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EXHIBIT 1.1
2,500,000 SHARES*
G.I. JOE'S, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_____________, 1999
CRUTTENDEN XXXX INCORPORATED
BLACK & COMPANY, INC.
As Representatives of the several Underwriters
c/o Cruttenden Xxxx Incorporated
00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
G.I. Joe's, Inc., an Oregon corporation (the "Company"), proposes to
sell an aggregate of 2,500,000 shares (the "Firm Shares") of the Company's
common stock, no par value per share (the "Common Stock"), to you and to the
several other underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as the representatives (the
"Representatives"). All of the shares will be sold by the Company. The Company
also proposes to sell at the Underwriters' option (the "Option") an aggregate of
up to 375,000 additional shares of Common Stock (the "Option Shares") on the
terms and for the purposes set forth in Section 1(b). The Firm Shares and the
Option Shares are referred to collectively herein as the "Shares."
The Company confirms as follows its agreement with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the parties herein contained and subject to all of the terms and
conditions of this Agreement,
--------
* Plus an option to purchase up to an additional 375,000 shares from the
Company to cover over-allotments.
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(i) the Company agrees to sell an aggregate of 2,500,000 shares of Common Stock
to the several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company the respective number of Firm
Shares set forth opposite that Underwriter's name in Schedule I hereto, at the
purchase price of $[________] for each Firm Share, subject to adjustments in
accordance with Section 8 hereof.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase, severally
and not jointly, up to the maximum number of Option Shares at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for the
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter bears
to the total number of Firm Shares, adjusted by you in such manner as to avoid
fractional shares.
2. Delivery and Payment.
(a) Payment for the Firm Shares to be sold hereunder is to be
made in New York Clearing House funds by wire transfers to an account designated
in writing by the Company for the Shares to be sold by it against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of Stoel
Rives LLP, 000 X.X. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx, at 7:00 a.m.,
Portland time, on the fourth business day after the date of this Agreement or at
such other time and date not later than four business days thereafter as you and
the Company shall agree upon, such time and date being herein referred to as the
"Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed.)
(b) To the extent the Option is exercised, delivery of the
Option Shares against payment by the Underwriters (in the manner specified
above) will take place at the offices specified above at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
(c) Certificates evidencing the Shares shall be in definitive
form and shall be registered in such names and such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and
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packaging of certificates for the Shares, the Company agrees to make such
certificates available for inspection at 10:00 a.m. Pacific time on the business
day preceding the Closing Date or the Option Closing Date, as the case may be.
(d) The cost of any original issue tax stamps and any transfer
or other taxes in connection with the issuance and delivery of the Firm Shares
and Option Shares by the Company to the respective Underwriters shall be borne
by the Company. The Company will save each Underwriter and any subsequent holder
of the Shares harmless from any and all liabilities with respect to or resulting
from any failure or delay by the Company in paying federal and state stamp and
other transfer taxes, if any, that may be payable or determined to be payable in
connection with the original issuance, transfer or sale to such Underwriter of
the Firm Shares and Option Shares. The Underwriters will save the Company
harmless from any and all liabilities with respect to or resulting from any
failure or delay by the Underwriters in paying federal and state stamp and other
transfer taxes, if any, that may be payable or determined to be payable in
connection with the transfer or sale by the Underwriters of the Firm Shares and
Option Shares.
(e) In addition to the sums payable to you as provided
elsewhere herein, you shall be entitled to receive on the Closing Date, for
yourselves alone and not as Representatives of the Underwriters, as additional
compensation for your services for an aggregate purchase price of $10.00 cash,
one or more purchase warrants (collectively, the ARepresentatives' Warrant@) for
the purchase of an aggregate of 250,000 shares of Common Stock at a price of
$[____] per share, upon the terms and subject to adjustment as described in the
form of Representatives' Warrant attached as Exhibit A hereto.
3. Representations and Warranties of the Company.
(a) The Company represents, warrants and covenants to each
Underwriter that:
(i) A registration statement on Form S-1 (File No.
333-61527) with respect to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder and has been
filed with the Commission. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. Such registration statement, as amended,
together with any registration statement filed by the Company pursuant to Rule
462(b) of the Act, herein referred to as the "Registration Statement," which
shall be deemed to include all information omitted therefrom in reliance upon
Rule 430A and contained in the Prospectus referred to below, 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.
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"Prospectus" means (a) the form of prospectus first filed with the Commission
pursuant to Rule 424(b), or (b) if the Company has elected to rely upon Rule 434
of the Act, the last preliminary prospectus included in the Registration
Statement filed prior to the time it becomes effective or filed pursuant to Rule
424(a) under the Act that is delivered by the Company to the Underwriters for
delivery to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule 424(b)(7)
under the Act. Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein referred to as a
"Preliminary Prospectus."
(ii) The Company has been duly organized and is an
active corporation under the laws of the state of Oregon, with corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement. There are no subsidiaries, direct or
indirect, of the Company. The Company is duly qualified to transact business in
all jurisdictions in which the failure so to qualify would have a material
adverse effect on the earnings, business, properties, assets, rights,
operations, condition (financial or other) or prospects of the Company.
(iii) The outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable, were issued in compliance with the registration and qualification
provisions of applicable federal and state securities laws, and were not issued
in violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities; the Shares to be issued and sold by the Company have
been duly authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue and sale
thereof. The Redemption and the Merger, as described in the Registration
Statement, were duly and validly authorized by all necessary corporate action by
the Company and (in the case of the Merger) by all necessary corporate action by
ND Holdings, Inc. The Redemption was effected in compliance with ORS 60.181 and
the Merger has taken effect pursuant to Oregon law. Except as and to the extent
described in the Registration Statement, no shareholder or former shareholder of
the Company is a "Dissenter" within the meaning of ORS 60.551 with respect to
the Merger. Neither the filing of the Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives rise to any rights,
other than those that have been waived or satisfied, for or relating to the
registration of any shares of Common Stock. No options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Company are outstanding except as set forth in the Prospectus.
(iv) All of the Shares conform to the description
thereof contained in the Registration Statement. The form of certificates for
the Shares conforms to the corporate law of the jurisdiction of the Company's
incorporation.
(v) The Commission has not issued an order preventing
or suspending the use of any Preliminary Prospectus relating to the proposed
offering of the
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Shares or, to the Company's knowledge, instituted proceedings for that purpose.
The Registration Statement contains, and the Prospectus and any amendments or
supplements thereto will contain, all statements that are required to be stated
therein by, and will conform to, the requirements of the Act and the Rules and
Regulations. The Registration Statement and any amendment thereto do not
contain, and through the Closing Date will not contain, any untrue statement of
a material fact and do not omit, and through the Closing Date will not omit, to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue statement
of material fact and do not omit, and will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use in the
preparation thereof.
(vi) The financial statements of the Company (other
than pro forma financial statements), together with related notes as set forth
in the Registration Statement, present fairly the financial position and the
results of operations and cash flows of the Company at the indicated dates and
for the indicated periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied
throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods have
been made. The summary financial and statistical data included in the
Registration Statement present fairly the information shown therein, and such
data have been compiled on a basis consistent with the financial statements
presented therein. The unaudited pro forma financial statements included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the Rules
and Regulations, and management of the Company believes, (i) the assumptions
underlying the pro forma adjustments are reasonable, (ii) that such adjustments
have been properly applied to the historical amounts in the compilation of such
statements and (iii) that such statements fairly present the pro forma results
of operations and the other information purported to be shown therein for the
respective periods therein specified.
(vii) Xxxxxx Xxxxxxxx LLP (the "Accountants"), which
has certified certain of the financial statements filed with the Commission as
part of the Registration Statement, is an independent public accountant as
required by the Act and the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding
pending or, to the knowledge of the Company, threatened against the Company
before any court or administrative agency or otherwise that if determined
adversely to the Company might (A) result in any material change in the
earnings, business, properties, assets, rights,
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operations, condition (financial or other) or prospects of the Company, or (B)
prevent the consummation of the transactions contemplated hereby, except as set
forth in the Registration Statement, and there are no contracts or documents of
the Company that would be required to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations that have not been filed as
exhibits to the Registration Statement.
(ix) The Company has good and marketable title to all
of the properties and assets reflected as owned in the latest balance sheet
included in the financial statements (or as described in the Registration
Statement) hereinabove described (other than for properties or assets disposed
of in the ordinary course of business since the date of such balance sheet),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
those reflected in such financial statements (or as described in the
Registration Statement) or that are not material in amount. The Company occupies
its material leased properties under valid and binding leases conforming in all
material respects to the description thereof set forth in the Registration
Statement.
(x) The Company has filed all federal, state, local
and foreign income tax returns that are required to have been filed by the
Company and has paid all taxes indicated by said returns and all assessments
received by the Company to the extent that such taxes have become due and are
not being contested in good faith. All tax liabilities have been adequately
provided for in the financial statements or records of the Company.
(xi) Since the respective dates as of which
information is given in the Registration Statement, as it may be amended or
supplemented, there has not been any change or, to the Company's knowledge, any
development involving a prospective change in or affecting the earnings,
business, properties, assets, rights, operations, condition (financial or
other), or prospects of the Company that is materially adverse to the Company,
whether or not occurring in the ordinary course of business, and there has not
been any transaction entered into by the Company that is material to the Company
other than transactions in the ordinary course of business and changes and
transactions contemplated by the Registration Statement, as it may be amended or
supplemented.
(xii) The Company is not and, with the giving of
notice or lapse of time or both, will not be in violation of or in default under
its articles of incorporation or bylaws or under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and which default is of material
significance in respect of the business, properties, assets, rights, operations,
condition (financial or other) or prospects of the Company. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which the Company is a party, or of the articles of incorporation, charter or
bylaws of the Company or any order, rule or regulation applicable
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to the Company of any court or of any regulatory body or administrative agency
or other governmental body having jurisdiction.
(xiii) The Company has full legal right, power and
authority to enter into this Agreement and perform the transactions contemplated
hereby and to file the Registration Statement, and each has been duly
authorized, executed and delivered by the Company, and this Agreement
constitutes a valid and binding obligation of the Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general principles of equity (regardless of whether considered
in a proceeding in equity or at law) and to the extent that rights of indemnity
or contribution under this Agreement may be limited by federal or state
securities laws or the public policies underlying such laws. Each approval,
consent, order, authorization, designation, declaration or filing by or with any
regulatory, administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement and the
consummation by the Company of the transactions herein contemplated (except such
additional steps as may be required by the Commission, the National Association
of Securities Dealers, Inc. (the "NASD") or any additional steps as may be
necessary to qualify the Shares for public offering by the Underwriters under
state securities or Blue Sky laws) has been obtained or made and is in full
force and effect.
(xiv) The Company holds all material licenses,
certificates and permits from governmental authorities that are necessary to the
conduct of its business, and, to the Company's knowledge, the Company has not
infringed any patents, patent rights, trade names, trademarks, copyrights or
other proprietary rights, which infringement is material to the business of the
Company. The Company knows of no current infringement by others of material
patents, patent rights, trade names, trademarks, copyrights or other proprietary
rights owned by or licensed to the Company.
(xv) The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(xvi) The Company is not an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended (the "1940 Act") and the rules and regulations of the Commission
thereunder.
(xvii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (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
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authorization, 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.
(xviii) The Company carries, or is covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of its business and the value of its properties and as is customary for
companies engaged in similar industries.
(xix) The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, that would cause
the loss of such qualification.
4. Agreements of the Company.
(a) The Company agrees with the several Underwriters as
follows:
(i) The Company will not, either prior to the date on
which the Registration Statement is declared effective (the "Effective Date") or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(ii) The Company will use its reasonable best efforts
to cause the Registration Statement to become effective and will notify the
Representatives promptly, and will confirm such notification in writing, (1)
when the Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (4) of the happening of
any event during the period mentioned in the second sentence of Section 4(a)(v)
that in the judgment of the Company makes any material statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which
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they are made, not misleading and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Company, the Registration Statement, any preliminary
prospectus or the Prospectus. If at any time the Commission issues any 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 moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to said Rule 430A and to notify
the Representatives promptly of all such filings.
(iii) The Company will furnish to the Representatives
or counsel for the Representatives without charge, two signed copies of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and all exhibits thereto and will furnish to
the Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules but without
exhibits.
(iv) The Company will comply with all the provisions
of any undertakings contained in the Registration Statement.
(v) On the Effective Date, and thereafter from time
to time during the period during which the Prospectus is required by law to be
delivered, the Company will deliver to each of the Underwriters, without charge,
as many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur that in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto and will
deliver to each of the Underwriters, without charge, such number of copies of
such supplement or amendment to the Prospectus as the Representatives may
reasonably request.
(vi) Prior to any public offering of the Shares, the
Company will cooperate with the Representatives and counsel to the Underwriters
in connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably request; provided, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
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not now so qualified or to take any action that would subject it to general
service of process in any jurisdiction where it is not now so subject.
(vii) During the period of three years commencing on
the Effective Date, the Company will furnish to the Representatives copies of
such financial statements and other periodic and special reports as the Company
may from time to time distribute generally to the holders of any class of its
capital stock and will furnish to the Representatives a copy of each annual or
other report it shall be required to file with the Commission.
(viii) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(ix) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to (1)
the preparation, printing and filing of the Registration Statement and exhibits
to it, each preliminary prospectus, Prospectus and any amendment or supplement
to the Registration Statement or Prospectus, (2) the preparation and delivery of
certificates representing the Shares, (3) the printing of this Agreement, the
Agreement Among Underwriters, any Dealer Agreements and any Underwriters'
Questionnaires, (4) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be reasonably
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (5) the quotation of the
Shares on the Nasdaq National Market System, (6) any filings required to be made
by the Underwriters with the NASD and the fees, disbursements and other charges
of counsel for the Underwriters in connection therewith, (7) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(a)(vi), including
the fees, disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (8) fees, disbursements and other
charges of counsel to the Company (but not those of counsel for the
Underwriters, except as otherwise provided herein) and (9) the transfer agent
for the Shares. In addition, the Company will pay all travel and lodging
expenses incurred by management of the Company in connection with any
informational "road show" meetings held in connection with the offering and will
also pay for the preparation of all materials used in connection with such
meetings. It is understood, however, that except as provided in Sections 4(x)
and 6 below, the Underwriters will pay all of their own costs and expenses,
including the fees of counsel for the Underwriters, stock transfer taxes on
resale of any of the Shares by them and any
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advertising expenses connected with any offers they make, together with all
expenses of the road show, other than direct expenses of the Company for travel
and lodging for Company participants in the road show.
(x) If this Agreement is terminated by the Company
pursuant to any of the provisions hereof (other than pursuant to Section 8
hereof) or if for any reason the Company is unable to perform its obligations
hereunder, the Company will reimburse the several Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by them in connection herewith.
(xi) The Company will not at any time, directly or
indirectly, take any action designed, or that might reasonably be expected, to
cause or result in, or that will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(xii) The Company will apply the net proceeds from
the offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" and shall file such reports with
the Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(xiii) The Company will not, and will cause each of
its officers, directors and the shareholders designated on Schedule II to enter
into an agreement (the "Lockup Agreements") with the Representatives to the
effect that they will not, without the prior written consent of Cruttenden Xxxx
Incorporated, offer, sell, offer to sell, contract to sell, assign, grant any
option to purchase, or otherwise dispose of or transfer any Common Stock of the
Company or any other security of the Company, convertible into, or exchangeable
or exercisable for, Common Stock for a period of 360 days after the date of the
Prospectus except (i) directors, officers and shareholders may make bona fide
gifts to donees who agree to be bound by such restrictions and (ii) the Company
may issue Common Stock or options to purchase Common Stock under the Company's
stock option plans described in the Prospectus.
5. Conditions of the Obligations of the Underwriters. The obligations
of each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Representatives and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made, and
the Shares shall be qualified or registered for sale in such jurisdictions as
the Representatives shall request, except where the failure to qualify or
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register Shares would not, in the reasonable judgment of the Representatives,
have a material adverse effect on its ability to market the Shares.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
applicable jurisdiction shall be in effect, and no proceeding for such purpose
shall be pending before or threatened or contemplated by the authorities of any
such jurisdiction, except where the failure to qualify or register Shares in
such jurisdiction would not, in the reasonable judgment of the Representatives,
have a material adverse effect on its ability to market the Shares, (iii) any
request for additional information on the part of the staff of the Commission or
any such authorities shall have been complied with to the satisfaction of the
staff of the Commission or such authorities and (iv) after the date hereof no
amendment or supplement to the Registration Statement or the Prospectus shall
have been filed unless a copy thereof was first submitted to the Representatives
and the Representatives do not object thereto in good faith, and the
Representatives shall have received certificates, dated the Closing Date and the
Option Closing Date and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company (who may, as to proceedings threatened and
clause (iii) above, rely upon the best of their information and belief) to the
effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or other) or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, that is not set forth in the
Registration Statement and the Prospectus, if in the reasonable judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the public
offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, business prospects, condition (financial or other) or
results of operations of the Company.
13
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
and all covenants and agreements contained herein to be performed on the part of
the Company and all conditions contained herein to be fulfilled or complied with
by the Company at or prior to the Closing Date and, with respect to the Option
Shares, at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
(f) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Xxxxxxx Coie
LLP, counsel for the Company dated the Closing Date or the Option Closing Date,
as the case may be, addressed to the Underwriters to the effect that:
(i) The Company has been duly organized and is an
active corporation under the laws of the state of Oregon, with corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company is duly qualified to
transact business in all jurisdictions in which the failure so to qualify would
have a materially adverse effect upon the business of the Company.
(ii) The Company has authorized and outstanding
capital stock as set forth under the caption "Capitalization" in the Prospectus;
the authorized shares of the Company's Common Stock have been duly authorized.
The outstanding shares of the Company's Common Stock have been duly authorized
and validly issued, are fully paid and non-assessable, and to the actual
knowledge of such counsel were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities. The
outstanding shares of the Company's Common Stock were issued in compliance with
the registration and qualification provisions of applicable federal and state
securities laws. The Redemption and the Merger, as described in the Registration
Statement, were duly and validly authorized by all necessary corporate action by
the Company and (in the case of the Merger) by all necessary corporate action by
ND Holdings, Inc. The Redemption was effected in compliance with ORS 60.181 and
the Merger has taken effect pursuant to Oregon law. Except as and to the extent
described in the Registration Statement, to the actual knowledge of such
counsel, no shareholder or former shareholder of the Company is a "Dissenter"
within the meaning of ORS 60.551 with respect to the Merger. All of the Shares
conform to the description thereof contained in the Prospectus; the certificates
for the Shares comply as to form with the requirements of Oregon law. The Shares
of Common Stock to be sold by the Company pursuant to this Agreement have been
duly authorized and will be validly issued, fully paid and non-assessable when
issued and paid for as contemplated by this Agreement. No preemptive rights of
shareholders exist under any statute or, to the actual knowledge of such
counsel, otherwise with respect to any of the Shares or the issue or sale
thereof.
14
(iii) Except as described in or contemplated by the
Prospectus, to the actual knowledge of such counsel, there are no (a)
outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for, any shares of capital stock
of the Company or (b) outstanding or authorized options, warrants or rights of
any character obligating the Company to issue any shares of its capital stock or
any securities convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of such stock, and, except as described in
the Prospectus, to the actual knowledge of such counsel, no holder of any
securities of the Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite the
sale of, any of the Shares or the right to have any shares of Common Stock or
other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities of
the Company.
(iv) The Registration Statement has been declared
effective under the Act and, to the actual knowledge of such counsel, no stop
order proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(v) The Registration Statement, the Prospectus and
each amendment or supplement thereto complied as as of their respective
effective or filing dates as to form in all material respects with the
requirements of the Act and the Rules and Regulations (except that such counsel
need express no opinion as to the financial statements and the notes thereto
complied and other financial and statistical data included therein or omitted
therefrom).
(vi) The statements under the captions "Risk
Factors--Shares Eligible for Future Sale," "Risk Factors--Potential Issuance of
Preferred Stock; Anti-Takeover Effect of Oregon Law," "Description of Capital
Stock," and "Shares Eligible for Future Sale" in the Prospectus, insofar as such
statements constitute a summary of matters of law, are correct in all material
respects.
(vii) Such counsel does not know of any contracts or
documents required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus that are not so filed
or described as required by the Act, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly and
accurately summarized in all material respects.
(viii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the Company except as set
forth in the Prospectus.
(ix) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the
15
articles of incorporation or bylaws of the Company or any agreement or
instrument known to such counsel to which the Company is a party or by which the
Company may be bound (except for such conflicts, breaches and defaults under
such agreements and instruments that would not have a materially adverse effect
upon the business of the Company).
(x) This Agreement has been duly and validly
authorized by all necessary corporate action by the Company, has been duly and
validly executed and delivered by and on behalf of the Company and is a valid,
binding and enforceable agreement of the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditor's rights
generally or by general principles of equity (regardless of whether considered
in a proceeding in equity or at law) and except as to those provisions relating
to indemnity or contribution for liabilities arising under the Act as to which
no opinion need be expressed.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body is required to be made or obtained by the Company in
connection with the execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions herein contemplated (other
than as may be required by the NASD or as required by state securities and Blue
Sky laws as to which such counsel need express no opinion), except such as have
been obtained or made specifying the same.
(xii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by this Agreement
and application of the net proceeds therefrom as described in the Prospectus,
required to register as an investment company under the 1940 Act.
In addition to the matters set forth above, such counsel shall
also provide to the Representatives a letter to the effect that nothing has come
to the attention of such counsel which causes it to believe that (i) the
Registration Statement, at the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements and notes thereto and
the other financial and statistical data included therein or omitted therefrom.
With respect to such statement, counsel for the Company may state that their
belief is based upon the procedures set forth therein but is without independent
investigation or verification.
16
(g) The Representatives shall have received from Stoel Rives
LLP, counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect specified
in the penultimate sentence of subparagraph (ii) and subparagraph (x) of
Paragraph (f) of this Section 5 and that the Company is a duly incorporated and
validly existing corporation under the laws of the state of Oregon. In addition
to the matters set forth above, such opinion shall also include a statement to
the effect that nothing has come to the attention of such counsel that leads
them to believe that (i) the Registration Statement, or any amendment thereto,
as of the time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) as of
the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to such
statement, counsel for the Underwriters may state that their belief is based
upon the procedures set forth therein but is without independent check and
verification.
(h) The Representatives shall have received at or prior to the
Closing Date from counsel for the Underwriters a memorandum or summary, in form
and substance satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under the
state securities or Blue Sky laws of such jurisdictions as the Representatives
may reasonably have designated to the Company.
(i) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representatives a letter,
dated the date of its delivery, addressed to the Representatives and in form and
substance reasonably satisfactory to the Representatives, confirming that they
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations and with respect to certain financial and other
statistical and numerical information contained in the Registration Statement.
At the Closing Date and, as to the Option Shares, the Option Closing Date, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, that shall confirm, on the basis of a review in accordance with
the procedures set forth in the letter from the Accountants, that nothing has
come to their attention during the period from the date of the letter referred
to in the prior sentence to a date (specified in the letter) not more than five
days prior to the Closing Date and the Option Closing Date, as the case may be,
that would require any change in their letter dated the date hereof if it were
required to be dated and delivered at the Closing Date and the Option Closing
Date.
(j) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be
17
furnished to the Representatives a certificate of the Company, dated the date of
its delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer and on behalf of the Company, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus on behalf of the Company.
As of the date of such certificate, such documents are true and correct in all
material respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue or
misleading. In the case of the certificate delivered at the Closing Date and the
Option Closing Date, since the Effective Date no event has occurred as a result
of which it is necessary to amend or supplement the Prospectus in order to make
the statements therein not untrue or misleading in any material respect.
(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally made, and are, at
the time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required to be performed
by the Company herein on or prior to the date of such certificate has been duly,
timely and fully performed, and each condition herein required to be satisfied
or fulfilled on or prior to the date of such certificate has been duly, timely
and fully satisfied or fulfilled.
(k) On or prior to the Closing Date, the Representatives shall
have received the executed agreements referred to in Section 4(a)(xiii).
(l) Prior to the Closing Date, the Shares shall have been duly
authorized for listing on the Nasdaq National Market System upon notice of
issuance.
6. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each 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, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and, subject to Section 6(c) below, any reasonable amount paid in settlement of,
any action, suit or proceeding or any claim asserted) to which they, or any of
them, may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading in
18
light of the circumstances in which they were made, provided that the Company
will not be liable to the extent that such loss, claim, liability, expense or
damage arises from the sale of the Shares in the public offering to any person
by an Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information furnished in writing to the Company by the Representatives on behalf
of any Underwriter expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus, and provided further that the Company
will not be liable to any Underwriter, the directors, officers, employees or
agents of such Underwriter or any person controlling such Underwriter with
respect to any loss, claim, liability, expense, charge or damage arising out of
or based on any untrue statement or omission or alleged untrue statement or
omission in any preliminary prospectus that is corrected in the Prospectus if
the person asserting any such loss, claim, liability, charge or damage purchased
Shares but was not sent or given a copy of the Prospectus at or prior to the
written confirmation of the sale of such Shares to such person. This indemnity
agreement will be in addition to any liability that the Company might otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information furnished in
writing to the Company by the Representatives on behalf of such Underwriter
expressly for use in the Registration Statement, the preliminary prospectus or
the Prospectus. The Company acknowledges that the statements set forth in the
last paragraph of the front cover page of the Prospectus, in the legend on the
inside front cover of the preliminary prospectus and the Prospectus, and under
the heading "Underwriting" in the preliminary prospectus and the Prospectus
constitute the only information furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify any such indemnifying
party will not relieve it from any liability that it may have to any indemnified
party under the foregoing provisions of this Section unless, and only to the
extent that, such omission materially prejudices the indemnifying party as a
result thereof. If any such action is brought against any indemnified party and
it notifies the indemnifying party of its commencement, the indemnifying party
will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the
19
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has in such instance been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred, provided that reasonable
evidence thereof is provided to the indemnifying party. Any indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and, subject to Section 6(c)
above, any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company
from persons other than the Underwriters or by the Underwriters from persons
other than the Company, to which the Company or one or more of the Underwriters
may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Underwriters. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears 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
20
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Company
and the Underwriters, with respect to the statements or omissions that resulted
in such loss, claim, liability, expenses or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include, for
purposes of this Section 6(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it and (ii) no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 6(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each director and
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against any such party in respect of which a claim
for contribution may be made under this Section 6(d), will notify any such party
or parties from whom contribution may be sought, but the omission so to notify
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d) unless, and
only to the extent that, as a result thereof such omission materially prejudices
the party or parties from whom contribution may be sought. No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of the Underwriters or the
Company, (ii) acceptance by the Underwriters of any of the Shares and payment
therefor or (iii) any termination of this Agreement.
21
7. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date) by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the Company if, prior to delivery and payment for the Shares,
as the case may be, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists the
Shares or by the Nasdaq National Market System, (ii) trading in securities
generally on the New York Stock Exchange or the Nasdaq Stock Market shall have
been suspended or limited or minimum or maximum prices shall have been generally
established on such exchange, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange or by order of the Commission or any
court or other governmental authority, (iii) a general banking moratorium shall
have been declared by either federal or New York State authorities or (iv) in
the reasonable opinion of the Representatives, there is any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or other calamity or crisis shall have
occurred, the effect of which is such as to make it, in the reasonable judgment
of the Representatives, impracticable to market the Shares.
8. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares that it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares that 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, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares that
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase in the proportions that the number of Firm Shares that they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares that all such nondefaulting Underwriters have so agreed to
purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares that any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 8 by more than one-ninth of such number of Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the aggregate
number of Firm Shares that such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase exceeds one-tenth of the aggregate number of
the Firm Shares and arrangements satisfactory to the Representatives and the
Company for the purchase of such Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In the event that within the 48-hour period referred to
above, the Representatives notify the Company that they have so arranged for the
purchase of such Firm Shares, or the Company notifies the Representatives that
it has so arranged for the purchase of such Firm Shares, either the
Representatives or the Company shall have the right
22
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 8 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 0000 XX
Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxx, 00000, Attention: Chief Financial Officer,
with a copy to Xxxxxxx X. Xxxxxxx, Xxxxxxx Coie LLP, 0000 XX Xxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxx, Xxxxxx, 00000, or (b) if to the Underwriters, to the
Representatives at the offices of Cruttenden Xxxx Incorporated, 00 Xxxxxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Corporate Finance Department
with a copy to Xxxx X. Xxxxxx, Stoel Rives LLP, 000 XX Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx 00000. Any such notice shall be effective only upon receipt.
Any notice may be made by telex, telephone or facsimile, but if so made shall be
subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of
the several Underwriters and the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
This Agreement shall be governed by and construed in
accordance with the laws of the state of Oregon applicable to contracts made and
to be performed entirely within such state.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
23
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
G.I. JOE'S, INC.
By:
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Xxxxxx X. Xxxxxxx
Chief Executive Officer, President and
Chairman of the Board
Confirmed as of the date first above mentioned:
CRUTTENDEN XXXX INCORPORATED
BLACK & COMPANY, INC.
Acting on behalf of themselves and as the
Representatives of the other several
Underwriters named in Schedule I hereof.
By: CRUTTENDEN XXXX INCORPORATED
By:
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Title:
24
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares To Be
Underwriter Purchased
Cruttenden Xxxx Incorporated
Black & Company, Inc.
Total
