Exhibit 1.1
10,000,000
RPM, INC.
COMMON SHARES
FORM OF UNDERWRITING AGREEMENT
March , 2002
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & COMPANY
MCDONALD INVESTMENTS INC.
As Representatives of the
several underwriters named in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
RPM, Inc., an Ohio corporation (the "COMPANY"), proposes to sell
10,000,000 shares (the "FIRM STOCK") of the Company's Common Shares, without par
value (the "COMMON SHARES"). In addition, the Company proposes to grant to the
Underwriters named in Schedule 1 hereto (the "UNDERWRITERS") an option to
purchase up to a 1,500,000 additional Common Shares on the terms and for the
purposes set forth in Section 3 (the "OPTION STOCK"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "STOCK." The
Common Shares, including the Stock, will have attached thereto rights (the
"RIGHTS") to purchase one-tenth of a Common Share. The Rights are to be issued
pursuant to a Rights Agreement (the "RIGHTS AGREEMENT") dated as of April 28,
1999 between the Company and ▇▇▇▇▇▇ Trust and Savings Bank (as amended as of
December 18, 2000 by and among the Company, Computershare Investor Services
(formerly ▇▇▇▇▇▇ Trust and Savings Bank) and National City Bank). This is to
confirm the agreement concerning the purchase of the Stock from the Company by
the Underwriters.
SECTION 1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to securities of
the Company, including the Stock and the Rights, has (i) been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the
"SECURITIES ACT"), and the rules and regulations (the "RULES AND REGULATIONS")
of the United States Securities and Exchange Commission (the "COMMISSION")
thereunder, (ii) been filed with the Commission under the Securities Act and
(iii) become effective under the Securities Act. Copies of such registration
statement and each of the amendments thereto have been delivered by the Company
to you as the representatives (the "REPRESENTATIVES") of the Underwriters. As
used in this Agreement, "EFFECTIVE TIME" means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "EFFECTIVE DATE"
means the date of the Effective Time; "BASIC PROSPECTUS" means each prospectus
included in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "REGISTRATION STATEMENT" means such registration
statement, as amended at the Effective Time, including all information contained
in the final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of the registration statement as
of the Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"PROSPECTUS" means the Basic Prospectus as supplemented by the prospectus
supplement dated March , 2002 (the "PROSPECTUS SUPPLEMENT") relating to the
Stock and the Rights in the form first used to confirm sales of Stock. If the
Company has filed an abbreviated registration statement to register additional
Common Shares pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Form S-3 under the
Securities Act, as of the effective date of the Registration Statement or the
date of such preliminary prospectus or the Prospectus, as the case may be. The
Commission has not issued any order preventing or suspending the use of any
preliminary prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") and the Rules and Regulations thereunder, as
applicable, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
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documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act,
the Exchange Act and the Rules and Regulations thereunder, as applicable, and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(d) The Company and each of StonCor Group, Inc., Dryvit Systems, Inc.,
Rust-Oleum Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated, Tremco Incorporated
and DAP Products Inc. (the "MATERIAL SUBSIDIARIES") have been duly incorporated
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or to be in good standing as a foreign corporation have not had and
would not, singularly or in the aggregate, reasonably be expected to have a
material adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole ("MATERIAL ADVERSE EFFECT").
(e) The Company has an authorized capitalization as set forth in the
Prospectus. All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus. All of the
Company's options, warrants and other rights to purchase or exchange any
securities for shares of the Company's capital stock have been duly and validly
authorized and issued, and conform to the description thereof contained in the
Prospectus. All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(f) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the descriptions thereof contained in the Prospectus. Upon payment
for and delivery of the Stock to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such Stock, in
each case free and clear of all liens, encumbrances, equities, preemptive
rights, subscription rights, other rights to purchase, voting or transfer
restrictions and other claims.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Rights Agreement has been duly authorized, executed and
delivered by the Company; the Rights have been duly authorized by the Company
and, when issued upon issuance of the Stock, will be validly issued, and the
Common Shares have been duly authorized by the Company and validly reserved for
issuance upon the exercise of the Rights in accordance with the terms of the
Rights Agreement, and when issued, such Common Shares will be validly issued,
fully paid and non-assessable.
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(i) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
Material Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Material Subsidiaries is subject, except where such
conflicts, breaches, violations or defaults have not had and would not,
singularly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, nor will such actions result in any violation of (i) the
provisions of the charter or by-laws of the Company or any of its Material
Subsidiaries or (ii) any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties or assets, except with respect to
this clause (ii) only, for such violations which have not had and would not,
singularly or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(j) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act. The
holders of outstanding shares of the Company's capital stock are not entitled to
preemptive or other rights to subscribe for the Stock. Except for , upon
completion of the offering, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(k) The Company has not sold or issued any Common Shares during the
six-month period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the Securities Act other
than shares issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(l) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such date, there
has not been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change or development involving a prospective
change, which has had or could, singularly or in the aggregate, reasonably be
expected to have a Material Adverse Effect, otherwise than as set forth or
contemplated in the Prospectus.
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(m) The financial statements (including the related notes and
supporting schedules) incorporated by reference in the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved.
(n) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇, who have certified certain financial
statements of the Company, whose report appears in and is incorporated by
reference in the Prospectus and who have delivered the letters referred to in
Section 7(e) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(o) The Company and each of its Material Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the Prospectus,
and all assets held under lease by the Company and its Material Subsidiaries are
held by them under valid, subsisting and enforceable leases, with such
exceptions as have not had and would not, singularly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(p) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
(q) The Company and each of its subsidiaries own or possess adequate
rights to use all patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights and
licenses (collectively, the "INTELLECTUAL PROPERTY") necessary for the conduct
of their respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others, with such exceptions
as have not had and would not, singularly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(r) Except as described in the Prospectus, there are no legal or
governmental proceedings pending or to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or any
of its subsidiaries is the subject which, if determined adversely to the Company
or any of its subsidiaries, singularly or in the aggregate, would reasonably be
expected to have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(s) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
(t) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
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(u) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, which might be expected to have a
Material Adverse Effect.
(v) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "REPORTABLE EVENT" (as defined in ERISA) has occurred
with respect to any "PENSION PLAN" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to the termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "CODE"); and each "pension plan" for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(w) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined adversely to
the Company or any of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might have) a Material Adverse Effect.
(x) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
non-material liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its capital stock.
(y) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing assets at
reasonable intervals.
(z) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject, except for such defaults
that have not had and would not, singularly or in the aggregate, reasonably be
expected to have a Material Adverse Effect, or (iii) is in violation in any
material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed to
obtain any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to the
conduct of its business, except for
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such violations or failures that have not had and would not, singularly or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(aa) To the best of the Company's knowledge after due inquiry, neither
the Company nor any of its subsidiaries, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of its subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(bb) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms "HAZARDOUS WASTES", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(cc) In the ordinary course of its business, the Company conducts a
periodic review of the effect any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("ENVIRONMENTAL LAWS") on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities have not had and
would not, singularly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(dd) Neither the Company nor any subsidiary is, nor as of the Closing
Date after giving effect to the offering and sale of the Stock and the
application of the net
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proceeds therefrom will be, an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(ee) To the best of the Company's knowledge after due inquiry, there
are no contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(ff) The statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources which the
Company believes to be reliable and accurate.
SECTION 2. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 10,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,500,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $ per
share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
SECTION 4. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City
time, on the fourth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "FIRST DELIVERY DATE." On the First Delivery Date, the Company shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such
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denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "SECOND DELIVERY DATE" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "DELIVERY
DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
SECTION 5. Further Agreements of the Company. The Company covenants and
agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to
make no further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any
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order preventing or suspending the use of any preliminary prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any preliminary prospectus or the Prospectus
or suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each preliminary prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Shares may be listed
10
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any Common Shares or securities convertible into or exchangeable for Common
Shares (other than (i) the Stock, (ii) Common Shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights and (iii) Common Shares issued no earlier than 45 days after
the date hereof in an aggregate amount not to exceed $15 million in connection
with the acquisition of another company), or sell or grant options, rights or
warrants with respect to any Common Shares or securities convertible into or
exchangeable for Common Shares (other than the grant of options pursuant to
option plans existing on the date hereof), (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such Common Shares, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Shares or other securities, in cash or otherwise, or (3) file
or cause to be filed a registration statement on Form S-8 or other similar form
with respect to any shares of Common Shares or securities convertible,
exercisable or exchangeable into Common Shares or any other securities of the
Company, in each case without the prior written consent of ▇.▇. ▇▇▇▇▇▇
Securities Inc. and ▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters; and to
cause each officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or letters,
substantially in the form of Exhibit A hereto, pursuant to which each such
person shall agree not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any Common Shares or securities convertible into or
exchangeable for Common Shares or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such Common Shares, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Shares or other securities, in cash or otherwise, in each case for a
period of 90 days from the date of the Prospectus, without the prior written
consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Underwriters;
(j) To apply for the listing of the Stock on the New York Stock
Exchange, and to use its best efforts to complete that listing, subject only to
official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock as set forth
in the Prospectus; and
11
(l) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended and the rules and regulations of
the Commission thereunder.
SECTION 6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any preliminary
prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement, any supplemental agreement among the Underwriters and any other
related documents in connection with the offering, purchase, sale and delivery
of the stock; (e) the filing fees incident to securing the review by the NASD of
the terms of sale of the Stock; (f) any applicable listing or other fees; (g)
the fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 5(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (h) the costs and expenses of the Company relating
to investor presentations on any "ROAD SHOW" undertaken in connection with the
marketing of the offering of the Stock, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show and (i) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel
12
all documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP shall have furnished to the
Representatives their written opinion, as counsel to the Company, addressed to
the Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of Ohio;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus. All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus;
(iii) The shares of the Stock being delivered on such Delivery
Date to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor will be duly and validly
issued, fully paid and non-assessable;
(iv) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any shares of the Stock pursuant to the
Company's charter or by-laws or any agreement or other instrument filed as an
exhibit to the Registration Statement or the documents incorporated by reference
therein;
(v) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion on the date
specified therein and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the Commission;
(vi) The Registration Statement and the Prospectus (and the
documents incorporated by reference therein) and any further amendments or
supplements thereto made by the Company prior to such Delivery Date (except for
the financial statements and related schedules and statistical data therein, as
to which such counsel need express no belief) comply as to form in all material
respects with the requirements of the Securities Act, the Exchange Act and the
Rules and Regulations thereunder, as applicable;
(vii) The statements contained in the Prospectus or in the
documents incorporated by reference therein under the captions "Description of
Our Common Shares", insofar as they describe charter documents, contracts, legal
proceedings, federal and state statutes, rules and regulations and other legal
matters, constitute a fair summary thereof;
(viii) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described or filed as
exhibits to the Registration Statement;
13
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The Rights Agreement has been duly authorized, executed
and delivered by the Company; the Rights have been duly authorized by the
Company and, when issued upon issuance of the Stock, will be validly issued, and
the Common Shares have been duly authorized by the Company and validly reserved
for issuance upon the exercise of the Rights in accordance with the terms of the
Rights Agreement, and when issued, such Common Shares will be validly issued,
fully paid and non-assessable;
(xi) The issue and sale of the shares of Stock being delivered
on such Delivery Date by the Company pursuant to this Agreement and the
execution, delivery and compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an exhibit to
the Registration Statement or the documents incorporated by reference therein,
nor will such actions result in any violation of the provisions of the charter
or by-laws of the Company; and, except for the registration of the Stock under
the Securities Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby, except for such consents, approvals,
authorizations, orders, filings or registrations as have been obtained or made;
(xii) Except as described in the Prospectus, to the best of
such counsel's knowledge after due inquiry, there are no contracts or agreements
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act; and
(xiii) The Company is not, nor as of the Closing Date after
giving effect to the offering and sale of the Stock and the application of the
net proceeds therefrom will be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Ohio. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and the Prospectus (and the documents incorporated by
reference) and (y) based on the foregoing, no facts have come to the attention
of such counsel which lead them to believe that the Registration Statement
(including the documents incorporated by reference therein) (except for the
financial statements and related schedules therein, as to which such counsel
need express no belief) as of the Effective Date, contained any untrue statement
of a material fact or
14
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that the Prospectus
(including the documents incorporated by reference therein) (except as stated
above) contains any untrue statement of a material fact or omits to state 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. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause
(viii) above).
(d) P. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have furnished to the Representatives his
written opinion, as General Counsel of the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) The Company is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses require such
qualification and has all power and authority necessary to own or hold its
properties and conduct the businesses in which it is engaged, except where the
failure to be so qualified or to be in good standing as a foreign corporation
have not had and would not, singularly or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(ii) Each of the Material Subsidiaries has been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification and have all
power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged, except where the failure to be
so qualified or to be in good standing as a foreign corporation have not had and
would not, singularly or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
(iii) All of the Company's options, warrants and other rights
to purchase or exchange any securities for shares of the Company's capital stock
have been duly and validly authorized and issued, and conform to the description
thereof contained in the Prospectus or the documents incorporated by reference
therein. All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(iv) To the best of such counsel's knowledge after due inquiry
and other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, singularly or in the aggregate, might have a Material
Adverse Effect; and, to the best of such counsel's
15
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) The statements contained in the Prospectus or in the
documents incorporated by reference under the captions "Legal Proceedings",
"Business--Legal Proceedings", "Business--Environmental Matters",
"Business--Environmental Proceedings", "Risk Factors--The chemical and
construction products industries we serve inherently expose us to potential
significant litigation-related costs", "Risk Factors--Environmental laws and
regulations could subject us to significant future liabilities", "Certain
Relationships and Related Transactions" and "Description of Our Common Shares",
insofar as they describe charter documents, contracts, legal proceedings,
federal and state statutes, rules and regulations and other legal matters,
constitute a fair summary thereof;
(vi) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company pursuant to this Agreement and
the execution, delivery and compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions contemplated hereby
will not conflict with or result in any violation of the provisions of the
charter or by-laws of the Company or any of its Material Subsidiaries or any
statute or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of its
Material Subsidiaries or any of their properties or assets; and, except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, except for such consents, approvals, authorizations,
orders, filings or registrations as have been obtained or made;
(vii) The Company owns, holds, licenses to or otherwise has
rights to use, all of the Intellectual Property that is necessary for the
conduct of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus, (A) there are
no rights of third parties to any such Intellectual Property; (B) to the
knowledge of such counsel, there is no infringement by third parties of any such
Intellectual Property; (C) there is no pending or, to such counsel's knowledge,
threatened action, suit, proceeding or claim by others challenging the Company's
rights in or to any such Intellectual Property; (D) there is no pending or, to
the knowledge of such counsel, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property and
(E) there is no pending or, to such counsel's knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others, and such counsel is unaware of any other fact which would form
a reasonable basis for any such claim; and
(viii) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or previously
owned or leased by the Company or its subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order,
16
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit,
except for any violation or remedial action which would not have, or could not
be reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has been no
material spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the environment surrounding such property
of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its subsidiaries or with
respect to which the Company or any of its subsidiaries have knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which have had and would not be reasonably likely to have, singularly or
in the aggregate with all such spills, discharges, leaks, emissions, injections,
escapes, dumpings and releases, a Material Adverse Effect.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Ohio. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and the Prospectus (and the documents incorporated by
reference) and (y) based on the foregoing, no facts have come to the attention
of such counsel which lead them to believe that the Registration Statement
(including the documents incorporated by reference therein) (except for the
financial statements and related schedules therein, as to which such counsel
need express no belief) as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus (including the documents incorporated by reference therein)
(except as stated above) contains any untrue statement of a material fact or
omits to state 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. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as set
forth in clause (viii) above).
(e) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇ a letter or letters, in form and
substance satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other
17
matters ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(g) With respect to the letter or letters of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇
referred to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Company shall have furnished to the Representatives a letter (the "BRING-DOWN
LETTER") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions set
forth in Sections 7(a) and 7(h) have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (B)
since the Effective Date no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the Prospectus
which has not been so set forth.
(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (A) any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (B) since such date,
there shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (A) or
(B), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New
18
York Stock Exchange or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or the settlement of such
trading generally shall have been materially disrupted or minimum prices shall
have been established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be such), including, without limitation, as a result of terrorist
activities after the date hereof, as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(k) The New York Stock Exchange shall have approved the Stock for
quotation, subject only to official notice of issuance.
(l) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Underwriters, is material or omits to state a fact which, in the reasonable
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
directors, officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, director,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any preliminary
prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the
19
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct), and
shall reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section 8(e);
provided, however, that the Company shall not be liable to any Underwriter under
the indemnity agreement in this Section 8(a) to the extent, but only to the
extent, that such loss, claim, damage or liability of such Underwriter results
from the fact such Underwriter sold Stock to a person and there was not sent or
given to such person, at or prior to the written confirmation of such sale to
such person, to the extent required by law, a copy of the Prospectus dated the
Effective Date (the "FINAL PROSPECTUS") and the loss, claim, damage or liability
of such Underwriter results from an untrue statement or omission of a material
fact contained in the Preliminary Prospectus previously delivered to such person
which was corrected in the Final Prospectus, unless the Company had not
previously furnished copies of the Final Prospectus in sufficient quantities to
such Underwriter to permit delivery on a timely basis. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Underwriter or to any director, officer, employee or controlling person
of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any preliminary
prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, , any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, which information is limited to the information set forth in Section
8(e), and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability
20
which any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
directors, officers, employees and controlling persons to be jointly represented
by separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the Stock
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i)
21
above but also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company, on the one hand, and the
total underwriting discounts and commissions received by the Underwriters with
respect to the shares of the Stock purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the shares of the
Stock under this Agreement, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the shares
of Stock underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
SECTION 9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided,
22
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the part
of any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "UNDERWRITER" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases
Firm Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(h) or 7(i), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
SECTION 11. Reimbursement of Underwriters' Expenses. If the Company
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
SECTION 12. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
23
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to (1) ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndicate Department (Fax: ) and (2)
▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Syndicate Department (Fax: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy, in the case of any
notice pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel (Fax: (▇▇▇) ▇▇▇-▇▇▇▇) with a
copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ at ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇); provided, however, that
any notice to an Underwriter pursuant to Section 8(c) shall be delivered or sent
by mail, telex or facsimile transmission to such Underwriter at its address set
forth in its acceptance telex to the Representatives, which address will be
supplied to any other party hereto by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by ▇.▇.
▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Representatives.
SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the directors,
officers and the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (B) the indemnity agreement
of the Underwriters contained in Section 8(b) of this Agreement shall be deemed
to be for the benefit of directors of the Company, officers of the Company who
have signed the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 15. Definition of the Terms "BUSINESS DAY" and "SUBSIDIARY".
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
24
SECTION 17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
25
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
RPM, INC.
By_____________________________
Name: ______________________
Title: ______________________
Accepted:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & COMPANY
MCDONALD INVESTMENTS INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By ______________________
Authorized Representative
By ▇▇▇▇▇▇ BROTHERS INC.
By ______________________
Authorized Representative
26
SCHEDULE 1
Underwriter Number of Firm Shares to be Purchased
27
EXHIBIT A
LOCK-UP LETTER AGREEMENT
_________________, 2002
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & COMPANY, INC.
MCDONALD INVESTMENTS INC.
As Representatives of the Underwriters
named in Schedule I to the Underwriting
Agreement referred to below
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: RPM, INC. -- PUBLIC OFFERING
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
Underwriters, propose to enter into an Underwriting Agreement (the "UNDERWRITING
AGREEMENT") with RPM, Inc., an Ohio corporation (the "COMPANY"), providing for
the public offering (the "PUBLIC OFFERING") by the several Underwriters named in
Schedule I to the Underwriting Agreement (the "UNDERWRITERS"), of common shares
of the Company (the "SECURITIES"). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Securities, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and ▇▇▇▇▇▇ Brothers Inc. on behalf of the Underwriters, the undersigned will
not, during the period ending 90 days after the date of the prospectus
supplement relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any
28
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any common shares of
the Company (the "COMMON STOCK") or any securities convertible into or
exercisable or exchangeable for Common Stock (including without limitation,
Common Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant), other than as bona fide gifts to persons or entities provided that (i)
the persons or entities enter into a lock-up letter substantially in the form of
this letter, (ii) ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇ Brothers Inc. receive
written notice prior to the transfer and (iii) no filing by any party, including
any donor or donee, under Section 16(a) of the Securities Exchange Act of 1934,
as amended, shall be required or shall be made voluntarily in connection with
such transfer, other than a filing on Form 5 made after the expiration of the
90-day period referred to above, or (2) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. In addition, the undersigned agrees that,
without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇
Brothers Inc. on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Letter Agreement.
29
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
By:
-----------------------------------------
Name:
Title:
30
Accepted as of the date first set forth above:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & COMPANY, INC.
MCDONALD INVESTMENTS INC.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I to the Underwriting Agreement
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:________________________________
Name:
Title:
By: ▇▇▇▇▇▇ BROTHERS INC.
By:________________________________
Name:
Title:
31