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EXHIBIT 4.4
SECURITIES AGREEMENT
THIS AGREEMENT is made as of the 31st day of March, 1995 by and among
RPM, INC., an Ohio corporation ("RPM"), XXXXXXX X. XXXXXX AND XXXXX X. XXXXXX,
the stockholders ("Stockholder(s)") of Simian Company, Inc., a Delaware
corporation ("Simian").
WITNESSETH:
WHEREAS, RPM, LS Acquisition Company, a Delaware corporation ("LS
Acquisition"), Simian and the Stockholders have entered into an Agreement and
Plan of Reorganization of even date herewith ("Reorganization Agreement")
pursuant to which the Stockholders are receiving RPM Common Shares, without par
value ("RPM Shares"), in exchange for their shares of Common Stock, no par
value, of Simian (the "Reorganization"); and
WHEREAS, RPM, LS Acquisition and the Stockholders have agreed that the
issuance of the RPM Shares in the Reorganization shall be pursuant to the
"private offering" exemption from registration with the Securities and Exchange
Commission ("SEC") provided by Section 4(2) of the Securities Act of 1933, as
amended (the "Act"), and Rule 506 promulgated pursuant to the Act; and
WHEREAS, RPM, LS Acquisition and the Stockholders have agreed further
that the Stockholders shall have, under the terms and conditions herein set
forth, the right to require or cause RPM
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to register all of the RPM shares received by such Stockholders (the
"Registrable RPM Shares") with the SEC; and
WHEREAS, the Stockholders also desire that the Reorganization be
treated as a tax-free reorganization within the meaning of Section 368(a)(1)(A)
and 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended; and
WHEREAS, RPM and LS Acquisition also desire that the Reorganization be
treated as a pooling-of-interest for accounting purposes;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein and in the Reorganization Agreement,
RPM, LS Acquisition and the Stockholders hereby agree as follows:
1. Exemption from Registration Under Section 4(2) and Rule 506.
In connection with each Stockholder's investment in the Registrable RPM
Shares, each Stockholder hereby represents, warrants, covenants and agrees as
follows:
1.1 Accredited Investor. Each Stockholder either is an "Accredited
Investor" as defined in Rule 501 promulgated pursuant to the Act or has, either
alone or with his or her purchaser representative, such knowledge and experience
in financial and business matters that he or she is capable of evaluating the
merits and risks of investment in the RPM Shares.
1.2 Information Received. Each Stockholder, directly or through his or
her purchaser representative, has received a copy of (i) RPM's Annual Report to
Shareholders for the fiscal year ended May 31, 1994, (ii) Proxy Statement for
the October 10, 1994 annual
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meeting of RPM shareholders, (iii) Annual Report on Form 10-K for the fiscal
year ended May 31, 1994, (iv) Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1994 and November 30, 1994, (v) Current Report on Form
8-K dated June 28, 1994 and amendment thereto on Form 8-K/A dated September 9,
1994, (vi) a brief description of the RPM Shares being offered, (vii) any
material changes in RPM's affairs that are not disclosed in the documents
furnished pursuant to this Section 1.2, which description, if any, is included
in the copy of the letter attached hereto as Exhibit A, and (viii) a description
of the terms or arrangements materially different from those for other Simian
Stockholders, which description (unless described in the Reorganization
Agreement) is included in the copy of the letter attached hereto as Exhibit A.
No Stockholder has made a written request to RPM that they make available to him
or her any exhibits to any of the documents listed in clauses (i) - (v) above.
Each Stockholder, directly or through his or her purchaser representative, has
had at a reasonable time prior to the date of this Agreement the opportunity to
ask questions of and receive answers from RPM concerning the terms and
conditions of the Reorganization, the Registrable RPM Shares and the business of
RPM and to obtain any additional information which RPM possesses or can acquire
without unreasonable effort or expense that each Stockholder has deemed
necessary or desirable to verify the accuracy of the information furnished
pursuant to this Section 1.2.
1.3 Limitations on Resale. Each Stockholder is aware that the
Registrable RPM Shares have not been registered under the
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Act and that he or she must hold such shares indefinitely unless they are
subsequently registered under the Act or an exemption from such registration is
available. Each Stockholder is also aware that any sales of the Registrable RPM
Shares pursuant to SEC Rule 144 may be made only after the minimum two (2) year
holding period and subject to the limitations on volume and manner of sale set
forth therein and only if RPM satisfies the requirements therefor. Each
Stockholder is acquiring the Registrable RPM Shares for his or her own account,
for investment and not with a view to the distribution thereof and will not
sell, transfer or otherwise dispose of such Registrable RPM Shares unless a
registration statement filed with the SEC pursuant to the Act with respect
thereto is in effect or RPM shall have received an opinion of counsel reasonably
satisfactory to it to the effect that such registration is not required. Each
Stockholder acknowledges and agrees that the certificates representing the
Registrable RPM Shares to be received by him or her shall bear a legend in the
form set forth on Exhibit B hereto stating the substance of such restrictions,
as well as those provisions of Section 4 hereof, and that RPM may issue stop
transfer instructions to the transfer agent of RPM Shares to preclude any
transfer in violation of such restrictions. Each Stockholder further
acknowledges that prior to execution and delivery of this Agreement he or she
received a written disclosure of the foregoing limitations on resale of the
Registrable RPM Shares and of the facts that the certificates representing such
shares will bear the above-referenced legend and that the above-referenced stop
transfer instructions will be issued
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as necessary. RPM agrees to cause the restrictive legend referred to above to be
removed from RPM Share Certificates for any Stockholder who qualifies under Rule
144(k).
1.4 Investment Decision. Based upon the information de- livered to each
Stockholder pursuant to this Section 1, a thorough review of this Agreement, the
Reorganization Agreement, and the other agreements and documents delivered in
connection therewith (including the Exhibits and Disclosure Schedules thereto),
each Stockholder understands the terms and conditions of the Reorganization and
of the Registrable RPM Shares to the extent necessary to make the investment
decision required by this Agreement and the Reorganization Agreement.
2. Registration Rights.
2.1 Registration Rights. From and after the date RPM publicly announces
financial results covering at least thirty (30) days of combined operations of
RPM and Simian as described in Section 4 of this Agreement, if RPM shall receive
a written request (or has previously received a written request which has not
been revoked) from a Stockholder that RPM file a registration statement under
the Act, or a similar document pursuant to any other statute then in effect
corresponding to the Act, covering the registration of at least 25% of the
Registrable RPM Shares, then RPM shall promptly notify the other Stockholder of
such request giving him or her not less than twenty (20) days to request to
include all or any portion of their Registrable RPM Shares in such registration
and shall use its best efforts to cause all Registrable RPM Shares that
Stockholders have requested be registered to be registered under
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the Act in a registration intended to permit the offering of the Registrable RPM
Shares continuously from time to time (the "Shelf Registration Statement").
Whenever requested under this Section 2.1 to use its best efforts to effect the
registration of any Registrable RPM Shares, RPM shall, as expeditiously as
reasonably possible (i) prepare and file with the SEC the Shelf Registration
Statement with respect to such Registrable RPM Shares and use its best efforts
to cause such registration statement to become and remain effective for a period
of twenty-four (24) months; provided, however, RPM shall in no event be
obligated either to file more than one (1) such registration statement in any
given six (6)-month period or to cause any such registration to remain effective
for more than twenty-four (24) months (although RPM shall be obligated to keep
such registration effective for twenty-four (24) months), (ii) prepare and file
with the SEC such amendments and supplements to such registration statement and
the Prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement whenever
the Stockholder of such Registrable RPM Shares shall desire to sell or dispose
of same, (iii) furnish to the Stockholders such numbers of copies of a
Prospectus in conformity with the requirements of the Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of the Registrable RPM Shares owned by them, and (iv) use its best efforts to
register and qualify the securities covered by such registration statement under
such other securities or Blue Sky laws
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of such jurisdictions within the United States and Puerto Rico as shall be
reasonably appropriate or as required for the distribution of the securities
covered by the registration statement, and to do such other reasonable acts and
things as may be required of it to enable such Stockholder to consummate the
public sale or other disposition in such jurisdictions of the securities covered
by such registration statement; provided that RPM shall not be required in
connection therewith or as a condition thereto to qualify to do business where
it is not so qualified or to file a general consent to service of process in any
such states or jurisdictions where it has not previously done so. RPM shall be
obligated to effect only one (1) Shelf Registration Statement pursuant to this
Section 2.1 and shall have no obligation with respect to any request for
registration made by any Stockholder pursuant hereto unless such request is
received by RPM before the date one (1) year from the date hereof.
2.2 Stockholders' Obligation to Furnish Information. It shall be a
condition precedent to the obligations of RPM to take any action pursuant to
Section 2 hereof that the Stockholders shall furnish to RPM such information
regarding them, the Registrable RPM Shares held by them, and the intended method
of disposition of such securities as RPM shall reasonably request and as shall
be required in connection with the action to be taken by RPM; provided, however,
that RPM shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 2.1 if the registration request is
subsequently withdrawn at the request of the selling Stockholders.
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2.3 Expenses of Registration. All expenses incurred in connection with
a registration pursuant to Section 2.1 (excluding underwriters' discounts and
commissions and brokerage or dealer commissions), including without limitation
all registration, qualification and filing fees, printers' and accounting fees,
and fees and disbursements of counsel for RPM, shall be borne by RPM; provided,
however, that RPM shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Section 2.1 if the registration
request is subsequently withdrawn at the request of the selling Stockholders.
2.4 Delay of Registration. No Stockholder shall have any right to take
any action to restrain, enjoin or otherwise delay any registration statement
under this Section 2 as the result of any controversy that might arise with
respect to the interpretation or implementation of this Section 2.
2.5 Indemnification. In the event any Registrable RPM Shares are
included in a registration statement under this Section 2:
2.5.1 Indemnification of Stockholders. To the extent permitted by
law, RPM will indemnify and hold harmless each Stockholder requesting or joining
in any registration statement under this Section 2, and each person, if any, who
controls such Stockholder within the meaning of the Act or the Securities
Exchange Act of 1934 (the "Exchange Act"), against any losses, claims, damages,
expenses (including reasonable costs of investigation) or liabilities, joint or
several, to which they may become subject under the Act or otherwise, insofar as
such losses,
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claims, damages or liabilities (or actions in respect thereof) arise out of or
are based on any untrue or alleged untrue statement of any material fact
contained in such registration statement, including any Prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or arise out of any violation by RPM of any rule or regulation
promulgated under the Act applicable to RPM and relating to action or inaction
required by RPM in connection with any such registration; and will reimburse
each such Stockholder or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 2.5.1 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of RPM (which consent shall not be
unreasonably withheld) nor shall RPM be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement, any
Prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Stockholder or controlling person. It is
expressly understood among the parties to this Securities
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Agreement that in no event shall RPM be obligated to agree to indemnify or
indemnify, in any respect, any underwriter, broker, dealer or other entity or
person effecting the sale, purchasing or otherwise distributing any of the
Registrable RPM Shares.
2.5.2 Indemnification of RPM. To the extent permitted by law, each
Stockholder requesting or joining in any registration statement under this
Section 2 will indemnify and hold harmless RPM, each of its directors, each of
its officers who have signed the registration statement, each person, if any,
who controls RPM within the meaning of the Act or the Exchange Act, and each
agent for RPM (within the meaning of the Act) against any losses, claims,
damages, expenses (including reasonable costs of investigation) or liabilities
to which RPM or any such director, officer, controlling person or agent may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages, expenses (including reasonable costs of investigation) or liabilities
(or actions in respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, including any Prospectus contained therein or any
amendments or supplements thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in such
registration statement, any Prospectus, or amendments or supplements thereof, in
reliance upon and in
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conformity with written information furnished by such Stockholder expressly for
use in connection with such registration; and each such Stockholder will
reimburse any legal or other expenses reasonably incurred by RPM or any such
director, officer, controlling person or agent in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 2.5.2 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of such Stockholder
(which consent shall not be unreasonably withheld).
2.5.3 Notification of and Participation in Claims. Promptly after
receipt by an indemnified party under this Section 2 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2,
notify the indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an indemnifying party
promptly of the commencement of any such action, if prejudicial to his, her or
its ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 2, but the omission so to
notify the indemnifying party will not relieve him, her or it of
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any liability that he, she or it may have to any indemnified party otherwise
than under this Section.
2.6 Reports Under Exchange Act. With a view to making available to the
Stockholders the benefits of Rule 144 promulgated under the Act and any other
rule or regulation of the SEC that may at any time permit a Stockholder to sell
securities of RPM to the public without registration, RPM agrees to use its best
efforts to (i) make and keep public information available, as those terms are
understood and defined in Rule 144, (ii) file with the SEC in a timely manner
all reports and other documents required of the Company under the Act and the
Exchange Act, and (iii) furnish to any Stockholder so long as such Stockholder
owns any of the Registrable RPM Shares forthwith upon request a written
statement by RPM that it has complied with the reporting requirements of Rule
144 and of the Act and the Exchange Act, a copy of the most recent annual or
quarterly report of RPM, and such other reports and documents so filed by RPM as
may be reasonably requested in availing any Stockholder of any rule or
regulation of the SEC permitting the selling of any such securities without
registration.
2.7 Transfer of Registration Rights. The registration rights of the
Stockholders under this Section 2 may not be transferred to any third party,
however, they will inure to the benefit of the Stockholders' respective heirs
and personal representatives.
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3. Continuity of Interest; Continuity of Business Enterprise.
After having discussed with each other their intentions regarding
registration and sale of the Registrable RPM Shares, the Stockholders jointly
and severally represent and warrant to RPM that there is no present intention
among them to sell such number of the Registrable RPM Shares received by them in
the Reorganization as would result in their retaining, in the aggregate, such
number of Registrable RPM Shares as would have a value as of the time of the
Reorganization of less than 50% of the value of all of the issued and
outstanding shares of Simian immediately prior to the Reorganization. RPM and LS
Acquisition represent and warrant to the Stockholders that they have no present
plan or intention to discontinue the business of LS Acquisition or to cause LS
Acquisition to sell or distribute such of its assets or properties as would
result in a failure of LS Acquisition to hold substantially all of its assets or
properties immediately following the Reorganization.
4. Pooling-of-Interests Accounting.
Each Stockholder acknowledges and agrees that the Reorganization shall
be treated as a pooling-of-interests for accounting purposes and that such
Stockholder will not, in addition to any other restriction on transfer of RPM
Shares otherwise contained herein, sell or otherwise transfer any of the RPM
Shares received by such Stockholder pursuant to the Reorganization until such
time as financial results covering at least thirty (30) days of the combined
operations of Simian and RPM shall have been publicly announced by RPM within
the meaning of APB No. 16.
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5. Notice of Sale of RPM Shares.
For a period of three (3) years from the date hereof, in the event a
bona fide offer to purchase is made to or solicited by or on behalf of a
Stockholder relative to the private sale in one or a series of related
transaction(s) of all or substantially all of his, her or its Registrable RPM
Shares (hereinafter "Offer to Purchase"), such Stockholder shall notify RPM in
writing of the price per share and other terms of the Offer to Purchase and the
identity of the prospective purchaser or group of purchasers within five (5)
days of such Stockholder's receipt of the Offer to Purchase.
6. Miscellaneous.
6.1 Notices and Communications. Unless otherwise provided herein, any
notice or other communication under this Agreement shall be deemed to have been
duly given or made on the earlier of (i) the date of receipt or (ii) the date
when the same shall have been posted by certified or registered mail, return
receipt requested, in any post office in the United States of America, postage
prepaid and addressed to the party to whom such notice or other communication is
to be given or made at such party's address set forth below, or to such other
address as such party shall designate by written notice to the other parties, as
follows:
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If intended for RPM:
RPM, Inc.
P. O. Xxx 000
0000 Xxxxx Xxxx
Xxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
with a copy to:
Xxxxxx, Halter & Xxxxxxxx
XxXxxxxx Investment Center
000 Xxxxxxxx Xxx.
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
If intended for the Stockholders:
Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
- and -
Xxxxx X. Xxxxxx
00000 Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
with a copy to:
Fenwick & Xxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
6.2 Governing Law. The validity, enforceability and construction of
this Agreement shall be governed by the laws of the State of Ohio.
6.3 Pronouns. The use of the feminine, masculine or neuter pronoun
shall not be restrictive as to gender and shall be interpreted in all cases as
the context may require.
6.4 Amendments; Successors. This Agreement may be amended only by an
agreement signed by all of the parties hereto
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and shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
6.5 Counterparts. This Agreement may be executed in any number of
counterparts, which may be separately executed by the parties hereto, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument. In making proof of this Agreement it shall be necessary
to produce or account for only one such counterpart signed by or on behalf of
the party sought to be charged herewith.
6.6 Entire Agreement. This Agreement, except insofar as it refers to
the Reorganization Agreement or any of the other agreements or documents
referred to therein, contains the entire agreement and understanding of the
parties with respect to the subject matter hereof. No prior agreement, either
written or oral, shall be construed to change, amend, alter, repeal or
invalidate this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date and year first above mentioned.
RPM, INC.
/s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXX Xxxxx X. Xxxxxxxx
Its: Vice President and Chief
Financial Officer
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
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