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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
PMC International, Inc.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
693437303
(CUSIP Number)
Joel Frank
Och-Ziff Management, L.L.C.
153 E. 53rd Street, 43rd Floor
New York, N.Y. 10022
212-292-5956
(Name, Address, and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 24, 1997
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Och-Ziff Capital Management, L.P.
2. CHECK THE APPROPRIATE ROW IF A MEMBER OF A GROUP*
*(SEE INSTRUCTIONS) (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
*(SEE INSTRUCTIONS)
WC
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(D) OR 2(E) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
1,866,666 Shares
8. SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
1,866,666 Shares
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,866,666 Shares
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* (SEE
INSTRUCTIONS)
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.6%
14. TYPE OF REPORTING PERSON*
*(SEE INSTRUCTIONS)
PN
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Item 1. Security and Issuer
The class of securities to which this statement on Schedule 13D relates
is the Common Stock, par value $0.01 per share (the "Shares"), of PMC
International, Inc., a Colorado corporation (the "Company"). The Company has
its principal executive offices at Anaconda Tower, 14th Floor, 555 Seventeenth
Street, Denver, Colorado 80202.
Item 2. Identity and Background
a. Och-Ziff Capital Management, L.P. (the "Partnership") is a limited
partnership organized under the laws of the State of Delaware. The principal
business of the Partnership is to make direct investments in marketable and
private securities and indirect investments as a limited partner in
partnerships that invest in securities. The address of each of the principal
business and the principal office of the Partnership is Citicorp Center, 153
East 53rd Street, 43rd Floor, New York, New York 10022.
The following additional persons are identified herein pursuant to
Instruction C of Schedule 13D:
b. Och-Ziff Associates, L.L.C. (the "General Partner") is a limited
liability company organized under the laws of the State of Delaware and is the
sole general partner of the Partnership. As such, the General Partner may be
deemed to control the Partnership. The principal business of the General
Partner is to serve as general partner of the Partnership. The address of the
principal business of the General Partner is the same as that of the
Partnership.
c. Daniel S. Och is the majority owner and sole controlling person of
the General Partner. The principal business of Mr. Och is to serve as
managing member of the General Partner. Mr. Och is a United States citizen.
The address of the principal business of Mr. Och is the same as that of the
Partnership.
The Partnership, the General Partner and Mr. Och are collectively
referred to herein as the "reporting persons."
None of the reporting persons has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the past five
years. None of the reporting persons was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, the result of which
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violation with respect to such laws
during the past five years.
Item 3. Source and Amount of Funds or Other Consideration
The Partnership acquired the Shares in a privately negotiated purchase
from the Company, closing on September 24, 1997, with working capital of the
Partnership in the amount of $2,799,999. Working capital of the Partnership
in the normal course of business is comprised of equity contributions of the
partners and earnings from operations of the Partnership.
Item 4. Purpose of Transaction
The Shares have been acquired by the reporting persons solely for
investment purposes. The reporting persons may, subject to market conditions
and their assessment of business prospects of the Company, acquire additional
Shares from time to time, through the Partnership or otherwise, and through
open market and/or privately negotiated transactions, as the reporting persons
determine in their discretion. The reporting persons may, however, determine
at any time to cease effecting such purchases and/or to dispose of all or a
portion of the Shares owned by them, including dispositions economically
effected by short sales or options transactions. The reporting persons will
continue to evaluate the business and prospects of the Company, and their
present and future interest in, and intentions with respect to, the Company,
and in connection therewith expect from time to time to consult with
management and other shareholders of the Company.
Other than as discussed above, or as otherwise described in Item 6 of
this Statement on Schedule 13D, the reporting persons currently have no plans
to effect any of the transactions required to be described in Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) -(b) The Partnership may be considered the beneficial owner of
the 1,866,666 Shares covered by this Statement, representing approximately
9.6% of the Company's 19,431,610 Shares outstanding as of the close of
business on September 24, 1997. Because it has unrestricted voting and
investment authority over the Shares as record owner, the Partnership is
considered to have sole voting and investment authority over the 1,866,666
Shares covered by this Statement.
Because of its status as general partner of the Partnership, the General
Partner may be considered the beneficial owner of the 1,866,666 Shares covered
by this Statement, representing approximately 9.6% of the Company's 19,431,610
Shares outstanding as of the close of business on September 24, 1997. In such
capacity the General Partner is considered to have shared voting and
dispositive power over the 1,866,666 Shares covered by this Statement.
Because of his status as majority owner and controlling person of the
General Partner, and because of the General Partner's status as general
partner of the Partnership, Mr. Och may be considered the beneficial owner of
the 1,866,666 Shares covered by this Statement, representing approximately
9.6% of the Company's 19,431,610 Shares outstanding as of the close of
business on September 24, 1997. In such capacity Mr. Och is considered to
have shared voting and dispositive power over the 1,866,666 Shares covered by
this Statement.
Each of the above calculations is based on outstanding Shares
information obtained from officials of the Company as of the date given, and
gives effect to Shares subject to options, warrants, rights or convertible
securities owned by the reporting persons.
(c) On September 24, 1997, the Partnership purchased 1,866,666 Shares
at a purchase price of $1.50 per Share (including commissions), in a private
offering from the Company to the Partnership and certain other subscribers
(the "Private Placement"). There were no other transactions in the Shares by
the reporting persons in the past sixty days.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
In a Registration Rights Agreement, dated as of September 22, 1997,
between the Company and the purchasers in the Private Placement, the Company
has agreed to file within 60 days of closing a shelf registration statement
covering the Shares and other shares of Common Stock which the Company may
elect to register on behalf of others. The Company agrees to use its best
efforts to keep the registration statement effective for the period ending on
the earlier to occur of (i) the date when the shares covered by such
registration statement have been disposed of, and (ii) the later of (x) two
years from closing or (y) the date when such shares may be sold or distributed
in reliance on Rule 144.
Except as described or referred to above, there are no contracts,
arrangements, understandings or relationships among the reporting persons, or
between such persons and any other person with respect to any securities of
the Company, including but not limited to transfer or voting of any securities
of the Company, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, division of profits or loss, or the
giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
1. Registration Rights Agreement, dated as of September 22, 1997,
among the Company, the Partnership and the other subscribers identified
therein.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October 3, 1997.
OCH-ZIFF CAPITAL MANAGEMENT, L.P.
By: OCH-ZIFF ASSOCIATES, L.L.C.
General Partner
By: /s/ Daniel S. Och
Title: Managing Member
<PAGE>
Exhibit Index
Exhibit 1. Registration Rights Agreement, dated September 22, 1997, among the
Company, the Partnership and the other subscribers identified
therein.
<PAGE>
Exhibit 1.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September 22, 1997, among PMC
International, Inc., a Colorado corporation (the "Company"), and each of the
subscribers referred to below (individually, a "Subscriber" and collectively,
the "Subscribers"). The Subscribers are listed on Schedule A to this
Agreement.
WHEREAS, the Company is a party to the separate Subscription Agreements
(the "Subscription Agreements") with each of the Subscribers pursuant to which
the Company has agreed, among other things, to issue shares of its common
stock, par value $.01 per share (the "Common Stock"), to each of the
Subscribers; and
WHEREAS, as a condition to the closing of the issuance of the Common
Stock under the Subscription Agreements, the Company has agreed to provide
registration rights with respect to the Common Stock as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Additional Common Stock: Any and all shares of Common Stock issued to
the Subscribers pursuant to Section 7.1 of the Subscription Agreement.
Closing Date: The date of the closing of the issuance of the Common
Stock pursuant to the Subscription Agreements.
Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
Common Stock: As defined in the recitals hereto.
Company: As defined in the introductory paragraph of this Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
Initiating Holders: Any holder or holders of Registrable Securities
holding at least 25% of the Registrable Securities, in the aggregate, and
initiating a request pursuant to Section 2.1(d) to effect the underwritten
offering of Registrable Securities.
Inspector: As defined in Section 2.3(j).
NASD: National Association of Securities Dealers, Inc.
Person: A corporation, an association, a partnership, an organization,
business, an individual, a governmental or political subdivision thereof or a
governmental agency.
Registrable Securities: Any and all shares of Common Stock issued to
Subscribers pursuant to the Subscription Agreements and any shares of
Additional Common Stock and any securities issued or issuable with respect to
any Common Stock or Additional Common Stock referred to above by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
As to any particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (b) they shall have been distributed to the
public pursuant to Rule 144, (c) they shall have been otherwise transferred,
new certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the Securities
Act or any similar state law then in force, or (d) they shall have ceased to
be outstanding.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 2, including, without limitation,
all registration filing and NASD fees, all stock exchange listing fees, all
fees and expenses of complying with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualification of any of the Registrable Securities), all word processing,
duplicating and printing expenses, messenger and delivery expenses, the fees
and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to performance and compliance, the reasonable
fees and disbursements of a single counsel retained by the holder or holders
of a majority (by number of shares) of the Registrable Securities being
registered; the fees and expenses of a "qualified independent underwriter" if
required by Rule 2720 adopted pursuant to Article VII of the ByLaws of the
NASD in connection with the offering of any of the Registrable Securities;
premiums and other costs of policies of insurance against liabilities arising
out of the public offering of the Registrable Securities being registered and
any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding underwriting discounts and commissions
and transfer taxes, if any, in respect of the Registrable Securities, which
shall be payable by each holder thereof.
Registration Statement: As defined in Section 2.1.
Regulation M. Regulation M promulgated under the Exchange Act as shall
be in effect at the time and any successor provision under the Exchange Act.
Rule 144: Rule 144 promulgated under the Securities Act as shall be in
effect at the time and any successor provision under the Securities Act.
Securities Act: The Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time. References to a particular
section of the Securities Act shall include a reference to the comparable
section, if any, of any such similar Federal statute.
Subscriber: As defined in the introductory paragraph.
Subscription Agreement: As defined in the recitals hereto.
2. Registration under Securities Act, etc.
2.1 Filing and Maintenance of Shelf Registration.
(a) Filing. The Company shall file within 60 calendar days following
the Closing Date a "shelf registration" statement (the "Registration
Statement") covering the Registrable Securities and all shares of Common Stock
which the Company may elect to register on behalf of other Persons and shall
use its best efforts to have such Registration Statement declared effective by
the Commission. The Company agrees to use its best efforts to keep the
Registration Statement continuously effective for the period commencing on the
date of effectiveness and ending on the earlier to occur of (i) the date when
each of the Registrable Securities ceases to be Registrable Securities and
(ii) the later of (x) two years after the Closing or (y) date when each of the
Registrable Securities not otherwise transferred or sold pursuant to the
Registration Statement may be sold or distributed by the holder thereof in
reliance upon Rule 144(e) (giving effect to all conditions thereof, including,
without limitation, the volume limitations contained in Rule 144(e)).
(b) Registration Statement Form. The Registration Statement under
this Section 2.1 shall be on such appropriate registration form of the
Commission as shall be selected by the Company and as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition (including an underwritten offering).
(c) Expenses. The Company shall pay all Registration Expenses in
connection with the registration contemplated by this Section 2.1. Each
holder of Registrable Securities shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such holder's Registrable Securities pursuant to the Registration Statement.
(d) Underwritten Offering. One or more Initiating Holders may, at any
two times for all Initiating Holders while the Registration Statement is
effective, request that the Company amend or supplement the Registration
Statement to effect an underwritten offering. The Company shall provide
prompt notice of such request to the holders of all Registrable Securities,
and shall as promptly as practicable amend or supplement the Registration
Statement to the extent required to permit the disposition in accordance with
such request. The Company's obligation to maintain the effectiveness of the
Registration Statement in accordance with Section 2.1(a) shall not be affected
by compliance with this paragraph.
2.2 Registration Procedures. In connection with the Company's
obligations to effect the registration of any Registrable Securities under the
Securities Act as provided in this Section 2, the Company shall, as
expeditiously as possible:
(a) prepare and file with the Commission, within any applicable time
periods specified in this Section 2, the requisite registration statement to
effect such registration and thereafter use its best efforts to cause such
registration statement to become and remain effective in accordance with
Section 2 hereof; provided, however, that before filing such registration
statement or any amendments thereto, the Company shall furnish to the counsel
selected by the holders of Registrable Securities which are to be included in
such registration copies of all such documents proposed to be filed, which
documents shall be subject to the review of such counsel;
(b) prepare and file with the Commission such amendments and
supplements to such registration statements and prospectuses used in
connection therewith as may be necessary to keep such registration statements
effective for the applicable periods specified in this Section 2 and to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statements during such applicable
periods;
(c) furnish, without charge, to each
holder of Registrable Securities covered by such registration statement and
each underwriter, if any, of the securities being sold by such holder such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any
other prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents, as such
holder and underwriter, if any, may reasonably request in order to facilitate
the public sale or other disposition of the Registrable Securities owned by
such holder; the Company consents to the use of the prospectus or any
amendment or supplement thereto by any such holder and underwriter in
connection with the offering and sale of Registrable Securities covered by
such prospectus and any amendment or supplement thereto;
(d) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities laws or blue sky laws of such jurisdictions as any
holder thereof and any underwriter of the securities being sold by such holder
shall reasonably request, to keep such registrations or qualifications in
effect for so long as such registration statement remains in effect, and take
any other action which may be reasonably necessary or advisable to enable such
holder and underwriter, if any, to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the Company
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (d) be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the holder
or holders thereof to consummate the disposition of such Registrable
Securities;
(f) furnish to each holder of Registrable Securities covered by such
registration statement a signed counterpart, addressed to such holder and the
underwriters, if any, of:
(i) an opinion of counsel for the Company, dated the effective
date of such registration statement (or, if such registration includes
an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), reasonably satisfactory in
form and substance to such holder, and
(ii) a "comfort" letter (or, in the case of any such Person which
does not satisfy the conditions for receipt of a "comfort" letter
specified in Statement on Auditing Standards No. 72, an "agreed upon
procedures" letter), dated the effective date of such registration
statement (and, if such registration includes an underwritten public
offering, a letter of like kind dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement, covering substantially the same matters with
respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to the underwriters in underwritten public offerings
of securities (with, in the case of an "agreed upon procedures" letter,
such modifications or deletions as may be required under Statement on
Auditing Standards No. 35) and, in the case of the accountants' letter,
such other financial matters, and, in the case of the legal opinion,
such other legal matters, as such holder (or the underwriters, if any)
may reasonably request;
(g) notify the holders of Registrable Securities covered by such
Registration Statement and the managing underwriter or underwriters, if any,
promptly and confirm such advice in writing promptly thereafter:
(i) when the registration statement, the prospectus or any prospectus
supplement related thereto or post-effective amendment to the registration
statement has been filed, and, with respect to the registration statement or
any post-effective amendment thereto, when the same has become effective;
(ii) of any request by the Commission for amendments or supplements to
the registration statement or 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 the initiation of any
proceedings by any Person for that purpose;
(i) if at any time the representations and warranties of the Company
made as contemplated by Section 2.4(a) below cease to be true and correct;
(ii) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale
under the securities or blue sky laws of any jurisdiction or the initiation or
threat of any proceeding for such purpose; and
(h) notify each holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon the Company's
discovery that, or upon the happening of any event as a result of which, the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
in the light of the circumstances under which they were made not misleading,
and at the request of any such holder promptly prepare and furnish to such
holder and each underwriter, if any, a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading; provided, however, that the Company may delay effecting
or causing to be effected a supplement or post-effective amendment to the
registration statement or the related prospectus, for a period not to exceed
90 days in any 365-day period; provided, further, that (i) the Company shall
notify the holders of Registrable Securities in writing both of its intention
to effect such delay and of the date on which such supplement or
post-effective amendment has been filed with the Commission or declared
effective, as the case may be, and (ii) the period during which the
registration statement shall be maintained effective pursuant to this
Agreement shall be extended as described below;
(i) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment;
(j) subject to entering into confidentiality arrangements in form and
substance reasonably satisfactory to the Company, make available for
inspection by a representative or representatives of the holders of
Registrable Securities covered by such registration statement, any underwriter
participating in any disposition pursuant to the registration statement and
any attorney or accountant retained by such holders or underwriter (each, an
"Inspector"), all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with such registration in order to permit a reasonable
investigation within the meaning of Section 11 of the Securities Act;
(k) use its best efforts to list all Registrable Securities covered by
such registration statement on any securities exchange on which any of the
securities of the same class as the Registrable Securities are then listed;
(l) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(m) cooperate with the holders of Registrable Securities covered by
such registration statement and the underwriter, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in such
names as the holders or the underwriter, if any, may reasonably request at
least three business days prior to any sale of Registrable Securities;
(n) otherwise use all best efforts to comply with all applicable rules
and regulations of the Commission, and make available to its securityholders,
as soon as reasonably practicable, an earnings statement covering the period
of at least 12 months, but not more than 18 months, beginning with the first
full calendar month after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder.
As a condition to the registration by the Company of a holder's
Registrable Securities, the Company may require such holder to furnish the
Company such information regarding such holder and the distribution of such
securities as the Company may from time to time reasonably request in writing.
The Company shall not file any registration statement or amendment
thereto or any prospectus or any supplement thereto (including such documents
incorporated by reference and proposed to be filed after the initial filing of
the registration statement) to which the holders of at least a majority of the
Registrable Securities covered by such registration statement or the
underwriter or underwriters, if any, shall reasonably object, provided that
the Company may file such document in a form required by law or upon the
advice of its counsel.
Each holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the occurrence of any event of the kind described
in subdivision (h) of this Section 2.2, such holder shall forthwith
discontinue such holder's disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (h) of this Section 2.2 and, if so directed by the
Company, shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice,
the period of time for which the Company shall be required to keep the
applicable registration statement effective shall be extended by the length of
the period from and including the date when each holder of any Registrable
Securities covered by such registration statement shall have received such
notice to the date on which each such holder has received the copies of the
supplemented or amended prospectus contemplated by paragraph (h) of this
Section 2.2. Each holder of Registrable Securities agrees that it will comply
at all times with the requirements of Regulation M.
2.3 Underwritten Offerings.
(a) Requested Underwritten Offerings. If the holders of the
Registrable Securities elect to effect an underwritten offering pursuant to
Section 2.1(d), the managing underwriter or underwriters for such underwritten
offering shall be selected by the Company and shall be reasonably acceptable
to the holders of at least a majority (by number of shares) of the Registrable
Securities participating in any such underwritten offering. If requested by
the underwriters for any such underwritten offering, the Company shall enter
into an underwriting agreement with such underwriters for such offering, such
agreement to contain such representations and warranties by the Company and
such other terms as are generally prevailing in agreements of this type,
including, without limitation, indemnities. The holders of the Registrable
Securities shall cooperate with the Company in the negotiation of the
underwriting agreement. The holders of Registrable Securities to be
distributed by such underwriters shall be parties to any such underwriting
agreement and such holders may, at their option, require that any or all of
the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of such holders and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such holders. Any
such holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law or by the
underwriters for such underwritten offering.
(b) Priority in Requested Underwritten Offering. If the holders of
the Registrable Securities elect to effect an underwritten offering pursuant
to Section 2.1(d) and, in connection therewith, the managing underwriter
advises each holder of Registrable Securities requesting to participate in
such underwritten offering and the Company in writing that, in its opinion,
the number of securities requested to be included in such underwritten
offering (including securities of the Company which are not Registrable
Securities) exceeds the number which can be sold in such offering within a
price range acceptable to the holders of a majority of the Registrable
Securities so requested to be included in such offering, the Company shall
include in such offering, to the extent of the number which the Company is so
advised can be sold in such offering, (i) first, Registrable Securities
requested to be included in such offering by the holder or holders of
Registrable Securities thereof, pro rata among such holders requesting
inclusion in such offering on the basis of the number of such securities
requested to be included by such holders, subject to any rights of (A) Bedford
Capital Financial Corporation ("Bedford") to participate in such underwritten
offering pursuant to the Amended and Restated Registration Rights Agreement,
dated as of December 24, 1996, between the Company and Bedford, and (B) the
parties to that certain Registration Rights Agreement, dated as of December
23, 1996, among the Company, Keefe, Bruyette & Woods, Inc., certain holders of
the Company's warrants issued in November, 1996 and certain persons who
acquired Common Stock in December, 1996, and (ii) second, if and only if all
Registrable Securities requested to be included in such underwritten offering
by the holders thereof are so included, other securities of the Company
requested to be included in such offering by the holders thereof, pro rata
among such holders requesting inclusion in such offering on the basis of the
number of such securities requested to be included by such holders.
(c) Holdback Agreement. Except to the extent required by any
agreement in existence as of the date of this Agreement, the Company agrees
not to effect any public sale or distribution of or otherwise dispose of its
equity securities or securities convertible into or exchangeable or
exercisable for any of such securities during the seven days prior to the date
any underwritten registration pursuant to Section 2.1(d) has become effective
and during the period ending on the earlier of (A) 90 days after any
underwritten registration pursuant to Section 2.1(d) has become effective, (B)
the day on which the underwriting syndicate of such offering shall have been
disbanded, and (C) such date as the Company, the managing underwriter and the
holders of the Registrable Securities shall otherwise agree, except as part of
such underwritten registration and except in connection with a stock option
plan, stock purchase plan, managing directors' plan, savings or similar plan,
or an acquisition of a business, merger or exchange of stock for stock.
(d) Participation in Underwritten Offerings. No holder of Registrable
Securities may participate in any underwritten offering hereunder unless such
holder (i) agrees to sell such holder's securities on the basis provided in
any underwriting arrangements approved, subject to the terms and conditions
hereof, by the holders of a majority (by number of shares) of Registrable
Securities to be included in such underwritten offering and (ii) completes and
executes all questionnaires, indemnities, underwriting agreements and other
documents (other than powers of attorney) required under the terms of such
underwriting arrangements. Notwithstanding the foregoing, no underwriting
agreement (or other agreement in connection with such offering) shall require
any holder of Registrable Securities to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations and warranties or agreements regarding such holder, such
holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law or by the
underwriters for such underwritten offering.
2.4 Indemnification.
(a) Indemnification by the Company. The Company shall, and hereby
does agree to, indemnify and hold harmless each holder of any Registrable
Securities covered by any registration statement filed pursuant to Section 2,
such holder's directors and officers, each other Person, if any, who controls
such holder within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such holder or any
such director or officer or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or 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, and the
Company shall reimburse such holder and each such director, officer and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such holder
specifically stating that it is for use in the preparation thereof; and;
provided further, however, that the Company shall not be liable in any such
case to any Person who sells Registrable Securities pursuant to a registration
statement filed pursuant to Section 2 or to any other Person, if any, who
controls such selling Person, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such selling Person's failure to send or give a copy of
the final prospectus, as the same may be then supplemented or amended, to the
Person asserting the existence of an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of such holder or any such director, officer, underwriter or
controlling person and shall survive the transfer of such securities by such
holder.
(b) Indemnification by the Holders. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to this Section 2, that the Company shall have
received an undertaking satisfactory to it from the prospective seller of such
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in subdivision (a) of this Section 2.4) the
Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly
executed by such seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Any such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling
person and shall survive the transfer of such securities by such seller.
Indemnification by Holders under this Section 2.4 shall not exceed the
aggregate gross proceeds received by the Company in the Offering (as defined
in the Subsciption Agreement).
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section 2.4, such
indemnified party shall, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement
of such action; provided, however, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this Section 2.4, except
to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that the indemnifying
party may wish, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement of any such action which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. No indemnified party shall consent to entry of any judgment or
enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying
party.
(d) Indemnification Payments. The indemnification required by this
Section 2.4 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(e) Contribution. If the indemnification provided for in the
preceding subdivisions of this Section 2.4 is unavailable to an indemnified
party in respect of any expense, loss, claim, damage or liability 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 expense, loss, claim, damage or
liability (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the holder on the other
from the distribution of the Registrable Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the holder on the other in connection with the statements
or omissions which resulted in such expense, loss, damage or liability, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the holder on the other in
connection with the distribution of the Registrable Securities shall be deemed
to be in the same proportion as the total net proceeds received by the Company
from the initial sale and issuance of the Registrable Securities by the
Company bear to the gain, if any, realized by the selling holder. The
relative fault of the Company on the one hand and of the holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission to state a material
fact relates to information supplied by the Company or by the holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; provided, however, that the
foregoing contribution agreement shall not inure to the benefit of any
indemnified party if indemnification would be unavailable to such indemnified
party by reason of the provisions contained in the first sentence of
subdivision (a) of this Section 2.4, and in no event shall the obligation of
any indemnifying party to contribute under this subdivision (e) exceed the
amount that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under subdivisions (a) or
(b) of this Section 2.4 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision
(e) were determined by pro rata allocation (even if the holders 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 and liabilities referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth in subdivision (c) of this Section 2.5, any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
3. Rule 144. The Company shall timely file the reports required to
be filed by it under the Securities Act and the Exchange Act (including but
not limited to the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c) of Rule 144) and the rules and regulations
adopted by the Commission thereunder and shall take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any
holder of Registrable Securities, the Company shall deliver to such holder a
written statement as to whether it has complied with the requirements of this
Section 3.
4. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act, of the
holders of a majority (by number of shares) of the Registrable Securities.
Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 4,
whether or not such Registrable Securities shall have been marked to indicate
such consent.
5. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of
such Registrable Securities for purposes of any request or other action by any
holder or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects,
the Company may require assurances reasonably satisfactory to it of such
owner's beneficial ownership of such Registrable Securities.
6. Notices. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any Person provided for
hereunder shall be in writing and shall be given to such Person (a) in the
case of a party hereto other than the Company, addressed to such party in the
manner set forth in the applicable Subscription Agreement or at such other
address as such party shall have furnished to the Company in writing, (b) in
the case of any other holder of Registrable Securities, at the address that
such holder shall have furnished to the Company in writing, or, until any such
other holder so furnishes to the Company an address, then to and at the
address of the last holder of such Registrable Securities who has furnished an
address to the Company, or (c) in the case of the Company, at 555 17th Street,
14th Floor, Denver, Colorado 80202 to the attention of Kenneth S. Phillips,
President, or at such other address, or to the attention of such other
officer, as the Company shall have furnished to each holder of Registrable
Securities at the time outstanding. Each such notice, request or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by air courier), when delivered at the address specified above,
provided that any such notice, request or communication to any holder of
Registrable Securities shall not be effective until received.
7. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are
for the benefit of the parties hereto other than the Company shall also be for
the benefit of and enforceable by any subsequent holder of any Registrable
Securities, subject to the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities required in order to be
entitled to certain rights, or take certain actions, contained herein.
8. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS
OF THE STATE OF COLORADO WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF
LAWS.
10. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
11. Entire Agreement. This Agreement, together with the Subscription
Agreement (including all schedules and Exhibits thereto) embodies the entire
agreement and understanding between the Company and each other party hereto
relating to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.
12. Severability. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
PMC INTERNATIONAL, INC.
By: __________________________________
Name: Kenneth S. Phillips, President and CEO
SUBSCRIBER
______________________________________
Name of Entity (Print or Type)
By:___________________________________
Name:
_____________________________________
Signature of Individual Subscriber
______________________________________
Name of Individual Subscriber
Address of Subscriber:
______________________________
______________________________
______________________________
