UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
Gunther International, Ltd.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
403203102
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(CUSIP Number)
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Thomas J. Tisch
667 Madison Avenue
New York, NY 10021
(212) 545-2927
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 26, 1996
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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 |_|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 403203102 Page 2 of 45 Pages
-----------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Four Partners
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 649,189
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
9 SOLE DISPOSITIVE POWER
REPORTING
649,189
PERSON
10 SHARED DISPOSITIVE POWER
WITH
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
649,189
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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CUSIP NO. 403203102 13D Page 3 of 45 Pages
This Statement amends, supplements and restates the Schedule 13D (the
"Schedule 13D") filed with the Securities and Exchange Commission on March 23,
1995, as amended by Amendment No. 1 dated April 6, 1995, Amendment No. 2 dated
June 23, 1995, and Amendment No. 3 dated August 24, 1995, by Four Partners, a
New York general partnership ("FP"), and relates to the purchase, subsequent to
the filing of Amendment No. 3 to the Schedule 13D, of 64,286 shares of Common
Stock, $.001 par value per share (the "Common Stock") of Gunther International,
Ltd. (the "Issuer").
Item 1. Security and Issuer.
The title of the class of equity securities to which this Statement
relates is the Common Stock, $.001 par value per share (the "Common Stock"), of
Gunther International, Ltd. (the "Issuer"). The principal executive offices of
the Issuer are located at 5 Wisconsin Avenue, Norwich Industrial Park, Norwich,
Connecticut 06360.
Item 2. Identity and Background.
This statement is being filed by Four Partners, a New York general
partnership ("FP"). The principal business of FP is investments. The address of
the principal business and the principal office of FP is c/o Thomas J. Tisch,
667 Madison Avenue, New York, New York 10021. The sole partners of FP are Andrew
H. Tisch 1991 Trust, for which Andrew H. Tisch is the managing trustee, Daniel
R. Tisch 1991
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CUSIP NO. 403203102 13D Page 4 of 45 Pages
Trust, for which Daniel R. Tisch is the managing trustee, James S. Tisch 1991
Trust, for which James S. Tisch is the managing trustee, and Thomas J. Tisch
1991 Trust, for which Thomas J. Tisch is the managing trustee. Thomas J. Tisch
has been appointed the Manager of FP.
Set forth below is certain information with respect to Andrew H. Tisch,
Daniel R. Tisch, James S. Tisch and Thomas J. Tisch (the "Messrs. Tisch"), who
are the respective managing trustees of the four partners of FP:
Present Principal
Name Business Address Occupation
Andrew H. Tisch 667 Madison Avenue Chairman, Management
New York, NY 10021 Committee, Loews
Corporation (a public
company primarily
engaged in insurance
and tobacco)
Daniel R. Tisch c/o Mentor Partners, L.P. General Partner,
499 Park Avenue Mentor Partners,
New York, NY 10022 L.P. (a partnership
engaged in investment
activities)
James S. Tisch 667 Madison Avenue President and Chief
New York, NY 10021 Operating Officer,
Loews Corporation (a
public company
primarily engaged in
insurance and
tobacco)
Thomas J. Tisch 667 Madison Avenue Managing Partner of
New York, NY 10021 FLF Associates and
Manager of FP
(partnerships engaged
in investment
activities)
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CUSIP NO. 403203102 13D Page 5 of 45 Pages
The Messrs. Tisch are brothers and are United States citizens.
During the last five years, none of the persons or the entities named
in this Item 2 has been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors), and none of the persons or the entities
named in this Item 2 has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction resulting in its or his being
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws, or finding any violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
All funds used to purchase the securities reported in Item 5 below were
provided from the working capital of FP. The aggregate purchase price of such
securities was approximately $1,687,087.
Item 4. Purpose of Transaction.
The securities purchased by FP were purchased solely for investment. FP
expects that it will, from time to time, review its investment position in the
Issuer and may, depending on market and other conditions, increase or decrease
such investment position.
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CUSIP NO. 403203102 13D Page 6 of 45 Pages
FP has no intention of seeking control of the Issuer, nor does it have
any plans or proposals with respect to any extraordinary corporate transaction
involving the Issuer or any sale of its assets or any change in its Board of
Directors, management, capitalization, dividend policy, charter or by-laws, or
any other change in its business or corporate structure or with respect to the
delisting or deregistration of any of its securities including, without
limitation, those matters described in subparagraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
FP holds 494,189 shares of Common Stock and, pursuant to the beneficial
ownership attribution provisions of Rule 13d-3(d)(1)(i) of the Securities
Exchange Act of 1934, is deemed to be the beneficial owner of 155,000 additional
shares of Common Stock issuable upon exercise of Common Stock Purchase Warrants
(the "Warrants") it acquired (a) on December 21, 1993 in connection with the
Issuer's initial public offering through a purchase of 100,000 units (the
"Units"), each consisting of one share of Common Stock and one Warrant, and (b)
in two transactions aggregating 55,000 Warrants reported in Amendment No. 2 to
Schedule 13D dated June 23,1995. Each Warrant is exercisable for one share of
Common Stock at an exercise price of $6.00 per
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CUSIP NO. 403203102 13D Page 7 of 45 Pages
share. Each Warrant became exercisable on December 21, 1994, one-year following
FP's acquisition of the Units.
(a) Set forth in the table below is the aggregate number of shares of
Common Stock beneficially owned as of the date hereof by each person or entity
listed in Item 2 of the Schedule 13D, together with the percentage of
outstanding shares of Common Stock which is beneficially owned by each such
person or entity.
Name of Amount and Nature of % of Class
Beneficial Owner Beneficial Ownership Outstanding (1)(2)
Four Partners 649,189 (2) 14.6% (2)
Andrew H. Tisch
1991 Trust 0 (3) 0
Daniel R. Tisch
1991 Trust 0 (3) 0
James S. Tisch
1991 Trust 0 (3) 0
Thomas J. Tisch
1991 Trust 0 (3) 0
Andrew H. Tisch 0 (3) 0
Daniel R. Tisch 0 (3) 0
James S. Tisch 0 (3) 0
Thomas J. Tisch 0 (3) 0
--------- ----
Total 649,189 14.6% (1)(2)
(1) The Issuer's 10-QSB for the fiscal quarter ended June 30, 1996
indicated that 4,133,269 shares of Common Stock were issued and
outstanding on August 12, 1996. FP believes that a total of 150,000
additional shares of Common Stock were issued at the time FP made its
most recent purchase on August 26, 1996. For purposes of this Schedule
13D, FP has therefore assumed that the number of outstanding shares of
Common Stock is approximately 4,283,269.
(2) Assumes that the 155,000 shares of Common Stock issuable upon exercise
of the Warrants have been issued and are outstanding and that no other
outstanding options,
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CUSIP NO. 403203102 13D Page 8 of 45 Pages
warrants, rights or conversion privileges have been exercised.
(3) Does not include shares owned by FP. None of the Messrs. Tisch
beneficially owns any shares of Common Stock, except to the extent that
beneficial ownership of shares of Common Stock beneficially owned by FP
may be attributed to them.
(b) With respect to the persons and entities named in response to
paragraph (a) above:
(i) FP has directly the sole power to vote or direct the vote and
dispose or direct the disposition of the 494,189 shares of Common Stock
owned by it and the 155,000 shares of Common Stock issuable upon exercise of
the Warrants; and
(ii) By virtue of their status as managing trustees of the trusts which
are the general partners of FP, the Messrs. Tisch may be deemed to have
indirectly shared power to vote or direct the vote and dispose or direct the
disposition of the 494,189 shares of Common Stock owned by FP and the
155,000 shares of Common Stock issuable upon exercise of the Warrants owned
by FP.
(c) The following transactions were effected by FP during the past 60
days. None of the persons or entities named in Item 2 above effected any other
transactions in the Common Stock during the past 60 days.
Transaction Date Security No. Price/Share Market
Privately
Purchase 9/26/96 Common 64,286 $3.50 Negotiated
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CUSIP NO. 403203102 13D Page 9 of 45 Pages
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
None of the persons or entities named in Item 2 above has any express
contracts, arrangements or understandings with any of the other persons or
entities named in Item 2 above with respect to the securities of the Issuer.
Except as set forth in this Schedule 13D, none of the persons or entities named
in Item 2 above has any contracts, arrangements, understandings or relationships
with any other person with respect to the securities of the Issuer.
August 14, 1995 Stock Purchase Agreement
On August 14, 1995, FP entered into a Stock Purchase Agreement (the
"August 14, 1995 Stock Purchase Agreement") with the Issuer pursuant to which FP
purchased 133,333 shares (the "1995 Shares") of Common Stock at a price of $3.00
per share. Pursuant to the August 14, 1995 Stock Purchase Agreement, the Issuer
agreed to use its best efforts to register the 1995 Shares under the Securities
Act of 1933, as amended (the "Securities Act"), in connection with the Issuer's
Registration Statement on Form S-1 (Registration No. 33-91736). The Issuer
agreed that if it is unable to cause the Registration Statement on Form S-1
including the 1995 Shares to become effective, then the Issuer will use its best
efforts to effect the registration of the 1995 Shares under
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CUSIP NO. 403203102 13D Page 10 of 45 Pages
the Securities Act on Form S-3 or such applicable form as may be properly
designated by the Issuer, and in connection therewith, the Issuer will promptly
prepare and file with the Commission a registration statement (the "New
Registration Statement") under the Securities Act and use its best efforts to
cause such New Registration Statement to become effective. The Issuer also
agreed to use its best efforts to maintain the Registration Statement current
under the Securities Act from its effective date until the earlier of (i) the
date which is two (2) years from the date of the August 14, 1995 Stock Purchase
Agreement or (ii) the date on which all 1995 Shares included therein have been
sold. The Issuer agreed to indemnify FP against certain liabilities relating to
specified violations of the Securities Act, the Securities Exchange Act of 1934,
as amended, state securities laws, or violations of regulations promulgated
under any of the above-mentioned laws.
The issuance to FP of the 1995 Shares acquired pursuant to the August
14, 1995 Stock Purchase Agreement was not registered under the Securities Act.
FP acknowledged that it must hold the 1995 Shares indefinitely unless they are
registered under the Securities Act or an exemption from such registration is
available. FP acknowledged that the Issuer may place restrictive legends on, and
stop transfer orders against, the certificates representing the 1995 Shares that
it is acquiring.
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CUSIP NO. 403203102 13D Page 11 of 45 Pages
August 26, 1996 Stock Purchase Agreement
On August 26, 1996, FP entered into a Stock Purchase Agreement (the
"August 26, 1996 Stock Purchase Agreement") with the Issuer pursuant to which FP
purchased 64,286 shares (the "1996 Shares") of Common Stock at a price of $3.50
per share. Pursuant to the August 26, 1996 Stock Purchase Agreement, the Issuer
agreed that if at any time it proposed to register the shares of Common Stock
under the Securities Act of 1933, as amended (the "Securities Act"), it would
cause any shares of Common Stock specified by FP to be registered and included
in the Issuer's registration statement. The Issuer agreed to indemnify FP
against certain liabilities relating to specified violations of the Securities
Act, the Securities Exchange Act of 1934, as amended, state securities laws, or
violations of regulations promulgated under any of the above-mentioned laws.
The issuance to FP of the 1996 Shares acquired pursuant to the August
26, 1996 Stock Purchase Agreement was not registered under the Securities Act.
FP acknowledged that it must hold the 1996 Shares indefinitely unless they are
registered under the Securities Act or an exemption from such registration is
available. FP acknowledged that the Issuer may place restrictive legends on, and
stop transfer orders against, the certificates representing the 1996 Shares that
it is acquiring.
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CUSIP NO. 403203102 13D Page 12 of 45 Pages
Other than the August 14, 1995 Stock Purchase Agreement and the August
26, 1996 Stock Purchase Agreement, none of the persons or entities named in Item
2 above has any contracts, arrangements, understandings or relationships with
the Issuer.
Item 7. Material to be filed as Exhibits.
Exhibit 1. Stock Purchase Agreement dated August 14, 1995
between the Issuer and FP.
Exhibit 2. Stock Purchase Agreement dated August 26, 1996
between the Issuer and FP.
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CUSIP NO. 403203102 13D Page 13 of 45 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
hereby certify that the information set forth in this statement is true,
complete and correct.
October 24, 1996 FOUR PARTNERS
By /s/ Thomas J. Tisch
Thomas J. Tisch
Manager of Four Partners
Exhibit 1
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of August 14, 1995, by and among GUNTHER
INTERNATIONAL, LTD., a Delaware corporation (the "Company"), and each of the
persons severally listed on the Schedule of Purchasers attached hereto. The
persons listed on the Schedule of Purchasers are sometimes hereinafter
collectively referred to as the "Purchasers" and individually as a "Purchaser."
WHEREAS, the Company desires to issue to sell, and the Purchasers
desire to purchase, a total of 334,000 shares of Common Stock, $.01 par value
(the "Common Stock"), of the Company, subject to the terms and conditions
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and each Purchaser,
severally and not jointly, hereby agree as follows:
SECTION 1. Sale and Purchase of the Shares. At the Closing (as defined
in Section 2.1 hereof), and subject to the terms and conditions hereof and in
reliance upon the representations, warranties and agreements contained herein,
the Company is issuing and selling to the Purchasers and each Purchaser is
purchasing from the Company the number of shares (the "Shares") of Common Stock
set forth opposite its name in the column labelled "Number of Shares" on the
Schedule of Purchasers for a purchase price of $3.00 per share, or a total
purchase price (the "Purchase Amount") set forth opposite the name of such
Purchaser in the column labelled "Purchase Amount" on the Schedule of
Purchasers.
SECTION 2
Closing, Payment and Delivery
2.1 Closing Date and Place of Closing. The closing of the purchase and
sale of the Shares hereunder (the "Closing") in the amounts and to the persons
specified in the Schedule of Purchasers shall be held simultaneously with the
execution and delivery of this Agreement at the offices of Reid & Priest LLP, 40
West 57th Street, New York, New York, at 10:00 a.m. Eastern Standard Time on the
date hereof (the "Closing Date") or at such other place and time as may be
mutually agreed upon by the Company and the Purchasers.
2.2 Payment and Delivery. At the Closing, each Purchaser shall pay to
the Company by wire transfer of immediately available funds or such other form
of payment as shall be mutually agreed upon by the Company and that Purchaser,
the Purchase Amount set forth opposite its name in the column labelled
"Purchaser Amount" on the Schedule of Purchasers, and the Company shall deliver
to each Purchaser a certificate or certificates representing the number of
Shares purchased as set forth opposite such Purchaser's name in the column
labelled "Number of Shares" on the Schedule of Purchasers.
SECTION 3
Representations and Warranties of the Company
The Company hereby represents and warrants to each Purchaser as
follows:
3.1 Organization, Qualification, Certificate and By-laws. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company is duly qualified or licensed to do
business as a foreign corporation in good standing in every jurisdiction where
the character of its properties, owned or leased, or the nature of its
activities make such qualification necessary.
3.2 Corporate Power. The Company has all requisite corporate power to
enter into this Agreement, to sell the Shares and to carry out and perform its
obligations under the terms of this Agreement, and also to own properties owned
by it and to conduct business as being conducted by it.
3.3 Capitalization. The Company's authorized capital stock, as of March
31, 1995, consists of 16,000,000 shares of Common Stock of which 3,596,275
shares of Common Stock are issued and outstanding, and 500,000 shares of
Preferred Stock, par value $.001 per share, none of which was outstanding. The
Company has reserved 125,000 shares of Common Stock for issuance upon the
exercise of outstanding options and warrants. All of the issued and outstanding
shares of Common Stock are validly issued, fully paid and non-assessable. All of
the Shares being issued to the Purchasers pursuant to this Agreement upon
issuance against payment therefor will be validly issued, fully paid and
non-assessable shares of Common Stock, and the issuance thereof is not subject
to preemptive rights. Except as disclosed in the Company's Reports (as
hereinafter defined), there are no outstanding options, warrants or other rights
of any kind to acquire any additional shares of capital stock of the Company or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire any such additional shares, nor is the
Company committed to issue any such option, warrant, right or security.
3.4 No Restrictive Agreements. The issuance and delivery of the Shares
to the Purchasers is not subject to any preemptive rights. Upon the delivery of
the Shares in the manner contemplated hereunder, the Purchasers will acquire the
beneficial and legal, valid and indefeasible title to such Shares, free and
clear of all pledges, liens, charges, claims or options of any kind, except for
restrictions on transfer under federal and state securities laws. Except as in
the Company's Reports, there are no agreements relating to the voting, purchase
or sale of capital stock of the Company (i) between or among the Company and any
of its stockholders and (ii) to the best of Company's knowledge, between or
among any of the Company's stockholders.
3.5 Authorization. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance by the
Company of this Agreement and for the authorization, issuance and delivery of
the Shares issuable upon payment therefor has been taken. This Agreement
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
3.6 Financial Information. The Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1995 (the "Company 10-K"), as amended (the
"Company's Reports") present fairly the financial position and results of
operations of the Company at the dates and for the periods to which they relate.
The audited financial statements contained in the Company's Reports have been
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved (except as may be
otherwise indicated in the notes thereto).
3.7 Absence of Certain Changes. At all times since March 31, 1995,
there has not been any event or condition of any character which has adversely
affected, or may be expected to adversely affect, the Company's business or
prospects, including but not limited to:
(a) any material adverse change in the condition, assets, liabilities
(existing or contingent) or business of the Company from that shown on the
Company's Reports;
(b) any damage, destruction or loss of any of the properties or assets
of the Company (whether or not covered by insurance) materially adversely
affecting the business or plans of the Company;
(c) any declaration, setting aside or payment or other distribution in
respect of any of the Company's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock by the Company;
(d) any actual or threatened cancellation or adverse modification of
any licensing agreement, marketing agreement or strategic partnership agreement
to which the Company is a party; or
(e) any labor trouble, or any other event or condition of any
character, materially adversely affecting the business or plans of the Company.
3.8 Taxes. The Company has filed or will file within the time
prescribed by law (including extensions of time approved by the appropriate
taxing authority) all tax returns and reports required to be filed with the
United States Internal Revenue Service and with the States of Delaware and
California and (except to the extent that the failure to file would not have a
material adverse effect on the condition or operations of the Company) with all
other jurisdictions where such filing is required by law. The Company has paid,
or made adequate provision for the payment of, all taxes, interest, penalties,
assessments or deficiencies shown to be due or claimed to be due on or in
respect of such tax returns and reports. The Company's federal income tax
returns have not, to the best of the Company's knowledge and belief, been
audited by the Internal Revenue Service.
3.9 Litigation. Except as otherwise disclosed in the Company's Reports,
there is neither pending nor, to the Company's knowledge, threatened any action,
suit, proceeding or claim to which the Company is or may be named as a party or
its property is or may be subject and in which an unfavorable outcome, ruling or
finding in any such matter or for all such matters taken as a whole might have a
material adverse effect on the condition, financial or otherwise, and operations
or prospects of the Company. The Company has no knowledge of any unasserted
claim which, if asserted and granted might have a material adverse effect on the
condition, financial or otherwise, operations or prospects of the Company.
3.10 Consents. Except for those consents and filings contemplated by
Section 5.2 hereof in connection with the Registration Statement, no consent,
approval, qualification, order or authorization of, or filing with, any
governmental authority is required in connection with the Company's execution,
delivery or performance of this Agreement, or the offer, sale or issuance of the
Shares by the Company other than "Blue Sky" filings which have been made based
upon the addresses of the Purchasers as set forth on the Schedule of Purchasers.
3.11 Compliance. The execution, delivery and performance of this
Agreement by the Company does not conflict with or cause a breach under any of
the terms or conditions of (i) its Certificate of Incorporation or By-laws or
(ii) any mortgage, indenture, contract, agreement, instrument, judgment, decree,
order, statute, rule or regulation to which the Company is subject and a breach
or violation of which might have a material adverse effect on the condition,
financial or otherwise, operations or prospects of the Company. To the best
knowledge of the Company, the operations of the Company and each Subsidiary have
complied and are in compliance in all material respects with all applicable
federal, state and local laws, and where appropriate, foreign laws, including,
without limitation, health, safety and environmental statues, regulations,
orders and judgments, except to the extent any failure to so comply would not
have a material adverse effect on the condition, financial or otherwise,
operations or prospects of the Company and the Subsidiaries, taken as a whole (a
"Company Material Adverse Effect"). The Company possesses all permits, licenses
and approvals of governmental authorities which are required in the operation of
its business, except for those the failure of which to hold might have a Company
Material Adverse Effect. To the best knowledge of the Company, the Company is in
compliance in all material respects with the terms and conditions of such
permits, licenses and approvals.
3.12 Company's Reports. The Company's Reports, taken as a whole as of
the date hereof, do not contain any untrue statement of material fact or omit to
state a material fact required to be state therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
3.13 Intellectual Property. The Company owns or has valid, adequate and
subsisting rights to use and exploit all patents, patent licenses, trade
secrets, copyrights, trademarks and service marks necessary for the conduct of
the business of the Company as described in the Company's Reports (collectively,
the "Intellectual Property") free and clear of any pledge, lien, charge, claim
or option. Such Intellectual Property is valid and in full force and effect,
except to the extent set forth in the Company Reports. None of the processes
currently used by the Company or any of the properties or products currently
sold by the Company or trademarks, trade names, labels or other marks or
copyrights used by the Company, to the best knowledge of the Company, infringes
the patent, industrial property, trademark, trade name, label, other mark, right
or copyright of any other person or entity. The Company has not received any
written notice of adverse claim with respect to any of the Intellectual
Property, and, to the Company's best knowledge, no basis exist for any such
claim.
SECTION 4
Representations and Warranties of Purchasers
Each Purchaser represents and warrants to the Company, severally and
not jointly, and only as to itself, as follows:
4.1 Experience. He is experienced in evaluating and investing in
companies such as the Company, and has such knowledge and experience in
evaluating the merits and risks of his investment, and has the ability to bear
the economic risks of his investment. He is an "accredited investor", as such
term is defined in Regulation D under the Securities Act.
4.2 Investment. He is acquiring the Shares for investment for its own
account and not with the view to, or for resale in connection with, any
distribution thereof (subject to the provisions of Sections 5.2(a) and 5.2(b)
hereof). He understands that the Shares have not been registered under the
Securities Act by reason of specified exemption from the registration provisions
of the Securities Act which depends upon, among other things, the bona fide
nature of its investment intent as expressed herein. He acknowledges that the
Company may place restrictive legends on, and stop transfer orders against, the
certificates representing the Shares that he is acquiring.
4.3 Rule 144. He acknowledges that the Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available. He has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions and that such Rule may not become available
for resale of the Shares.
4.4 Authority. He has full power and authority under all applicable
laws to enter into this Agreement and to consummate the transactions herein and
has taken all action necessary to authorize its execution and performance of
this Agreement. This Agreement when executed and delivered will be duly executed
and will constitute a legal, valid and binding obligation of each of the
Purchasers, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement or creditors' rights generally and general
principles of equity.
4.5 Access to Information. He is fully familiar with the Company's
business, operations and financial history as set forth in the Company's
Reports. He has had an opportunity to discuss and to ask questions with respect
to the Company's business, operations and financial affairs with appropriate
officers of the Company and has had the opportunity to review the Company's
facilities.
SECTION 5
Covenants of the Company
5.1 Future Reports. For a period of two (2) years after the date hereof
and so long as the Purchaser is a holder of Shares, the Company will furnish to
the Purchaser (i) all annual, quarterly and periodic reports and proxy
statements filed by the Company with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (ii) all registration statements filed by the Company under
the Securities Act, within five (5) days after filing such report or
registration statement with the Commission. So long as any Purchaser holds any
Shares, the Company will file all reports required to be filed by it under the
Exchange Act and will take such further action as any Purchaser may reasonably
request, all to the extent required to enable such Purchaser to sell pursuant to
(i) Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act or (ii) a registration statement on Form S-3 or such other
registration form of the Securities and Exchange Commission applicable to the
sale of securities for the account of securities holders. The Company will also
promptly furnish to the Purchasers copies of all reports or other material
information relating to the Company which it furnishes to any other shareholder
(as such) of the Company.
5.2 Registration Under the Securities Act. (a) The Company shall use
its best efforts to include the Shares in its Registration Statement on Form S-1
(Registration No. 33-91736) filed with the Commission (the "Pending Registration
Statement"), and to use its best efforts to cause the Pending Registration
Statement to become effective. If the Company is unable to cause the Pending
Registration Statement including the Shares to become effective, then the
Company shall use its best efforts to effect the registration of the Shares
under the Securities Act on Form S-3 or such applicable form as may be properly
designated by the Company, and in connection therewith, the Company shall as
promptly as reasonably practicable, prepare and file with the Commission a
registration statement (the "New Registration Statement") under the Securities
Act and use its best efforts to cause such New Registration Statement to become
effective. The Company shall use its best efforts to maintain the Registration
Statement current under the Securities Act from its effective date until the
earlier of (i) the date which is two (2) years from the date of this Agreement
or (ii) the date on which all Shares included therein have been sold. The
Company shall bear the entire cost and expense of the Pending Registration
Statement or the New Registration Statement initiated by it under this Section.
The Company shall supply prospectuses and such other documents as each Purchaser
may request and shall qualify the Shares for sale in such jurisdictions as
requested, provided, however, that the Company reserves the right, in its sole
discretion, not to qualify the Shares in any jurisdiction where the Company
would be required to qualify as a foreign corporation and is not otherwise
required to be qualified therein.
(b) The obligations of the Company and the rights of the Purchasers
under this Section 5.2 shall be subject to the following additional terms,
conditions and limitations:
(i) Furnishing of Information. Each Purchaser shall be required to
furnish to the Company and to its counsel all relevant information concerning
the proposed method of sale or other distribution by such Purchaser of its
Shares, and such other information as the Company and its counsel reasonably may
require to amend the Pending Registration Statement or to prepare and file the
New Registration Statement in accordance with the applicable provisions of the
Securities Act and the rules and regulations promulgated by the Commission
thereunder. If requested by the Company, such information shall be furnished in
writing.
(ii) Sales Suspension. If, at any time when the Company is required to
maintain a registration statement effective and current with respect to the
Shares any event or events shall occur which would cause the prospectus
contained therein, as then amended or supplemented, to be other than in
compliance with the requirements of Section 10 of the Securities Act, the
Company will promptly give notice thereof to each Purchaser and, upon receipt of
such notice, each Purchaser shall immediately cease and desist from effecting
any sales of its Shares until it shall have received notice from the Company
that such sales again may be effected together with copies of a prospectus which
has been amended or supplemented so as to conform to the requirements of said
Section 10. Upon the occurrence of any such event, the Company promptly shall
use its best efforts to prepare and file with the Commission a post-effective
amendment to such registration statement, or a post-effective amendment or
supplement to the prospectus, so that the prospectus, as so amended or
supplemented, will comply with the requirements of Section 10 of the Securities
Act.
(iii) Indemnification. (A) The Company will indemnify and hold harmless
each Purchaser, the officers and directors, if any, of such Purchaser, and each
person, if any, who controls such Purchaser, (each, an "Indemnified Holder"),
against any losses, claims, damages, expenses (including reasonable costs of
investigation), and liabilities (joint or several) (collectively, "Claims") to
which any of them may become subject under the Securities Act, the Exchange Act,
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"Violation"): (I) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any post-effective amendment
thereof, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (II) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of the Registration Statement, or contained in the final prospectus (as amended
or supplemented if the Company files any amendment thereof or supplement thereto
with the Commission) or in any document incorporated by reference therein or the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or (III) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulations promulgated
under the Securities Act, the Exchange Act or any state securities law. Subject
to the restrictions set forth in Part (C) below with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Holders promptly as
such expenses are incurred and are due and payable for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Part (A): (x) shall not
apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Holder expressly for use in connection with the
preparation of either the Pending Registration Statement or the New Registration
Statement or any such amendment thereof or supplement thereto; (y) with respect
to any preliminary prospectus, shall not inure to the benefit of any such person
from whom the person asserting any such Claim purchased the Shares that are the
subject thereof (or to the benefit of any person controlling such person) if the
untrue statement or omission of material fact contained in the preliminary
prospectus was corrected in the prospectus, as then amended or supplemented and
such corrected prospectus was furnished by the Company for delivery to such
person as required by law; and (z) shall not apply to amounts paid in settlement
of any Claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Holder.
(B) Each Purchaser agrees to indemnify and hold harmless, to the same
extent and in the same manner set forth in Part (A) of this Subsection (iii),
the Company, each of its directors, each of its officers who sign the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, the other Purchasers selling
Shares pursuant to either the Pending Registration Statement or the New
Registration Statement or any of their respective directors or officers or any
person who controls such Purchaser (collectively and together with an
Indemnified Holder, an "Indemnified Party"), against any Claim to which any of
them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished to the
Company by such Purchaser expressly for use in connection with such Registration
Statement; and such Purchaser will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnification contained in this Part B
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Purchaser, which consent
shall not be unreasonably withheld and provided, further, that such Purchaser
shall be liable under this Part B for only that amount of a Claim as does not
exceed the net proceeds to such Purchaser as a result of the sale of the Shares
pursuant to either the Pending Registration Statement or the New Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party.
(C) Promptly after receipt by a person seeking indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action
(including any governmental action), such Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party (an "Indemnifying
Party") under this Subsection (iii), deliver to the Indemnifying party a written
notice of the commencement thereof and the Indemnifying Party shall have the
right to participate in, and, to the extent the Indemnifying Party so desires,
jointly with any other Indemnifying Party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the Indemnifying
Parties; provided, however, that an Indemnified Party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
Indemnifying Party, if, in the reasonable opinion of counsel for the Indemnified
Party, representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by
counsel to the Indemnifying Party in such proceeding. The Company shall pay for
only one legal counsel (in addition to any local counsel) for the Purchasers;
such legal counsel shall be selected by Purchasers holding a majority in
interest of the Shares. The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action shall not relive such Indemnifying Party of any liability to the
Indemnified Party under this Subsection (iii), except to the extent that the
Indemnifying Party is substantially prejudiced in its ability to defend such
action as a result of such failure.
SECTION 6
Miscellaneous
6.1 Governing Law. This Agreement shall be governed by and construed
with the laws of the State of New York, without reference to the conflicts of
law principles thereof.
6.2 Survival. The representations and warranties made in Sections 3 and
4 herein shall survive the Closing for a period of one year.
6.3 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors,
assigns, heirs, executors and administrators.
6.4 Entire Agreement; Amendment. This Agreement and the documents
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Company and the Purchasers;
provided, however, that Purchasers of at least eighty (80%) percent of the
Shares together with the Company, may by written instrument amend the provisions
of Section 5.2 hereof.
6.5 Notice, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or by express courier, or delivered either by hand or by
messenger, addressed (a) if to a Purchaser, as indicated on the Schedule of
Purchasers attached hereto, or at such other address as such Purchaser shall
have furnished to the Company in writing, or (b) if to the Company, at 5
Wisconsin Avenue, Norwich Industrial Park, Norwich, Connecticut 06360, Attn:
President and Chief Executive Officer, or at such other address as the Company
shall have furnished to the Purchasers in writing.
6.6 Rights; Separability. Unless otherwise expressly provided herein,
the rights of the Purchasers hereunder are several rights, not rights jointly
held with any of the other Purchasers. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceabilty of the remaining provisions shall not in any way be affected or
impaired thereby.
6.7 Broker. The Company and each Purchaser represent to the other that
it has not retained any person who might be entitled to a commission or finder's
fee in connection with the negotiation and execution of this Agreement. Each
party hereto agrees to indemnify the other from any liability for commissions or
finder's fees by reason of such party's breach of the foregoing representation.
This Section 6.7 shall survive the Closing.
6.8 Information Confidential. Each Purchaser acknowledges that the
information received by it pursuant to this Agreement may be confidential and is
for the Purchaser's use only. It will not use such confidential information in
violation of the Exchange Act or otherwise, or reproduce, disclose or
disseminate such information to any other person (other than its employees or
agents having a need to know the contents of such information, and its attorneys
and financial advisors), except in connection with the exercise of rights under
this Agreement, unless the Company has made such information available to the
public generally or such Purchaser is required to disclose such information by a
governmental body.
6.9 Expenses. The Company and the Purchasers shall bear their own
expenses and legal fees incurred on their behalf with respect to this Agreement
and the transactions contemplated hereby, except as otherwise provided herein.
6.10 Titles and Gender. The titles of the Sections and Subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. Whenever used herein, the singular
member includes the plural, the plural includes the singular, and the use of any
gender shall include all genders.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.
GUNTHER INTERNATIONAL, LTD.
By:/s/ James H. Whitney
James H. Whitney
President and Chief
Executive Officer
PURCHASERS:
FOUR PARTNERS
/s/ Thomas J. Tisch
<PAGE>
GUNTHER INTERNATIONAL, LTD.
SCHEDULE OF PURCHASERS
Aggregate
Name and Address Number Purchase
of Purchaser of Shares Price
- ---------------- --------- ---------
Four Partners 133,333 $399,999
Exhibit 2
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of August 26, 1996, by and among GUNTHER
INTERNATIONAL, LTD., a Delaware corporation (the "Company"), and each of the
persons severally listed on the Schedule of Purchasers attached hereto. The
persons listed on the Schedule of Purchasers are sometimes hereinafter
collectively referred to as the "Purchasers" and individually as a "Purchaser."
WHEREAS, the Company desires to issue to sell, and the Purchasers
desire to purchase, a total of 150,000 shares of Common Stock, $.01 par value
(the "Common Stock"), of the Company, subject to the terms and conditions
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and each Purchaser,
severally and not jointly, hereby agree as follows:
SECTION 1. Sale and Purchase of the Shares. At the Closing (as defined
in Section 2.1 hereof), and subject to the terms and conditions hereof and in
reliance upon the representations, warranties and agreements contained herein,
the Company is issuing and selling to the Purchasers and each Purchaser is
purchasing from the Company the number of shares (the "Shares") of Common Stock
set forth opposite its name in the column labelled "Number of Shares" on the
Schedule of Purchasers for a purchase price of $3.50 per share, or a total
purchase price (the "Purchase Amount") set forth opposite the name of such
Purchaser in the column labelled "Purchase Amount" on the Schedule of
Purchasers.
SECTION 2
Closing, Payment and Delivery
2.1 Closing Date and Place of Closing. The closing of the purchase and
sale of the Shares hereunder (the "Closing") in the amounts and to the persons
specified in the Schedule of Purchasers shall be held simultaneously with the
execution and delivery of this Agreement at the offices of Reid & Priest LLP, 40
West 57th Street, New York, New York, at 10:00 a.m. Eastern Standard Time on the
date hereof (the "Closing Date") or at such other place and time as may be
mutually agreed upon by the Company and the Purchasers.
2.2 Payment and Delivery. At the Closing, each Purchaser shall pay to
the Company by wire transfer of immediately available funds or such other form
of payment as shall be mutually agreed upon by the Company and that Purchaser,
the Purchase Amount set forth opposite its name in the column labelled
"Purchaser Amount" on the Schedule of Purchasers, and the Company shall deliver
to each Purchaser a certificate or certificates representing the number of
Shares purchased as set forth opposite such Purchaser's name in the column
labelled "Number of Shares" on the Schedule of Purchasers.
SECTION 3
Representations and Warranties of the Company
The Company hereby represents and warrants to each Purchaser as
follows:
3.1 Organization, Qualification, Certificate and By-laws. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company is duly qualified or licensed to do
business as a foreign corporation in good standing in every jurisdiction where
the character of its properties, owned or leased, or the nature of its
activities make such qualification necessary.
3.2 Corporate Power. The Company has all requisite corporate power to
enter into this Agreement, to sell the Shares and to carry out and perform its
obligations under the terms of this Agreement, and also to own properties owned
by it and to conduct business as being conducted by it.
3.3 Capitalization. The Company's authorized capital stock, as of March
31, 1996, consists of 16,000,000 shares of Common Stock of which 4,133,269
shares of Common Stock are issued and outstanding, and 500,000 shares of
Preferred Stock, par value $.001 per share, none of which were outstanding. The
Company has reserved 125,000 shares of Common Stock for issuance upon the
exercise of outstanding options and warrants. All of the issued and outstanding
shares of Common Stock are validly issued, fully paid and non-assessable. All of
the Shares being issued to the Purchasers pursuant to this Agreement upon
issuance against payment therefor will be validly issued, fully paid and
non-assessable shares of Common Stock, and the issuance thereof is not subject
to preemptive rights. Except as disclosed in the Company's Reports (as
hereinafter defined), there are no outstanding options, warrants or other rights
of any kind to acquire any additional shares of capital stock of the Company or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any such additional shares, nor is the
Company committed to issue any such option, warrant, right or security.
3.4 No Restrictive Agreements. The issuance and delivery of the Shares
to the Purchasers is not subject to any preemptive rights. Upon the delivery of
the Shares in the manner contemplated hereunder, the Purchasers will acquire the
beneficial and legal, valid and indefeasible title to such Shares, free and
clear of all pledges, liens, charges, claims or options of any kind, except for
restrictions on transfer under federal and state securities laws. Except as in
the Company's Reports, there are no agreements relating to the voting, purchase
or sale of capital stock of the Company (i) between or among the Company and any
of its stockholders and (ii) to the best of Company's knowledge, between or
among any of the Company's stockholders.
3.5 Authorization. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance by the
Company of this Agreement and for the authorization, issuance and delivery of
the Shares issuable upon payment therefor has been taken. This Agreement
constitutes a valid and binding agreement of the Company enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
3.6 Financial Information. The Company's Annual Report on Form 10-KSB
for the fiscal year ended March 31, 1996 (the "Company 10-K"), as amended (the
"Company's Reports") present fairly the financial position and results of
operations of the Company at the dates and for the periods to which they relate.
The audited financial statements contained in the Company's Reports have been
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved (except as may be
otherwise indicated in the notes thereto).
3.7 Absence of Certain Changes. At all times since March 31, 1996,
there has not been any event or condition of any character which has adversely
affected, or may be expected to adversely affect, the Company's business or
prospects, including but not limited to:
(a) any material adverse change in the condition, assets, liabilities
(existing or contingent) or business of the Company from that shown on the
Company's Reports;
(b) any damage, destruction or loss of any of the properties or assets
of the Company (whether or not covered by insurance) materially adversely
affecting the business or plans of the Company;
(c) any declaration, setting aside or payment or other distribution in
respect of any of the Company's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock by the Company;
(d) any actual or threatened cancellation or adverse modification of
any licensing agreement, marketing agreement or strategic partnership agreement
to which the Company is a party; or
(e) any labor trouble, or any other event or condition of any
character, materially adversely affecting the business or plans of the Company.
3.8 Taxes. The Company has filed or will file within the time
prescribed by law (including extensions of time approved by the appropriate
taxing authority) all tax returns and reports required to be filed with the
United States Internal Revenue Service and with the States of Delaware and
California and (except to the extent that the failure to file would not have a
material adverse effect on the condition or operations of the Company) with all
other jurisdictions where such filing is required by law. The Company has paid,
or made adequate provision for the payment of, all taxes, interest, penalties,
assessments or deficiencies shown to be due or claimed to be due on or in
respect of such tax returns and reports. The Company's federal income tax
returns have not, to the best of the Company's knowledge and belief, been
audited by the Internal Revenue Service.
3.9 Litigation. Except as otherwise disclosed in the Company's Reports,
there is neither pending nor, to the Company's knowledge, threatened any action,
suit, proceeding or claim to which the Company is or may be named as a party or
its property is or may be subject and in which an unfavorable outcome, ruling or
finding in any such matter or for all such matters taken as a whole might have a
material adverse effect on the condition, financial or otherwise, and operations
or prospects of the Company. The Company has no knowledge of any unasserted
claim which, if asserted and granted might have a material adverse effect on the
condition, financial or otherwise, operations or prospects of the Company.
3.10 Consents. Except for those consents and filings contemplated by
Section 5.2 hereof in connection with the Registration Statement, no consent,
approval, qualification, order or authorization of, or filing with, any
governmental authority is required in connection with the Company's execution,
delivery or performance of this Agreement, or the offer, sale or issuance of the
Shares by the Company other than "Blue Sky" filings which have been made based
upon the addresses of the Purchasers as set forth on the Schedule of Purchasers.
3.11 Compliance. The execution, delivery and performance of this
Agreement by the Company does not conflict with or cause a breach under any of
the terms or conditions of (i its Certificate of Incorporation or By-Laws or
(ii) any mortgage, indenture, contract, agreement, instrument, judgment, decree,
order, statute, rule or regulation to which the Company is subject and a breach
or violation of which might have a material adverse effect on the condition,
financial or otherwise, operations or prospects of the Company. To the best
knowledge of the Company, the operations of the Company and each Subsidiary have
complied and are in compliance in all material respects with all applicable
federal, state and local laws, and where appropriate, foreign laws, including,
without limitation, health, safety and environmental statues, regulations,
orders and judgments, except to the extent any failure to so comply would not
have a material adverse effect on the condition, financial or otherwise,
operations or prospects of the Company and the Subsidiaries, taken as a whole (a
"Company Material Adverse Effect"). The Company possesses all permits, licenses
and approvals of governmental authorities which are required in the operation of
its business, except for those the failure of which to hold might have a Company
Material Adverse Effect. To the best knowledge of the Company, the Company is in
compliance in all material respects with the terms and conditions of such
permits, licenses and approvals.
3.12 Company's Reports. The Company's Reports, taken as a whole as of
the date hereof, do not contain any untrue statement of material fact or omit to
state a material fact required to be state therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
3.13 Intellectual Property. The Company owns or has valid, adequate and
subsisting rights to use and exploit all patents, patent licenses, trade
secrets, copyrights, trademarks and service marks necessary for the conduct of
the business of the Company as described in the Company's Reports (collectively,
the "Intellectual Property") free and clear of any pledge, lien, charge, claim
or option. Such Intellectual Property is valid and in full force and effect,
except to the extent set forth in the Company Reports. None of the processes
currently used by the Company or any of the properties or products currently
sold by the Company or trademarks, trade names, labels or other marks or
copyrights used by the Company, to the best knowledge of the Company, infringes
the patent, industrial property, trademark, trade name, label, other mark, right
or copyright of any other person or entity. The Company has not received any
written notice of adverse claim with respect to any of the Intellectual
Property, and, to the Company's best knowledge, no basis exist for any such
claim.
SECTION 4
Representations and Warranties of Purchasers
Each Purchaser represents and warrants to the Company, severally and
not jointly, and only as to itself, as follows:
4.1 Experience. He is experienced in evaluating and investing in
companies such as the Company, and has such knowledge and experience in
evaluating the merits and risks of his investment, and has the ability to bear
the economic risks of his investment. He is an "accredited investor", as such
term is defined in Regulation D under the Securities Act.
4.2 Investment. He is acquiring the Shares for investment for its own
account and not with the view to, or for resale in connection with, any
distribution thereof (subject to the provisions of Sections 5.2(a) and 5.2(b)
hereof). He understands that the Shares have not been registered under the
Securities Act by reason of specified exemption from the registration provisions
of the Securities Act which depends upon, among other things, the bona fide
nature of its investment intent as expressed herein. He acknowledges that the
Company may place restrictive legends on, and stop transfer orders against, the
certificates representing the Shares that he is acquiring.
4.3 Rule 144. He acknowledges that the Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available. He has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions and that such Rule may not become available
for resale of the Shares.
4.4 Authority. He has full power and authority under all applicable
laws to enter into this Agreement and to consummate the transactions herein and
has taken all action necessary to authorize its execution and performance of
this Agreement. This Agreement when executed and delivered will be duly executed
and will constitute a legal, valid and binding obligation of each of the
Purchasers, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement or creditors' rights generally and general
principles of equity.
4.5 Access to Information. He is fully familiar with the Company's
business, operations and financial history as set forth in the Company's
Reports. He has had an opportunity to discuss and to ask questions with respect
to the Company's business, operations and financial affairs with appropriate
officers of the Company and has had the opportunity to review the Company's
facilities.
SECTION 5
Covenants of the Company
5.1 Future Reports. For a period of two (2) years after the date hereof
and so long as the Purchaser is a holder of Shares, the Company will furnish to
the Purchaser (i) all annual, quarterly and periodic reports and proxy
statements filed by the Company with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (ii) all registration statements filed by the Company under
the Securities Act, within five (5) days after filing such report or
registration statement with the Commission. So long as any Purchaser holds any
Shares, the Company will file all reports required to be filed by it under the
Exchange Act and will take such further action as any Purchaser may reasonably
request, all to the extent required to enable such Purchaser to sell pursuant to
(i) Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act or (ii) a registration statement on Form S-3 or such other
registration form of the Securities and Exchange Commission applicable to the
sale of securities for the account of securities holders. The Company will also
promptly furnish to the Purchasers copies of all reports or other material
information relating to the Company which it furnishes to any other shareholder
(as such) of the Company.
5.2 Registration Under the Securities Act. (a) If the Company at any
time proposes to register any shares of Common Stock under the Securities Act,
the Company will promptly give written notice to Purchaser of its intention to
do so and, upon the written request of Purchaser given within 30 days after
receipt of any such notice (which request shall specify the number of shares of
Common Stock intended to be included in such Registration Statement by
Purchaser), the Company will cause all such shares to be so registered and
included in such Registration Statement; provided, that the Company may elect to
not cause any such shares to be so registered (i) if such Registration Statement
is in connection with an underwritten offering and the underwriters object to
the inclusion of such shares for valid business reasons, or (ii) in the case of
a registration solely to implement a dividend reinvestment or similar plan, an
employee benefit plan or a registration filed on Form S-4 or any successor form,
or a registration filed on a form which does not permit registrations of
resales. If some but not all the shares of Common Stock with respect to which
the Company shall have received requests for registration shall be excluded from
any such registration in connection with an underwritten offering, the Company
shall make appropriate allocation of shares to be registered among the Purchaser
and any other person (other than the Company or any person exercising demand
registration rights in connection with such registration) who or which is
permitted to register their shares of Common Stock in connection with such
registration pro rata in the proportion that the number of shares requested to
be registered by each selling shareholder bears to the total number of shares
requested to be registered by all persons then desiring to have Common Stock
registered for sale. The Company shall bear the entire cost and expense of the
Registration Statement. The Company shall supply prospectuses and such other
documents as each Purchaser may request and shall qualify the Shares for sale in
such jurisdictions as requested, provided, however, that the Company reserves
the right, in its sole discretion, not to qualify the Shares in any jurisdiction
where the Company would be required to qualify as a foreign corporation and is
not otherwise required to be qualified therein.
(b) The obligations of the Company and the rights of the Purchasers
under this Section 5.2 shall be subject to the following additional terms,
conditions and limitations:
(i) Furnishing of Information. Each Purchaser shall be required to
furnish to the Company and to its counsel all relevant information concerning
the proposed method of sale or other distribution by such Purchaser of its
Shares, and such other information as the Company and its counsel reasonably may
require to prepare and file the Registration Statement in accordance with the
applicable provisions of the Securities Act and the rules and regulations
promulgated by the Commission thereunder. If requested by the Company, such
information shall be furnished in writing.
(ii) Sales Suspension. If, at any time when the Company is required to
maintain a registration statement effective and current with respect to the
Shares any event or events shall occur which would cause the prospectus
contained therein, as then amended or supplemented, to be other than in
compliance with the requirements of Section 10 of the Securities Act, the
Company will promptly give notice thereof to each Purchaser and, upon receipt of
such notice, each Purchaser shall immediately cease and desist from effecting
any sales of its Shares until it shall have received notice from the Company
that such sales again may be effected together with copies of a prospectus which
has been amended or supplemented so as to conform to the requirements of said
Section 10. Upon the occurrence of any such event, the Company promptly shall
use its best efforts to prepare and file with the Commission a post-effective
amendment to such registration statement, or a post-effective amendment or
supplement to the prospectus, so that the prospectus, as so amended or
supplemented, will comply with the requirements of Section 10 of the Securities
Act.
(iii) Indemnification. (A) The Company will indemnify and hold harmless
each Purchaser, the officers and directors, if any, of such Purchaser, and each
person, if any, who controls such Purchaser, (each, an "Indemnified Holder"),
against any losses, claims, damages, expenses (including reasonable costs of
investigation), and liabilities (joint or several) (collectively, "Claims") to
which any of them may become subject under the Securities Act, the Exchange Act,
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"Violation"): (I) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any post-effective amendment
thereof, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (II) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of the Registration Statement, or contained in the final prospectus (as amended
or supplemented if the Company files any amendment thereof or supplement thereto
with the Commission) or in any document incorporated by reference therein or the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or (III) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulations promulgated
under the Securities Act, the Exchange Act or any state securities law. Subject
to the restrictions set forth in Part (C) below with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Holders promptly as
such expenses are incurred and are due and payable for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Part (A): (x) shall not
apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Holder expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (y) with respect to any preliminary prospectus, shall not
inure to the benefit of any such person from whom the person asserting any such
Claim purchased the Shares that are the subject thereof (or to the benefit of
any person controlling such person) if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected in the
prospectus, as then amended or supplemented and such corrected prospectus was
furnished by the Company for delivery to such person as required by law; and (z)
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Holder.
(B) Each Purchaser agrees to indemnify and hold harmless, to the same
extent and in the same manner set forth in Part (A) of this Subsection (iii),
the Company, each of its directors, each of its officers who sign the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, the other Purchasers selling
Shares pursuant to the Registration Statement or any of their respective
directors or officers or any person who controls such Purchaser (collectively
and together with an Indemnified Holder, an "Indemnified Party"), against any
Claim to which any of them may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such Claim arises out of or is based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Purchaser expressly for use in connection with
such Registration Statement; and such Purchaser will reimburse any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnification contained
in this Part B shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of such Purchaser,
which consent shall not be unreasonably withheld and provided, further, that
such Purchaser shall be liable under this Part B for only that amount of a Claim
as does not exceed the net proceeds to such Purchaser as a result of the sale of
the Shares pursuant to the Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party.
(C) Promptly after receipt by a person seeking indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action
(including any governmental action), such Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party (an "Indemnifying
Party") under this Subsection (iii), deliver to the Indemnifying Party a written
notice of the commencement thereof and the Indemnifying Party shall have the
right to participate in, and, to the extent the Indemnifying Party so desires,
jointly with any other Indemnifying Party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the Indemnifying
Parties; provided, however, that an Indemnified Party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
Indemnifying Party, if, in the reasonable opinion of counsel for the Indemnified
Party, representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by
counsel to the Indemnifying Party in such proceeding. The Company shall pay for
only one legal counsel (in addition to any local counsel) for the Purchasers;
such legal counsel shall be selected by Purchasers holding a majority in
interest of the Shares. The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action shall not relive such Indemnifying Party of any liability to the
Indemnified Party under this Subsection (iii), except to the extent that the
Indemnifying Party is substantially prejudiced in its ability to defend such
action as a result of such failure.
SECTION 6
Miscellaneous
6.1 Governing Law. This Agreement shall be governed by and construed
with the laws of the State of New York, without reference to the conflicts of
law principles thereof.
6.2 Survival. The representations and warranties made in Sections 3 and
4 herein shall survive the Closing for a period of one year.
6.3 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective successors,
assigns, heirs, executors and administrators.
6.4 Entire Agreement; Amendment. This Agreement and the documents
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Company and the Purchasers;
provided, however, that Purchasers of at least eighty (80%) percent of the
Shares together with the Company, may by written instrument amend the provisions
of Section 5.2 hereof.
6.5 Notice, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or by express courier, or delivered either by hand or by
messenger, addressed (a) if to a Purchaser, as indicated on the Schedule of
Purchasers attached hereto, or at such other address as such Purchaser shall
have furnished to the Company in writing, or (b) if to the Company, at 5
Wisconsin Avenue, Norwich Industrial Park, Norwich, Connecticut 06360, Attn:
President and Chief Executive Officer, or at such other address as the Company
shall have furnished to the Purchasers in writing.
6.6 Rights; Separability. Unless otherwise expressly provided herein,
the rights of the Purchasers hereunder are several rights, not rights jointly
held with any of the other Purchasers. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
6.7 Broker. The Company and each Purchaser represent to the other that
it has not retained any person who might be entitled to a commission or finder's
fee in connection with the negotiation and execution of this Agreement. Each
party hereto agrees to indemnify the other from any liability for commissions or
finder's fees by reason of such party's breach of the foregoing representation.
This Section 6.7 shall survive the Closing.
6.8 Information Confidential. Each Purchaser acknowledges that the
information received by it pursuant to this Agreement may be confidential and is
for the Purchaser's use only. It will not use such confidential information in
violation of the Exchange Act or otherwise, or reproduce, disclose or
disseminate such information to any other person (other than its employees or
agents having a need to know the contents of such information, and its attorneys
and financial advisors), except in connection with the exercise of rights under
this Agreement, unless the Company has made such information available to the
public generally or such Purchaser is required to disclose such information by a
governmental body.
6.9 Expenses. The Company and the Purchasers shall bear their own
expenses and legal fees incurred on their behalf with respect to this Agreement
and the transactions contemplated hereby, except as otherwise provided herein.
6.10 Titles and Gender. The titles of the Sections and Subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. Whenever used herein, the singular
member includes the plural, the plural includes the singular, and the use of any
gender shall include all genders.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.
GUNTHER INTERNATIONAL, LTD.
By: /s/James H. Whitney
James H. Whitney
President and Chief Executive Officer
PURCHASERS:
FOUR PARTNERS
/s/ Thomas J. Tisch
[Name]
[Name]
[Name]
[Name]
<PAGE>
GUNTHER INTERNATIONAL, LTD.
SCHEDULE OF PURCHASERS
Aggregate
Name and Address Number Purchase
of Purchaser of Shares Price
---------------- --------- ---------
64,286 $225,001.00
