EXHIBIT 1.1
2,250,000 Shares
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ GROUP INCORPORATED
Common Stock
______________
UNDERWRITING AGREEMENT
St. Petersburg, Florida
_____________, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INCORPORATED
As Representatives of the Several Underwriters
c/o Raymond ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Group Incorporated, a Washington corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell an aggregate of 1,462,500 authorized and unissued shares (the
"Company Firm Shares") of the Company's common stock, par value $0.01 per share,
to the several Underwriters named in Schedule I hereto (the "Underwriters").
Certain shareholders of the Company, named in Schedule II hereto (the "Selling
Shareholders"), acting severally and not jointly, propose, subject to the terms
and conditions stated herein, to issue and sell an aggregate of 787,500
authorized and outstanding shares (the "Shareholder Firm Shares") of the
Company's common stock, par value $0.01 per share, to the Underwriters. The
Company Firm Shares and the Shareholder Firm Shares are hereafter collectively
referred to as the "Firm Shares." In addition, the Selling Shareholders, acting
severally and not jointly, have agreed to sell to the Underwriters, upon the
terms and conditions set forth herein, up to an additional 337,500 authorized
and outstanding shares of the Company's common stock, par value $0.01 per share
(the "Additional Shares"), solely to cover over-allotments by the Underwriters,
if any. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares." The Company's common stock, par value $0.01 per
share, including the Shares, is hereinafter referred to as the "Common Stock."
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Incorporated are acting as
the representatives of the several Underwriters and in such capacity are
hereinafter referred to as the "Representatives."
Each of the Company and each Selling Shareholder wishes to confirm as
follows its agreement with you and the other several Underwriters, on whose
behalf you are acting, in connection with the several purchases of the Shares
from the Company and the Selling Shareholders.
SECTION 1. 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 thereunder
(collectively, the "Act"), a registration statement on Form S-1 (File No.
333-50735), including a prospectus subject to completion, relating to the
Shares. Such registration statement (including all financial schedules and
exhibits), as amended at the time when it became effective and as may thereafter
be amended by post-effective amendment, together with (any documents
incorporated by reference therein and any registration statement filed by the
Company pursuant to Rule 462(b) under the Act, is referred to in this Agreement
as the "Registration Statement." The term "Prospectus" as used in this Agreement
means (i) the prospectus in the form included in the Registration Statement, or
(ii) if the prospectus included in the Registration Statement omits information
in reliance upon Rule 430A under the Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the Act or as
part of a post-effective amendment to the Registration Statement after the
Registration Statement becomes effective, the prospectus as so filed, or (iii)
if the prospectus included in the Registration Statement omits information in
reliance upon Rule 430A under the Act and such information is included in a term
sheet (as described in Rule 434(c) under the Act) filed with the Commission
pursuant to Rule 424(b) under the Act, the prospectus included in the
Registration Statement and such term sheet, taken together. The prospectus
subject to completion in the form included in the Registration Statement at the
time of the initial filing of such Registration Statement with the Commission
and as such prospectus is amended from time to time until the date upon which
the Registration Statement was declared effective by the Commission is referred
to in this Agreement as the "Prepricing Prospectus."
SECTION 2. AGREEMENTS TO SELL AND PURCHASE.
The Company hereby agrees to sell the Firm Shares, and each Selling
Shareholder hereby agrees to sell such number of Firm Shares and Additional
Shares as is set forth opposite such Selling Shareholder's name on Schedule II
hereto, to the Underwriters and, upon the basis of the representations,
warranties and agreements of the Company and the Selling Shareholders herein
contained and subject to all the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholders the aggregate number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto (or such number of Firm Shares
as adjusted pursuant to Section 10 hereof), at a purchase price of $__________
per Share (the "purchase price per Share").
In addition, each Selling Shareholder also agrees to sell to the
Underwriters up to said number of Additional Shares as is set forth opposite
such Selling Shareholder's
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name on Schedule II hereto, and upon the basis of the representations,
warranties and agreements of the Company and the Selling Shareholders herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right for 30 days from the date upon which the
Registration Statement is declared effective by the Commission to purchase from
the Selling Shareholders up to 337,500 Additional Shares, at the purchase price
per Share for the Firm Shares. The Additional Shares shall, if purchased, be
purchased solely for the purpose or covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments as you may determine to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be sold as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares as
adjusted pursuant to Section 10 hereof) bears to the total number of Firm
Shares.
SECTION 3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in our judgment is advisable and initially to
offer the Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m., St. Petersburg, Florida time, [four]
business days after the date hereof (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement between you
and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m.,
St. Petersburg, Florida time, on such date or dates (the "Additional Closing
Date" (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten business
days after the giving of the notice hereinafter referred to), as shall be
specified in a written notice from you an behalf of the Underwriters to the
Company, of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. Such notice may be given to the Company by
you at any time within 30 days after the date upon which the Registration
Statement is declared effective by the Commission. The place of closing for the
Additional Shares and the Additional Closing Date may be varied by agreement
between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and such denominations as
you shall request prior to 1:00 p.m., St. Petersburg, Florida time, on the
second full business day preceding the Closing Date or the Additional Closing
Date, as the case may be. Such certificates shall be made available to you in
St. Petersburg, Florida for inspection and
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packaging not later than 9:30 a.m., St. Petersburg, Florida time, on the
business day immediately preceding the Closing Date or the Additional Closing
Date, as the case may be. The certificates evidencing the Firm Shares and any
Additional Shares to be purchased hereunder shall be delivered to you on the
Closing Date or the Additional Closing Date, as the case may be, against payment
of the purchase price therefor by wire transfer or certified or official bank
check or checks payable in same day funds. If the Representatives so elect,
delivery of the Shares may be made by credit through full fast transfer to the
accounts at the Depository Trust Company designated by the Representatives.
The certificates in negotiable form for the Firm Shares and Additional
Shares have been placed in custody (for delivery under this Agreement) under the
Custody Agreement (as defined below). Each Selling Shareholder agrees that the
certificates for the Shares for such Selling Shareholder so held in custody are
subject to the interests of the Underwriters hereunder, that the arrangements
made by such Selling Shareholder for such custody, including the Power of
Attorney (as defined below) is to that extent irrevocable and that the
obligations of such Selling Shareholder hereunder shall not be terminated by the
act of such Selling Shareholder or by operation of law, whether by the death or
incapacity of such Selling Shareholder or the occurrence of any other event,
except as specifically provided herein or in the Custody Agreement. If any
Selling Shareholder should die or be incapacitated, or if any other such event
should occur, before the delivery of the certificates for the Shares to be sold
by such Selling Shareholder hereunder, such Shares, except as specifically
provided herein or in the Custody Agreement, shall be delivered by the Custodian
(as defined below) in accordance with the terms and conditions of this Agreement
as if such death, incapacity or other event had not occurred, regardless of
whether the Custodian shall have received notice of such death or other event.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
(a) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing (i) when the Registration Statement has
become effective (if not effective as of the time and date of this Agreement)
and when any post-effective amendment to the Registration Statement or any
registration statement filed pursuant to Rule 462(b) under the Act if filed or
becomes effective, (ii) if Rule 430A under the Act is employed, when the
Prospectus or term sheet (as described in Rule 434(b) under the Act) has been
timely filed pursuant to Rule 424(b) under the Act, (iii) of any request by the
Commission for amendments or supplements to the Registration Statement, any
Prepricing Prospectus or the Prospectus or for additional information, (iv) 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 threatened
initiation) of an proceeding for such purposes, and (v) within the period of
time referred to in Section 5(c) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any event that comes to the attention of the Company that
makes any statement made in the
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Registration Statement or the Prospectus (as then amended or supplemented) or
that requires the making of any additions thereto or changes therein in order to
make the statements therein not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act of any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(b) The Company will furnish to you, without charge, two signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto as you may reasonably request.
(c) The Company will not file any amendment to the Registration
Statement, file any registration statement pursuant to Rule 462(b) under the Act
or make any amendment or supplement to the Prospectus of which you shall not
previously have been advised (with a reasonable opportunity to review such
amendment or supplement) or to which you have reasonably objected after being so
advised, or which is not in compliance with the Act. The Company will prepare
and file with the Commission any amendments or supplements to the Registration
Statement or Prospectus which, in the opinion of counsel of the several
Underwriters may be necessary or advisable in connection with the distribution
of the Shares by the Underwriters.
(d) The Company has delivered or will deliver to you, without charge,
in such quantities as you have requested or may hereafter reasonably request,
copies of each form of the Prepricing Prospectus. The Company consents to the
use, in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this Agreement as is
practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or a dealer,
the Company will deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
they may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If
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during such period of time any event shall Occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary to supplement
or amend the Prospectus to comply with the Act or any other law, the Company
will promptly prepare and file with the Commission an appropriate supplement or
amendment thereto, and will furnish to each Underwriter and to each dealer who
has previously requested Prospectuses, without charge, a reasonable number of
copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process in suits, other
documents as may be reasonably necessary in order to effect such registration or
qualification, provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, in any
jurisdiction where it is not now so subject. In each jurisdiction in which the
Shares shall have been qualified as above provided, the Company will make and
file such statements and reports in each year as are or may be required by the
laws of such jurisdiction. In the event that the qualification of the Shares in
any jurisdiction is suspended, the Company shall so advise you promptly in
writing.
(g) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a 12-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act, and will
advise you in writing when such statement has been so made available.
(h) During the period of five years hereafter, the Company will
furnish to you (i) as soon as practicable after the end of each fiscal year a
copy of its Annual Report on Form 10-K, (ii) as soon as available, a copy of
each report or definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or mailed to stockholders, and (iii) from time to time such other
information concerning the Company as you may reasonably request. Until the
termination of the offering of the Shares, the Company will timely file all
documents, and any amendments to previously filed documents, required to be
filed by it pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
(i) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
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(j) If Rule 430A under the Act is employed, the Company will timely
file the Prospectus or term sheet (as described in Rule 434(b) under the Act)
pursuant to Rule 424(b) under the Act.
(k) The Company will not sell, contract to sell or otherwise dispose
of any Common Stock or rights to purchase Common Stock until after the date 180
days from the effective date of the Registration Statement, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., except to the underwriters
pursuant to this Agreement, and except that the Company may issue Common Stock
upon the exercise or conversion of warrants, stock options, preferred stock or
convertible debentures issued and outstanding at the time of effectiveness of
the Registration Statement and described in the Registration Statement, and
except that the Company may grant options under the Company's Stock Option
Plans.
(l) The Company will not, directly or indirectly, take any action
that would constitute, or any action designed, or which might reasonably be
expected to cause or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(m) If at any time during the 90-day period after the first date that
any of the Shares are released by you for sale to the public, any rumor,
publication, or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Common Stock (including
the Shares) has been or is likely to be materially affected (regardless of
whether such rumor, publication, or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after written notice from you of
advising the Company to the effect set forth above, promptly consult with you
concerning the advisability and substance of, and, if appropriate, disseminate,
a press release or other public statement responding to or commenting on such
rumor, publication, or event.
(n) The Company shall not invest or otherwise use the proceeds
received by the Company from its sale of the Shares, or otherwise conduct its
business, in such a manner as would require the Company or any Subsidiary (as
defined below) to register as an investment company under the Investment Company
Act of 1940, as amended.
(o) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of its incorporation or the rules of the Nasdaq National
Market or any national securities exchange on which the Common Stock is then
listed, a registrar (which, if permitted by applicable laws and rules, may be
the same entity as the transfer agent) for its Common Stock.
(p) The Company hereby agrees that this Agreement shall be deemed,
for all purposes, to have been made and entered into in Pinellas County,
Florida. The Company agrees that any dispute hereunder shall be litigated solely
in the Circuit Court of the State of Florida in Pinellas County, Florida or in
the United States District Court
7
for the Middle district of Florida, Tampa Division, and further agrees to submit
itself to the personal jurisdiction of such courts.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter and each Selling Shareholder on the
date hereof, and shall be deemed to represent and warrant to each Underwriter
and each Selling Shareholder on the Closing Date and the Additional Closing
Date, that:
(a) The Registration Statement has been declared effective by the
Commission under the Act and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. Each Prepricing
Prospectus included as part of the Registration Statement as originally filed or
as part of any amendment or supplement thereto, or filed pursuant to Rule 424(a)
under the Act, complied when so filed in all material respects with the
provisions of the Act, except that this representation and warranty does not
apply to statements in or omissions from such Prepricing Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
or on behalf of any Underwriter through you expressly for use therein.
(b) The Commission has not issued any order preventing or suspending
the use of any Prepricing Prospectus, and the Prepricing Prospectus included as
part of the Registration Statement declared effective by the Commission complies
as to form in all material respects with the requirements of the Act. The
Registration Statement, in the form in which it became effective and also in
such form as it may be when any post-effective amendment thereto shall become
effective, and any registration statement filed pursuant to Rule 462(b) under
the Act, complies and will comply in all material respects with the provisions
of the Act and does not and will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement (or any amendment or supplement
thereto) made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein. The Prospectus, and any
supplement or amendment thereto, when filed with the Commission under Rule
424(b) under the Act, complies and will comply in all material respects with the
provisions of the Act and does not and will not at any such times contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, in the light of the circumstances under which
they were made, not misleading, except that this representation and warranty
does not apply to statements in or omissions from the Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
or on behalf of any Underwriter through you expressly for use therein.
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(c) The capitalization of the Company is as set forth in the
Prospectus as of the date set forth therein. All the outstanding shares of
Common Stock (including without limitation the Shareholder Firm Shares and the
Additional Shares) and other securities of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and are free of any
preemptive or similar rights; all offers and sales of the capital stock,
warrants, options and debt or other securities of the Company and the Subsidiary
(as defined below) prior to the date hereof (including without limitation the
Shareholder Firm Shares and Additional Shares) were made in compliance with the
Act and all other applicable state, federal and foreign laws or regulations, or
any actions under the Act or any state, federal or foreign laws or regulations
in respect of any such offers or sales are effectively barred by effective
waivers or statutes of limitation; the Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights, the securities of the Company conform to
the description thereof in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), the form of certificate for the Shares
conforms to the corporate law of the State of Washington; and the delivery of
certificates for the Shares to be issued and sold by the Company pursuant to the
terms of this Agreement and payment for such Shares will pass valid marketable
title to such shares, free and clear of any voting trust arrangements, liens,
encumbrances, equities, claims or defects in title to the several Underwriters
purchasing such Shares in good faith and without notice of any lien, claim or
encumbrance.
(d) The Company is a corporation duly organized and validly existing
under the laws of the State of Washington with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), 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 to so
register or qualify does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company and RMI taken as a whole; RMI is duly registered as a broker-
dealer under the Exchange Act and as an investment adviser under the Investment
Adviser's Act of 1940 and with each state in which it is required to be so
registered.
(e) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Incorporated, a Washington corporation ("RMI" or
"Subsidiary"), is the only Subsidiary of the Company as of the date hereof. Each
of the Company and RMI is a corporation duly organized and validly existing
under the laws of its state of incorporation with full corporate power and
authority to own, lease and operate its property and to conduct its business as
presently conducted and as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), 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
require such registration or qualification, except where the
9
failure to so register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiary, taken as a whole. All of the
outstanding shares of capital stock of the Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned by the
Company directly, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance. Except for the Subsidiary, the Company does not own
a material interest in or control, directly or indirectly, any other
corporation, partnership, joint venture, association, trust or other business
organization.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or the Subsidiary, or
to which the Company or the Subsidiary, or to which their respective properties
are subject, that are required to be described in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) but are not described as
required. There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described or fled as required
or incorporated by reference as permitted by the Act. All such contracts to
which the Company or any Subsidiary is a party have been duly authorized,
executed and delivered by the Company or the respective Subsidiary, constitute
valid and binding agreements of the Company or the respective Subsidiary and are
enforceable against the Company or the respective Subsidiary in accordance with
the terms thereof.
(g) Neither the Company nor the Subsidiary is in violation of its
articles of incorporation or bylaws or other charter documents, or of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or the Subsidiary or of any decree of any court or governmental agency
or body having jurisdiction over the Company or the Subsidiary, or in default in
any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or the Subsidiary is a party or by which the Company or the
Subsidiary or any of their respective properties may be bound.
(h) The execution and delivery of this Agreement, and the performance
by the Company of its obligations under this Agreement, have been duly and
validly authorized by the Company, and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(i) None of the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby (i) is or may be void or
voidable by any person or entity, (ii) requires any consent, approval,
authorization or other order
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of or registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may be
required for the registration of the Shares under the Act and compliance with
the securities or Blue Sky laws of various jurisdictions, all of which will be,
or have been, effected in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the articles of incorporation or bylaws or other charter documents, of the
Company or any subsidiary, or (iii) conflicts or will conflict with or
constitutes a breach of, or a default under, any agreement, indenture, lease or
other instrument to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary or any of their respective properties may be
bound, or violates any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any Subsidiary or any
of their respective properties, or results in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to the terms of any agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
may be bound or to which the property or assets of the Company or any Subsidiary
is subject.
(j) Except as described in the Prospectus, neither the Company nor
RMI has outstanding at the Closing Date (and the Additional Closing Date, if
applicable) except for Options granted pursuant to the Company's Stock Option
Plan after the Closing Date, and will not have outstanding any options to
purchase, or any warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of Common Stock or any such warrants or convertible securities or obligations.
Except as has been complied with or waived, no holder of securities of the
Company or any other person has rights to the registration of any securities of
the Company because of the filing of the Registration Statement.
(k) Deloitte & Touche LLP, the certified public accountants who have
certified the consolidated financial statements filed as part of the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), are independent public accountants as required by the Act. The
consolidated financial statements, together with related schedules and notes,
forming part of the Registration Statement and the Prospectus (and any amendment
or supplement thereto), present fairly both the historical and pro forma
consolidated financial position, results of operations and changes in financial
position of the Company and the Subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply, such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and all adjustments necessary for a fair presentation of the
results for such period have been made, and the other financial and statistical
information and data set forth in the Registration Statement and Prospectus (and
any amendment or supplement thereto) is accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company. No financial statements or schedules are required to be included in or
incorporated by reference into the Registration Statement that have not been so
included or incorporated.
11
(l) Subsequent to the respective dates as of which such information
is given in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor the Subsidiary has incurred any
liability or obligation, direct or contingent, or entered into any transaction,
whether or not in the ordinary course of business, that is material to the
Company and the Subsidiary, taken as a whole, and there has not been any
material change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Company or the Subsidiary, or any material
adverse change, or any development involving or which may reasonably be expected
to involve a potential future material adverse change, in the condition
(financial or other), business, net worth or results of operations of the
Company and the Subsidiary, taken as a whole.
(m) The Company and the Subsidiary have good and marketable title to
all property (real and personal) described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) as being owned by the
Company or such Subsidiary, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) or such as
are not materially burdensome and do not interfere in any material respect with
the use of the property or the conduct of the business of the Company and the
Subsidiary, taken as a whole, and the property (real and personal) held under
lease by the Company or any Subsidiary, as applicable, is held by them under
valid, subsisting and enforceable leases with only such exceptions as in the
aggregate are not materially burdensome and do not interfere in any material
respect with the conduct of the business of the Company and the Subsidiary,
taken as a whole.
(n) The Company and RMI have not distributed and will not distribute
prior to the Closing Date (or the Additional Closing Date, if any) any offering
material in connection with the offering and sale of the Shares other than the
Prepricing Prospectus and the Registration Statement, the Prospectus or other
materials permitted by the Act and distributed with the prior written approval
of the Underwriters. The Company and RMI have not taken, directly or indirectly,
any action which constituted or any action designed, or which might reasonably
be expected to cause or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(o) Neither the Company nor any Subsidiary is an "investment
company," an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company within the meaning of the Investment Company Act of
1940, as amended.
(p) The Company and the Subsidiary have all permits, licenses,
franchises, approvals, consents and authorizations of governmental or regulatory
authorities or private persons or entities (hereinafter "permit" or "permits")
as are necessary to own their respective properties and to conduct their
respective businesses in the manner described in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subject to such
qualifications as may be set forth
12
therein, except where the failure to have obtained any such permit has not had
and will not have a material adverse effect upon the condition (financial or
other) or the business of the Company and the Subsidiaries, taken as a whole;
the Company and the Subsidiary have fulfilled and performed all of their
material obligations with respect to each such permit and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination of any such permit or result in any other material impairment of the
rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as described in
the Prospectus, such permits contain no restrictions that are materially
burdensome to the Company and the Subsidiaries, taken as a whole.
(q) The Company and the Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which they are engaged;
and the Company has no reason to believe that the Company and the Subsidiary
will not be able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue their respective businesses as a comparable cost.
(r) The Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurances 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 generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(s) Neither the Company nor the Subsidiary has, directly or
indirectly, at any time during the past five years (i) made any unlawful
contribution to any candidate for political office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any federal,
state or foreign governmental official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof or applicable foreign
jurisdictions.
(t) Except as set forth in the Registration Statement and the
Prospectus, neither the Company nor the Subsidiary has violated any
environmental, safety or similar law applicable to their respective businesses,
nor any federal or state law relating to discrimination in the hiring, promotion
or pay of employees nor any applicable federal or state wages and hours laws,
nor any provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, which in each case might result in any
material adverse change in the business, prospects, financial condition or
results of operation of the Company and the Subsidiary, taken as a whole. No
labor disturbance by the employees of the Company or the Subsidiary exists to
the best of the Company and RMI's knowledge, or is imminent. No
13
collective bargaining agreement exists with any of the Company's or any
Subsidiary's employees and, to the Company's knowledge, no such agreement is
imminent. Neither the employment by the Company or any Subsidiary of their key
personnel nor the activities of such individuals at the Company or any
Subsidiary conflicts with, constitutes a breach of, or otherwise violates any
employment, noncompetition, nondisclosure or similar agreement or covenant by
which such individuals may be bound.
(u) The Company and the Subsidiary own and have full right, title and
interest in and to, or have the right to use, each material trade name,
trademark, service ▇▇▇▇, patent, copyright, license, and other rights and all
know-how (including trade secrets and other unpatented and/or proprietary or
confidential information, systems, or procedures) (collectively, "Intellectual
Property Rights") under which the Company and the Subsidiary conducts all or any
portion of their respective businesses, which Intellectual Property Rights are
adequate to conduct such businesses as conducted or as proposed to be conducted
or as described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto); except as otherwise disclosed in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), neither the Company nor the Subsidiary has created any lien or
encumbrance on, or granted any right or license with respect to, its respective
Intellectual Property Rights; there is no claim pending against the Company or
the Subsidiary with respect to any of their respective Intellectual Property
Rights; neither the Company nor the Subsidiary has received notice that, nor is
the Company aware that, any Intellectual Property Right which they use or have
used in the conduct of their respective businesses infringed or infringes upon
or conflicted or conflicts with the rights of any third party, which
infringement of conflict could have a material adverse effect upon the condition
(financial or other) of the Company and the Subsidiary, taken as a whole; and
the Company is not aware of any facts which, with the passage of time or
otherwise, would cause the Company or the Subsidiary to infringe upon or
otherwise violate the Intellectual Property Rights of any third party.
(v) A registration statement on Form 8-A has been filed under Section
12(g) of the Exchange Act. The Common Stock Application has been designated for
inclusion on the Nasdaq National Market ("NNM") under the symbol "RMGI."
(w) All federal, state, local and foreign tax returns required to be
filed by or on behalf of the Company and the Subsidiary with respect to all
periods ended prior to the date of this Agreement have been filed (or are the
subject of valid extension) with the appropriate federal, state, local and
foreign authorities and all such tax returns, as filed, are accurate in all
material respects. All federal, state, local and foreign taxes (including
estimated tax payments) required to be shown on all such tax returns or claimed
to be due from or with respect to the respective businesses of the Company and
the Subsidiaries have been paid or reflected as a liability on the consolidated
financial statements of the Company for appropriate periods. All deficiencies
asserted as a result of any federal, state, local or foreign tax audits have
been paid or finally settled and no issue has been raised in any such audit
which, by application of the same or similar principles, reasonably could be
expected to result in a proposed
14
deficiency for any other period not so audited. No state of facts exist or has
existed which would constitute grounds for the assessment of any material tax
liability with respect to the periods that have not been audited by appropriate
federal, state local or foreign authorities. There are no outstanding agreements
or waivers extending the statutory period of limitation applicable to any
federal, state, local or foreign tax return for any period.
(x) The Company and the Subsidiaries are in compliance with all
provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to
Disclosure of Doing Business with Cuba; if the Company or any Subsidiary
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 or incorporated by reference in the Prospectus, if any,
concerning the business of the Company or any Subsidiary 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.
(y) RMI is registered as a broker-dealer with the Commission and
under the Laws of all fifty U.S. states, the District of Columbia and Puerto
Rico, is a member of the NASD, the NYSE, the American Stock Exchange and the
Pacific Stock Exchange and, is in compliance with all applicable Laws, rules,
regulations, orders, by-laws and similar requirements in connection wish such
registrations and membership, including without limitation Rule 15c-1 under the
Securities Exchange Act of 1934 (the "Net Capital Rule"), except where the
failure to be so registered or in such compliance would not have a material
adverse effect on the Company and its subsidiaries taken as a whole .
(z) To the extent required by applicable law, rule or regulation, RMI
is appropriately registered with Canadian securities regulatory authorities and
is in compliance with all applicable laws and regulations in connection
therewith except where the failure to be so registered or in such compliance
would not have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(aa) RMI is registered as an investment advisor with the Commission,
is registered or exempt from regulation in all fifty states, the District of
Columbia and Puerto Rico, and is in compliance in all material respects with all
applicable laws, rules, regulations, orders and similar requirements in
connection therewith except where the failure to be so registered or in such
compliance would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(bb) The Company and the Subsidiary have filed all financial reports
and registrations, reports, statements, notices, and other Filings required to
be filed by the Company or the Subsidiary with any governmental agency or
industry organization having authority for enforcing laws and regulations
applicable to the company's business as a broker-dealer and investment adviser
in the United States, including,
15
without limitation, the SEC, the NASD, the NYSE, and state securities
commissions (each, a "Financial Regulatory Authority") or any other governmental
agency, body or official, including all required amendments or supplements to
any of the above, except for Filings, the failure of which to make would not
have a material adverse effect on the Company and its subsidiaries taken as a
whole (collectively, including the financial reports, the "Filings"). Each
Filing complied as to form and substance in all material respects with the
applicable law or regulation requiring such Filing to be filed and did not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading and each financial
report was true, complete and correct in all material respects, and complied in
all material respects with applicable accounting principles and the regulatory
requirements applicable to such report.
SECTION 6A. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder, severally and not jointly, represents and warrants to
each Underwriter and the Company on the date hereof, and shall be deemed to
represent and warrant to each Underwriter and the Company on the Closing Date
and the Additional Closing Date, that:
(a) Such Selling Shareholder has full right, power and authority to
sell, assign, transfer and deliver the Shares to be sold by such Selling
Shareholder hereunder; and upon delivery of such Shares hereunder and payment of
the purchase price as herein contemplated, each of the Underwriters will obtain
valid marketable title to the Shares purchased by it from such Selling
Shareholder, free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest, including any liability for estate or inheritance
taxes, or any liability to or claims of any creditor, devisee, legatee or
beneficiary of such Selling Shareholder.
(b) Such Selling Shareholder has duly authorized (if applicable),
executed and delivered, in the form heretofore furnished to the Representatives,
a Power of Attorney (the "Power of Attorney") appointing ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
and V. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as attorneys-in-fact (collectively, the "Attorneys" and
individually, an "Attorney") and a Letter of Transmittal and Custody Agreement
(the "Custody Agreement") with ▇▇▇▇▇ ▇▇▇▇▇▇ Shareholder Services, LLC, as
custodian (the "Custodian"); each of the Power of Attorney and the Custody
Agreement constitutes a valid and binding agreement of such Selling Shareholder,
enforceable against such Selling Shareholder in accordance with its terms, and
each of such Selling Shareholder's Attorneys, acting alone, is authorized to
execute and deliver this Agreement and the certificate referred to in Section
9(i) hereof on behalf of such Selling Shareholder, subject to the minimum
purchase price as provided in the Power of Attorney to determine the purchase
price to be paid by the several Underwriters to such Selling Shareholder as
provided in Section 2 hereof, to authorize the delivery of the Shares to be sold
by the Selling Shareholders under this Agreement and to duly endorse (in blank
or otherwise) the certificate or certificates representing such Shares or a
stock power or powers with respect thereto, to accept payment therefor, and
otherwise to act on behalf of such Selling Shareholder in connection with this
16
Agreement. Certificates in negotiable form for all Shares to be sold by such
Selling Shareholder under this Agreement, together with a stock power or powers
duly endorsed in blank by such Selling Shareholder, have been placed in custody
with the Custodian for the purpose of effecting delivery hereunder.
(c) All authorizations, approvals, consents and orders necessary for
the execution and delivery by such Selling Shareholder of the Power of Attorney
and the Custody Agreement, the execution and delivery by or on behalf of such
Selling Shareholder of this Agreement and the sale and delivery of the Shares to
be sold by the Selling Shareholders under this Agreement (other than such
authorizations, approvals or consents as may be necessary under state or other
securities or Blue Sky laws) have been obtained and are in full force and
effect; such Selling Shareholder, if other than a natural person, has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction of its organization as the type of entity that it purports to be;
and such Selling Shareholder has full right, power, and authority to enter into
and perform its obligations under this Agreement and such Power of Attorney and
Custody Agreement, and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder under this Agreement.
(d) Such Selling Shareholder will not offer, sell or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire, Common
Stock, during the period from the Closing Date to the date 180 days following
the effective date of the Registration Statement, inclusive, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. [consent to ▇▇▇▇▇▇ ▇▇▇▇▇▇
terms?]
(e) Certificates in negotiable form for all Shares to be sold by such
Selling shareholder under this Agreement, together with a stock power or powers
duly endorsed in blank by such Selling Shareholder, have been placed in custody
with the Custodian for the purpose of effecting delivery hereunder.
(f) This Agreement has been duly authorized by such Selling
Shareholder that is not a natural person and has been duly executed and
delivered by or on behalf of such Selling Shareholder and constitutes the valid
and binding agreement of such Selling Shareholder, enforceable against such
Selling Shareholder in accordance with its terms; and the performance of this
Agreement and the consummation of the transactions herein contemplated will not
result in a breach of or default under any material bond, debenture, note or
other evidence of indebtedness, or any material contract, indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
such Selling Shareholder is a party or by which such Selling Shareholder or any
Selling Shareholder Shares hereunder may be bound or, to the best of such
Selling Shareholder's knowledge, result in any violation of any law, order,
rule, regulation, writ, injunction or decree of any court or governmental agency
or body or, if such Selling Shareholder is other than a natural person, result
in any violation of any provisions of the charter, bylaws or other
organizational documents of such Selling Shareholder.
17
(g) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(h) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares, except as required by regulatory obligations in
connection with such Selling Shareholders performance of employment obligations,
to the extent such Selling Shareholder is an RMI employee.
(i) All information furnished by or on behalf of such Selling
Shareholder relating to such Selling Shareholder and the Shares to be sold by
such Selling Shareholders under this Agreement that is contained in the
representations and warranties of such Selling Shareholder in such Selling
Shareholder's Power of Attorney or set forth in the Registration Statement and
the Prospectus is, and on the Closing Date will be, true, correct and complete,
and does not, and on the Closing Date will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make such statements not misleading.
(j) Such Selling Shareholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be complied
with or satisfied pursuant to this Agreement on or prior to the Closing Date and
will advise one of its Attorneys prior to the Closing Date if any statement to
be made on behalf of such Selling Shareholder in the certificate contemplated by
Section 9(i) would be inaccurate if made as of the Closing Date.
(k) Such Selling Shareholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first refusal
or other similar right to purchase any of the Shares that are to be sold by the
Company or any of the other Selling Shareholders to the Underwriters pursuant to
this Agreement, and such Selling Shareholder does not own any capital stock of
the Company or warrants, options or similar rights to acquire, and does not have
any right or arrangement to acquire, any capital stock, rights, warrants,
options or other securities from the Company, other than those described in the
Registration Statement and the Prospectus.
(l) Such Selling Shareholder is not aware (without having conducted
any investigation or inquiry) that any of the representations and
warranties of the Company set forth in Section 6 above is untrue or
inaccurate, or, in the case of ▇▇▇▇▇▇ ▇▇▇▇▇ that the description of the
Severance and Correspondent Clearing Agreement between him and RMI is true,
correct and complete, and does not, and on the Closing Date will not,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make such statements not
misleading.
SECTION 7. EXPENSES. The Company hereby agrees with the several
Underwriters that the Company will pay or cause to be paid the costs and
expenses
18
associated with the following: (i) the preparation, printing or reproduction,
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Prepricing Prospectus, the
Prospectus, each registration statement filed pursuant to Rule 462(b) under the
Act, and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, each registration statement filed
pursuant to Rule 462(b) under the Act, and all amendments or supplements to any
of them, as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the offering of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Shares; (v) the listing of
the Shares on the Nasdaq National Market; (vi) the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(f) hereof (including the reasonable fees
and expenses of counsel for the Underwriters relating to the preparation,
printing or reproduction, and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification); (vii) the filing fees in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc, in connection with the offering; (viii) the
transportation and other expenses incurred by or on behalf of representatives of
the Company in connection with the presentations to prospective purchasers of
the Shares; (ix) the fees and expenses of the Company's accountants and the fees
and expenses of counsel (including local and special counsel) for the Company;
(x) the preparation, printing and distribution of bound volumes for the
Representatives and their counsel; (xi) the performance by the Company of its
other obligations under this Agreement; and (xii) $100,000 as a nonaccountable
expense allowance, to be paid to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. If the
transactions contemplated hereby are not consummated by reason of any failure,
refusal or inability on the part of the Company or any Selling Shareholder to
perform any agreement on its part to be performed hereunder or to fulfill any
condition of the Underwriters' obligations hereunder, the Company will reimburse
the several Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel for the several Underwriters) incurred by the
Underwriters in investigating, preparing to market or marketing the Shares. The
provisions of this Section 7 are intended to relieve the Underwriters from the
payment of the expenses and costs which the Selling Shareholders and the Company
hereby agree to pay, but shall not affect any agreement which the Selling
Shareholders and the Company may make, or may have made, for the sharing of such
expenses and costs. Such agreements shall not impair the obligations of the
Company and the Selling Shareholders hereunder to the several Underwriters.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION. The Company agrees to
indemnify and hold harmless you and each other Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities
19
and expenses (including reasonable costs of investigation) arising out of or
based upon any breach of any representation, warranty, agreement or covenant of
the Company contained herein or any untrue statement or alleged untrue statement
of a material fact contained in any Prepricing Prospectus the Registration
Statement, the Prospectus, any amendment or supplement thereto, or in any
Registration Statement filed pursuant to Rule 462(b) under the Act, or arising
out of or based upon any omission or alleged omission to state therein a
material fact requited to be stated therein or necessary to make the statements
therein not misleading, or arising out of or based upon any untrue statement or
alleged untrue statement of any material fact contained in any audio or visual
materials used in connection with the marketing of the Shares, including,
without limitation, slide, videos, films and tape recordings, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are based
upon an untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information relating to an Underwriter furnished in writing
to the Company by or on behalf of any Underwriter through you expressly for use
in connection therewith or arise out of materials prepared solely by the
Underwriters without the knowledge of the Company or any of its representatives
based upon material information obtained from sources other than, directly or
indirectly, the Company or its representatives. This indemnification shall be in
addition to any liability that the Company may otherwise have.
Each Selling Shareholder, severally and not jointly, agrees to indemnify
and hold harmless you and each other Underwriter and each person, if any, who
controls any underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any breach of any representation, warranty, agreement or
covenant of such Selling Shareholder contained herein or any untrue statement or
alleged untrue statement of a material fact contained in any Prepricing
Prospectus, the Registration Statement, the Prospectus, any amendment or
supplement thereto, or in any Registration Statement filed pursuant to Rule
462(b) under the Act, or arising out of or based upon 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, but only with respect
to information relating to such Selling Shareholder furnished in writing by or
on behalf of such Selling Shareholder through you expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, any
amendment or supplement thereto, or any Registration Statement filed pursuant to
Rule 462(b) under the Act. This indemnification shall be in addition to any
liability that the Selling Shareholders or any Selling Shareholder may otherwise
have.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company or any Selling Shareholder, such Underwriter or such
controlling person shall promptly notify in writing the party(s) against whom
indemnification is being sought (the "indemnifying party" or "indemnifying
parties"), and such indemnifying party(s) shall assume the defense thereof,
including the employment of counsel reasonably acceptable to such Underwriter or
such controlling person and payment of all fees and
20
expenses. Such Underwriter or any such controlling person shall 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 Underwriter or such controlling person unless (i) the indemnifying party(s)
has (have) agreed in writing to pay such fees and expenses, (ii) the
indemnifying party(s) has (have) failed to assume the defense and employ counsel
reasonably acceptable to the Underwriter or such controlling person, or (iii)
the named parties to any such action (including any impleaded parties) include
both such Underwriter or such controlling person and the indemnifying party(s),
and such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and any indemnifying
party(s) by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the indemnifying party(s) shall not have the right to assume the
defense of such action on behalf of such Underwriter or such controlling
person). The indemnifying party(s) shall not be liable for any settlement of any
such action effected without its (their) written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, the indemnifying party(s) agrees to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the immediately preceding
paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and each Selling Shareholder,
to the same extent as the foregoing indemnity from the Company and each Selling
Shareholder to each Underwriter, but only with respect to information relating
to such Underwriter furnished in writing by or on behalf of such underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any Prepricing Prospectus, any amendment or supplement thereto, or any
Registration Statement filed pursuant to Rule 462(b) under the Act. If any
action or claim shall be brought or asserted against the Company, any of its
directors, any such officers, or any such controlling person or any Selling
Shareholder based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, any amendment or supplement thereto, or any Registration
Statement filed pursuant to Rule 462(b) under the Act, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph, such
Underwriter shall have the rights and duties given to the Company and the
Selling Shareholders by the preceding paragraph (except that if the Company or
any Selling Shareholder 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 such Underwriter's expense), and the Company, its directors, any
such officers, and any such controlling persons and the Selling Shareholders
shall have the rights and duties given to the Underwriters by the immediately
preceding paragraph. This indemnification shall be in addition to any liability
the Underwriters or any Underwriter may otherwise have.
21
If the indemnification provided for in this Section 8 is unavailable to an
indemnified party under the first, second or fourth paragraph hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an 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 or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company or the Selling Shareholders, as applicable, on the one hand and the
Underwriters on the other hand from the offering of the Shares 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 or
the Selling Shareholders, as applicable, on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company or the
Selling Shareholders, as applicable, on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares (before deducting expenses) received by
the Company or the Selling Shareholders, as applicable, bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriters shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by the
Company or the Selling Shareholders, as applicable, or the Underwriters from the
offering of the Shares shall include the net proceeds (before deducting
expenses) received by the Company or the Selling Shareholders, as applicable,
and the underwriting discounts and commissions received by the Underwriters,
from the sale of such Additional Shares, in each case computed on the basis of
the respective amounts set forth in the notes to the table on the cover page of
the Prospectus. The relative fault of the Company or the Selling Shareholders,
as applicable on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Shareholders, as
applicable, on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
In any event, neither the Company nor any Selling Shareholder will, without
the prior written consent of the Representatives, settle or compromise or
consent to the entry of any judgment in any proceeding or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not the Representatives or any person who controls the
Representatives within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of all
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
22
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 8 was
determined by a 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 fifth paragraph
of this Section 8. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
the fifth paragraph of this Section 8 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8 are several in proportion to the respective number of Firm Shares set
forth opposite their names in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof) and not joint.
Notwithstanding the foregoing, the liability of each Selling Shareholder
under the representations and warranties contained in Section 6A hereof and
under the indemnity agreements contained in the provisions of this Section 8
shall be limited to an amount equal to the initial public offering price of the
Shares sold by such Selling Shareholder to the Underwriters minus the amount of
the underwriting discount paid thereon to the Underwriters by such Selling
Shareholder. The Company and such Selling Shareholders may agree, as among
themselves and without limiting the rights of (he Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
In any proceeding relating to the Registration Statement, any Preliminary
Prospectus, the Prospectus, any supplement or amendment thereto, or any
registration statement filed pursuant to Section 462(b) of the Act, each party
against whom contribution may be sought under this Section 8 hereby consents to
the jurisdiction of any court having jurisdiction over any other contributing
party, agrees that process issuing from such court may be served upon him or it
by any other contributing party and consents to the service of such process and
agrees that any other contributing party may join him or it as an additional
defendant in any such proceeding in which such other contributing party is a
party.
Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Selling Shareholders set
forth in this Agreement shall remain operative and in full
23
force and effect, regardless of (i) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter, the Company, its
directors or officers or any person controlling the Company, or any Selling
Shareholder, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A Successor to any Underwriter or any
person controlling any Underwriter, to the Company, its directors or officers,
or any person controlling the Company, or any Selling Shareholder, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
SECTION 9. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., New York City time, on the date hereof, or at such later date
and time as shall be consented to in writing by you, and all filings required by
Rules 424(b) and 430A under the Act shall have been timely made; and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction.
(b) Subsequent to the effective date of the Registration Statement
there shall not have occurred any change, or any development involving, or which
might reasonably be expected to involve, a potential future material adverse
change, in the condition (financial or other), business, properties, net worth
or results of operations of the Company and the Subsidiaries, taken as a whole,
not contemplated by the Prospectus (or any supplement thereto), that in your
reasonable opinion, as Representatives of the several Underwriters, would
materially and adversely affect the market for the Shares.
(c) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of ▇▇▇▇▇▇▇ Coie, counsel for the Company, dated
the Closing Date (and the Additional Closing Date, if any), satisfactory to you
and your counsel, to the effect that:
(i) The Company is a corporation duly incorporated under the
laws of the State of Washington, and validly existing in good standing,
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 any amendment or supplement thereto), 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 to so register or qualify does not have a material
adverse effect on the condition (financial or other), business, properties,
net worth or results of operation of the Company and the Subsidiaries,
taken as a whole.
24
(ii) The Subsidiary is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization, 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 any amendment or supplement
thereto), 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 to so register or qualify does not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operation of the Company and
the Subsidiaries, taken as it whole. All issued and outstanding shares of
capital stock of the Subsidiary have been validly issued and are fully paid
and nonassessable and to such counsel's knowledge free and clear of all
liens, encumbrances, equities and claims. To such counsel's knowledge, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiary.
(iii) The authorized capital stock and other securities of the
Company conform in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Securities."
(iv) All shares of capital stock or other securities of the
Company other than the Shares to be issued and sold by the Company
hereunder have been duly authorized and validly issued, are fully paid and
nonassessable and to such counsel's knowledge have not been issued in
violation of any co-sale right, registration right, right of first refusal,
preemptive right, or other similar right.
(v) The Shares to be issued and sold to the Underwriters and by
the Company, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free and clear of all liens, encumbrances,
equities and claims and to the best knowledge of such counsel after
reasonable inquiry will not have been issued in violation of any co-sale
right, registration right, right of first refusal, preemptive right, or
other similar right.
25
(vi) The form of certificates for the Shares conforms to the
requirements of the applicable corporate laws of the State of Washington.
(vii) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel after reasonable inquiry, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending before or threatened
by the Commission.
(viii) The Company has all requisite corporate power and
authority to enter into this Agreement and to issue, sell and deliver the
Shares to be sold by it to the Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the Company
and RMI and is valid, legal and binding agreement of the Company and RMI
enforceable against the Company in accordance with its terms, except as
enforceability thereof may be limited by (A) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights
generally, and (B) equitable principles being applied at the discretion of
a court before which any proceeding may be brought; and the Company has
adequate authorization and has taken all action necessary to authorize the
indemnification provisions contained in Section 8 herein.
(ix) To the knowledge of such counsel after reasonable inquiry,
neither the Company nor any Subsidiary is in violation of any law,
ordinance, administrative or governmental rule or regulation applicable to
the Company or any Subsidiary or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any Subsidiary
except where such violation does not and will not have a material adverse
effect on the condition (financial or other), business, properties, net
worth or results of operation of the Company and the Subsidiaries, taken as
a whole.
26
(x) The property described in the Registration Statement and
the Prospectus (or any amendment or supplement thereto) as held under lease
by the Company or any Subsidiary is held under valid, subsisting and
enforceable leases, with only such exceptions as in the aggregate are not
material and do not interfere in any material respect with the conduct of
the business of the Company and the Subsidiaries, taken as a whole.
(xi) Such counsel has reviewed all agreements, contracts,
indentures, leases or other documents or instruments referred to in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) (other than routine contracts entered into by the Company or any
Subsidiary to the extent summarized or disclosed therein, entered into in
the normal course of business) and such agreements, contracts, indentures,
leases or other documents or instruments are fairly summarized or disclosed
therein, and filed as exhibits thereto or incorporated by reference therein
as required, and such counsel does not know, after reasonable inquiry, of
any agreements, contracts, indentures, leases or other documents or
instruments required to be so summarized or disclosed or filed which have
not been so summarized or disclosed or filed.
(xii) The statements under the captions "Risk Factors--Anti-
Takeover Considerations," "--Shares Eligible for Future Sale,"
"Business Regulation," "Description of Capital Stock" and "Shares Eligible
for Future Sale" in the Registration Statement and the Prospectus, insofar
as such statements constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly and correctly summarize
and present in all material respects the information called for with
respect to such documents and matters. Such counsel has no reason to
believe that the descriptions in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) of statutes,
regulations or legal or governmental proceedings are other than accurate or
fail to present fairly the information required to be shown, provided that
such counsel need express no opinion to matters relating to Federal, State
or SEC regulated broker dealers.
(xv) Neither the Company nor any Subsidiary is, nor will any of
them become, as a result of the consummation of the transactions
contemplated
27
hereby and the application of the net proceeds therefrom as set forth in
the Registration Statement and the Prospectus (or any amendment or
supplement thereto) under the caption "Use of Proceeds," an "investment
company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xvi) To the best knowledge of such counsel after reasonable
inquiry, other than as described or contemplated in the Prospectus (or any
supplement thereto), there are no legal or governmental proceedings pending
or threatened against the Company or the Subsidiary or to which the
Company or the Subsidiary or any of their respective properties are
subject, which are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto).
(d) You shall have received on the Closing Date, and the Additional
Closing Date, if any, an opinion of ▇▇▇▇▇▇, Pepper & Shefelman, regulatory
counsel to RMI and the Company, to the effect that such counsel are special
regulatory counsel for the Company and RMI and have read the Registration
Statement and the Prospectus, including, particularly the portions of the
Registration Statement and the Prospectus referred to below and that:
(i) RMI is registered as a broker-dealer with the Commission and
under the laws of all fifty U.S. states, the District of Columbia and
Puerto Rico, is a member of the NASD, the NYSE, the American Stock Exchange
and the Pacific Stock Exchange and, to such counsel's knowledge, no
proceedings have been threatened against RMI nor has RMI received any
notice of proceeding relating to the revocation or modification of any such
registration.
(ii) RMI is registered as an investment advisor with Commission,
is registered in those states in which registration is necessary to conduct
its business, to such counsel's knowledge, no proceedings have been
threatened against RMI nor has RMI received any notice of proceeding
relating to the revocation or modification of any such registration.
(iii) The statements under the captions "Risk Factors -
Regulation", "Risk of NYSE and NASD Enforcement Proceedings", "-Constraints
Imposed by Net Capital Requirements", "Business - Regulation", "-Net
Capital Requirement", insofar as such statements constitute a summary of
matters of law correctly summarize and present in all material respects the
information called for with respect to such matters. Such counsel has no
reason to believe that the statements contained under the captions set
forth in the preceding sentence, or any other descriptions in the
Registration Statement and Prospectus (or any amendment or supplement
thereto) of statutes, regulations or legal or governmental proceedings
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statement
therein not misleading.
28
(e) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the
Selling Shareholders, dated the Closing Date (and the Additional Closing Date,
if any) satisfactory to you and your counsel, to the effect that
(i) Each Selling Shareholder that is not a natural person has
full right, power and authority to enter into and to perform its
obligations under the Power of Attorney and Custody Agreement to be
executed and delivered by it in connection with the transactions
contemplated herein; the Power of Attorney and Custody Agreement of each
Selling shareholder that is not a natural person has been duly authorized
by such Selling Shareholder has been duly executed and delivered by or on
behalf of such Selling Shareholder; and the Power of Attorney and Custody
Agreement of each Selling Shareholder constitutes the valid and binding
agreement of such Selling Shareholder, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles;
(ii) Each of the Selling Shareholders has full right, power and
authority to enter into and to perform its obligations under this Agreement
and to
29
sell, transfer, assign and deliver the Shares to be sold by such Selling
Shareholder hereunder;
(iii) This Agreement has been duly authorized by each Selling
Shareholder that is not a natural person and has been duly executed and
delivered by or on behalf of each Selling Shareholder and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of such Selling Shareholder, enforceable in accordance with its
terms, except insofar as the indemnification and contribution provisions
hereunder may be limited by applicable law and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally
or by general equitable principles;
(iv) Upon the delivery of and payment for the Shares as
contemplated in this Agreement, each of the Underwriters will receive valid
marketable title to the Shares purchased by it from such Selling
Shareholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest. In rendering such opinion, such
counsel may assume that the Underwriters are without notice of any defect
in the title of any of such Selling Shareholders to the Shares being
purchased from such Selling Shareholders;
In rendering such opinion, counsel may rely upon an opinion or opinions,
each dated the Closing Date (and the Additional Closing Date, if applicable), of
other counsel as to the laws of a jurisdiction other than the State of
Washington, provided that (1) each such local counsel is acceptable to you, (2)
each such opinion so relied upon is addressed to counsel and you, (3) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to you and is in form and substance satisfactory
to you, and (4) counsel shall state in their opinion that they believe that they
and you are justified in relying thereon. In rendering such opinion, local
counsel may rely, to the extent they deem such reliance proper, as to matters of
fact upon certificates of officers of the Company and of government officials.
Copies of all such certificates shall be furnished to you and your counsel on
the Closing Date (and the Additional Closing Date, if applicable).
In rendering such opinion, in each case where such opinion is qualified by
"the knowledge of such counsel after reasonable inquiry," such counsel may rely
as to matters of fact upon certificates of executive and other officers and
employees of the Company as you and such counsel shall deem are appropriate and
such other procedures as you and such counsel shall mutually agree; provided,
however, in each such case, such counsel shall state that it has no knowledge
contrary to the information contained in such certificates or developed by such
procedures and knows of no reason why you should not reasonably rely upon the
information contained in such certificates or developed by such procedures.
In addition to the opinion set forth above, counsel to the Company shall
state that during the course of the preparation of the Registration Statement
and the Prospectus, and any amendments or supplements thereto, nothing has come
to the attention of such
30
counsel which has caused it to believe that the Registration Statement, as of
the time it became effective under the Act, the Prospectus or any amendment or
supplement thereto, on the date it was filed pursuant to Rule 424(b), as of the
respective dates when such documents were filed with the Commission, and the
Registration Statement and the Prospectus, or any amendment or supplement
thereto, as of the Closing Date (except for the financial statements and other
financial and statistical information contained therein or omitted therefrom,
and the matters covered by the opinion of ▇▇▇▇▇▇, Pepper & Sheffelman as to
which no opinion need be expressed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statement therein not misleading. With respect to such
statement, counsel shall state that although such counsel did not undertake to
determine independently the accuracy, completeness and fairness of the
statements contained in the Registration Statement or in the Prospectus and
takes no responsibility therefor (except to the extent specifically set forth
herein), such counsel did participate in discussions and meetings with officers
and other representatives of the Company and discussions with the auditor for
the Company in connection with the preparation of the Registration Statement and
the Prospectus, and it is on the basis of the foregoing (relying as to certain
factual matters on the information provided to such counsel and not on an
independent investigation) that such counsel is making such statement.
(f) You shall have received on the Closing Date (and the Additional
Closing Date, if any) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇.,
counsel for the Underwriters, dated the Closing Date (and the Additional Closing
Date, if any), with respect to the issuance and sale of the Firm Shares, the
Registration Statement and other related matters as you may reasonably request,
and the Company and its counsel shall have furnished to your counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(g) You shall have received letters addressed to you and dated the
date hereof and the Closing Date (and the Additional Closing Date, if any) from
Deloitte & Touche independent certified public accountants, substantially in the
forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be,
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock or other securities of the Company
nor any material increase in the short-term or long-term debt of the Company
(other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change (present or potential future)
in the condition (financial or other), business properties, net worth or results
of operation of the Company and the Subsidiaries shall not have any liabilities
or obligations direct or contingent (whether or
31
not in the ordinary course of business) that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto); and (v)
all of the representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing Date
and signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to you) to the effect set
forth in this Section 9(g) and in Section 9(h) hereof.
(i) The Company shall not have failed in any material respect at or
prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(j) You shall be satisfied that, and you shall have received a
certificate dated the Closing Date, from the Attorneys for each Selling
Shareholder to the effect that as of the Closing Date, they have not been
informed that: (i) the representations and warranties made by such Selling
Shareholder herein are not true or correct in any material respect on the
Closing Date; or (ii) such Selling Shareholder has not complied with any
obligation or satisfied any condition which is required to be performed or
satisfied on his or its part at or prior to the Closing Date.
(k) The Company and the Selling Shareholders shall have furnished or
caused to have been furnished to you such further certificates and documents as
you shall be reasonably requested.
(l) At or prior to the Closing Date, you shall have received the
written commitment of each of the Company's directors, executive officers and
shareholders set forth on Schedule III hereto, not to offer, sell or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire, Common
Stock, following the effective date of the Registration Statement, inclusive,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., in sum
and substance satisfactory to you which commitments shall be in full force and
effect as of the Closing Date (and the Additional Closing Date, if any).]
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Additional Closing
Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (j) shall be dated in
the Additional Closing Date and the opinions and letters
32
referred to in paragraphs (c) through (f) shall be revised to reflect the sale
of Additional Shares.
SECTION 10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the parties
hereto, or (b) release of notification of the effectiveness of the Registration
Statement by the Commission.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in the Agreement Among Underwriters,
to purchase the Firm Shares which such defaulting Underwriter or Underwriters
agreed, but failed or refused to purchase. If any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares and arrangements satisfactory to you and the
Company for the purchase of such Firm Shares are not made with 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company or any Selling Shareholder. In any
such case that does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven (7) 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 this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such default
of any such Underwriter under this Agreement.
SECTION 11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, American Stock Exchange or The Nasdaq
Stock Market shall have been suspended or materially limited, (ii) trading of
any securities of the Company, including the Shares, on the New York Stock
Exchange, American Stock Exchange or The Nasdaq Stock Market shall have been
suspended or materially limited, whether as the result of a stop order by the
Commission or otherwise, (iii) a general moratorium on commercial banking
activities in New York or Florida shall have been declared by either federal or
state authorities, (iv) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions or other material event the effect
of which on the financial markets of the United States is such as to make it, in
your judgment, impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of
33
the Shares, or (v) the Company or any Subsidiary shall have, in the sole
judgment of the Representatives, sustained any loss or interference, material to
the Company and the Subsidiaries, taken as a whole, with their respective
businesses or properties from fire, flood, hurricane, accident, or other
calamity, whether or not covered by insurance, or from any labor disputes or any
legal or governmental proceeding, or there shall have been any material adverse
change (including, without limitation, a material change in management or
control of the Company) in the condition (financial or otherwise), business
prospects, net worth, or results of operations of the Company and the
Subsidiaries, taken as a whole, except in each case as described in, or
contemplated by, the Prospectus (excluding any amendment or supplement thereto).
Notice of such cancellation shall be promptly given to the Company and its
counsel by telegraph, telecopy or telephone and shall be subsequently confirmed
by letter.
All representations, warranties, covenants and agreements of the Company
and the Selling Shareholders herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Section 8
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person,
or by or on behalf of the Company or any Selling Shareholder, or any of their
officers, directors or controlling persons, and shall survive the delivery of
the Shares to the several Underwriter hereunder or termination of this
Agreement.
SECTION 12. APPROVAL OF ▇▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Incorporated,
which is serving as one of the Representatives hereunder, may not make, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Associates, Inc., any decisions or
take any action on behalf of all the Underwriters, including, without limitation
(a) the approval of any legal or other documents required to be delivered by or
on behalf of the Company or the Selling Shareholder, (b) the determination
whether certain conditions to the consummation of the offering have been
satisfied, and (c) the waiver of the satisfaction of such conditions.
SECTION 13. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth under the caption "Underwriting" in any Prepricing Prospectus and in the
Prospectus, constitute all the information furnished by or on behalf of the
Underwriters through you or on your behalf as such information is referred to in
Sections 6(a), 6(b) and 8 hereof.
SECTION 14. NOTICES; SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at; or (ii) if to you, as the Underwriters, to (A) ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Associates, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention:_______________________________; and (B) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Incorporated,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇, Chief Executive Officer (with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Coie, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (with a copy to ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
34
Washington 98154); or (iii) if to one or more of the Selling Shareholders, to
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, as Attorney for the Selling Shareholders, at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ , ▇▇▇▇▇-▇▇▇▇.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers and the other controlling
persons referred to in Section 8 hereof, and the Selling Shareholders, and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue or this Agreement.
Neither of the terms "successor" and "successors and assigns" as used in this
Agreement shall Include a purchaser from you of any of the Shares in his status
as such purchaser.
SECTION 15. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
without reference to choice of law principles thereunder. This Agreement may be
signed in various counterparts which together shall constitute one and the same
instrument. This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ GROUP INCORPORATED
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SELLING SHAREHOLDERS
By:_______________________________________
Attorney-in-Fact for the Selling
Shareholders named in Schedule II
hereto
35
CONFIRMED as of the date first
above mentioned, on behalf of
itself and the other several
Underwriters named in Schedule I
hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
By:__________________________________
Authorized Representative
36
SCHEDULE I
UNDERWRITERS
Number of
Name Firm Shares
---- -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates Inc.....................................
===========
TOTAL..............................................................
37
SCHEDULE II
SELLING SHAREHOLDERS
Number of
Number of Additional
Name Firm Shares Shares
---- ----------- -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates Inc.....................
=========== ===========
TOTAL..............................................
38
SCHEDULE III
LOCK-UP AGREEMENTS
Name
----
39