1
EXHIBIT 1.1
2,800,000 Shares
PAMARCO TECHNOLOGIES INC.
COMMON STOCK
UNDERWRITING AGREEMENT
EVEREN Securities, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
2
2,800,000 Shares
PAMARCO TECHNOLOGIES INC.
Common Stock
(par value $.01 per share)
UNDERWRITING AGREEMENT
, 1998
EVEREN Securities, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of
the Several Underwriters
c/o EVEREN Securities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Pamarco Technologies, Inc., a Delaware corporation (the "Company"), and
the stockholders of the Company set forth on Schedule I attached hereto
(collectively referred to as the "Selling Stockholders") confirm their agreement
with each other and the several underwriters listed on Schedule II attached
hereto (the "Underwriters"), for whom EVEREN Securities, Inc. and Xxxxxx
Xxxxxxxxxx Xxxxx Inc. (collectively, the "Representatives") have been duly
authorized to act as representatives, as follows:
SECTION 1. The Shares. Subject to the terms and conditions set forth in
this agreement (the "Agreement"), the Company proposes to issue and sell
1,600,000 shares of its authorized but unissued common stock, par value $.01 per
share (the "Common Stock"), to the several Underwriters and the Selling
Stockholders propose to sell an aggregate of 1,200,000 shares of issued and
outstanding Common Stock to the several Underwriters in the amounts set forth on
Schedule I. Such 2,800,000 shares of Common Stock proposed to be sold by the
Company and the Selling Stockholders are hereinafter referred to as the "Firm
Shares." Certain of the Selling Stockholders also propose to grant to the
Underwriters an option to purchase up to an aggregate of 420,000 additional
shares of Common Stock (the "Additional Shares") if requested by the
Underwriters as provided in Section 3 hereof. The Firm Shares and the Additional
Shares are herein collectively called the "Shares."
The Company and each of the Selling Stockholders hereby confirm their
agreements with the Underwriters as follows:
3
SECTION 2. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission promulgated
thereunder (collectively, the "Act"), a registration statement on Form S-1 (File
No. 333-38757) including a prospectus, relating to the Shares. To the extent
the registration statement has been amended, each such amendment has been
prepared and duly filed. The registration statement, as amended at the time when
it became or becomes effective, including all financial schedules and exhibits
thereto and all of the information (if any) deemed to be part of the
registration statement at the time of its effectiveness pursuant to Rule 430A
under the Act ("Rule 430A), is hereinafter referred to as the "Registration
Statement"; the prospectus in the form first provided to the Underwriters by the
Company in connection with the offering and sale of the Shares (whether or not
required to be filed pursuant to Rule 424(b) under the Act ("Rule 424(b)")) is
hereinafter referred to as the "Prospectus," except that if any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Shares that differs from the Prospectus
(whether or not any such revised prospectus is required to be filed by the
Company pursuant to Rule 424(b) under the Act), the term "Prospectus" shall
refer to the revised prospectus from and after the time it is first provided to
the Underwriters for such use; and each preliminary prospectus included in the
Registration Statement prior to the time it became or becomes effective is
herein referred to as a "Preliminary Prospectus."
SECTION 3. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to the
terms and conditions hereof, (i) the Company agrees to issue and sell to the
Underwriters, at a price of $____ per Share (the "Purchase Price"), 1,600,000
Firm Shares; (ii) each Selling Stockholder agrees to sell to the Underwriters,
at the Purchase Price, the number of Firm Shares set forth next to such Selling
Stockholder's name on Schedule I; and (iii) each Underwriter agrees, severally
and not jointly, to purchase from the Company and the Selling Stockholders, at
the Purchase Price, the aggregate number of Firm Shares set forth opposite the
name of such Underwriter in Schedule II hereto. The number of Firm Shares to be
purchased by each Underwriter from the Company and each Selling Stockholder
shall be as nearly as practicable in the same proportion as the number of Firm
Shares being sold by the Company and the Selling Stockholders bears to the total
number of Firm Shares to be sold hereunder.
On the basis of the representations and warranties contained in this
Agreement, and subject to the terms and conditions hereof, (i) the Selling
Stockholders indicated on Schedule I hereto agree to sell to the Underwriters,
at the Purchase Price, up to an aggregate of 420,000 Additional Shares; and (ii)
the Underwriters shall have the right to purchase, severally and not jointly,
from time to time, up to an aggregate of 420,000 Additional Shares at the
Purchase Price. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, (i) each such Selling Stockholder agrees to sell the number of
Additional Shares (subject to adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Additional Shares to be purchased as the maximum number
2
4
of Additional Shares set forth opposite the name of such Selling Stockholder on
Schedule I bears to the maximum number of Additional Shares to be sold by all
such Selling Stockholders, and (ii) each Underwriter, severally and not jointly,
agrees to purchase the number of Additional Shares (subject to such adjustments
to eliminate fractional shares as the Representatives may determine) that bears
the same proportion to the total number of Additional Shares to be purchased as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II bears to the total number of Firm Shares.
For a period of 180 days from the date this Agreement becomes
effective, the Company will not, without the prior written consent of EVEREN
Securities, Inc. on behalf of the Underwriters (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
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;
provided, however, that this clause shall not apply to the transactions
involving the Shares expressly contemplated hereby and the granting of options
exercisable for shares of Common Stock under those benefit plans described in
the Prospectus (the "Option Plan") and the sales of shares of Common Stock
pursuant to the exercise of options granted under the Option Plan and provided
further, however, that the Company may issue shares of Common Stock
("Acquisition Shares") during such period in connection with acquisitions of
businesses so long as the purchaser of such Acquisition Shares agrees to be
bound by a lock-up letter in form and substance satisfactory to you pursuant to
which such purchaser agrees with the Company not to sell, offer to sell, solicit
an offer to buy, contract to sell, grant any option to purchase, or otherwise
transfer or dispose of, any such Acquisition Shares at any time before the
expiration of such 180 day period and the certificates evidencing such
Acquisition Shares bear a legend to such effect.
For a period of 180 days from the date this Agreement becomes
effective, the Company will not, without the prior written consent of EVEREN
Securities, Inc. on behalf of the Underwriters, file a registration statement
relating to shares of capital stock (including the Common Stock) or securities
convertible into or exercisable or exchangeable for, capital stock or warrants,
options or rights to purchase or acquire, capital stock, with the exception of
the filing of Registration Statements on Form S-8 with respect to the Option
Plan.
For a period of 180 days from the date this Agreement becomes
effective, the Selling Stockholders will not, without the prior written consent
of EVEREN Securities, Inc. on behalf of the Underwriters (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, 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
3
5
of Common Stock or such other securities, in cash or otherwise; provided,
however, that this clause shall not apply to the transactions involving the
Shares expressly contemplated hereby or the sale of Shares of Common Stock
purchased on the open market.
The Company has furnished or will furnish to you "lock-up" letters, in
form and substance satisfactory to you, signed by each stockholder of the
Company who is also an employee or director of the Company.
SECTION 4. Delivery and Payment. The Company and each of the Selling
Stockholders agree with each Underwriter as follows:
(a) Delivery to the Underwriters of and payment for the Firm
Shares shall be made at 10:00 A.M., New York City time, on the third
full business day (such time and date being referred to as the "Closing
Date") following the date of the initial public offering of the Firm
Shares as advised to you by the Company, at such place as you shall
designate.
(b) Delivery to the Underwriters of and payment for any
Additional Shares to be purchased by the Underwriters shall be made at
such place as the Representatives shall designate, at 10:00 A.M., New
York City time, on such date or dates (individually, an "Option Closing
Date" and collectively, the "Option Closing Dates"), which may be the
same as the Closing Date but shall in no event be earlier than the
Closing Date, as shall be specified in a written notice from the
Representatives to the Selling Stockholders of the Underwriters'
determination to purchase a number, specified in said notice, of
Additional Shares. Any such notice may be given at any time on or prior
to the 45th day after the date of this Agreement.
(c) Certificates for the Shares shall be registered in such
names and issued in such denominations as you shall request in writing
not later than two business days prior to the Closing Date or the
applicable Option Closing Date, as the case may be, and shall be made
available for inspection not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date or the applicable
Option Closing Date, as the case may be, with any transfer taxes
payable upon initial issuance or the transfer thereof duly paid by the
Company for the respective accounts of the Underwriters against payment
of the Purchase Price therefor by certified or official bank check or
checks payable in New York Clearing House or similar next-day funds to
the order of the Company or the Selling Stockholders, as the case may
be.
SECTION 5. Agreements of the Company. The Company agrees with each
Underwriter that:
(a) it will, if the Registration Statement has not heretofore
become effective under the Act, file an amendment to the Registration
Statement or, if necessary pursuant to Rule 430A under the Act, a
post-effective amendment to the Registration Statement, as soon as
practicable after the execution and delivery of this Agreement, and
will use its reasonable
4
6
commercial efforts to cause the Registration Statement or such
post-effective amendment to be declared effective at the earliest
possible time; and the Company will comply fully and in a timely manner
with the applicable provisions of Rule 424(b), Rule 430A and the other
rules under the Act;
(b) it will advise you promptly and, if requested by you,
confirm such advice in writing, (i) when the Registration Statement has
become effective, if and when the Prospectus is sent for filing
pursuant to Rule 424 under the Act and when any post-effective
amendment to the Registration Statement becomes effective, (ii) of the
receipt of any comments from the Commission that relate to the
Registration Statement or requests by the Commission for amendments to
the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction, or the initiation or,
to the knowledge of the Company, threat of any proceedings for such
purpose by the Commission or any state securities commission or other
regulatory authority, and (iv) of the happening of any event or
information becoming known during the period referred to in paragraph
(e) below that makes any statement of a material fact made in the
Registration Statement untrue or that requires the making of any
additions to or changes in the Registration Statement (as amended or
supplemented from time to time) in order to make the statements therein
not misleading or that makes any statement of a material fact made in
the Prospectus (as amended or supplemented from time to time) untrue or
that requires the making of any additions to or changes in the
Prospectus (as amended or supplemented from time to time) in order to
make the statements therein, not misleading; if at any time the
Commission shall issue or institute proceedings (or threaten to
institute any such proceedings) to issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue or institute
proceedings (or threaten to institute proceedings) to issue an order
suspending the qualification or exemption of the Shares under any state
securities or Blue Sky laws, the Company shall use its reasonable
commercial efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;
(c) it will furnish to you without charge four (4) signed
copies of the Registration Statement as first filed with the Commission
and of each amendment to it, including all exhibits filed therewith,
and will furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits, as you may reasonably
request;
(d) it will not file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or make any amendment or supplement to the
Prospectus of which you shall not previously have been advised and
provided a copy a reasonable period of time prior to the filing thereof
or to which you or your counsel shall reasonably object; and it will
prepare and file with the Commission,
5
7
promptly upon your reasonable request, any amendment to the
Registration Statement or supplement to the Prospectus that may be
necessary or advisable in connection with the distribution of the
Shares by you in your or your counsel's opinion, and will use its
reasonable commercial efforts to cause the same to become effective as
promptly as possible;
(e) promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as a
prospectus is required by the Act to be delivered in connection with
the sales by an underwriter or a dealer (in the reasonable opinion of
your counsel), it will furnish to each Underwriter and dealer without
charge as many copies of the Prospectus (and any amendment or
supplement of the Prospectus) as such Underwriter or dealer may
reasonably request for the purposes contemplated by the Act; the
Company consents to the use of the Prospectus and any amendment or
supplement thereto by any Underwriter or any dealer, both in connection
with the offering or sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection therewith;
(f) if during the period specified in paragraph (e) any event
shall occur or information become known as a result of which in the
reasonable opinion of your counsel it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in
light of the circumstances existing as of the date the Prospectus is
delivered to a purchaser, not misleading, or it is necessary to amend
or supplement the Prospectus to comply with any law, forthwith to
prepare and, subject to paragraph 5(d) above, it will file with the
Commission at the sole expense of the Company an appropriate amendment
or supplement to the Prospectus so that the statements of any material
facts in the Prospectus, as so amended and supplemented, will not in
light of the circumstances when it is so delivered, be misleading, or
so that the Prospectus will comply with law and it will furnish to the
Underwriters and to such dealers as the Underwriters shall specify, at
the sole expense of the Company, such number of copies thereof as such
Underwriters or dealers may reasonably request;
(g) prior to any public offering of the Shares, it will
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification, if necessary, of the Shares for
offer and sale by the several Underwriters and by dealers under the
state securities or Blue Sky laws of such jurisdictions as you may
request (provided, that the Company shall not be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not so
qualified or to take any action which would subject it to general
consent to service of process in any jurisdiction in which it is not
now so subject); the Company will continue such qualification in effect
so long as required by law for the distribution of the Shares and will
file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification
(provided, that the Company shall not be obligated to take any action
that would subject it to general consent to service of process in any
jurisdiction in which it is not now so subject);
6
8
(h) it will not, prior to the exercise in full or termination
or expiration of the option to purchase the Additional Shares, incur
any liability or obligation, direct or contingent, or enter into any
material transaction, other than in the ordinary course of business,
except as contemplated by the Prospectus;
(i) it will not acquire any capital stock of the Company prior
to the exercise in full or termination or expiration of the option to
purchase the Additional Shares nor will the Company declare or pay any
dividend or make any other distribution upon the Common Stock payable
to stockholders of record on a date prior to the exercise in full or
termination or expiration of the option to purchase the Additional
Shares, except in either case as contemplated by the Prospectus;
(j) it will make generally available to its security holders
and furnish to the Underwriters as soon as reasonably practicable a
consolidated earnings statement covering a period of at least 12 months
beginning after the "effective date" (as defined in Rule 158 under the
Act) of the Registration Statement (but in no event commencing later
than 90 days after such date) that will satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder and to advise you in
writing when such statement has been made so available;
(k) during the period of five years after the date of this
Agreement, it will furnish to you a copy (i) as soon as practicable
after the filing thereof, of each report filed by the Company with the
Commission, any securities exchange or the National Association of
Securities Dealers, Inc. ("NASD"); (ii) as soon as practicable after
the release thereof, of each material press release in respect of the
Company; (iii) as soon as available, of each report of the Company
mailed to stockholders; and (iv) as soon as available, such other
publicly available information concerning the Company as you may
reasonably request;
(l) whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective as to all of its
provisions or is terminated, to pay all costs, fees, expenses and taxes
incident to the performance by the Company of its obligations
hereunder, including (i) the preparation, printing, filing and
distribution under the Act of the Registration Statement (including
financial statements and exhibits), each Preliminary Prospectus and all
amendments and supplements to any of them prior to or during the period
specified in paragraph (e) above of this Section 5, (ii) the word
processing, reproduction and distribution of this Agreement, the Blue
Sky Survey and any other agreements, memoranda, correspondence and
other documents prepared and delivered by the Underwriters or their
counsel in connection with the offering of the Shares (including in
each case any disbursements of counsel for the Underwriters relating to
such preparation and delivery), (iii) the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws
of the several states, including in each case the fees and
disbursements of counsel for the Underwriters, relating to such
registration or qualification and memoranda relating thereto, (iv)
filings and clearance with the NASD in connection with the offering and
sale of the Shares, (v) the approval for quotation of the Shares on the
Nasdaq National Market,
7
9
(vi) furnishing such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the
offering or sale of the Shares by the Underwriters or by dealers to
whom the Shares may be sold, (vii) obtaining the opinions to be
provided pursuant to Section 8(g) of this Agreement and (viii) the
performance by the Company of all of its other obligations under this
Agreement; if the sale of the Shares provided for herein is not
consummated because the Underwriters exercise their right to terminate
this Agreement pursuant to Section 9 hereof and any of the following
have occurred during the term of this Agreement: (a) there has been any
material adverse change in the condition (financial or otherwise),
earnings, affairs, business or prospects of the Company, or (b) the
United States has engaged in hostilities which resulted in the
declaration of a national emergency or war, (c) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market has been suspended or materially limited
or (d) a moratorium on commercial banking activities has been declared
by federal or New York state authorities, the effect of any of which in
the reasonable judgment of the Underwriters made it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the
terms set forth in the Prospectus, the Company will promptly reimburse
the Underwriters upon demand for all reasonable out-of-pocket expenses
(including the fees and disbursements of counsel for the Underwriters)
that shall have been incurred by the Underwriters in connection with
the proposed purchase and sale of the Shares;
(m) it will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the
Prospectus and it will report the application of the proceeds therefrom
as may be required in accordance with Rule 463 under the Act;
(n) if, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in
reliance upon Rule 430A, then immediately following the execution and
delivery of this Agreement, it will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule
424(b), copies of an amended Prospectus, or, if required by such Rule
430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so
omitted;
(o) it will cause the Shares to be approved for quotation,
subject to notice of issuance or sale, on the Nasdaq National Market;
it will comply with all registration, filing and reporting requirements
of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act") and the Nasdaq National Market; and
(p) it will use its reasonable commercial efforts to do and
perform all things required to be done and performed under this
Agreement by it prior to or after the Closing Date or any Option
Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Shares.
8
10
SECTION 6. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as
of the date hereof, the Closing Date and each Option Closing Date that:
(i) the Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus
relating to the proposed offering of the Shares nor instituted
or threatened any proceedings for that purpose. The
Registration Statement, on the date it became or becomes
effective, each Preliminary Prospectus, on the date of the
filing thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof
with the Commission (or if not filed, on the date provided by
the Company to the Underwriters in connection with the
offering and sale of the Shares) and at the Closing Date and
each Option Closing Date conformed or will conform in all
material respects with the requirements of the Act and the
rules and regulations promulgated thereunder ("Rules and
Regulations"); the Registration Statement, on the date it
became or becomes effective, did not or will not contain an
untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; each Preliminary
Prospectus, on the date of the filing thereof with the
Commission, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission (or
if not filed, on the date provided by the Company to the
Underwriters in connection with the offering and sale of the
Shares) and at the Closing Date and each Option Closing Date
did not and will not include an untrue statement of material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading; the foregoing shall not apply to statements in or
omissions from the Registration Statement and the Prospectus
made or omitted in reliance upon, and in conformity with,
information relating to the Underwriters furnished in writing
to the Company by or on behalf of the Underwriters with your
consent expressly for use therein; the Company hereby
acknowledges for all purposes under this Agreement that the
statements set forth under the caption "Underwriting" in the
Prospectus constitute the only written information furnished
to the Company by or on behalf of the Underwriters for use in
the preparation of the Registration Statement or the
Prospectus or any amendment or supplement thereto;
(ii) the Company has been duly incorporated and is a
validly existing corporation in good standing under the laws
of Delaware, with full corporate power and authority to own or
lease its properties and assets and to conduct its business as
described in the Registration Statement and the Prospectus and
is duly qualified to do business in each jurisdiction in which
it owns or leases real property or in which the conduct of its
business or the ownership or leasing of property requires such
qualification, except where the failure to be so qualified,
either individually or in the
9
11
aggregate, would not have a material adverse effect on the
condition (financial or otherwise), business, assets,
prospects, net worth or results of operations of the Company
and the Subsidiaries (as defined below) taken as a whole (a
"Material Adverse Effect");
(iii) all of the Company's subsidiaries
(collectively, the "Subsidiaries") are identified in an
exhibit to the Registration Statement. Each Subsidiary is a
corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to
register or qualify does not have a Material Adverse Effect;
all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validity issued,
are fully paid and nonassessable, and are owned by the Company
directly or indirectly through one of the other Subsidiaries,
free and clear of any lien, adverse claim, security interest,
equity or other encumbrance. Other than with respect to the
Subsidiaries, the Company does not have, directly or
indirectly, any ownership interest or agreement or agreement
in principal to acquire any ownership interest which is
material to the Company in consideration of its consolidated
assets, in any corporation, partnership, joint venture,
association or other business organization;
(iv) the capitalization of the Company is, and upon
consummation of the transactions contemplated hereby and by
the Prospectus will be, as set forth in the Registration
Statement and the Prospectus under the caption
"Capitalization;" all of the outstanding shares of capital
stock of the Company have been duly authorized and are validly
issued, are fully paid and nonassessable and conform to the
description thereof in the Registration Statement and the
Prospectus and were not issued in violation of any preemptive
rights or other rights to subscribe for or purchase
securities; and, except (A) as set forth in the Registration
Statement and the Prospectus, and (B) for the Company's
agreement with Amir Investments Corporation and Smurfit
International B.V. (the "Sellers") to issue shares of Common
Stock to the Sellers upon Pamarco, Incorporated and Pamarco
Europe, Ltd.'s achievement of certain aggregate pre-tax
earnings during the period from January 1, 1995 to December
31, 1999 and the Sellers' election to take such shares in lieu
of cash, no options, warrants or other rights to purchase from
the Company, agreements or other obligations of the Company to
issue or other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding; the
description of the Option Plan and the other options or rights
granted and exercised thereunder, as set forth in the
Registration Statement and the Prospectus, accurately and
fairly presents the
10
12
information required to be shown under the Act with respect to
such options and rights;
(v) subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus, and except as described therein, (A) neither the
Company nor any of the Subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered
into any material transactions not in the ordinary course of
business, (B) neither the Company nor any of the Subsidiaries
has purchased any of its outstanding capital stock or
declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock or otherwise, and (C) there
has not been any material adverse change in the Company's or
any of the Subsidiaries' condition (financial or otherwise),
business, assets, prospects or results of operations or any
change in the Company's or any of the Subsidiaries' capital
stock, short-term debt or long-term debt that is material to
the Company and the Subsidiaries, taken as a whole;
(vi) the Shares to be sold by the Company pursuant to
this Agreement have been duly and validly authorized and, when
issued, delivered and paid for pursuant to this Agreement,
will be validly issued, fully paid and nonassessable, and will
conform to the description thereof contained in the
Prospectus;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance
with its terms;
(viii) neither the Company nor any of the
Subsidiaries is in violation of its certificate or articles of
incorporation or by-laws, or other organizational documents;
neither the Company nor any of the Subsidiaries is in
violation of or in breach of or in default in (nor has any
event occurred that with notice or lapse of time, or both,
would be a breach of or a default in) the performance of any
obligation, agreement or condition contained in any agreement,
lease, contract, permit, license, franchise agreement,
mortgage, loan agreement, debenture, note, deed of trust,
bond, indenture or other evidence of indebtedness or any other
instrument or obligation (collectively, "Obligations and
Instruments") to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries
or any of their respective properties or assets is bound or
affected (except, in each case, for such contravention or
default as would not have a Material Adverse Effect); neither
the Company, nor any of the Subsidiaries, is in violation of
any statute, judgment, decree, order, Rule or regulation
(collectively, "Laws") applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets
and, to the knowledge of the Company, no other party under any
contract or other agreement to which the Company or any of its
Subsidiaries is a party is in material default thereunder
except
11
13
for such defaults as would not individually or in the
aggregate result in a Material Adverse Effect;
(ix) the execution, delivery and performance of this
Agreement and delivery of the Shares by the Company and
compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will
not, alone or upon notice or the passage of time or both (A)
require any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other
governmental body or third party (except such as may be
required under the Act and the securities or Blue Sky laws of
the various states or by the NASD), (B) result in the creation
or imposition of any lien, charge or encumbrance upon any of
the properties or assets of the Company or any of the
Subsidiaries pursuant to the terms and provisions of any
Obligation or Instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties or assets
is bound, (C) conflict with or constitute a breach or default
under the certificate or articles of incorporation or by-laws,
or other organizational documents, of the Company or any of
the Subsidiaries, (D) conflict with or constitute a breach or
default under any Obligation or Instrument to which the
Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or any of their respective
properties or assets is bound (except for such creation,
conflict, breach or default as would not have a Material
Adverse Effect), or (E) assuming compliance with the Act and
all applicable state securities or Blue Sky laws, violate or
conflict with any Laws applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets,
(except for such violation or conflict as would not have a
Material Adverse Effect);
(x) except as set forth in the Prospectus, there is
no action, suit, proceeding, inquiry or investigation,
governmental or otherwise, before any court, arbitrator or
governmental agency or body (collectively, "Proceedings")
pending to which the Company or any of the Subsidiaries is a
party or to which any of their respective properties or assets
are subject, that, if determined adversely to the Company,
would result in a Material Adverse Effect, or that might
materially and adversely affect the properties or assets
thereof, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of
any of the Shares to be sold hereunder, and to the knowledge
of the Company, no such Proceedings are threatened or
contemplated; and there is no contract, document, agreement or
transaction to which the Company or any of the Subsidiaries is
a party, or that involved or involves the Company or any of
the Subsidiaries or any of their respective properties or
assets that are required to be described in or filed as
exhibits to the Registration Statement or the Prospectus by
the Act or the Rules and Regulations that have not been so
described or filed; no action has been taken with respect to
the Company or any of the Subsidiaries, and no statute, Rule
or regulation or order has been enacted, adopted or issued by
any governmental agency that
12
14
suspends the effectiveness of the Registration Statement,
prevents or suspends the use of any Preliminary Prospectus or
the Prospectus or suspends the sale of the Shares in any
jurisdiction referred to in Section 5(g) hereof; no
injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction has been
issued with respect to the Company or any of the Subsidiaries
that might prevent the issuance of the Shares, suspend the
effectiveness of the Registration Statement, prevent or
suspend the use of any Preliminary Prospectus or the
Prospectus or suspend the sale of the Shares in any
jurisdiction referred to in Section 5(g) hereof; and every
request made to the Company of the Commission, or any
securities authority or agency of any jurisdiction, for
additional information (to be included in the Registration
Statement or the Prospectus or otherwise) has been complied
with in all material respects;
(xi) neither the Company nor any of the Subsidiaries
has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), or
any foreign, Federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees or
any applicable foreign, Federal or state wages and hours laws,
or any provisions of the Employee Retirement Income Security
Act of 1974, as amended or the rules and regulations
promulgated thereunder or similar foreign laws, that, in each
case or in the aggregate, might result in a Material Adverse
Effect; none of the real property owned or leased by the
Company or any of the Subsidiaries is contaminated with any
waste or hazardous substances, and neither the Company nor any
of the Subsidiaries may be deemed an "owner or operator" of a
"facility" or "vessel" which owns, possesses, transports,
generates, discharges or disposes of a "hazardous substance"
as those terms are defined in 601 of the Comprehensive
Response Compensation and Liability Act of 1980, U.S.C. 601 et
seq.;
(xii) the Company and each of the Subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities or third parties
("Permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease
and operate their respective properties and assets and to
conduct their respective businesses, except where the failure
to have any such Permit would not have a Material Adverse
Effect; the Company and each of the Subsidiaries has fulfilled
and performed all of their respective material obligations
with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time, or both would allow,
revocation or termination thereof or result in any other
material impairment of the rights of the holder of any such
Permit, except where such revocation or impairment would not
have a Material Adverse Effect; and except as described in the
Prospectus, such Permits contain no restrictions that are
materially burdensome to the Company or any of the
Subsidiaries;
13
15
(xiii) the Company is not, and after the sale of the
Shares contemplated hereunder will not be, and does not intend
to conduct its business in a manner in which it would become,
an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act");
(xiv) except as otherwise set forth in the
Prospectus, each of the Company and the Subsidiaries has good
title (marketable title with respect to its real property),
free and clear of all liens, claims, encumbrances and
restrictions (except liens for taxes not yet due and payable)
to all property and assets described in the Registration
Statement as being owned by it; all leases to which the
Company or any of the Subsidiaries is a party are subsisting,
valid and binding and no default has occurred or is continuing
thereunder that would result in a Material Adverse Effect; and
each of the Company and the Subsidiaries enjoys peaceful and
undisturbed possession under all such leases to which the
Company or any of the Subsidiaries is a party as lessee and
which are material to the Company and the Subsidiaries taken
as a whole with such exceptions as do not materially interfere
with the use made thereof by the Company or any of the
Subsidiaries;
(xv) each of the Company and the Subsidiaries
maintains reasonably adequate insurance for the conduct of its
business in accordance with prudent business practices with
solvent and reputable third-party insurers;
(xvi) Deloitte & Touche LLP, the accounting firm that
has certified or reviewed, or shall certify or review, the
financial statements and supporting schedules filed or to be
filed with the Commission as part of the Registration
Statement and the Prospectus, is an independent public
accounting firm with respect to the Company as required by the
Act;
(xvii) the financial statements of the Company and
the Subsidiaries, together with the related notes and
schedules of the Company and the Subsidiaries included in the
Registration Statement and the Prospectus, are consistent with
the books and records of the Company and present fairly in all
material respects the consolidated financial position, results
of operations and cash flows of the Company and the
Subsidiaries at the indicated dates and for the indicated
periods; such financial statements have been prepared in
accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved,
and all adjustments necessary for a fair presentation of
results for such periods have been made and any unaudited
financial statements have been prepared on a basis
substantially consistent with that of the audited financial
statements included in the Registration Statement and the
Prospectus;
14
16
(xviii) all rights of securityholders of the Company
to require registration of shares of Common Stock (a
"registration right") or any other security of the Company
because of the filing of the Registration Statement or
consummation of the transactions contemplated by this
Agreement or to receive notification of such filing or
consummation have been duly waived with respect to the public
offering contemplated hereby. There are no preemptive rights
with respect to the offering being made by the Prospectus;
(xix) except as disclosed in the Registration
Statement and the Prospectus, no labor dispute with the
employees of the Company or of any of the Subsidiaries exists,
or to the knowledge of the Company, is imminent, that would
result in a Material Adverse Effect; and neither the Company
nor any of the Subsidiaries has received notice of any
existing or imminent labor disturbance by the employees of any
of their respective principle suppliers, customers,
manufacturers or contractors that would result in any Material
Adverse Effect;
(xx) the Company and each of the Subsidiaries have
filed or caused to be filed, or have properly filed extensions
for, all foreign, federal, state and local income, value added
and franchise tax returns and have paid all taxes and
assessments shown thereon as due, except for such taxes and
assessments as are disclosed or adequately reserved against
and that are being contested in good faith by appropriate
proceedings, promptly instituted and diligently conducted; all
material tax liabilities are adequately provided for on the
books of the Company and the Subsidiaries, and there is no
material tax deficiency that has been or might be asserted
against the Company that is not so provided for;
(xxi) the Company and each of the Subsidiaries own or
possess, or can acquire on reasonable terms, the patents,
patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, "Patents and Proprietary Rights") currently
employed by them in connection with the businesses now
operated by them except where the failure to so own, possess
or acquire such Patent and Proprietary Rights would not have a
Material Adverse Effect; and the Company has not received any
notice and is not otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Patent or Proprietary Rights that, if the subject of any
unfavorable decision, ruling or finding, singly or in the
aggregate, would result in a Material Adverse Effect;
(xxii) each of the Company and the Subsidiaries is
conducting and intends to conduct its business so as to comply
in all material respects with applicable federal, state, local
and foreign government Laws, except where the failure to
comply would not have a Material Adverse Effect; and except as
set forth in the Registration
15
17
Statement and the Prospectus, neither the Company nor any of
the Subsidiaries has been charged with or, to the Company's
knowledge, is under investigation with respect to, any
material violation of any such Laws;
(xxiii) the statistical and market related data
included in the Registration Statement and the Prospectus are
based on or derived from sources the Company reasonably and in
good faith believes to be accurate, reasonable and reliable;
(xxiv) the Company has not taken and will not take,
directly or indirectly, any action designed to stabilize or
manipulate or which has constituted or that might reasonably
be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of, the price of
any security of the Company to facilitate the sale or resale
of the Shares;
(xxv) neither the Company nor any Subsidiary nor, to
the Company's knowledge, any employee or agent of the Company
or any of the Subsidiaries has made any payment of funds or
received or retained any funds in violation of any law, Rule
or regulation (including, without limitation, the Foreign
Corrupt Practices Act) or of a character required to be
disclosed in the Prospectus; neither the Company nor any of
the Subsidiaries has, at any time during the past five years,
(1) made any unlawful contributions to any candidate for any
political office, or failed fully to disclose any contribution
in violation of law, or (2) made any unlawful payment to
state, federal or foreign government officer or officers, or
other person charged with similar public or quasi-public duty;
(xxvi) each of the Company and the Subsidiaries
maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with
respect to any differences;
(xxvii) there is no material document of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement that is not described or filed as required;
(xxviii) no transaction has occurred between or among
the Company or any of the Subsidiaries and any of the
Company's or the Subsidiaries' officers or directors or any
affiliate or affiliates of any such officer or director that
is required
16
18
to be described in and is not described in the Registration
Statement and the Prospectus; and
(xxix) the Company confirms as of the date hereof
that each of the Company and the Subsidiaries is in compliance
with all provisions of Section I of Florida Statutes, Section
517.075, An Act Relating to Disclosure of Doing Business with
Cuba; the Company further agrees that if the Company or any of
the Subsidiaries commences engaging in business with the
government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has
become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with
Cuba or with any person or affiliate located in Cuba changes
in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form
acceptable to the Department.
(b) Each Selling Stockholder severally and not jointly
represents and warrants to, and agrees with, the Underwriters that:
(i) such Selling Stockholder has all requisite power
to enter into this Agreement and to sell, assign, transfer and
deliver to the Underwriters the Shares to be sold by such
Selling Stockholder hereunder in accordance with the terms of
this Agreement. This Agreement has been duly executed and
delivered by such Selling Stockholder and constitutes and will
constitute the legal, valid and binding obligation of such
Selling Stockholder enforceable against such Selling
Stockholder in accordance with its terms;
(ii) such Selling Stockholder has duly executed and
delivered a power of attorney and custody agreement (with
respect to such Selling Stockholder, the "Power-of-Attorney"
and the "Custody Agreement," respectively), each in the form
heretofore delivered to the Representatives, appointing each
of _________________ and _____________________ individually,
as such Selling Stockholder's attorney-in-fact (in each case,
the "Attorney-in-Fact"), with authority to execute, deliver
and perform this Agreement on behalf of such Selling
Stockholder and appointing _____________________, as custodian
thereunder (the "Custodian"); certificates in negotiable form,
endorsed in blank or accompanied by blank stock powers duly
executed, with signatures appropriately guaranteed,
representing the Shares to be sold by such Selling Stockholder
hereunder have been deposited with the Custodian pursuant to
the Custody Agreement for the purpose of delivery pursuant to
this Agreement; such Selling Stockholder has full power to
enter into the Custody Agreement and the Power-of-Attorney and
to perform its obligations under the Custody Agreement; the
Custody Agreement and Power-of-Attorney have been duly
executed and delivered by such Selling Stockholder and are the
legal, valid, binding
17
19
and enforceable instruments of such Selling Stockholder; such
Selling Stockholder agrees that each of the Shares represented
by the certificates on deposit with the Custodian is subject
to the interests of the Underwriters hereunder, that the
arrangements made for such custody, the appointment of the
Attorneys-in-Fact and the right, power and authority of the
Attorneys-in-Fact to execute and deliver this Agreement and to
carry out the terms of this Agreement are to that extent
irrevocable and that the obligations of such Selling
Stockholder hereunder shall not be terminated, except as
provided in this Agreement or the Custody Agreement, by any
act of such Selling Stockholder, by operation of law or
otherwise, whether in the case of any individual Selling
Stockholder by the death or incapacity of such Selling
Stockholder, in the case of a trust or estate by the death of
the trustee or trustees or the executor or executors or the
termination of such trust or estate, or in the case of a
corporate or partnership Selling Stockholder by its
liquidation or dissolution or by the occurrence of any other
event; if any individual Selling Stockholder, trustee or
executor should die or become incapacitated or any such trust
should be terminated, or if any corporate or partnership
Selling Stockholder shall liquidate or dissolve, or if any
other event should occur, before the delivery of such Shares
hereunder, the certificates for such Shares deposited with the
Custodian shall be delivered by the Custodian in accordance
with the respective terms and conditions of this Agreement as
if such death, incapacity, termination, liquidation or
dissolution or other event had not occurred, regardless of
whether or not the Custodian or the Attorneys-in-Fact shall
have received notice thereof;
(iii) such Selling Stockholder is the lawful record
owner of the Shares to be sold by such Selling Stockholder
hereunder; upon sale and delivery of, and payment for, such
Shares, as provided herein, such Selling Stockholder will
convey good and marketable title to such Shares, free and
clear of any security interests, liens, encumbrances,
equities, claims, options, rights of third parties or other
defects;
(iv) such Selling Stockholder has reviewed the
Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) and the Registration
Statement, and the information regarding such Selling
Stockholder set forth therein under the caption "Principal and
Selling Stockholders' is complete and accurate;
(v) the sale by such Selling Stockholder of Shares
pursuant hereto is not prompted by any material adverse
information concerning the Company or any Subsidiary that is
not set forth in the Registration Statement or the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus);
(vi) the sale of the Shares to the Underwriters by
such Selling Stockholder pursuant to this Agreement, the
compliance by such Selling Stockholder with the other
provisions of this Agreement, the Custody Agreement and the
consummation
18
20
of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except
such as have been obtained, such as may be required under
state and foreign Blue Sky laws and, if the Registration
Statement is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act and the
Exchange Act, or (B) result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or any of such
Selling Stockholder's properties are bound, or any statute or
any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable
to such Selling Stockholder;
(vii) neither such Selling Stockholder, nor, if such
Selling Stockholder is a trust, any trustee or beneficiary of
such Selling Stockholder, is affiliated as a director,
officer, partner, stockholder, or otherwise with any
securities broker or dealer which is a member of the NASD or
any other organization that owns or controls any member of the
NASD; and
(viii) such Selling Stockholder has not taken, nor
will such Selling Stockholder take, directly or indirectly,
any action designed to, or that might reasonably be expected
to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Shares pursuant to the distribution contemplated
by this Agreement and, other than as permitted by the Act, no
Selling Stockholder has distributed, nor will such Selling
Stockholder distribute, any prospectus or other offering
material in connection with the offering and sale of the
Shares.
(c) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty made by the Company to each Underwriter as
to the matters covered thereby and shall be deemed incorporated herein
in its entirety and shall be effective as if such representation and
warranty were made herein; and any certificate signed by the Selling
Stockholders as such and delivered to you or to counsel for the
Underwriters shall also be deemed a representation and warranty
severally and not jointly made by such Selling Stockholder to each
Underwriter as to the matters covered thereby and shall also be deemed
incorporated herein in its entirety and shall be effective as if such
representation and warranty were made herein.
SECTION 7. Indemnification.
(a) The Company and the Selling Stockholders, jointly and
severally, shall indemnify and hold harmless each of the Underwriters
and each person, if any, who controls each of the Underwriters within
the meaning of Section 15 of the Act or Section 20 of the
19
21
Exchange Act (the "indemnified parties") from and against any and all
losses, claims, damages, liabilities and judgments caused by, arising
out of, related to or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
(as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), including the information deemed to
be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A, if applicable, or the Prospectus or any
Preliminary Prospectus or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that neither the Company nor the Selling Stockholders shall be
liable in any such case to the extent that such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or
omission made or omitted in reliance upon, and in conformity with,
information relating to the Underwriters furnished in writing to the
Company by or on behalf of the Underwriters with your consent expressly
for use therein; and provided further, however, that the
indemnification contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or
judgment arising from the sale of the Shares by such Underwriter to any
person if a copy of the Prospectus shall not have been delivered or
sent to such person within the time required by the Act, and the untrue
statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, provided that the Company has delivered
the Prospectus to the several Underwriters in requisite quantity on a
timely basis to permit such delivery or sending.
(b) In case any action shall be brought against any of the
indemnified parties, based upon any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the
Company or the Selling Stockholders, such indemnified parties shall
promptly notify the Company or the Selling Stockholders, as the case
may be, in writing. No indemnification provided for in this Section 7
shall be available to any indemnified party who shall fail to give such
notice if the indemnifying party does not have knowledge of such claim
for indemnification, but only to the extent that such indemnifying
party has been materially prejudiced by the failure to give such
notice. The omission to so notify the indemnifying party shall not
relieve the indemnifying party otherwise than under this Section 7. The
Company or the Selling Stockholders, as the case may be, shall promptly
assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party (which may include,
among others, Xxxxxx, Xxxxx & Xxxxxxx LLP) and payment of all fees and
expenses. The indemnifying parties shall not agree to settle any such
action without the consent of EVEREN Securities, Inc., which such
consent shall not unreasonably be withheld. The indemnified parties
shall each have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified parties unless
(i) the employment of such counsel shall have been specifically
authorized by the Company, (ii) the
20
22
Company or the Selling Stockholders, as the case may be, shall have
failed to assume promptly the defense or to employ counsel reasonably
satisfactory to such indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the
indemnified parties and the Company or the Selling Stockholders, and an
indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to one or more of the indemnified
parties that are different from or additional to those available to the
Company or the Selling Stockholders (in which case the Company and the
Selling Stockholders shall not have the right to assume the defense of
such action on behalf of such indemnified party, it being understood,
however, that the Company and the Selling Stockholders shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in
addition to any required local counsel) for the indemnified parties,
which firm shall be designated in writing by EVEREN Securities, Inc.,
and that all such reasonable fees and expenses of such counsel shall be
reimbursed promptly as they are incurred). Neither the Company nor the
Selling Stockholders shall 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 written consent of the
Company or the Selling Stockholders, as the case may be, the Company
and the Selling Stockholders shall indemnify and hold harmless the
indemnified parties from and against any and all loss or liability by
reason of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional and complete release in writing of
such indemnified party from any and all liability on claims that are
the subject matter of such proceeding, which such settlement shall be
in form and substance satisfactory to the indemnified party. The
indemnification provided in this Section 7 will be in addition to any
liability which the Company and the Selling Stockholders may otherwise
have.
(c) The Underwriters agree, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement, each Selling Stockholder, and any
person controlling the Company or a Selling Stockholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company and the
Selling Stockholders to the Underwriters but only with reference to
information stated in or omitted from the Registration Statement, the
Prospectus or any Preliminary Prospectus in reliance upon, and in
conformity with, information relating to the Underwriters furnished in
writing to the Company by or on behalf of the Underwriters with your
consent expressly for use therein. In case any action shall be brought
against the Company, any of the Selling Stockholders, any of the
Company's directors, any such officers or any person controlling the
Company based on the Registration Statement, the Prospectus or any
Preliminary Prospectus and in respect of which indemnity may be sought
against the Underwriters, the Underwriters shall
21
23
have the rights and duties given to the Company and the Selling
Stockholders by Section 7(b) hereof (except that if the Company and the
Selling Stockholders shall have assumed the defense thereof, such
Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter),
and the Selling Stockholders, the Company, its directors, any such
officers and any person controlling the Company shall have the rights
and duties given to the "indemnified parties" by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
for any reason unavailable to an indemnified party or insufficient to
hold such indemnified party harmless in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders
on the one hand and the Underwriters on the other from the offering of
the Shares or (ii) if the allocation provided in 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)
above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders
on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering and
sale of the Shares (before deducting expenses) received by the Company
and the Selling Stockholders on the one hand, and the total
underwriting discounts and commissions received by the Underwriters on
the other, bears to the total price to the public of the Shares, in
each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company, the Selling Stockholders
and the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or the alleged omission to state a material fact
relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by
22
24
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
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 been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no
Selling Stockholder shall be required to contribute, more in the
aggregate than the Maximum Amount (as defined below). No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this Section 7 to contribute are several in proportion
to the respective amount of Shares purchased hereunder by each
Underwriter and not joint.
(f) Notwithstanding anything set forth to the contrary herein,
the liability of each Selling Stockholder under this Section 7,
together with any liability for any breach of any representation,
warranty, covenant or other provisions of this Agreement, shall be
limited to the proceeds received by such Selling Stockholder from the
sale of such Selling Stockholder's Shares pursuant to this Agreement,
net of underwriting discounts and commissions paid by such Selling
Stockholder to the Underwriters in connection with such sale. The
foregoing limitation for each Selling Stockholder is referred to as the
"Maximum Amount."
(g) In addition, the liability of each Selling Stockholder
under this Section 7, together with any liability for any breach of any
representation, warranty, covenant or other provision of this
Agreement, shall be proportional based on the ratio that the number of
Shares being sold by such Selling Stockholder bears to the total number
of Shares being sold by all Selling Stockholders; provided, however,
that with respect to the breach of any representation or warranty in
Section 6(b), such liability shall not be so proportional, no Selling
Stockholder shall be liable for the breach of any such representation
or warranty by any other Selling Stockholder, and each Selling
Stockholder shall be liable in full (not to exceed the Maximum Amount)
with respect to any breach thereof by such Selling Stockholder.
SECTION 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the Closing Date and the Option Shares on any Option Closing Date are subject
to the fulfillment of each of the following conditions on or prior to the
Closing Date and each Option Closing Date:
(a) All the representations and warranties of the Company and
the Selling Stockholders contained in this Agreement and in any
certificate delivered hereunder shall be true and correct in all
material respects on the Closing Date and each Option Closing Date with
the same force and effect as if made on and as of the Closing Date or
Option Closing Date, as applicable. The Company and the Selling
Stockholders shall not have failed at or
23
25
prior to the Closing Date or Option Closing Date, as applicable, to
perform or comply in all material respects with any of the agreements
herein contained and required to be performed or complied with by the
Company at or prior to the Closing Date.
(b) If the Registration Statement is not effective at the time
of the execution and delivery of this Agreement, the Registration
Statement shall have become effective (or, if a post-effective
amendment is required to be filed pursuant to Rule 430A under the Act,
such post-effective amendment shall have become effective) not later
than 9:30 A.M., New York City time, on the date of this Agreement or
such later time as you may approve in writing or, if the Registration
Statement has been declared effective prior to the execution and
delivery hereof in reliance on Rule 430A, the Prospectus shall have
been filed as required hereby, if necessary; and at the Closing Date
and each applicable Option Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been commenced or shall be
pending before or threatened by the Commission; every request for
additional information on the part of the Commission shall have been
complied with to the Underwriters' reasonable satisfaction; no stop
order suspending the sale of the Shares in any jurisdiction referred to
in Section 5(g) shall have been issued and no proceeding for that
purpose shall have been commenced or shall be pending or threatened.
(c) The Shares shall have been qualified for sale under the
Blue Sky laws of such states as shall have been specified by the
Representatives where such qualification is required by applicable law.
(d) The legality and sufficiency of the authorization,
issuance and sale or transfer and sale of the Shares hereunder, the
validity and form of the certificates representing the Shares, the
execution and delivery of this Agreement and all corporate proceedings
and other legal matters incident thereto, and the form of the
Registration Statement and the Prospectus (except financial statements)
shall have been approved by counsel for the Underwriters exercising
reasonable judgment, and no Underwriter shall have advised the Company
that the Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of material fact, or
omits to state a fact that in your opinion is material and is required
to be stated therein or is necessary to make the statements therein not
misleading.
(e) You shall have received an agreement from each of the
officers and directors who are not Selling Stockholders of the Company
(the "Additional Stockholders"), whereby each such officer or director
agrees to be bound by an agreement to the same effect as the covenants
set forth in the last paragraph of Section 3 of this Agreement (the
"Lock-Up Agreements").
(f) You shall have received signed opinions (reasonably
satisfactory to you and your counsel) dated the Closing Date or the
Option Closing Date, as the case may be, of
24
26
counsel for the Company, its Subsidiaries (but not Pamarco Europe,
Ltd.) and the Selling Stockholders to the effect that:
(i) the Company is a validly existing corporation in
good standing under the laws of the State of Delaware, with
all necessary corporate power and authority to own, lease and
operate its properties and assets and to conduct its business
as described in the Prospectus;
(ii) the Company is in good standing as a foreign
corporation in the states of ______________ and
________________ which, to our knowledge, are the only states
where the Company owns or leases real property.
(iii) Each of the Subsidiaries is a validly existing
corporation in good standing under the laws of the
jurisdiction of its organization, with all necessary corporate
power and authority to own, lease, and operate its properties
and assets and to conduct its business as described in the
Registration Statement and the Prospectus and is in good
standing as a foreign corporation in the states of
_________________ and _____________________ which, to our
knowledge, are the only states where the Subsidiaries own or
lease real property; and all the outstanding shares of capital
stock of each of the Subsidiaries are owned of record by the
Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any adverse claim.
(iv) the Company has all requisite corporate power
and authority to enter into and perform this Agreement and the
performance of the Company's obligations hereunder has been
duly authorized by all necessary corporate action; this
Agreement has been duly executed and delivered by and on
behalf of the Company, and constitutes a legal, valid and
binding agreement of the Company, enforceable in accordance
with its terms, except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally;
no approval, consent, order, authorization, declaration or
filing by or with any regulatory, administrative or other
governmental body or, to such counsel's knowledge, third
party, is necessary in connection with the execution and
delivery of this Agreement and the consummation of the
transactions contemplated herein (other than as may be
required by the NASD or as required by state securities or
Blue Sky laws, as to which such counsel need express no
opinion) except as have been obtained and made under the Act
and such other as have been obtained or made, with counsel
specifying the same;
(v) the authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
"Capitalization;" and all of the shares of capital stock of
the Company outstanding immediately prior to the Closing Date
have been duly authorized and validly issued, are fully paid
and non-assessable and were not
25
27
issued in violation of any statutory or, to our knowledge,
other preemptive rights or other rights to subscribe for or
purchase securities; and, to our knowledge, except as set
forth in the Prospectus, there are no outstanding options,
warrants or other rights to convert any obligation into, or
exchange any securities for, shares of capital stock or
ownership interests in the Company;
(vi) the Registration Statement has become effective
under the Act, the Prospectus has been filed as required by
Rule 424(b) under the Act, if necessary, and, to our
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose are pending or have been initiated or threatened
by the Commission; and the Registration Statement (including
the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A,
if applicable), the Prospectus and each amendment or
supplement thereto, as of their respective effective or issue
dates, (except for the financial statements and other
statistical or financial data included therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Rules and Regulations;
(vii) the statements made in the Registration
Statement under the captions, "Description of Capital Stock,"
"Management-Stock Option Plan," "Management-Employment
Agreements" and "Shares Eligible for Future Sale" to the
extent that they constitute summaries of documents referred to
therein or matters of law or legal conclusions, have been
reviewed by such counsel and are accurate and fairly present
the information disclosed therein;
(viii) the certificates for the Shares to be
delivered hereunder are in proper legal form under, and
conform in all respects to the requirements of the DGCL, and
when duly countersigned by the Company's transfer agent and
delivered to you or upon your order against payment of the
agreed consideration therefor in accordance with the
provisions of this Agreement, the Shares sold by the Company
hereunder and represented thereby will be duly authorized and
validly issued, fully paid and nonassessable; and will not
have been issued in violation of any statutory preemptive or,
to the knowledge of such counsel after reasonable inquiry,
other similar rights that entitle or will entitle any person
to acquire any shares upon issuance thereof by the Company;
(ix) the execution and delivery of this Agreement,
the issuance and sale of the Shares by the Company as
contemplated herein and the fulfillment of the terms hereof by
the Company will not result in the creation of any lien,
charge or encumbrance upon any of the properties or assets of
the Company or any of the Subsidiaries pursuant to the terms
and provisions of, or conflict with, or violate or constitute
a breach of or default under (or an event which with notice or
lapse or time, or both, would constitute a breach of or a
default under) or otherwise give any
26
28
other party the right to terminate, the certificate or
articles of incorporation or by-laws or other organizational
documents of the Company or any of the Subsidiaries or the
terms and provisions of any Obligations and Instruments, known
to us, to which the Company or any of the Subsidiaries is a
party or by which the Company or any of its Subsidiaries, or
any of their respective properties or assets may be bound or
affected, which such conflict, violation, breach or default
would have a Material Adverse Effect, or violate any Laws of
any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over the
Company or any of the Subsidiaries or any of their respective
properties or assets;
(x) to such counsel's knowledge and except as
described in the Prospectus, there is no Proceeding pending or
threatened, to which the Company or any of the Subsidiaries is
or may be a party or to which the business or property of the
Company or any of the Subsidiaries is or may be the subject
that would result in any Material Adverse Effect; or that
seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Shares to the
Underwriters;
(xi) the descriptions in the Registration Statement
and Prospectus of contracts, instruments and other documents
filed as exhibits to the Registration Statement are accurate
in all material respects; such counsel does not know of any
Proceedings required to be described in the Prospectus that
are not described, or of any contracts or documents of a
character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that were not described or filed as
required;
(xii) the Company is not an "investment company"
subject to registration or regulation under the Investment
Company Act or a company controlled by an "investment company"
subject to registration or regulation under the Investment
Company Act;
(xiii) with respect to each Selling Stockholder, this
Agreement has been duly executed and delivered by or on behalf
of each such Selling Stockholder and has been duly authorized
in the case of all corporate, partnership, trust or other
non-human Selling Stockholders; and, to such counsel's
knowledge, the performance of this Agreement and the
consummation of the transactions contemplated herein by such
Selling Stockholder will not result in a breach or violation
of any of the terms and provisions of, or constitute a default
under any Obligations and Instruments known to such counsel to
which any such Selling Stockholder is a party or by which it
is bound or to which any of the Shares are bound or any Laws
of any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over the
Selling Stockholders;
27
29
(xiv) this Agreement is the legal, valid and binding
agreement of each Selling Stockholder enforceable in
accordance with its terms, except as enforceability of the
same may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally;
(xv) each Lock-Up Agreement has been duly executed
and delivered by or on behalf of each Additional Stockholder
and is a legal, valid and binding agreement of each Additional
Stockholder enforceable in accordance with its terms, except
as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally; and
(xvi) Upon delivery of the Shares pursuant to this
Agreement and payment therefor as contemplated herein, the
Underwriters will acquire good and marketable title to the
Shares free and clear of any adverse claim.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants of
the Company and representatives of the Underwriters and their counsel,
at which the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although such counsel is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as set forth above)
and has not made any independent check or verification thereof, on the
basis of the foregoing (relying as to materiality to a large extent
upon the statements of officers and other representatives of the
Company), no facts have come to such counsel's attention that lead such
counsel to believe that either the Registration Statement or any
amendment (including any post-effective amendment) thereto at the time
such Registration Statement or amendment became effective, and as of
the Closing Date and any applicable Option Closing Date, contained or
contains 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 herein not misleading, or that the Prospectus or any
amendment or supplement thereto as of their respective issue dates and
as of the Closing Date and any applicable Option Closing Date contained
or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, except that such counsel need express
no comment with respect to the financial statements, schedules and
other financial and statistical data included in the Registration
Statement or the Prospectus.
In rendering his opinion as aforesaid, counsel may rely upon
an opinion or opinions, each dated the Closing Date or the Option
Closing Date, as the case may be, of other counsel retained by him or
the Company as to laws of any jurisdiction other than the United
States, the Commonwealth of Pennsylvania or the State of Delaware,
provided that (1) each such
28
30
local counsel is acceptable to the Representatives, (2) such reliance
is expressly authorized by each opinion so relied upon and a copy of
each such opinion is addressed and delivered to the Representatives and
is, in form and substance, satisfactory to them and their counsel, and
(3) counsel shall state in his opinion that he believes that he and the
Underwriters are justified in relying thereon.
(g) You shall have received an opinion of counsel for Pamarco
Europe, Ltd. dated the Closing Date or the Option Closing Date, as the
case may be, in form and substance reasonably satisfactory to you.
(h) You shall have received an opinion of Benesch,
Friedlander, Xxxxxx & Aronoff LLP, counsel for the Underwriters, dated
the Closing Date or the Option Closing Date, as the case may be, in
form and substance reasonably satisfactory to you.
(i) You shall have received, in connection with the execution
of this Agreement and on the Closing Date and each Option Closing Date,
a "cold comfort" letter from Deloitte & Touche LLP, dated as of each
such date in form and substance satisfactory to you with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(j) You shall have received from the Company a certificate,
signed by Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx in their capacities
as Chief Executive Officer and Chief Financial Officer of the Company,
respectively, addressed to the Underwriters and dated the Closing Date
or Option Closing Date, as applicable to the effect that:
(i) such officer does not know of any Proceedings
instituted, threatened or contemplated against the Company of
a character required to be disclosed in the Prospectus which
is not so disclosed; such officer does not know of any
material contract required to be filed as an exhibit to the
Registration Statement which is not so filed;
(ii) such officer has carefully examined the
Registration Statement and the Prospectus and all amendments
or supplements thereto and, in such officer's opinion, such
Registration Statement or such amendment as of its effective
date and as of the Closing Date, and the Prospectus or such
supplement as of its date and as of the Closing Date, did not
contain an untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and, in
such officer's opinion, since the effective date of the
Registration Statement, no event has occurred or information
become known which should have been set forth in an amendment
to the Registration Statement or a supplement to the
Prospectus which has not been so set forth in such amendment
or supplement;
29
31
(iii) the representations and warranties of the
Company set forth in Section 6(a) of this Agreement are true
and correct in all material respects as of the date of this
Agreement and as of the Closing Date or the Option Closing
Date, as the case may be, and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to such Closing
Date; and
(iv) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
preliminary prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the knowledge of the respective signers, no
proceedings for that purpose have been instituted or are
pending or threatened under the Act.
The delivery of the certificate provided for in this subparagraph shall
be and constitute a representation and warranty of the Company as to
the facts required in the immediately foregoing clauses (iii) and (iv)
of this subparagraph to be set forth in said certificate.
(k) You shall have received a certificate of each Selling
Stockholder dated the Closing Date or the Option Closing Date, as the
case may be, to the effect that the representations and warranties of
such Selling Stockholder set forth in Sections 6(a) and 6(b) of this
Agreement are true and correct as of such date and the Selling
Stockholder has complied with all the agreements and satisfied all the
conditions on the part of such Selling Stockholder to be performed or
satisfied at or prior to such date.
(l) You and Benesch, Friedlander, Xxxxxx & Xxxxxxx LLP,
counsel for the Underwriters, shall have received on or before the
Closing Date or the Option Closing Date, as the case may be, such
further documents, opinions, certificates and schedules or instruments
relating to the business, corporate, legal and financial affairs of the
Company as you and they shall have reasonably requested from the
Company.
SECTION 9. Effective Date of Agreement, Termination and Defaults. This
Agreement shall become effective upon, and shall not be deemed delivered until,
the later of (i) execution of this Agreement and (ii) when notification of the
effectiveness of the Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
and any exercise of the option to purchase Additional Shares may be canceled at
any time prior to any Option Closing Date by the Underwriters by written notice
to the Company if any of the following has occurred: (i) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change or development involving a prospective
material adverse change in the condition, financial or otherwise, of the Company
and the Subsidiaries taken as a whole or the earnings, affairs, management, or
business of the Company and the Subsidiaries taken
30
32
as a whole, whether or not arising in the ordinary course of business, that
would, in the Representatives' sole judgment, make it impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus, (ii)
any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in the Representatives' sole judgment,
is material and adverse and would, in the Representatives' sole judgment, make
it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market or limitation on prices for securities on
either such exchange or the Nasdaq National Market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, Rule or order of any court or other governmental authority that in
the Representatives' sole opinion materially and adversely affects, or will
materially and adversely affect, the business or operations of the Company and
the Subsidiaries, (v) the declaration of a banking moratorium by either federal
or New York state authorities, (vi) the taking of any action by any Federal,
state or local government or agency in respect of its monetary or fiscal affairs
that in the Representatives' sole opinion has a material adverse effect on the
financial markets in the United States or (vii) there shall be any change in
financial markets or in political, economic or financial conditions which, in
the opinion of the Representatives, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the terms set
forth in the Prospectus or materially adversely affects the market for the
Shares,
If on the Closing Date or on any Option Closing Date, as the case may
be, any of the Underwriters shall fail or refuse to purchase the Firm Shares or
Additional Shares, as the case may be, which it has agreed to purchase hereunder
on such date, and the aggregate number of Firm Shares or Additional Shares, as
the case may be, that such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed, in the aggregate, 10% of the
total number of Shares that all Underwriters are obligated to purchase on such
date, each non-defaulting Underwriter shall be obligated, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule II
hereto bears to the total number of Firm Shares or Additional Shares, as the
case may be, that all the non-defaulting Underwriters have agreed to purchase,
or in such other proportion as you may specify, to purchase the Firm Shares or
Additional Shares, as the case may be, that such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
Closing Date or on the Option Closing Date, as the case may be, any of the
Underwriters shall fail or refuse to purchase the Firm Shares or Additional
Shares, as the case may be, in an amount that exceeds, in the aggregate, 10% of
the total number of the Shares, and arrangements satisfactory to you and the
Company for the purchase of such Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability on the part of the
non-defaulting Underwriters, the Company and the Selling Stockholders, except as
otherwise provided in this Section 9. In any such case that does not result in
termination of this Agreement, either you or the Company may postpone the
Closing Date or the Option Closing Date, as the case may be, for not longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under
31
33
this paragraph shall not relieve a defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
The indemnity and contribution provisions and other agreements,
representations and warranties of the Company, the Selling Stockholders and the
Company's officers and directors set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Shares, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of any of the Underwriters or by
or on behalf of the Company or any Selling Stockholder or the officers or
directors of the Company or any controlling person of the Company, (ii)
acceptance of the Shares and payment therefor hereunder or (iii) termination of
this Agreement. Notwithstanding any termination of this Agreement, the Company
shall be liable for and shall pay all expenses it has agreed to pay pursuant to
Section 5(l).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of, and shall be binding upon, the Company, the Selling
Stockholders, the Underwriters, any indemnified person referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The terms "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
SECTION 10. Effectiveness of Registration Statement. You, the Company
and the Selling Stockholders will use your, its and their reasonable commercial
efforts to cause the Registration Statement to become effective, if it has not
yet become effective, and to prevent the issuance of any stop order suspending
the effectiveness of the Registration Statement and, if such stop order be
issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Information Furnished by the Underwriters. The statements
set forth in the last paragraph on the cover page, the stabilization legend on
the inside cover page, and the statements in the first paragraph, the third
paragraph, the third sentence of the sixth paragraph and the eighth paragraph
under the caption "Underwriting" in any preliminary prospectus and in the
Prospectus, constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Sections 6(b) and
7 hereof.
SECTION 12. Miscellaneous. All communications hereunder will be in
writing and, if sent to the Underwriters will be mailed, delivered or
telegraphed and confirmed to you c/o EVEREN Securities, Inc., 00 Xxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Syndicate Department, with a
copy to Benesch, Friedlander, Xxxxxx & Xxxxxxx LLP, 0000 XX Xxxxx, 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxx X. Xxxxxx; if sent to the
Company will be mailed, delivered or telegraphed and confirmed to the Company at
its corporate headquarters with a copy to Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx
Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Xxxxxx X.
Xxxxxxxxx; and if sent to the Selling Stockholders will be mailed, delivered or
telegraphed care of the Company, with a copy to Xxxxxx, Xxxxx & Xxxxxxx LLP,
2000
32
34
Xxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Xxxxxx X.
Xxxxxxxxx, or in any case to such other address as the person to be notified may
have requested in writing.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters,
including you.
Very truly yours,
PAMARCO TECHNOLOGIES, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
SELLING STOCKHOLDERS
By: _______________________________
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
EVEREN Securities, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Acting as Representatives of the several
Underwriters named in Schedule II
By: EVEREN Securities, Inc.
By: _______________________________
Maury X. Xxxx, Managing Director
33
35
SCHEDULE I
MAXIMUM NO.
NO. OF FIRM OF ADDITIONAL
SHARES SHARES
SELLING STOCKHOLDER BEING SOLD TO BE SOLD
------------------- ----------- -------------
Bradford Venture Partners, L.P. 526,666 184,333
Bradford Investors, L.P. 309,485 108,320
Overseas Equity Investors Partners, L.P. 298,765 104,568
Bradford Venture Partners Special Situations, L.P. 8,653 3,028
Xxxxxxx X. Xxxxxxx 7,621 2,667
Xxxxxxxx Xxxxx Revocable Trust No. 1 U/D/T 12/3/91 6,131 2,146
Xxxxxxxx Xxxxx Revocable Trust No. 2 U/D/T 12/3/91 6,131 2,146
Xxxxxxx Corporation (Xxxx Xxxxx) 4,591 1,607
Xxxxxxx X. Xxxxxx 3,926 1,374
Xxxxx X. Xxxxxx 3,759 1,316
Xxxxxx X. Xxxxxxxxx, Trustee U/A/D 3/17/69 3,566 1,248
Bradford Xxxx Xxxxx 3,277 1,147
Belisarius Corporation (Xxxxxx X. Xxxxxxx) 2,966 1,038
Xxxxxxx X. Xxxxx 2,923 1,023
Xxxxxxxxx X. Xxxxxx 2,227 779
Bradford Xxxx Xxxxx, Trustee U/A/D 11/4/78
F/B/O Xxxx X. Xxxxx 1,574 551
Xxxxxxx X. Xxxxx, Trustee U/A/D 12/26/84
F/B/O Xxxxxxx Xxx Xxxxxx 1,504 526
Xxxxxxx X. Xxxxx, Trustee U/A/D/ 2/26/88
F/B/O Xxxxxxx Xxx Xxxxxx 1,337 468
Xxxx X. Xxxxxxx 1,278 447
Xxxxxx X. Xxxxx 1,079 378
Xxxx X. Xxxxxxxxxx 788 276
Xxxxxx X. Xxxxx U/A/D 3/28/89
F/B/O Bradford Taybrook Xxxxx 650 228
Xxxxxx X. Xxxx 473 166
Xxxxx Xxxxxx 394 138
Xxxxx Xxxxx 236 82
--------- -------
TOTAL: 1,200,000 420,000
34
36
SCHEDULE II
NUMBER OF
FIRM SHARES
TO BE
UNDERWRITER PURCHASED
----------- -----------
EVEREN Securities, Inc.............................
Xxxxxx Xxxxxxxxxx Xxxxx Inc........................
---------
TOTAL: 2,800,000
=========
35
37
UNDERWRITING AGREEMENT - DRAFT OF 1/12/98
36