purchaser shall be free from
the provisions of this Section. It is expressly agreed that immediately after
the date which is two years from September 22, 1995, the percentage referred to
in the first sentence of this Section (6) shall be 10%.
The Purchaser covenants and agrees that prior to registering the transfer
of greater than fifty percent (50%) of its membership interests to any person or
entity that does not own, or is not a beneficiary of any trust that owns,
membership interests on the date hereof (whether in one or more transactions),
it will require such transferee to agree in writing to be bound by the
provisions of Section (6) hereof. In addition, the Purchaser covenants and
agrees that prior to any distribution, by way of dividend or otherwise, of any
of the Shares to any member thereof, the Purchaser shall require such member to
agree in writing to be bound by the provisions of Section (6) hereof.
The Purchaser agrees that a legend reflecting the Company's right of first
refusal as set forth herein shall be affixed to the certificate(s) represent the
Shares.
(7) Notices
Any notices or other communication required or permitted herein shall be
sufficiently given if sent by registered or certified mail, postage prepaid,
return receipt requested, and if to the Company, to the address set forth above,
and if to the Purchaser, to the address set forth below the Purchaser's
signature hereto, or to such other addresses as the Company or the Purchaser
shall designate to the other by notice in writing, with copies of any such
notices or other communication sent to:
If to the Purchaser: Eliot Lauer, Esq.
Curtis, Mallet-Prevost, Colt
& Mosle
101 Park Avenue
New York, New York 10178
If to the Company: Robert Oppenheimer, Esq.
Chamberlain, D'Amanda, Oppenheimer
& Greenfield
1600 Crossroads Office Building
Rochester, New York 14614
(8) Successors and Assigns
This subscription for Shares and Subscription Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and to the successors
and assigns of the Company and to the personal and legal representatives of the
Purchaser, and to the extent applicable, its successors and assigns.
(9) Applicable Law
Except when an interpretation of federal and/or state securities laws is
necessary or such law governs, this Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
(10)Certification with Respect to Federal Dividend and Interest Payments;
Back-up Withholding
Under penalties of perjury, the Purchaser hereby certified to the Company
as follows:
(a) The number shown below is the Purchaser's Social
Security or other taxpayer identification number and such number is the
Purchaser's correct taxpayer identification number; and
(b) the Purchaser is not subject to back-up withholding
either because the Purchaser has not been notified by the Internal
Revenue Service that the Purchaser is subject to back-up withholding as a
result of failure to report all interest or dividends, or the Internal
Revenue Service has notified the Purchaser that the Purchaser is no
longer subject to back-up withholding.
IN WITNESS WHEREOF, the Purchaser has executed and delivered this
Subscription Agreement as of this 22nd day of September, 1995.
Subscription: one million (1,000,000) Shares of the $.01 par value common stock
of CPAC, Inc. at $11.00 per Share.
/s/ Eliot Lauer 101 Park Avenue - 35th Floor
_____________________________ _____________________________________
Signature of Subscriber Residence and/or Business Address
Eliot Lauer New York New York 10178-0061
_____________________________ _____________________________________
Typed or Printed Name City State Zip
51-0369089
_____________________________
Social Security or Tax
Identification No. of Subscriber
ACCEPTED:
CPAC, INC.
Dated: September 22, 1995 By: /s/ Thomas N. Hendrickson
_____________________________________
Thomas N. Hendrickson
President and Chief Executive
Officer
EXHIBIT 4.3
December 28, 1995
Board of Directors
CPAC, Inc.
2364 Leicester Road
Leicester, New York 14481
Re: Subscription to Purchase 632,000 Shares of CPAC, Inc. Common
Stock, $.01 par value per share
Gentlemen:
(1) Subscription:
The Purchaser, CPAC Investors, L.L.C., a limited liability company
organized under the laws of the State of Delaware (the "Purchaser"), hereby
subscribes to purchase 632,000 shares ("Shares") of the $.01 par value common
stock of CPAC, Inc. at $11.00 per Share and hereby tenders payment for the
subscribed number of Shares by certified check, bank draft or Federal Funds wire
transfer made payable to CPAC, Inc. (the "Company") in the amount of $6,952,000.
In connection with this subscription, the Purchaser hereby executes this
Subscription Agreement and hereby acknowledges that the Purchaser and/or the
Purchaser's authorized representatives have received from the Company or its
counsel, read, reviewed, understand and are familiar with:
(i) the Company's Annual Report (Form 10-K), as well as any
amendments thereof, filed with the Securities and Exchange
Commission for the fiscal years ended March 31, 1992 through and
including 1995;
(ii) the Company's annual reports and definitive proxy statements
distributed to shareholders in connection with the annual
meeting of shareholders held in August 1992 through and
including 1995;
(iii) the Company's definitive Proxy Statement distributed to
shareholders in connection with the special meeting of
shareholders held December 28, 1995 and a certificate of the
duly authorized Inspectors of Election for such meeting
certifying the favorable vote of the shareholders for the
subject sale;
(iv) Quarterly Reports (Form 10-Q) filed with the Securities and
Exchange Commission for the quarters ended June 30, 1992 through
and including September 30, 1995;
(v) Current Reports (Form 8-K, and any amendments thereto) filed
with the Securities and Exchange Commission for reportable
events taking place on October 13, 1994, January 16, 1995 and
October 5, 1995;
(vi) Copies of the Company's Certificate of Incorporation, all
amendments thereto and the Company's By-Laws and all amendments
thereto;
(vii) The Closing Books maintained by the Company with respect to the
acquisition of The Fuller Brush Company on October 13, 1994 as
well as copies of certain documentation detailing the
environmental problems associated with the Company's acquisition
of the Great Bend facility and arrangements for the remediation
thereof;
(viii) Material contracts executed in connection with the Company's
licensing arrangement with Stanhome, Inc.;
(ix) The responses of Company counsel to the Company's request to
provide the Company's independent auditors with certain
information in connection with the preparation of the Company's
audited financial statements for the fiscal years ended March
31, 1992 through and including 1995; and
(x) Certain information, both oral and written, with respect to
developments pertaining to the Company's ongoing operations.
The Purchaser further acknowledges that, except as set forth in such
reports, proxy statements, documents and other information made available by the
Company as described above as well as those representations made by the Company
herein, no representations or warranties have been made to the Purchaser, or to
the Purchaser's authorized representatives by the Company, or by any person
acting on behalf of the Company, with respect to the offer or sale of the Shares
and/or the economic, tax, or any other aspects or consequences of a purchase of
the Shares and/or the investment made thereby. Further, the Purchaser has not
relied upon any information concerning the Company, written or oral, other than
that contained in the aforementioned reports, proxy statements, documents, or
other information.
The Purchaser hereby acknowledges that the Purchaser and/or the
Purchaser's authorized representatives have had an opportunity to ask questions
of, and receive answers from persons acting on behalf of the Company to verify
the accuracy and completeness of the information set forth in such reports,
proxy statements, documents, and other information prior to sale and the
Purchaser hereby acknowledges that the Purchaser and/or the Purchaser's
authorized representatives have not requested the Company to provide any
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy and
completeness of the information made available.
(2) Purchaser's Representations and Warranties:
The Purchaser further represents and warrants to the Company:
(a) The Shares are being purchased by the Purchaser for investment
only, for the Purchaser's own account, and are not being purchased by the
Purchaser with a view to distribution of such Shares, or for the offer and/or
sale in connection with any distribution thereof. The Purchaser is not
participating, directly or indirectly, in an underwriting of the Shares or in
any similar undertaking. The Purchaser has no present plans to enter into any
contract, undertaking, agreement or arrangement which would entail an
underwriting of such Shares or any similar distribution thereof;
(b) The Shares are being purchased by the Purchaser for investment only
and not with a view to changing control of the Company within the meaning of
Rule 12b-2 promulgated by the Securities and Exchange Commission;
(c) The Purchaser is an "accredited investor" as that term is defined
in Rule 501 of Regulation D, promulgated by the Securities and Exchange
Commission;
(d) The Purchaser understands that there is no guarantee of profits or
against loss as a result of purchasing the Shares and the Purchaser hereby
states that the Purchaser can afford a complete loss of the investment in such
Shares. The Purchaser further warrants that the Purchaser's present financial
condition is such that the Purchaser has no present or perceived future need to
dispose of any portion of the Shares to satisfy any existing or contemplated
undertaking, obligation, need or indebtedness. Consequently, the Purchaser
represents that the Purchaser has sufficient liquid assets to pay the full
purchase price of the Shares, has adequate means for providing for the
Purchaser's current needs and possible contingencies and has no current need to
liquidate any of the Purchaser's investment in the Company;
(e) The Purchaser has been represented by such legal counsel and other
advisors, each of whom has been personally selected by the Purchaser, as the
Purchaser has found necessary to consult, concerning the purchase of the Shares,
and such representation has included an examination of applicable documents and
an analysis of all relevant tax, financial and securities law aspects of an
investment in the Shares. The Purchaser, the Purchaser's counsel, advisors, and
such other persons with whom the Purchaser has found it necessary or advisable
to consult, have represented to the Purchaser that they have knowledge or
experience in business and financial matters to evaluate the information set
forth in the aforementioned reports, press releases and/or other public
information statements issued by the Company, the risks associated with this
investment, and to make an informed investment decision with respect hereto. To
the extent that the Purchaser has found it necessary to consult with any such
counsel and/or advisors concerning the purchase of the Shares, the Purchaser has
relied upon their advice and counsel in making such investment decision.
(f) The Purchaser is a limited liability company organized under the
laws of the State of Delaware.
(3) Company's Representations and Warranties
The Company represents and warrants to the Purchaser:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York;
(b) The Company has authorized capital consisting of 10,000,000 shares
of common stock with a par value of $.01 per share, of which 5,212,364 are
issued and outstanding and 60,767 shares are held in its treasury;
(c) When fully paid by the Purchaser, the Shares purchased pursuant to
this Agreement will be properly issued and non-assessable;
(d) The Company has the full right, power, legal capacity and authority
to sell and transfer the Shares, free and clear of any statutory, contractual or
other limitations and to enter into and perform its obligations under the
Subscription Agreement. This Subscription Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
obligation of the Company, enforceable against it in accordance with the terms
hereof;
(e) The consummation of the transaction contemplated by this
Subscription Agreement will not result in or constitute the following: (i) a
breach or an event that, with notice or lapse of time or both, would be a
default, breach or violation of the Certificate of Incorporation of the Company,
or any material lease, license, promissory note, commitment, indenture,
mortgage, deed of trust, or other material agreement, instrument, or arrangement
to which the Company is a party or by which it or its property is bound; (ii) an
event that would permit any party to terminate any material agreement or to
accelerate the maturity of any indebtedness or other obligation of the Company;
or (iii) the creation or imposition or any lien, charge, or encumbrance of any
of the properties of the Company;
(f) the information contained in the reports, proxy statements,
documents and other information made available by the Company as described in
paragraph (1) of this Subscription Agreement contain no untrue statements of
material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading;
(g) as of the date of the execution of this Subscription Agreement and
closing of the Subscription, there have been no material, adverse changes in the
Company's assets, prospects, operations or financial condition since the
applicable dates of the aforementioned reports, proxy statements, documents, and
other information distributed by the Company.
(4) Securities Law Restrictions on Transfers
The Purchaser understands that the offer and/or sale of the Shares to the
Purchaser is not required to be registered under the Securities Act of 1933 (the
"1933 Act") by reason of a specific exemption for the offer and sale of the
Shares under the provisions of Regulation D promulgated by the Securities and
Exchange Commission. The Purchaser further understands that, except as provided
in paragraph (5) below, the Company has not agreed to register the Shares for
distribution and/or resale in accordance with the provisions of the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), or to register the Shares
for distribution and/or resale under any applicable state securities laws.
Hence, it is the Purchaser's understanding that by virtue of the provisions of
certain rules respecting "restricted securities" promulgated under such federal
and/or state laws, unless such secondary distribution and/or resale is
registered as provided in paragraph (5) below, the Shares which the Purchaser is
purchasing by virtue of this Subscription Agreement must be held indefinitely
and may not be sold, transferred, pledged, hypothecated or otherwise encumbered
for value, unless and until such secondary distribution and/or resale is
subsequently registered under such federal and/or state securities laws or
unless an exemption from registration is available, in which case the Purchaser
still may be limited as to the amount of the Shares that may be sold,
transferred, pledged and/or encumbered for value.
The Purchaser, therefore, agrees that any certificates evidencing the
Shares received by the Purchaser by virtue of this Subscription Agreement shall
be stamped or otherwise imprinted with a conspicuous legend to give notice of
the securities law transfer restrictions set forth herein and the Purchaser
acknowledges that the Company may cause stop transfer orders to be placed on the
Purchaser's account. The legend shall be in substantially the following form:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE COMMON SHARES
REPRESENTED BY THIS CERTIFICATE SHALL BE MADE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND IS IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.
(5) Registration Rights
(a) Registration Rights; Requests for Registration.
(1) The Purchaser shall be entitled at any time after the
expiration of the six month period immediately following September 30, 1995 to
make a written request that the Company register for resale under the 1933 Act,
all or any number of the Shares, provided that with respect to any such request,
the Company shall not be required by the registration rights granted under this
Section (5) to file a Registration Statement or cause a filed Registration
Statement to become effective if such filing, in compliance with and pursuant to
the regulations and rules contained in Regulation S-X dealing with the age of
financial statements at the effective date of a registration statement, would
require the Company to include in such Registration Statement audited financial
statements of the Company which, but for such request, would not otherwise have
been required, in compliance with such applicable rules and regulations, to have
been furnished by the Company in the normal course of its business and
operations. Any registration requested pursuant to this paragraph (5)(a)(1) is
referred to herein as the "Demand Registration".
The Purchaser understands that the Company sold Five Hundred
Thousand (500,000) of its $.01 par value common stock to other "accredited
investors" in a private placement on October 4, 1995. The Purchaser further
understands that such other investors have been granted rights which, if a
majority of the aggregate number of those shares sold so request, would enable
the holders thereof to request registration of their shares (the "Registerable
Shares"). Within thirty days after receipt of the Purchaser's registration
request, the Company will give written notice of such request to all the holders
of Registerable Shares and will include in such registration all Registerable
Shares with respect to which the Company has received written requests for
inclusion therein within 15 days after the Company's notice is mailed.
For purposes of the Purchaser's right to demand registration, a
registation will not count as a Demand Registration until (i) it has become
effective and (ii) the Purchaser is able to sell the Shares requested to be
included in such registration. Any Demand Registration shall be made on a short
registration form (on Form S-3 or any similar short registration form) whenever
the Company is permitted under applicable rules promulgated by the Securities
and Exchange Commission to use such short form.
(2) Whenever the Company proposes to register (either on its own
behalf or on behalf of holders of its equity securities other than the Shares)
any of its equity securities under the 1933 Act including the Registerable
Shares (other than pursuant to the registrations of equity securities to be sold
under one or more of the Company's employee benefit plans on Form S-8), and the
registration form to be used may be used for a registration of the Shares, the
Company will give prompt written notice to Purchaser and to the holders of the
Registerable Shares of its intention to effect such a registration and will
include in such registration, the Purchaser's and all Registerable Shares with
respect to which the Company has received written request by the Purchaser and
by the holders of the Registerable Shares for inclusion therein within 30 days
after the mailing of the Company's notice. Any registrations requested pursuant
to this paragraph (5)(a)(2) are referred to herein as "Piggyback Registrations".
(b) The Demand Registration
(1) Priority of Demand Registration
The Company will not include in the Demand Registration any
other of its equity securities without the written consent of the Purchaser. If
a Demand Registration is an underwritten offering, and the managing underwriters
of such offering advise the Company in writing that, in their opinion, the
number of the Shares, the Registerable Shares and other equity securities to be
included exceeds the number of the Shares, Registerable Shares and other equity
securities which can be sold in such offering, the Company will include in such
registration prior to the inclusion of the Registerable Shares and any other of
the Company's equity securities, the Shares without regard to the inclusion of
any Registerable Shares and/or other equity securities. If in the opinion of
the managing underwriters a number of Registerable Shares requested to be
included in such registration can be sold (in addition to all of the Shares
requested to be sold), such Registerable Shares shall be included pro rata among
the respective holders thereof based on a fraction, with respect to each holder,
the numerator of which is the number of Registerable Shares requested to be sold
by such holder, and the denominator of which is the number of Registerable
Shares requested to be included in such Demand Registration by all holders of
the Registerable Shares.
(2) Restrictions on Demand Registration.
The Company will not be obligated to effect more than two
Demand Registrations. Further, the Company will not be obligated to effect any
Demand Registration within three months after the effective date of a
registration in which the Purchaser exercised its "piggyback registration"
rights pursuant to paragraph (5)(a)(2) hereof and all of the Shares requested by
the Purchaser to be included in the registration were so included.
(3) Selection of Underwriters
The Company shall have the exclusive right to select the
underwriter(s), including the exclusive right to designate the managing
underwriter(s), with respect to any Demand Registration offering, provided that
such selection is acceptable to the Purchaser, which acceptance shall not be
unreasonably withheld.
(4) Expenses of the Demand Registration
The Company shall pay all expenses incident to any Demand
Registration, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Company
in connection with any Demand Registration. The Purchaser will be required to
pay its pro rata share of any underwriter and/or brokerage commissions
attributable to the inclusion of the Shares in the Demand Registration.
(c) Piggyback Registration.
(1) Priority on Primary Registrations.
If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that, in their opinion, the number of equity securities
requested to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration (i) the
equity securities the Company proposes to sell, (ii) the Shares and the
Registerable Shares requested to be included in such Piggyback Registration, pro
rata among the holders thereof, based upon a fraction, with respect to each
holder, the numerator of which is the number of shares requested to be sold by
such holder, and the denominator of which is the total number of the Purchaser's
and the Registerable Shares requested to be included in such Piggyback
Registration by the Purchaser and by all holders of the Registerable Shares and
(iii) any other equity securities requested to be included in such registration.
(2) Priority on Secondary Registrations.
If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's equity securities (other than
the Purchaser or the holders of the Registerable Shares in their capacity as the
Purchaser or as holders of the Registerable Shares), and the managing
underwriters advise the Company in writing that, in their opinion, the number of
equity securities requested to be included in such registration exceeds the
number which can be sold in such offering, the Company will include in such
registration (i) the equity securities to be sold in the secondary offering by
the holders of the Company's equity securities requesting such registration,
(ii) the Purchaser's Shares and the Registerable Shares requested to be included
in such Piggyback Registration, pro rata among the holders thereof based upon a
fraction, with respect to each holder, the numerator of which is the number of
shares requested to be sold by such holder and the denominator of which is the
total number of the Purchaser's and the Registerable Shares requested to be
included in such Piggyback Registration by the Purchaser and by all holders of
Registerable Shares, and (iii) any other equity securities requested to be
included in such registration.
(3) Expenses of Piggyback Registrations
The Company shall pay all expenses incident to the Piggyback
Registration, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent, certified public accountants, underwriters
(excluding discounts and commissions) and any other persons retained by the
Company in connectiion with such Piggback Registrations. The Purchaser will be
required to pay its pro rata share of any underwriter and/or brokerage
commissions attributable to the inclusion of the Shares in the Piggyback
Registration.
(d) Other Registrations
If the Company has previously filed a registration statement with
respect to the Shares pursuant to a Demand Registration and if such previous
registration has not been withdrawn or abandoned, the Company will not file or
cause to be effective any other registration statement with respect to any of
its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the 1933 Act (except with respect to
securities to be sold under any of the Company's employee benefit plans
registered on Form S-8), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least six months has
elapsed from the effective date of such previous Demand Registration.
(e) Holdback Agreement.
(1) Provided the Company, its Directors and its Officers agrees as
provided in Section 5(e)(2) below, the Purchaser agrees not to effect any public
sale or distribution of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the ninety day period beginning on the effective date of
any underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten Registration), unless the underwriters
managing the registered Demand or Piggyback public offering otherwise agree.
This restriction shall not apply in the case of the Shares which have been
registered previously in either the Demand or a Piggyback Registration.
(2) The Company agrees, and shall cause its Directors and Officers
to agree, not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and the ninety day period
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registation or with respect to sales of its securities under any employee
benefit plan pursuant to registration on Form S-8), unless the underwriters
managing the registered Demand or Piggyback public offering otherwise agree.
(f) Scope of Registration Rights; Registration Procedures.
The Company's registration obligations under this Subscription
Agreement are "best efforts" obligations only. Whenever the Purchaser has
requested that any Shares be registered (either Demand or Piggyback), the
Company will use its best efforts to effect the registration and the sale of
such Shares with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:
(1) Prepare and file with the Securities and Exchange Commission a
registration statement (which shall be, to the extent the Company is permitted
to do so under applicable rules promulgated by the Securities and Exchange
Commission, a short-form registation statement) with respect to such Shares and
use its best efforts to cause such registration statement to become effective;
(2) Prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective as permitted by Rule 415 promulgated by the
Securities and Exchange Commission and comply with the provisions of the 1933
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended method
of distribution by the sellers thereof set forth in such registration statement;
(3) Furnish to each Purchaser such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus,
if any) and such other documents as such Purchaser may reasonably request in
order to facilitate the disposition of the Shares, including copies of any legal
opinions and other "comfort" letters that counsel may prepare in connection with
the registration of such Shares;
(4) Use its best efforts to register or qualify such Shares in
such jurisdictions as any Purchaser reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Purchaser to consummate the disposition in such jurisdictions of the Shares
provided that the Company will not be required to
(i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subparagraph;
(ii) subject itself to taxation in any jurisdiction
where it would not otherwise be subject to taxation but for this
subparagraph;
(iii) consent to general service of process in any
jurisdiction where it would not otherwise be subject to process but for
this subparagraph;
(5) notify the Purchaser at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, and, at the request of the
Purchaser, the Company will prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Shares, such
prospectus will not contain an untrue statement of material fact or omit to
state any fact necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading;
(6) enter into any such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Purchaser or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such registered Shares;
(7) make available for inspection by any Purchaser, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement and cause the Company's attorneys
and accountants to deliver legal opinions and comfort letters to the Purchaser
which have been delivered in connection therewith.
(g) Indemnification.
(1) The Company agrees to indemnify and hold harmless, to the
extent permitted by law, the Purchaser, each underwriter of such Shares, its
members and managers and each person who controls such person or entity (within
the meaning of the 1933 Act) against all losses, claims, damages, liabilities
and expenses which arise out of or are based on any untrue statement or alleged
untrue statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any amendment thereto or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading or in violation of
the 1933 Act or Blue Sky laws except insofar as the same are caused by or
contained in any information furnished in writing to the Company by such holder
expressly for use therein or by such holders' failure to deliver a copy of the
registration statement or prospectus or any amendments of supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same;
(2) In connection with any registration statement in which the
Purchaser is participating, the Purchaser will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the 1933 Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any statement thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading or in violation of
the 1933 Act or Blue Sky laws, but only to the extent that such alleged untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder; provided that the obligation to indemnify as set
forth herein will be several, not joint and several, among such holders of
Shares and the liability of each such holder of Shares will be in proportion to
and limited to the net amount received by such holder from the sale of the
Shares pursuant to such registration statement;
(3) Any person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying
party of any claim with respect to which such person seeks
indemnification, provided, however, that the failure to give such notice
will not relieve the indemnified party of any liability hereunder, and
(ii) unless in such indemnified party's reasonable
judgment, a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit the indemnifying
party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent, but such consent will
not be unreasonably withheld. An indemnifying party who is not entitled
to or elects not to assume the defense of the claim, will not be obligated
to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim unless
in the reasonable judgment of any indemnified party, a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
6) Company's Right of First Refusal
Reference is hereby made to the Company's right of first refusal contained
in the subscription agreement between the parties hereto dated September 22,
1995. The Purchaser agrees that if the Purchaser desires to sell Shares which,
together with any shares the Purchaser desires to sell governed by the Company's
right of first refusal contained in the September 22, 1995 agreement, represent
7.5 percent or more of the Company's issued and outstanding common stock to the
same purchaser or to any affiliated group of purchasers within the meaning of
Section 13 of the 1934 Act, in one or more related privately negotiated
transactions, the Purchaser shall first offer the Shares constituting such
percentage for sale to the Company to be purchased by the Company. Every such
offer to sell any or all of the Shares and the price of the Shares to the
Company, shall be set forth in writing. Such price shall reflect a bona fide
offer to the Purchaser (which offer shall be affirmed in writing by the
Purchaser and/or its counsel, to the reasonable satisfaction of the Company).
The Company shall have the right, within twenty-four (24) hours after the
receipt by it of such written offer by the Purchaser, to purchase the Shares
offered for sale by the Purchaser. Such purchase shall be made by the Company
by its tendering the full purchase price for the Shares for which the written
offer is received by means of a certified check, bank draft made payable to the
Purchaser, or by federal funds wire transfer to the Purchaser or to its
designee. Payment shall be made to the Purchaser or to its designee within
twenty (20) days after the receipt of the written offer by the Purchaser to sell
the Shares.
It is expressly agreed that if the Company shall have refused in writing,
or shall have failed to accept the offer by the Purchaser for it to purchase all
of the Shares offered for sale within the twenty-four hour period above
specified, then all such non-accepted Shares of the Purchaser shall be free from
the provisions of this Section.
It is expressly agreed that immediately after the date which is two years
from September 22, 1995, the percentage referred to in the first sentence of
this Section (6) shall be 10%.
The Purchaser covenants and agrees that prior to registering the transfer
of greater than fifty percent (50%) of its membership interests to any person or
entity that does not own, or is not a beneficiary of any trust that owns,
membership interests on the date hereof (whether in one or more transactions),
it will require such transferee to agree in writing to be bound by the
provisions of Section (6) hereof. In addition, the Purchaser covenants and
agrees that prior to any distribution, by way of dividend or otherwise, of any
of the Shares to any member thereof, the Purchaser shall require such member to
agree in writing to be bound by the provisions of Section (6) hereof.
The Purchaser agrees that a legend reflecting the Company's right of first
refusal as set forth herein shall be affixed to the certificate(s) represent the
Shares.
(7) Notices
Any notices or other communication required or permitted herein shall be
sufficiently given if sent by registered or certified mail, postage prepaid,
return receipt requested, and if to the Company, to the address set forth above,
and if to the Purchaser, to the address set forth below the Purchaser's
signature hereto, or to such other addresses as the Company or the Purchaser
shall designate to the other by notice in writing, with copies of any such
notices or other communication sent to:
If to the Purchaser: Eliot Lauer, Esq.
Curtis, Mallet-Prevost, Colt
& Mosle
101 Park Avenue
New York, New York 10178
If to the Company: Robert Oppenheimer, Esq.
Chamberlain, D'Amanda, Oppenheimer
& Greenfield
1600 Crossroads Office Building
Rochester, New York 14614
(8) Successors and Assigns
This subscription for Shares and Subscription Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and to the successors
and assigns of the Company and to the personal and legal representatives of the
Purchaser, and to the extent applicable, its successors and assigns.
(9) Applicable Law
Except when an interpretation of federal and/or state securities laws is
necessary or such law governs, this Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
(10) Certification with Respect to Federal Dividend and Interest
Payments; Back-up Withholding
Under penalties of perjury, the Purchaser hereby certified to the
Company as follows:
(a) The number shown below is the Purchaser's Social Security or
other taxpayer identification number and such number is the Purchaser's
correct taxpayer identification number; and
(b) the Purchaser is not subject to back-up withholding either
because the Purchaser has not been notified by the Internal Revenue
Service that the Purchaser is subject to back-up withholding as a result
of failure to report all interest or dividends, or the Internal Revenue
Service has notified the Purchaser that the Purchaser is no longer subject
to back-up withholding.
IN WITNESS WHEREOF, the Purchaser has executed and delivered this
Subscription Agreement as of this 28th day of December, 1995.
Subscription: Six Hundred Thirty-Two Thousand (632,000) Shares of the $.01 par
value common stock of CPAC, Inc. at $11.00 per Share.
/s/ Eliot Lauer 101 Park Avenue - 35th Floor
____________________________ _______________________________
Signature of Subscriber Residence and/or Business
Address
Eliot Lauer New York New York 10178-0061
____________________________ _______________________________
Typed or Printed Name City State Zip
51-0369089
____________________________
Social Security or Tax
Identification No. of Subscriber
ACCEPTED:
CPAC, INC.
Dated: December 28, 1995 By: /s/ Thomas N. Hendrickson
_______________________________
Thomas N. Hendrickson
President and Chief Executive
Officer
EXHIBIT 5 & EXHIBIT 23.2
June 21, 1996
The Board of Directors
CPAC, Inc.
2364 Leicester Road
Leicester, NY 14481
Gentlemen:
This opinion is issued to you in connection with the registration of
1,875,000 shares of the $.01 par value common stock (the `Shares'') of CPAC,
Inc. (the `Company'') under the Securities Act of 1933. The Shares are being
registered with the Securities and Exchange Commission under a Registration
Statement on Form S-3 being filed on or about June 21, 1996 (the `Registration
Statement') in connection with a resale by certain shareholders who currently
own the Shares. We are familiar with the relevant documents and materials used
in preparing the Registration Statement and the Prospectus which forms a part of
the Registration Statement and documents reflecting certain actions taken by the
Company in connection with the purchase of the shares by the current holders.
Based on our review of the relevant documents and materials, it is our
opinion that the Company has taken all necessary and required corporate
proceedings in connection with the issuance of the Shares, all of which are
presently issued and outstanding common stock, and that all of the Shares have
been legally issued and are fully paid and non-assessable.
We hereby consent to the reference to our firm under the caption `Legal
Matters' in the Prospectus and to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
CHAMBERLAIN, D'AMANDA,
OPPENHEIMER & GREENFIELD
BY: /s/ Richard B. Sullivan
_____________________________
Richard B. Sullivan
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
CPAC, Inc. on Form S-3 of our report dated May 30, 1996, on our audits of the
consolidated financial statements and the financial statement schedule of CPAC,
Inc. and Subsidiaries as of March 31, 1996, and 1995, and for each of the three
years in the period ended March 31, 1996, which report is included in the Annual
Report on Form 10-K/A. We also consent to the reference to our firm under the
caption `Experts''.
/s/ Coopers & Lybrand L.L.P
______________________________
COOPERS & LYBRAND L.L.P
Rochester, New York
June 27, 1996
