UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
REINHOLD INDUSTRIES, INC. (FORMERLY KEENE CORPORATION)
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(Name of Issuer)
Class A Common Stock, par value $.01 per share
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(Title of Class of Securities)
75935A109
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(CUSIP Number)
Richard A. Lippe, Esq.
Managing Trustee
Keene Creditors Trust
The Chancery
190 Willis Avenue
Mineola, New York 11501
(516) 747-0300
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
July 16, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
_
|_|.
_
Check the following box if a fee is being paid with the statement |_|
Page 1 of 14 pages
The Index to Exhibits is on page 4.
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Page 2 of 4 Pages
This Amendment No. 1 amends and supplements the Schedule 13D filed on August 12,
1996 (the "Schedule 13D") by the Keene Creditors Trust (the "Trust") with
respect to the Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), of Reinhold Industries, Inc. (formerly Keene Corporation), a
Delaware corporation ("Reinhold"). All capitalized terms used in this Amendment
and not otherwise defined herein have the meaning ascribed to such terms in the
Schedule 13D.
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended by adding the following
paragraphs immediately before the final paragraph of such Item:
The Trust intends to continuously review its investment in Reinhold.
In connection with the Trust's ongoing evaluation of Reinhold's business and
prospects and on future developments (including, but not limited to, stock
market and general economic conditions), the Trust reserves the right to change
its plans or intentions at any time and to take any and all actions it may deem
appropriate to maximize the value of its investment in Reinhold.
The Trust has retained HT Capital Advisors, LLC ("HT") to assist the
Trust in developing and implementing a strategy to realize upon the value of its
investment in Reinhold, including an evaluation of whether the Trust should at
this time seek a merger, sale of shares or other transaction that would involve
a disposition by the Trust of all of its shares of Class B Common Stock for
cash. A copy of the Trust's agreement with HT, executed on July 16, 1998, is
attached as Exhibit 6 hereto.
Item 7. Material To Be Filed as Exhibits
Exhibit Number Title
-------------- -----
6 Letter agreement dated as of
July 2, 1998 between the Trust
and HT Capital Advisors, LLC
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Page 3 of 4 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete, and
correct.
Dated: July 27, 1998
Keene Creditors Trust
By: /s/ Richard A. Lippe
____________________________________
Richard A. Lippe, Managing Trustee
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Page 4 of 4 Pages
<TABLE>
<CAPTION>
Exhibit Method of
Number Title Filing Page
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<S> <C> <C> <C>
6 Letter agreement dated as of Filed herewith 5
July 2, 1998 between the Trust
and HT Capital Advisors, LLC
</TABLE>
HT CAPITAL ADVISORS, LLC
PERSONAL & CONFIDENTIAL
July 2, 1998
Richard A. Lippe, Esq.
Managing Trustee
c/o Meltzer, Lippe, Goldstein, Wolf,
Schlissel & Sazer
The Chancery
190 Willis Avenue
Mineola, NY 11501
Dear Mr. Lippe:
This letter will confirm our understanding that Keene Creditors Trust (the
"Trust") has engaged HT Capital Advisors, LLC ("HT") to act as the Trust's
exclusive financial advisor in connection with a Transaction (as defined below)
between the Trust and any other person or entity (any such person or entity
being a "Purchaser").
Section 1. Financial Advisory Services to be Rendered. (a) In connection with
this engagement HT shall:
(i) familiarize itself to the extent it deems appropriate and
feasible with the Trust and with the business, operations,
properties, financial condition and prospects of Reinhold
Industries, Inc. ("Reinhold"), of which the Trust is majority
shareholder, and any prospective Purchaser, it being understood
that HT shall, in the course of such familiarization rely
entirely upon publicly available information and such other
information as may be supplied by the Trust in combination with
Reinhold or the Purchaser, without any obligation of independent
investigation;
(ii) assist the Trust in developing and implementing a strategy to be
used in connection with the Transaction;
(iii) If HT and the Trust believe it to be advisable, HT will assist
the Trust in preparing a memorandum for distribution to
potential Purchasers selected by the Trust and HT, describing
the Trust and Reinhold and its business, operations, properties,
financial condition and prospects, it being specifically agreed
that (x) such memorandum shall be based entirely on information
supplied by the Trust in conjunction with Reinhold, which
information the Trust hereby warrants shall be complete and
accurate in all material respects (y) the Trust shall be solely
responsible for the accuracy and completeness of such
memorandum, and (z) other than as contemplated by this clause
1(a)(iii), such memorandum may not be disclosed publicly or made
available to third parties, except with HT's prior written
consent;
<PAGE>
(iv) Develop a list of potential Purchasers for the Transaction;
(v) Consult with the Trust from time to time as to such potential
Purchasers;
(vi) Hold preliminary discussions with potential Purchasers
concerning their interest in the Transaction;
(vii) With the approval of the Trust, provide potential Purchasers
with information provided to HT by the Trust concerning the
Trust and Reinhold and its business to enable such potential
Purchasers to evaluate the Transaction;
(viii) If requested, introduce the Trust to one or more potential
Purchasers for the purpose of direct negotiations between the
parties and assist the Trust in such negotiations;
(ix) If requested, advise the Trust as to the structure, purchase
price and the terms and conditions of the Transaction;
(x) Perform such other investment banking and financial advisory
services as HT and the Trust may from time to time agree.
(b) This agreement does not constitute a commitment for or expression of
interest in providing or arranging any financing or placing or
underwriting any securities which may be required for consummation of a
Transaction. If HT or any of its affiliates is asked and elects to
provide or arrange any such financing, or to place or underwrite any
such securities, HT or such affiliate and the recipient of such
financing shall enter into a separate agreement setting forth the terms
and conditions of, and the fees payable in connection with, such
financing.
(c) HT agrees that Eric Lomas and Stephen C. Tardio will be assigned to this
engagement and will devote the time necessary to ensure full performance
of HT's duties hereunder.
(d) Notwithstanding the broader definition of "consideration" used herein,
it is understood that the Trustees do not expect to be favorably
disposed to a Transaction on terms other than all cash.
Section 2. Definitions. For purposes of this letter agreement, the following
terms shall have the meanings set forth below:
(a) The term "Transaction" shall mean, whether in one or a series of
transactions (i) any sale, merger, leveraged buy-out, tender or exchange offer,
restructuring or other extraordinary corporate transaction involving a
disposition of the Trust's investment in Reinhold (the "Securities") and a
Purchaser, or (ii) the acquisition by a Purchaser, directly or indirectly,
through public or private purchases, sales or otherwise of all or any portion of
the Securities of the Trust.
(b) The term "Investment Vehicle" shall have the meaning set forth in Section
(a) above.
<PAGE>
(c) The term "Consideration" shall mean the total proceeds and other
consideration paid to the Trust in connection with a Transaction (which
consideration shall be deemed to include amounts paid or to be paid into escrow)
and in any event shall include (in each case to the extent paid to the Trust):
(i) cash, (ii) notes, securities and other property (including all options,
warrants or other instruments or arrangements convertible into or exercisable
for any of the foregoing) at the fair market value thereof; (iii) all long-term
liabilities (including capitalized leases, pension liabilities, guarantees and
indebtedness for borrowed money) of the Trust repaid or retired by the Purchaser
in connection with or in anticipation of a Transaction; (iv) payments to be made
in installments; (v) contingent payments (whether or not related to future
earnings or operations).
The fair market value of non-cash consideration consisting of securities shall
be determined based upon the closing sale price for such securities on the
registered national securities exchange providing the primary market therein on
the last trading day prior to the public announcement of the Transaction, or if
such securities are not so traded, the average of the closing bid and asked
prices as reported by the National Association of Securities Dealers Automated
Quotation System or equivalent quotation system located outside of the United
States on the last trading day prior to the public announcement of the
Transaction. If such securities are not so traded or reported the fair market
value of such securities and any other non-cash Consideration shall be
determined in good faith by HT. If all or any portion of the consideration is to
be paid over time, then that portion of the Transaction Fee attributable thereto
shall be payable as and when such payments are made. If all or any portion of
the Consideration consists of contingent payments, then the portion of the
Transaction Fee attributable thereto shall be payable as and when such payments
are made by the Purchaser.
(d) "Indemnified Person" shall have the meaning assigned thereto in Schedule A
hereof.
Section 3. Term of Engagement. It is understood that HT's services hereunder may
be terminated with or without cause, by the Trust or by HT at any time upon 30
days prior written notice, without liability or continuing obligation; provided
that the provision of Section 2 (Definitions), 4 (Compensation), 5 (Expenses), 6
(Indemnity), 7 (Cooperation), 9 (Payments), 10 (Consent to Jurisdiction) and 12
(Miscellaneous) shall survive termination or expiration of this Agreement.
Section 4. Compensation. As compensation for HT's services hereunder, the Trust
shall pay to HT the following fees in cash as and when set forth below:
(a) A non-refundable retainer of $30,000, payable upon execution of
this agreement;
(b) An additional fee (the "Transaction Fee") equal to the greater
of (i) $150,000 and either (ii) 3% of the consideration, payable
in cash upon the closing of any Transaction if during the term
of this Agreement or, with a party contacted by HT, at any time
within 12 months after the expiration or termination date of
this Agreement; or (iii) 1 1/2% of the consideration payable in
<PAGE>
cash upon the closing of any Transaction with a party not
contacted by HT if at any time within 12 months after the
expiration or termination date of this Agreement (x) such
Transaction is consummated or (y) an agreement is entered into
which subsequently results in a consummated Transaction.
(c) No fee payable to any other financial advisor either by the
Trust or any other entity shall reduce or otherwise affect the
fees payable hereunder to HT.
Section 5. Expenses. In addition to compensation payable pursuant to Section 4
and regardless of whether any Transaction is announced, commences or occurs, the
Trust shall reimburse HT promptly upon request for reasonable expenses incurred
by HT in connection with this engagement, including, without limitation,
reasonable fees and disbursements of legal counsel and other professional
advisors to HT. HT will obtain written approval for all expenditures in excess
of $10,000. Such approval shall not be unreasonably withheld.
Section 6. Indemnification and Contribution. HT and the Trust agree to the
provisions with respect to the Trust's indemnification of HT and other matters
set forth in Schedule A, the terms of which are hereby incorporated by reference
into this Agreement.
Section 7. Cooperation, Confidentiality, Etc. (a) The Trust in combination with
Reinhold shall furnish HT with all information and data which HT shall
reasonably deem appropriate in connection with its activities on the Trust's
behalf (all of which information shall be accurate and complete in all material
respects) and will not withhold or omit any material information, and shall
provide HT reasonable access to the Trust's Trustees, Trust Advisory Committee
and Reinhold's officers, directors, employees and professional advisors. The
Trust shall involve HT in or keep HT apprised of all material discussions
between the Trust and potential Purchasers and shall make available to HT all
material information regarding potential Purchasers which the Trust receives
from any source whatsoever and shall request from potential Purchasers such
information which HT believes appropriate to its engagement hereunder.
(b) The Trust recognizes and consents to the fact that (i) HT will use and rely
on the accuracy and completeness of public reports and other information
provided by others including information provided by the Trust in combination
with Reinhold or potential Purchasers or their respective officers, employees,
auditors, attorneys or other agents in performing the services contemplated by
this Agreement, and (ii) HT does not assume responsibility for, and may rely
without independent verification upon, the accuracy and completeness of any such
information. The Trust acknowledges its understanding that HT will not undertake
an independent evaluation or appraisal of any assets or liabilities of the Trust
or Reinhold or a Purchaser or a physical inspection of the properties or assets
of the Trust or Reinhold or a Purchaser.
(c) The Trust represents and warrants to HT that any information heretofore or
hereafter furnished to HT is and will be true and correct in all material
respects and does not and will not omit any material fact required to make the
information given to HT not misleading. The Trust agrees to notify HT promptly
of any material change in the business or financial condition of the Trust or
Reinhold, during the course of HT's engagement that may require an amendment or
<PAGE>
supplement to any of the information provided to HT so that such information
will not be misleading in any material respect or omit to state any material
fact that is required to be stated or that is necessary in order to make any
such information not misleading given the occurrence of any such change.
(d) The Trust agrees that HT's advice is for the use and information of the
Trust only and may not be relied upon by others. The Trust will not disclose
such advice to others (except the Trust's professional advisors provided,
however, that nothing herein shall prohibit disclosure to the Trustees Advisory
Committee, to the United States Bankruptcy Court for the Southern District of
New York, or as required in connection with any litigation) or summarize or
refer to such advice without, in each case, HT's prior written consent.
Notwithstanding anything to the contrary contained in the foregoing, in the
event the Trust is required by law to make any filings with any governmental
authority (including without limitations the Securities and Exchange Commission
or other regulatory or administrative agency or any court) or any written
disclosure to any third party, which mention HT, or any disclosure to the
holders of its securities concerning HT or the advice rendered by HT hereunder,
the Trust shall afford HT the opportunity to review such disclosure in advance
and to approve the form thereof, such approval not to be unreasonably withheld
or delayed.
(e) The Trust recognizes that HT has been retained by the Trust only to act as
financial advisor to the Trust and that in such capacity HT shall act as an
independent contractor and in no other capacity (including, but not limited to,
that of a fiduciary). It is further agreed that the Trust's engagement of HT is
not deemed to be on behalf of, and is not intended to confer rights upon, any
individual beneficiary of the Trust or any person not a party hereto as against
HT or any Indemnified Person. Unless otherwise expressly agreed by HT in
writing, no one other than the Trust is authorized to rely upon this engagement
of HT or any statements or conduct by HT.
(f) Notwithstanding anything herein to the contrary, it is understood that HT is
not undertaking to provide any legal, accounting or tax advice in connection
with its engagement hereunder, and the Trust shall rely solely upon its own
experts therefore; HT may, however, assist the Trust in coordinating the
obtaining of such advice.
Section 8. Payments. The Trust agrees that all amounts payable to HT hereunder,
whether pursuant to Section 4, 5, 6 or otherwise, shall be paid in New York in
immediately available United States dollars, without set-off and without
deduction for any withholding, value-added or other similar taxes.
Section 9. Consent to Jurisdiction. The Trust hereby irrevocably consents to the
exclusive jurisdiction of any New York State or United States Federal Court
sitting in New York County over any action or proceeding arising out of or
relating to this Agreement, and the Trust hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard in such New York
State or Federal court. The Trust irrevocably consents to the service of any and
all process in any such action or proceeding by the mailing or copies of such
process to it at its address set forth above. The Trust agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdiction by suit on the judgment or in any other manner
provided by law. Notwithstanding anything to the contrary contained herein,
nothing in this Section 9 is intended to prevent either party hereto from
instituting an action in a jurisdiction outside of New York for the sole and
exclusive purpose of enforcing a judgment rendered by a New York State or United
States Federal Court sitting in New York County. Solely for the purposes of
<PAGE>
enforcing the indemnification and contribution provisions of Section 6 of this
Agreement (as set forth in Schedule A), the Trust consents to the jurisdiction
and service of process of any court in which any action, claim or proceeding
which is subject to such provisions is brought and hereby further and
irrevocably and unconditionally waives and agrees not to plead or claim in any
court that such action, claim or proceeding is brought in an inconvenient forum.
Section 10. Publicity. If requested, the Trust shall include a mutually
acceptable reference to HT in any press release or other public announcement
made by the Trust regarding the matters described in this letter. HT may place
advertisements describing its services hereunder in financial and other
newspapers at its own expenses.
Section 11. Miscellaneous. HT may perform its obligations hereunder either
directly or through its affiliates, and the provision of this agreement shall
apply equally to HT and any such affiliates. The Trust may not assign its rights
or obligations hereunder. This Agreement (a) has been duly executed and
delivered on behalf of each of the Trust and HT and constitutes the legal,
valid, binding and enforceable obligation of such party, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles or public policy
considerations; (b) sets forth the entire understanding of the parties relating
to the subject matter hereof and supersedes and cancels any prior
communications, understanding and agreement between the parties; (c) may not be
amended or modified except in a written instrument executed by each of the
parties; (d) may be signed in counterparts, each of which shall continue an
original and which together shall constitute one and the same agreement; and (e)
shall be governed by and construed in accordance with the internal laws of State
of New York, without regard to principles of conflict of law. ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATED TO THE SERVICES
OF HT HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY IS HEREBY WAIVED OR
DEEMED WAIVED BY HT AND BY THE TRUST.
<PAGE>
If the foregoing terms meet with your approval, please indicate your acceptance
by signing and returning the attached copy of this letter.
Very truly yours,
HT CAPITAL ADVISORS, LLC
By: /s/ Eric Lomas
_______________________________________
Eric J. Lomas, President
Accepted and Agreed:
KEENE CREDITORS TRUST
By: /s/ Richard A. Lippe, Managing Trustee
______________________________________
<PAGE>
Schedule A
INDEMNIFICATION AND CONTRIBUTION
(a) The Trust will indemnify and hold harmless HT and its affiliates, and their
respective officers, directors, advisors, representatives, agents, employees,
and each other person controlling HT or any of its affiliates within the meaning
of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of
the Securities Exchange Act of 1934, as amended (each such party, including HT,
an "Indemnified Person") from and against any and all losses, claims, damages
and liabilities, joint or several (collectively, "Damages"), (i) related to,
arising out of, or in connection with HT's engagement under this Agreement, HT's
performance of any services in connection therewith or any transaction
contemplated thereby, and (ii) reimburse an Indemnified Person immediately upon
request for all expenses as they are incurred (including without limitation,
fees and disbursements of legal counsel and usual and customary expenses for an
Indemnified Person's involvement in discovery proceeding or testimony)
(collectively, "Expenses") to the extent incurred in connection with
investigating, preparing to defend or defending any commenced or threatened
action or legal, administrative or judicial proceeding or investigation
(collectively, "Proceedings"), related to or arising out of any matter referred
to in the Agreement, including an Indemnified Person's service thereunder
(whether or not any Indemnified Person is a party to such Proceedings) except
that this sentence shall not apply with respect to Damages or Expenses arising
out of losses that are finally (and not subject to appeal) judicially determined
to have resulted primarily from an Indemnified Person's willful misconduct or
gross negligence. The indemnification and reimbursement of obligations contained
herein shall apply whether or not HT or any other Indemnified Person is a formal
party to any lawsuit, claim or other proceeding and are expressly intended to
cover, among other things, reimbursement of legal and other expenses incurred in
a deposition or other discovery proceeding. In the event that any reimbursed
expenses are finally judicially determined to have resulted directly and
primarily from such Indemnified Person's gross negligence or willful misconduct
in performing the services which are the subject of the Agreement, HT shall
promptly refund to the Trust the portion of amounts advanced under this Schedule
A in respect of reimbursement of expenses which is attributable to expenses
incurred in relation to the act or omission of such Indemnified Person who is
the subject of such determination. The Company also agrees that no Indemnified
Person shall have any liability to the Trust for or in connection with this
engagement, except for liability for Damages and expenses which are finally
judicially determined to have resulted directly and primarily from the willful
gross negligence of the Indemnified Person. The Trust will promptly notify an
Indemnified Person of the assertion against it or, to its knowledge, any other
person of any claim or the commencement of any action, proceeding or
investigation relating to or arising out of any matter referred to in the
Agreement, including an Indemnified Person's services thereunder.
(b) The Trust and HT agree that if, for any reason, any indemnification sought
pursuant to this Schedule A is unavailable (other than because of gross
negligence or willful misconduct) or is insufficient to hold any Indemnified
Person harmless, then, whether or not HT is the person entitled to the
<PAGE>
indemnification, the Trust and HT shall each contribute to amounts paid or
payable by the Indemnified Person in respect of the Damages and expenses
(including all legal and other fees and expenses incurred in defending any
action or claim) for which such indemnification is unavailable or insufficient
in such proportion as is appropriate to reflect the relative benefits received
(or anticipated to be received) by the Trust and its stockholders, on the one
hand, and HT, on the other hand, in connection with the acts which resulted in
such Damages and expenses; provided that in no event shall the amount to be
contributed by HT exceed the amount of fees actually received by HT hereunder
(excluding any amounts received by HT as reimbursement of expenses). It is
hereby agreed that the relative benefits to the Trust and its stockholders on
the one hand and HT on the other hand with respect to this engagement shall be
deemed to be in the same proportion as (x) the total value paid, transferred,
exchanged or received or proposed to be paid, transferred, exchanged or received
by the Trust, in connection with any Transaction (whether or not consummated)
bears to (y) the fee paid or payable to HT in connection with this engagement.
The Trust and HT agree that if and only if the allocation pursuant to the first
sentence of this paragraph (b) is unavailable or is insufficient to hold any
Indemnified Person harmless, then, whether or not HT is the person entitled to
indemnification, the Trust and HT shall each contribute to amounts paid or
payable by the Indemnified Person in respect of the Damages and expenses
(including all legal and other fees and expenses incurred in defending any
action or claim) for which such indemnification is unavailable or insufficient
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Trust, on the one hand, and HT, on the other
hand, in connection with the matters as to which such Damages relate, as well as
any other equitable considerations. The Trust and HT agree that it would not be
just and equitable if contribution pursuant to this Schedule A were determined
by pro rata allocation or by any other method which does not take into account
the equitable considerations referred to herein.
(c) The Trust and HT agree to consult in advance with one another with respect
to the terms of any proposed waiver, release or settlement of any Proceeding to
which the Trust or an Indemnified Person may be subject as a result of the
matters contemplated by the Agreement and this Schedule A. The Trust further
agrees not to enter into any such waiver, release or settlement without the
prior written consent of an Indemnified Person, unless such waiver, release or
settlement includes an unconditional release of such Indemnified Person from all
liability arising out of such Proceeding.
(d) The agreements of the Trust under this Schedule A shall be in addition to
any liabilities the Trust may otherwise have, shall be binding upon and inure to
the benefit of any successors and personal representatives of the Trust or an
Indemnified Person, and shall apply whether or not HT or any other Indemnified
Person is a formal party to any Proceeding. The agreements set forth in this
Schedule A shall remain in full force and effect following the completion or
termination of the engagement contemplated by the Agreement. ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATED TO THE SERVICES
OF HT HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY IS HEREBY WAIVED OR
DEEMED WAIVED BY EACH INDEMNIFIED PERSON AND BY THE TRUST.
(e) The Trustees individually shall have no liability hereunder.
