1,000,000 SHARES
ALPINE ENTERTAINMENT, INC.
MANAGING PLACEMENT AGENT AGREEMENT
September ____, 2000
RH Investment Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Gentlemen:
Alpine Entertainment, Inc., a Delaware corporation ("Company"), hereby confirms
its agreement with you, as Managing Placement Agent, as follows:
SECTION 1. DESCRIPTION OF THE OFFERING. The Company proposes to offer for sale
and sell to the public up to 1,250,000 shares of its common stock, par value
$.0001 per share ("Common Stock"), at the price of $6.00 per share
("Offering").
All funds received from subscribers will be held in City National Bank ("Escrow
Agent"), pursuant to an agreement among you, the Company and the Escrow Agent
("Escrow Agreement"). Although, the Escrow Agreement is not currently completed
or executed, the Company intends to utilize City National Bank for this purpose.
TheCompany will determine, in its sole discretion, to accept or reject
subscriptions for Common Stock within five days following receipt thereof. Funds
of an investor whose subscription is rejected will be promptly returned directly
to such person by the Escrow Agent, without interest thereon or deduction
therefrom, pursuant to the terms of the Escrow Agreement to be finalized.
In the event that at least 250,000 shares of Common Stock have not been sold
within 180 days from the initial effective date of the Registration Statement
(as hereinafter defined) under the Securities Act of 1933, as amended
("Securities Act"), which period may be extended for an additional 60 days by
you, the Offering will terminate and all funds received from subscribers will be
promptly returned in full by the Escrow Agent directly to subscribers, without
interest thereon or deduction therefrom, as provided in the will Agreement.
Provided that at least 250,000 shares of Common Stock are sold within the
foregoing period, the Company may continue to offer the Common Stock for sale
until (i) 1,250,000 shares are sold or (ii) the 180 day time period is exceeded,
whichever first occurs; the Offering may be terminated at any time prior thereto
at the discretion of the Company.
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The Company reserves the right to refuse to sell shares of Common Stock to any
person at any time.
The Company, the Common Stock and the Offering are more fully described in the
Registration Statement (as hereinafter defined) and the Prospectus (as
hereinafter defined). All terms used in this Agreement, unless specifically
defined herein, shall have the meanings set forth in such Registration Statement
and Prospectus.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with you, that:
(a) The Company is duly organized and validly existing as a corporation in
good standing under the laws of the State of California. The Company
has the full power and authority and all necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all
governmental and regulatory officials and bodies required to own its
properties and conduct its business as described in the Prospectus (as
herein defined); the Company is duly qualified to do business under the
laws of (and is in good standing as such in) each jurisdiction in which
it owns or leases property, has an office, or in which business is
conducted and such qualification is required, except where the failure
to so qualify would not have a material adverse effect on the business,
assets or financial condition of the Company, and no proceeding has
been instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
(b) The Company does not own or control, directly or indirectly, any
corporation, association, partnership or other entity other than as
identified in the Registration Statement (as herein defined).
(c) The execution, delivery and performance by the Company of this
Agreement has been duly authorized by all necessary action and will not
(i) violate any provision of the Articles of Incorporation or Bylaws of
the Company (in each case as amended at the time of this Agreement),
(ii) result in the breach, or be in contravention, of any provision of
any agreement, franchise, license, indenture, mortgage, deed of trust
or other instrument to which the Company is a party or by which the
Company or its property may be bound or affected, or any order, law,
statute, rule or regulation applicable to the Company of any court or
regulatory body, administrative agency or other governmental body
having jurisdiction over the Company or any of its property, or any
order of any court or governmental agency or authority entered in any
proceeding to which the Company was or is now a party or by which it is
bound or (iii) result in the creation of any lien, charge or
encumbrance upon any property of the Company. No consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement by the Company, or the
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consummation by the Company of the transactions contemplated hereby,
other than under the Securities Act, the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated by the
Securities and Exchange Commission ("Commission") thereunder
(collectively, the "Exchange Act"), state securities laws and
regulations (collectively, the "Blue Sky Laws") applicable to the
public offering of the Common Stock as described in the Registration
Statement and the Prospectus (as hereinafter defined), and/or the rules
of the National Association of Securities Dealers, Inc. ("NASD"). This
Agreement has been duly executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance
with its terms, except insofar as rights to indemnity or contribution
may be limited by applicable law and subject to bankruptcy, insolvency
or similar laws generally affecting the rights of creditors and
equitable principles affecting the right to obtain specific enforcement
or similar equitable relief.
(d) A registration statement on Form SB-2 (Registration File No.
333-92299) and an Amendment No. 1 with respect to the Common Stock has
been carefully prepared by the Company in conformity with the
requirements of the Securities Act and the rules and regulations
("Rules and Regulations") of the Commission thereunder, and has been
filed with the Commission; the Company has so prepared and has filed or
proposes to file prior to the effective date of such registration
statement or subsequent to such effective date pursuant to Rule 430A
under the Rules and Regulations, an additional amendment or amendments
to such registration statement. There have been delivered to you and
your counsel two signed copies of such registration statement, as
initially filed with the Commission and each amendment thereto,
together with copies of each exhibit filed therewith, and two conformed
copies of such registration statement, as initially filed with the
Commission and each amendment thereto (but without exhibits) and of
each related preliminary prospectus ("Preliminary Prospectus") and of
the proposed final form of prospectus. As used in this Agreement, the
term "Registration Statement" means such registration statement,
including exhibits, financial statements and schedules and documents
incorporated therein by reference, as finally amended and revised at
the time such registration statement becomes effective, including the
information, if any, deemed to be a part thereof pursuant to Rule 430A
of the Rules and Regulations, and the term "Prospectus" means the
related prospectus in the form first filed on behalf of the Company
with the Commission pursuant to Rule 424(b) under the Securities Act.
Any reference herein to any Registration Statement, Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents and information, if any, incorporated by reference
therein. Any reference to any amendment or supplement to any
Registration Statement, Preliminary Prospectus or Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Exchange Act and incorporated therein by reference.
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(e) Neither the Commission nor any state securities or "blue sky"
authorities has issued any order preventing or suspending the use of
any Preliminary Prospectus, and each Preliminary Prospectus has
conformed fully in all material respects with the requirements of the
Securities Act, the Rules and Regulations and the Blue Sky Laws and, as
of its date, has not included any untrue statement of a material fact
or omitted to state a fact required to be stated therein or necessary
to make the statements therein not misleading; when the Registration
Statement becomes effective, and at all times subsequent thereto up to
each Closing Date (as defined herein), the Registration Statement and
the Prospectus, and any amendments or supplements thereto, will contain
all statements that are required to be stated therein in accordance
with the Securities Act, the Rules and Regulations and the Blue Sky
Laws and will in all material respects conform to the requirements of
the Securities Act, the Rules and Regulations and the Blue Sky Laws,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will include any untrue statement of a
material fact or omit to state a fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from any Preliminary Prospectus,
the Registration Statement, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by you specifically for inclusion therein.
(f) There are no contracts or other documents, transactions or
relationships of or by and between the Company or any of the respective
officers or directors of the Company required to be described in the
Registration Statement or filed as exhibits to the Registration
Statement by the Securities Act or the Rules and Regulations which have
not been described or filed as required or incorporated by reference as
permitted by the Securities Act and the Rules and Regulations.
(g) The Company has authorized capital stock as set forth in the
Prospectus. All outstanding shares of capital stock of the Company have
been duly authorized, validly and legally issued and are fully paid and
nonassessable; such shares have not been issued in violation of or
subject to any preemptive rights provided for by law or by the
Company's Articles of Incorporation or Bylaws. The Common Stock
conforms in all material respects to all statements with respect
thereto contained in the Prospectus, and such statements conform to the
provisions set forth in the Articles of Incorporation and Bylaws of the
Company.
(h) The shares of Common Stock sold in the Offering, upon receipt of full
payment therefor and delivery by the Company, will be duly authorized,
validly and legally issued, fully paid and nonassessable, and will not
have been issued in violation of or subject to any preemptive rights
provided for by law or by the Company's Articles of Incorporation or
Bylaws or be subject to any lien, claim, encumbrance, security
interest, preemptive rights or any other claim of any third party.
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(i) Except as described in the Prospectus, there is not pending, or, to the
knowledge of the Company, threatened, any action, suit, proceeding,
inquiry or investigation to which the Company is a party, or to which
the property of the Company is subject, before or brought by any court,
governmental agency or body or arbitration tribunal, which, if
determined adversely to the Company, would result in any material
adverse change in the business, financial position, net worth, results
of operations or prospects of the Company, or materially and adversely
affect its property or assets.
(j) The financial statements and the related notes included in the
Registration Statement, in any Preliminary Prospectus or in the
Prospectus present fairly the financial position, results of operations
and cash flows of the Company at the dates and for the periods
indicated and have been prepared in accordance with generally accepted
accounting principles, except as otherwise stated therein. Xxxxxxxx &
Company, P.A., who have audited certain financial statements as set
forth in their report included in the Registration Statement and
Prospectus and each Preliminary Prospectus, are independent accountants
as required by the Securities Act and the Rules and Regulations.
(k) The Company is not in violation of its Articles of Incorporation and
Bylaws, or in default or breach under any court or administrative order
or decree, or in default with respect to any provision of any lease,
loan agreement, franchise, license, permit, agreement or other
contractual obligation to which the Company is a party or by which the
Company or any of its property is bound, and there does not exist any
state of facts which constitutes an event of default or breach under
such documents or which, upon notice or lapse of time or both, would
constitute such an event of default or breach except those, if any,
described in the Prospectus or such defaults or breaches which,
individually or in the aggregate, are not, and with notice or lapse of
time, or both, would not become, material to the Company. The Company
is not in violation or breach of any law, order, rule, regulation,
writ, injunction or decree of any governmental authority or
instrumentality or any court, domestic or foreign, which violation
would have a materially-adverse effect on its business as described in
the Prospectus.
(1) Neither the Company nor any of its affiliates, nor any director or
officer of the foregoing, have taken and will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in (i) a violation of Rule 1Ob-6 under the Exchange Act
or (ii) the manipulation of the price of the Common Stock facilitate
the sale or resale of such securities.
(m) The Company has good and marketable title to all the property and
assets reflected as owned by it in the Prospectus, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind or nature
whatsoever, except those, if any, reflected in the Prospectus, or which
are not material to the Company and do not materially affect the value
of such property and do not materially interfere with the use made or
proposed to be made of such property; all properties held or used by
the Company under leases, licenses, franchises or other agreements are
held by it under valid, subsisting and enforceable leases, licenses,
franchises or other agreements (subject to bankruptcy, reorganization,
moratorium or similar laws affecting creditors' rights generally).
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(n) Since its inception, the Company has not sustained any material loss or
interference with its business or property from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or
decree; and subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, the Company has
not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the
ordinary course of business, and there has not been any material change
in the capital stock or long-term debt of the Company, or any material
adverse change, or any development involving a prospective material
adverse change, in the business, financial position, net worth, results
of operations or prospects of the Company, except in each case as
described in or contemplated by the Prospectus.
(o) The Company has filed all necessary federal, state and foreign income
and franchise tax returns and has paid all taxes shown as due thereon,
and has no knowledge of any tax deficiency which has been asserted or
threatened against the Company which would materially adversely affect
its business, operations or property.
(p) The Company keeps accurate books and records and maintains internal
accounting controls which provide reasonable assurance that (i)
transactions are executed in accordance with management's
authorization, (ii) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (iii) access to its assets is permitted only in
accordance with management's authorization and (iv) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(q) There are no holders of securities of the Company having rights to
registration thereof under the Securities Act or preferential rights to
purchase Common Stock or any other securities of the Company, except as
disclosed in the Registration Statement and the Prospectus.
(r) All documents delivered or to be delivered by the Company or its
representatives in connection with the issuance and sale of the Common
Stock were on the dates on which they were delivered or will be on the
dates on which they are to be delivered, in all material respects,
true, complete and correct.
(s) The Company owns, or possesses the requisite licenses or other rights
to use, all trademarks, service marks, service names and trade names
necessary to conduct its business as described in or contemplated by
the Prospectus; there is no claim or action by any person pertaining to
(or proceeding pending or threatened which challenges) the rights of
the Company with respect to any trademarks, service marks, service
RH Investment Corporation
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names or trade names used in the conduct of its business as described
in or contemplated by the Prospectus; the products, services and
processes of the Company have not infringed and do not infringe upon
proprietary rights held or asserted by third parties which
infringement, if resolved adversely to the Company, could materially
affect its earnings, assets, affairs, business prospects or condition
(financial and other).
(t) The Company has not distributed and will not distribute prior to the
final Closing Date (as hereinafter defined), any offering material in
connection with the offer and sale of the Common Stock other than as
permitted by the Securities Act.
(u) The Company has not (i) had any material dealings within the twelve
months prior to the date of this Agreement with any member of the NASD,
or any person related to or associated with such member, other than
discussions and meetings relating to the Offering, except as disclosed
in writing to you prior to the date hereof; (ii) entered into a
financial or management consulting agreement except as contemplated
hereunder; or (iii) engaged any intermediary between you and the
Company, and/or any of the affiliates of the Company, in connection
with the Offering, and no person has been or will be compensated in any
manner for such service.
(v) Each of the Company's directors, executive officers and 10%
shareholders shall have agreed in writing that, from the date hereof
through the final Closing Date (as hereinafter defined), and for a
period of 90 days thereafter, they will not, without your prior written
consent, sell, offer or contract to sell, or grant any option to
purchase, or otherwise dispose of, directly or indirectly, any shares
of Common Stock owned by them (or any securities convertible into or
exchangeable for any shares of Common Stock) except pursuant to this
Agreement.
Any certificate signed by any officer of the Company and delivered to you or to
your counsel shall be deemed a representation and warranty of the Company to you
as to the matters covered thereby and any certificate delivered by the Company
to its counsel for purposes of enabling such counsel to render any opinion
referred to in this Agreement will also be furnished to you and to your counsel
and shall be deemed to be additional representations and warranties to you by
the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE MANAGING PLACEMENT AGENT. You
hereby represent and warrant to, and agree with, the Company as follows:
(a) You are a corporation duly organized, validly existing under the laws
of the State of California, with all requisite power and authority to
enter into this Agreement and to carry out your obligations hereunder.
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(b) This Agreement (i) has been duly authorized, executed and delivered by
you, (ii) constitutes your legal, valid and binding obligation, and
(iii) subject to applicable bankruptcy, insolvency and other laws
affecting the enforceability of creditors' rights generally, is
enforceable as to you in accordance with its terms, specific
performance hereof being limited by general principles of equity and
the enforceability of the indemnification provisions hereof.
(c) The execution, delivery and performance of this Agreement by you and
the consummation by you of the transactions contemplated hereby and by
the Prospectus will not conflict with or result in a breach or
violation by you of any of the terms or provisions of, or constitute a
default in any material respect under, (i) any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which you are a party or to which you or your property are subject,
(ii) your Articles of incorporation or Bylaws or (iii) any statute,
judgment, decree, order, rule or regulation applicable to you of any
court or governmental agency or body having jurisdiction over you, your
affiliates or your property.
(d) You are, and at all times through the final Closing Date (as herein
defined) shall remain, duly registered pursuant to the provisions of
the Exchange Act as a broker-dealer; you are, and at all times through
the final Closing Date shall remain, a member in good standing of the
NASD; you will not reallow discounts or pay commissions or other
compensation for participation in the distribution of the Offering to
any broker-dealer which is not a member of the NASD, including foreign
broker-dealers registered under the Exchange Act; you shall act as an
independent contractor, and nothing herein shall constitute you an
employee of the Company; you shall not make sales of Common Stock
discretionary accounts.
(e) In connection with the offer, offer for sale and sale of Common Stock,
you (and your representatives and agents) shall conform to and comply
with (i) the provisions of the Conduct Rules of the NASD, (ii)
applicable provisions of federal law, including without limitation the
Securities Act, the Rules and Regulations and the Exchange Act, and
(iii) the Blue Sky Laws applicable to the Offering, relating to, among
other things, the period during which and conditions under which the
Common Stock may be offered, offered for sale and sold; you shall not
distribute the Prospectus or otherwise commence the Offering without
prior written confirmation from the Company or its counsel that the
Offering may be commenced under applicable securities laws, rules and
regulations.
(f) Pursuant to your appointment made in Section 4 hereof, you will use
your best efforts to procure subscribers for Common Stock will conduct
the Offering in compliance with the provisions of the Securities Act,
the Rules and Regulations, the Exchange Act, applicable Blue Sky Laws
and the rules and regulations of the NASD; accordingly, as of each
Closing Date (as herein defined), you will have:
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(1) not made any untrue statement of a material fact and not
omitted to state a material fact required to be stated or
necessary to make any statement made not misleading, to the
extent, if any, that representations are made by you
concerning the Offering or matters set forth in the Prospectus
other than those set forth in the Prospectus;
(2) prior to any sale of any Common Stock, reasonably believed
that an investment in the Common Stock was suitable for each
subscriber;
(3) promptly distributed any amendment or supplement to the
Prospectus provided to you pursuant to Section 5(b) of this
Agreement to persons who had previously received a Prospectus
from you and who you believed continued to be interested in
Common Stock and have included such amendment or supplement in
all deliveries of the Prospectus made after receipt of any
such amendment or supplement;
(4) only used sales materials other than the Prospectus which have
been approved for use in the Offering by the Company, and
refrained from providing any such materials to any offeree
unless accompanied or preceded by the Prospectus;
(5) prior to the sale of any Common Stock, reasonably believed
that each subscriber met the investor standards and other
requirements set forth in the Prospectus and the Blue Sky
Letters (as hereinafter defined) and that an investment in the
Common Stock was suitable for such subscriber; you will have
prepared and maintained, for your benefit and the benefit of
the Company, file memoranda and other appropriate records
substantiating the foregoing and shall retain such records for
the period required under Exchange Act Rule 17a-4 or the laws
of any state in which you offer the Common Stock for sale,
whichever is longer; and
(6) not made any representations on behalf of the Company other
than those contained in the Prospectus, nor shall you have
acted as an agent of the Company, or for the Company in any
other capacity, except as expressly set forth herein.
SECTION 4. PURCHASE SALE AND DELIVERY OF COMMON STOCK. On the basis of the
covenants, representations, and warranties herein contained and subject to the
terms and conditions herein set forth:
(a) The Company hereby engages you as its exclusive agent to solicit
subscriptions for the Common Stock in accordance with the terms of the
Registration Statement, the Prospectus and this Agreement, and you
agree to use your best efforts to procure such subscriptions. You may,
however, discharge your responsibilities under this Agreement by acting
as a Managing Placement Agent and forming a group of securities dealers
("Selected Placement Agents" ), including you, to procure subscribers
for the Common Stock. Any agreement between you and a securities dealer
pursuant to which such securities dealer becomes a Selected Placement
Agent shall require such dealer to represent and warrant that it will
conduct the Offering in the manner set forth herein. The allocation of
Common Stock among you and the Selected Placement Agents shall be made
by you.
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(b) Subject to the terms and conditions set forth herein, in consideration
of your execution of this Agreement and performance of your obligations
hereunder, the Company agrees that, at each Closing (as defined
herein), you shall receive (i) selling commissions in an amount equal
to 10% of the aggregate purchase price of the Common Stock sold by you
(or any Selected Placement Agent) and (ii) a nonaccountable expense
allowance equal to 3% of the aggregate purchase price of the Common
Stock sold by you (or any Selected Placement Agent). The aggregate
commissions and expense allowance payable in connection with the sale
of Common Stock will be disbursed to you, as provided herein and as
will be provided in Escrow Agreement; thereupon, you shall pay to each
of the other Selected Placement Agents, if any, in such amount (which
shall not exceed commissions and expense allowance in the amounts of
10% and 3%, respectively, of the aggregate purchase price of the Common
Stock sold by such Agent), at such times and upon such terms and
conditions as shall have been agreed upon between you and such Selected
Placement Agent, that portion of the aggregate commissions to which
such Selected Placement Agent is entitled.
(c) As additional consideration for your services rendered pursuant to this
Agreement, on the final Closing Date (as hereinafter defined), the
Company will sell to you or your designees, at a price of $0.01 per
warrant ("Warrant Price"), warrants ("Underwriter's Warrants") to
purchase shares of Common Stock, under the following terms and
conditions:
(1) The aggregate number of shares of Common Stock subject to
Underwriter's Warrants will be equal to 10% of the shares of
Common Stock sold by you (or any Selected Placement Agent)
pursuant to this Agreement.
(2) The Underwriter's Warrants may not be sold, hypothecated,
exercised, assigned or transferred for a period of one year
after the initial effective date of the Registration
Statement, except to partners or officers of the Selected
Placement Agents (including the Managing Placement Agent).
(3) Underwriter's Warrants shall be exercisable during the 4-year
period commencing on the first anniversary of the final
Closing Date ("Warrant Exercise Term"), at any time and from
time to time, in whole or in part, during the said Warrant
Exercise Term, and shall grant to the holder the right to
purchase one share of Common Stock for each Underwriter's
Warrant at a price per share equal to 135% of the initial
public offering price of the Common Stock.
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(4) The Underwriter's Warrants shall contain such other terms and
conditions as are satisfactory, in form and substance to you
and your counsel, including without limitation, adjustment and
exercise provisions.
(5) The Company agrees and undertakes, upon the expiration of a
12-month period after the final Closing Date, and at any time
during the 4-year period thereafter, one time only, to
register under the Securities Act all or any part of the
Underwriter's Warrants and/or the shares issuable upon the
exercise thereof ("Underlying Shares"), upon the written
request of holders of a majority of such Warrants and
Underlying Shares, at the Company's sole cost and expense,
including "blue sky" fees for counsel and "blue sky" filing
fees to qualify the Underwriter's Warrants and Underlying
Shares for sale in those jurisdictions requested by you, at
the time determined by you.
(6) The Company agrees and undertakes, during the four-year period
described in subsection 4(c)(3), above, that if the Company
shall seek to register any of its securities under the
Securities Act, each holder of the Underwriter's Warrants
shall be notified and shall be entitled to elect to have
included in such proposed registration, without cost or
expense, any or all of his Underwriter's Warrants or
Underlying Shares ("Piggy-Back Rights"). In the event of such
a proposed registration, the Company shall furnish the holders
of Underwriter's Warrants with no less than 30 days written
notice prior to the proposed filing of a registration
statement. Such notice shall continue to be given by the
Company to such Warrantholders for each proposed registration
by the Company until such time as all Underwriter's Warrants
or Underlying Shares have been registered. Warrantholders
shall exercise Piggy-Back Rights by giving written notice
within 20 days of the receipt of the Company's notice of
intention to file a registration statement.
(d) Each subscriber for Common Stock must (i) complete and execute a
Subscription Agreement (in the form included as Exhibit A to the
Prospectus) and any other documents which may be required by you or the
Company in connection with such subscription (collectively,
"Subscription Documents") and (ii) tender payment in full for the
Common Stock subscribed for ("Subscription Payment"); checks
representing Subscription Payments should be made payable to "Business
& Trust & Investment, Escrow Agent"; you shall deliver Subscription
Payments received by you to the Escrow Agent, City National Bank, by
12:00, noon, on the business day following such receipt by you,
together with a schedule setting forth the amount of each such
Subscription Payment and the name, mailing address and state of
residence of the subscriber. Concurrently with your delivery of each
Subscription Payment to the Escrow Agent, you shall forward to the
Company executed originals of all related Subscription Documents,
retaining copies of all such Subscription Documents for your records.
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(e) Within five days following receipt by it of executed Subscription
Documents, the Company shall determine to accept or reject each
subscription and shall notify you and the Escrow Agent orally (to be
confirmed in writing). If the Company elects to reject a subscription,
the related Subscription Payment shall, upon receipt by the Escrow
Agent of oral notice (to be confirmed in writing) from the Company of
such rejection, promptly be returned directly to the rejected
subscriber by the Escrow Agent, without interest thereon or deduction
therefrom.
(f) Subject to the terms hereof and of the Escrow Agreement, the first
disbursement of subscription proceeds (including disbursement of
amounts due to you hereunder) shall take place not less than 5 days nor
more than 15 days following the date upon which cleared funds
representing payment in full for at least 1,000 shares of Common Stock
(or such lesser amount as may be agreed to in writing by the parties
hereto, in their discretion) have been received by the Escrow Agent
under the terms of the Escrow Agreement; such initial disbursement is
referred to herein as the "Initial Closing," and the date thereof is
referred to as the "Initial Closing Date." Following the Initial
Closing, subscription proceeds shall be disbursed from time to time as
agreed among you, the Company and the Escrow Agent; each such further
disbursement of subscription proceeds is referred to herein as an
"Additional Closing," and the date thereof as an "Additional Closing
Date." The Initial Closing and Additional Closings are sometimes
referred to herein as a "Closing" or "Closings"; and the Initial
Closing Date and Additional Closing Dates are sometimes referred to
herein as a "Closing Date" or "Closing Dates."
(g) Each Closing shall take place at the offices of the Escrow Agent, in
Beverly Hills, California, or, at your option, at such other place as
you may agree upon in writing with the Company.
(h) After the final Closing Date, you will not be considered to have any
continuing or future duty or obligation of any kind to the Company.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and will
advise you promptly upon notification from the Commission of
effectiveness. The Company will advise you promptly of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for
that purpose, or of any notification of the suspension of qualification
of the Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceedings for that purpose, and will also advise
you promptly of any request of the Commission for amendment or
supplement to the Registration Statement (either before or after it
becomes effective), to any Preliminary Prospectus or to the Prospectus,
or for additional information, and will not file or make
RH Investment Corporation
June ___, 2000
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any amendment or supplement to the Registration Statement (either
before or after it becomes effective), to any Preliminary Prospectus or
the Prospectus of which you have not been furnished with a copy prior
to such filing or to which you reasonably object; and the Company will
file promptly and will furnish to you at or prior to the filing thereof
copies of all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to the Exchange Act subsequent to the date of the Prospectus,
and for so long as the delivery of a prospectus is required in
connection with the offer or sale of the Common Stock. 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. The Company will file the Prospectus pursuant to Rule 424(b)
under the Securities Act, if required, not later than the Commission's
close of business on the second business day following the execution
and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A of the Commission.
(b) If at any time when a prospectus relating to the Common Stock is
required to be delivered under the Securities Act, any event occurs as
a result of which the Prospectus, including any amendments or
supplements, would include an untrue statement of a material fact, or
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, or if it is
necessary at any time to amend the Prospectus, including any amendments
or supplements, to comply with the Securities Act or the Rules and
Regulations, the Company will notify you and request you to suspend
(and to advise the other Selected Placement Agents, if any, to suspend)
solicitation of offers to purchase Common Stock; and the Company will
promptly prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance; and, in case any Selected
Placement Agent (including you) is required to deliver a Prospectus
nine months or more after the effective date of the Registration
Statement, the Company upon request will prepare promptly and deliver
to you such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities
Act and applicable provisions of the Blue Sky Laws.
(c) The Company will not, prior to the final Closing Date, incur any
material liability or obligation, direct or contingent, or enter into
any material transaction other than in the ordinary course of business,
except as disclosed prior thereto in the Prospectus.
(d) The Company shall promptly prepare and file with the Commission such
reports as may be required to be filed under the Securities Act, the
Rules and Regulations, the Exchange Act or the Blue Sky Laws.
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(e) Not later than 3 months after the end of the period referred to below,
the Company will make generally available to you and to the Company's
security holders an earnings statement (which need not be audited)
covering a period of at least 12 months beginning with its first fiscal
quarter occurring after the effective date of the Registration
Statement, which will satisfy the provisions of the last paragraph of
Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder.
(f) The Company shall comply in all respects with the undertakings given by
it in connection with the qualification or registration of the Common
Stock under the Securities Act or the Blue Sky Laws.
(g) During such period as a prospectus is required by law to be delivered
in connection with sales by any Selected Placement Agent, the Company
will furnish to you at its expense, copies of the Registration
Statement, the Prospectus, any Preliminary Prospectus and all
amendments and supplements to any such documents in such quantities as
you may reasonably request, for the purposes contemplated by the
Securities Act and the Rules and Regulations.
(h) The Company shall promptly apply for and take such steps as may
reasonably be necessary, to obtain and maintain the quotation of a
Common Stock by the NASDAQ Small Cap Market and on the NASD OTC
Bulletin Board.
(i) During the period of 3 years following the date of this Agreement, as
soon as practicable after the end of each fiscal year, the Company will
furnish to you two copies, and to each of the other Selected Placement
Agents one copy, of the Annual Report of the Company containing a
balance sheet as of the close of such fiscal year and corresponding
statements of income, members' equity and cash flows for the fiscal
year then ended, such financial statements to be under the report of
independent public accountants. During such period, the Company will
also furnish to you, if applicable, one copy of (i) each report filed
by the Company with the Commission, or with any exchange or quotation
source pursuant to the requirements of, or any agreement with, such
exchange or quotation source, as soon as practicable after the filing
thereof and (ii) each report of the Company mailed to its shareholders,
as soon as available.
(j) The Company will apply the net proceeds from the sale of the Common
Stock to be sold by it hereunder for the purposes set forth in the
Prospectus.
(k) The Company will not make any offer, sale, transfer, issuance or other
disposition of any of its securities, other than grants of options,
within 120 days following the final Closing Date, and will obtain the
undertaking of each executive officer (as defined under the Securities
Act), director and holder of 10% or more of the aggregate equity
ownership of the Company immediately prior to such date not to make any
such offer, sale or other disposition within such period, otherwise
than hereunder or with your written consent or pursuant to bona fide
gifts, provided, in the last case, that each donee agrees in writing
with you to be bound by the same restrictions on the offer, sale and
disposition of securities as are expressed in this Section 5(k).
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(1) The Company shall at all times reserve and keep available such number
of authorized shares of Common Stock as are sufficient to permit the
exercise of all Underwriter's Warrants; all shares of Common Stock
issued upon the exercise of Underwriter's Warrants, upon receipt of
full payment therefor and delivery to the purchaser, will be duly
authorized, validly and legally issued, fully paid and nonassessable,
and such Common Stock will not have been issued in violation of or
subject to any preemptive rights provided for by law or by the
Company's corporate charter or Bylaws or be subject to any lien, claim,
encumbrance, security interest, preemptive rights or any other claim of
any third party.
(m) Prior to the final Closing Date, the Company will not issue, directly
or indirectly, without your prior written consent, a press release or
other communication or hold any press conference with respect to the
Company, its activities or the Offering.
(n) The Company will, promptly upon your request, prepare and file with the
Commission any amendments or supplements to the Registration Statement
or Prospectus, and take any other action, which, in your opinion or the
opinion of your counsel, may be reasonably necessary or advisable in
connection with the distribution of the Common Stock, and will use its
best efforts to cause the same to become effective as promptly as
practicable.
SECTION 6. COVENANTS OF THE MANAGING PLACEMENT AGENT. You will use your best
efforts to procure subscribers for Common Stock and will conduct the Offering in
compliance with the provisions of the Securities Act, the Rules and Regulations,
the Exchange Act, applicable Blue Sky Laws and the rules and regulations of the
NASD; accordingly, as of each Closing Date (as herein defined), you will have
(i) not made any untrue statement of a material fact and not omitted to state a
material fact required to be stated or necessary to make any statement made not
misleading, to the extent any representations are made by you concerning the
Offering or matters set forth in the Prospectus other than those which are set
forth in the Prospectus, and (ii) prior to any sale of Common Stock, reasonably
believed that an investment in the Common Stock was suitable for the subscriber.
SECTION 7. STATE QUALIFICATIONS. The Company further represents and warrants to,
and agrees with, you as follows:
(a) The Company will take all necessary action to either qualify or
register the Common Stock for sale or exempt such securities from such
qualification or registration in such states as you and the Company
shall agree upon in writing.
RH Investment Corporation
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(b) The Company or its counsel will provide you or your counsel with
copies, at the time they are filed, of all correspondence,
applications, forms, and other documents filed with each jurisdiction
where the Common Stock is to be registered or qualified or offered in
an exempt transaction.
(c) Upon receipt of notification by the Company of the qualification,
registration, or exemption of the Common Stock by an applicable
jurisdiction, the Company or its counsel will promptly notify you or
your counsel in writing of such action, which writing shall summarize
the conditions and other requirements imposed by such jurisdiction in
granting such qualification, registration or exemption, including
offeree qualification or suitability and broker-dealer and agent
registration requirements applicable to the conduct of the Offering
(collectively, the "Blue Sky Letters"); you shall not offer or sell the
Common Stock in any jurisdiction until receipt of such Blue Sky Letters
from the Company or its counsel.
(d) In each jurisdiction where the Common Stock has been registered or
qualified or is offered or sold in an exempt transaction as provided
above, the Company will make and file such statements, documents,
materials, and reports as are or may be required to be made or filed.
(e) The Company will promptly provide to you for delivery to all offerees
and purchasers of Common Stock any additional information, documents or
instruments which you, the Company and/or your respective counsel deem
necessary to comply with the rules, regulations, and judicial and
administrative interpretations respecting compliance with such
exemptions or qualifications and registrations in those jurisdictions
where the Common Stock is to be offered or sold.
SECTION 8. PAYMENT OF EXPENSES.
(a) Whether or not the transactions contemplated hereunder are consummated
or this Agreement becomes effective or is terminated for any reason,
except as set forth below (and in addition to the nonaccountable
expense allowance provided for in Section 4(b) of this Agreement), the
Company will pay or cause to be paid all costs and expenses incurred in
connection with the Offering, including without limitation (i) the
Commission's registration fee, (ii) the expenses of printing and
distributing this Agreement, the Selected Dealer Agreements, the
Registration Statement, each Preliminary Prospectus, the Prospectus
(and any amendments or supplements thereto) and the Blue Sky Memorandum
(and any supplements thereto), (iii) fees and expenses of accountants
and counsel for the Company. (iv) expenses of qualification of the
Common Stock under state "blue sky" and securities laws, including the
fees and disbursements of counsel to the Managing Placement Agent in
connection therewith, (v) filing fees paid or incurred by the Managing
Placement Agent in connection with filings with the NASD and (vi) the
costs and charges of its transfer agent and registrar.
RH Investment Corporation
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(b) The Company and each Selected Placement Agent (including the Managing
Placement Agent) will bear its own travel, lodging and living expenses
incurred in connection with marketing, dealer and other meetings and
the cost of all advertising, publicity and selling or promotional
materials used in connection therewith.
(c) Notwithstanding any other provision hereof to the contrary, whether or
not this Agreement is terminated pursuant to Section 12 hereof or
otherwise, the Company will pay or reimburse the Managing Placement
Agent for the actual itemized out-of-pocket expenses incurred by it in
connection with investigating, preparing to market and marketing of the
Common Stock, including fees and expenses of its counsel (in accordance
with the provisions of NASD Conduct Rule 2710); provided, however,
that, without the consent of the Company, such reimbursement for legal
fees shall not exceed in the aggregate $12,500, and reimbursement for
other out-of-pocket expenses shall not exceed in the aggregate $5,000.
SECTION 9. CONDITIONS OF THE OBLIGATIONS OF THE MANAGING PLACEMENT AGENT. Your
obligations hereunder shall be subject to the condition that all of the
representations and warranties of the Company herein as of the date hereof and
as of each Closing Date are true and correct in all material respects and to the
accuracy of the statements of the officers of the Company made pursuant hereto,
to the performance by the Company of its obligations hereunder, and to the
following conditions:
(a) The Registration Statement shall have become effective not later than
1:00 P.M., Los Angeles, California, time, on the business day following
the date hereof, unless otherwise effective prior hereto pursuant to
Rule 430A of the Rules and Regulations or otherwise. The Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations, if required, within the applicable time
period prescribed for such filing by the Rules and Regulations and in
accordance with Section 5(a) of this Agreement. Prior to each Closing
Date, no stop order suspending the effectiveness of the Registration
Statement shall have been instituted or shall be pending or, to the
knowledge of the Company or you, shall be contemplated by the
Commission or any "blue sky" authority, and any request of the
Commission or any Blue Sky authority of any jurisdiction for additional
information (to be included in the Registration Statement or Prospectus
or otherwise) shall have been complied with to your reasonable
satisfaction.
(b) The Common Stock shall have been qualified or registered for sale under
the Blue Sky Laws of such states as shall have been agreed upon between
you and the Company, pursuant to and as provided in Section 7 of this
Agreement.
(c) The legality and sufficiency of the authorization, issuance and sale of
the Common Stock pursuant to the Registration Statement, the validity
and form of the certificates representing the Common Stock, the
execution and delivery of this Agreement, and all proceedings and other
legal matters incident thereto, and the form of the Registration
Statement (except financial statements, if any, and other financial
data included in such Registration Statement) shall have been approved
by your counsel.
RH Investment Corporation
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(d) You shall not have advised the Company that the Registration Statement
or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact, or omits to state a fact which is material
and is required to be stated therein or necessary to make the
statements therein not misleading, unless, in the opinion of your
counsel, any such untrue statement or omission is not material.
(e) Since the dates as of which information is given in the Registration
Statement:
(1) the Company shall not have sustained any material loss or
interference with its business from any labor dispute, fire,
explosion, flood or other calamity (whether or not insured),
or from any court or governmental action, order or decree; and
(2) there shall not have been any change in the equity ownership,
short-term debt or long-term debt of the Company or a change,
or a development involving a prospective change, in or
affecting the ability of the Company to conduct its business
(whether by reason of any court, legislative, other
governmental action, order, decree, or otherwise), or in the
general affairs, management, financial position, members'
equity 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 Prospectus, the effect of which on
the Company, in any such case described in clause (1) or (2)
of this Section 9(e), is, in your judgment (exercising your
sole discretion), so material and adverse as to make it
impracticable or inadvisable to proceed with the distribution
of the Offering or the delivery of the Common Stock as
contemplated by the Registration Statement and the Prospectus.
(f) There shall have been furnished to you on the Initial Closing Date and
the final Closing Date the written opinion of counsel to the Company,
addressed to you and dated as of such Closing Date, to the effect that,
as of each Closing which has then occurred:
(1) the Company is duly organized and validly existing as a
corporation in good standing under the laws of the State of
California and possesses full power and authority to own its
property and conduct its business as described in the
Prospectus;
(2) the Company is duly qualified to do business under the laws of
(and is in good standing as such in) each jurisdiction in
which it owns or leases property, has an office, or in which
business is conducted and such qualification is required,
except where the failure to so qualify would not have a
material adverse effect on the conduct of its business, its
assets or its financial condition;
RH Investment Corporation
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(3) the Registration Statement has become effective under the
Securities Act and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for
that purpose has been instituted or is pending before, or
threatened by, the Commission or any "blue sky" or securities
authority; such counsel has no reason to believe that either
the Registration Statement or the Prospectus, or any document
incorporated by reference therein, contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading (except for the financial
statements and other financial data included therein, as to
which such counsel need express no opinion); to the best
knowledge of such counsel, all descriptions in the
Registration Statement and the Prospectus of statutes,
regulations and governmental proceedings are accurate and
fairly present the information disclosed in all material
respects, and such counsel does not know of any legal,
governmental or regulatory proceedings, pending or threatened,
required to be described in the Prospectus, nor of any
contracts or documents of a character required to be described
in or filed as exhibits to the Registration Statement, which
are not so described or filed;
(4) the Company has full power and authority to enter into and
perform this Agreement; this Agreement, and the performance of
the obligations of the Company hereunder, have been duly
authorized by all necessary action and this Agreement has been
duly executed and delivered by and on behalf of the Company,
and is a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, except that rights
to indemnity or contribution may be limited by applicable law
and enforceability of the agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally; and no approval,
authorization or consent of any court, board, agency or
instrumentality of the United States or of any state or other
jurisdiction is necessary in connection with the execution and
delivery of this Agreement, or in connection with the issue or
sale of the Common Stock by the Company pursuant to this
Agreement (other than under the Securities Act, applicable
Blue Sky Laws and the rules of the NASD) or the consummation
by the Company of any transaction contemplated by this
Agreement;
(5) the shares of Common Stock to be sold in the Offering have
been duly authorized and, when issued and delivered by the
Company, against full payment therefor, will be legally and
validly issued, fully paid and nonassessable, to the best
knowledge of such counsel, such securities will not have been
RH Investment Corporation
June ___, 2000
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issued subject to any lien, claim, encumbrance, security
interest or any other claim of any third party, except as
described in the Prospectus; and the Common Stock conforms as
to legal matters in all material respects to the description
thereof set forth contained in the Prospectus;
(6) to the best knowledge of such counsel, the execution and
performance of this Agreement will not contravene any of the
provisions of, or result in a default under, any agreement,
franchise, license, indenture, mortgage, deed of trust or
other instrument to which the Company is a party, or by which
the Company or its property is bound; or violate any of the
provisions of the Articles of incorporation or Bylaws of the
Company (in each case, as amended at the date of such
opinion), or to the best knowledge of such counsel, violate
any statute, order, rule or regulation of any regulatory or
governmental body having jurisdiction over the Company;
(7) to the best knowledge of such counsel, except as described in
the Prospectus, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation to which the
Company is a party, or to which the property of the Company is
subject, before or brought by any court, governmental agency
or body or arbitration tribunal, which, if determined
adversely to the Company, would result in any material adverse
change in the business, financial position, net worth, results
of operations or prospects of the Company, or materially and
adversely affect its properties or assets;
(8) to the best knowledge of such counsel, the Company owns or
possesses the requisite licenses or other rights to use, all
trademarks, service marks, service names and trade names
necessary to conduct its business as described in or
contemplated by the Prospectus; to the best knowledge of such
counsel, there is no claim or action by any person pertaining
to (or proceeding pending or threatened which challenges) the
rights of the Company with respect to any trademarks, service
marks, service names or trade names used in the conduct of its
business as described in or contemplated by the Prospectus; to
the best knowledge of such counsel, the products, services and
processes of the Company have not infringed and do not
infringe upon proprietary rights held or asserted by third
parties which infringement, if resolved adversely to the
Company, could materially affect its earnings, assets,
affairs, business prospects or condition (financial and
other);
(9) to the best knowledge of such counsel, the Company has good
and marketable title to all the property and assets reflected
as owned by it in the Prospectus, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind or nature
whatsoever except those, if any, reflected in the Prospectus
or which are not material to the Company and do not materially
RH Investment Corporation
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affect the value of such property and do not materially
interfere with the use made or proposed to be made of such
property; to the best knowledge of such counsel, all property
held or used by the Company under leases, licenses, franchises
or other agreements are held by it under valid, subsisting and
enforceable leases, licenses, franchises or other agreements,
subject to bankruptcy, insolvency or similar laws generally
affecting the rights of creditors and equitable principles
affecting the right to obtain specific enforcement or similar
equitable relief;
(10) to the best knowledge of such counsel, there are no holders of
securities of the Company having rights to the registration of
such securities, and there are no options, warrants or other
rights to acquire any equity interest in the Company, or any
security convertible into such equity interest, except as
disclosed in the Prospectus;
(11) the statements in the Registration Statement and Prospectus,
insofar as they are descriptions of specific contracts,
agreements or other documents, and the statements appearing in
the Prospectus under the caption "Description of Securities,"
insofar as they refer to statements of law or legal
conclusions, are accurate and present fairly the information
required to be shown;
(12) to the best knowledge of such counsel, the Company is not in
violation of its Articles of Incorporation or Bylaws, or other
organizational or charter documents or in default (nor has an
event occurred which, with notice, lapse of time or both,
would constitute such a default) in the performance of any
obligation, agreement or condition contained in any bond,
indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other agreement or instrument to which the
Company is a party or by which the Company or any of its
property may be bound or affected, and to the best knowledge
of such counsel, the Company is not in violation of any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where such violation or default could have
a material adverse effect on the respective business, property
or operations of the Company;
(13) to the best knowledge of such counsel, there are no legal,
governmental or regulatory proceedings, pending or threatened,
required to be described in the Prospectus, which are not so
described;
(g) There shall have been furnished to you on the Initial Closing Date and
the final Closing Date the written opinion of the law firm of Xxxxxx,
Coffee and Nojima, special securities counsel to the Company, addressed
to you and dated as of such Closing Date, to the effect that, as of
each Closing which has then occurred:
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(1) the Registration Statement and Prospectus, and each amendment
or supplement thereto (except for the financial statements and
other financial data therein, as to which such counsel need
express no opinion), as of their respective effective or issue
dates, comply as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations and any required filing of the Prospectus and any
supplements thereto pursuant to Rule 424(b) of the Rules and
Regulations have been made in the manner and within the time
period required by such Rules and Regulations; and
(2) to the best knowledge of such counsel, there are no contracts
or other documents required to be summarized or described in
the Registration Statement or to be filed as exhibits thereto
which are not so summarized, described or filed, nor does such
counsel know of any regulations required to be described or
referred to in the Registration Statement or Prospectus which
are not described or referred to in the Registration Statement
or Prospectus.
(h) If you shall so request in writing, you shall have received, on the
Initial Closing Date, a survey prepared by The Law Offices of Xxxxxx,
Coffee and Nojima, addressed to you and dated as of such Closing Date,
relating to "blue sky" laws of such jurisdictions upon which you and
the Company agree in writing ("B1ue Sky Survey"); the Blue Sky Survey
will advise that the appropriate "blue sky" action, if any, was taken
in each of such jurisdictions so as to permit such offers and sales as
indicated in such Survey; the Blue Sky Survey may be based upon an
examination of the statutes and regulations, if any, of such
jurisdictions as reported in standard compilations and upon
interpretive advice obtained from representatives of certain securities
commissions.
(i) If you so request in writing, there shall have been furnished to you,
on each Closing Date an opinion of The Law Offices of Xxxxxx, Coffee
and Nojima, addressed to you and dated as of each such Closing Date,
with respect to the Common Stock, the Registration Statement and the
Prospectus, and other related matters as you may reasonably require,
and the Company shall have furnished to such counsel such documents and
shall have exhibited to them such papers and records as they request
for the purpose of enabling them to pass upon such matters.
(j) There shall have been furnished to you, on the Initial Closing Date and
the final Closing Date, a certificate of the principal executive
officer and the principal financial officer of the Company, dated as of
such Closing Date, to the effect that:
(1) the representations and warranties of the Company which are
set forth in Section 2 hereof are true and correct as of the
date of this Agreement and as of each Closing Date, as if
again made on and as of such Closing Date, and the Company
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to such date;
RH Investment Corporation
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(2) to the best of their knowledge, the Commission has not issued
an order preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as part of the Registration
Statement or any amendment thereto, no stop order suspending
the effectiveness of the Registration Statement or enjoining
the use of the Prospectus has been issued, and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act;
(3) each of the respective signers of the certificate has
carefully examined the Registration Statement and the
Prospectus and, in his opinion and to the best of his
knowledge, information and belief, the Registration Statement
and the Prospectus and any amendments or supplements thereto
contain all statements required to be stated therein, and
neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto includes any untrue statement
of material fact or omits to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required
to be set forth in an amended or supplemented prospectus which
has not been so set forth; and
(4) since the effective date of the Registration Statement, there
has not been any material adverse change or, to their
knowledge, a development involving a prospective material
adverse change in the business, properties, financial
condition or earnings of the Company, whether or not arising
from transactions in the ordinary course of business, except
as disclosed in said Registration Statement theretofore
amended including the proposed amendment thereto delivered to
you prior to or contemporaneously with the execution of this
Agreement or (but only if you expressly consent thereto in
writing) delivered to you thereafter; since such date and
except as so disclosed, or in the ordinary course of business,
the Company has not incurred any liability or obligation,
direct or indirect, or entered into any material transaction;
since such date and except as so disclosed there has not been
any material change in the equity ownership of the Company or
its short-term debt or long-term debt; since such date and
except as so disclosed, the Company has not incurred any
material contingent obligations, and no material litigation is
pending or, to their knowledge, threatened against the
Company; and, since such date and except as so disclosed, the
Company has not sustained a material loss or interference with
its business from any labor dispute, fire, explosion, flood or
other calamity (whether or not insured) or from any court or
governmental action, order or decree.
The delivery of the certificate provided for in this Section 9(k) shall
be and constitute a representation and warranty of the Company as to
the facts required in the immediately foregoing clauses (1), (2), (3)
and (4) of this Section 9(j) to be set forth in said certificate.
RH Investment Corporation
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(k) There shall have been furnished to you, on or before the initial
Closing Date, written agreements signed by the Company's directors, its
executive officers and each holder of 10% or more of its equity
securities to the effect that such persons will not make any offer,
sale or other disposition of any equity interest in the Company for a
period of 180 days after the final Closing Date, except with the prior
written consent of the Managing Placement Agent or pursuant to bona
fide gifts, provided, in the last case, that each donee agrees in
writing with you to be bound by the same restrictions on the offer,
sale or disposition of equity interests in the Company as are set forth
in the agreements described in this Section 9(k).
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably
satisfactory to you and your counsel. The Company shall promptly
furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and other documents as you may
reasonably request from time to time. With respect to any Closing, by
written instrument delivered to the Company, you may from time to time,
in your sole discretion, waive any of the requirements imposed upon the
Company pursuant to this Section, including without limitation the
requirement that any opinion, certificate, survey or other document be
delivered to you at any Closing or as of any Closing Date; any such
waiver by you with respect to a Closing shall not in any way be
construed as such waiver with respect to any other Closing. If any
condition to your obligations hereunder to be satisfied prior to or a
Closing Date is not so satisfied, this Agreement at your election will
terminate upon notification to the Company without liability on the
part of any Selected Placement Agent (including you) or the Company,
except for the expenses or fees to be paid or reimbursed by the Company
pursuant to Sections 4 and 8 hereof and except to the extent provided
in Section 10 hereof.
SECTION 10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless you, each of your
officers, directors, employees and agents, and each person, if any, who
controls you within the meaning of the Securities Act or the Exchange
Act against any losses, claims, damages or liabilities, joint or
several, to which you or each such officer, director, employee, agent
or controlling person may become subject under the Securities Act, the
Exchange Act, Blue Sky Laws or other federal or state laws or
regulations, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of
the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in or incorporated in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or in any application filed under any Blue Sky Law or other
document executed by the Company specifically for that purpose or based
upon written information furnished by the Company and filed in any
state or other jurisdiction in order to qualify any or all of the
RH Investment Corporation
June ___, 2000
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Common Stock under the securities laws thereof (any such document,
application or information being hereinafter referred to as a "Blue
Sky Application") or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; the
Company agrees to reimburse you and each such other indemnified person
for any legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any
such case to the extent that:
(1) any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or in any Blue Sky Application
in reliance upon and in conformity with written information
furnished to the Company by you specifically for use therein
(but in no event shall the assistance in the drafting of all
or any portion of the Registration Statement, any Preliminary
Prospectus, the Prospectus, such amendment or supplement or
such other document of the type referred to in the preceding
paragraph by you or your counsel constitute such information);
or
(2) if such statement or omission was contained or made in a
Preliminary Prospectus and corrected in the Prospectus and (i)
any such loss, claim, damage or liability suffered or incurred
by you (or any person who controls you) resulted from an
action, claim or suit by any person who purchased Common Stock
from you in the Offering, and (ii) you failed to deliver or
provide a copy of the Prospectus to such person at or prior to
the confirmation of the sale of such Common Stock in any case
where such delivery is required by the Securities Act unless
such failure was due to failure by the Company to provide
copies of the Prospectus to you as required by this Agreement.
The indemnification obligations of the Company as provided above (i)
extend upon the same terms and conditions to, and shall inure to the
benefit of, each Selected Placement Agent and each of its respective
officers, directors and each person, if any, who controls such Selected
Placement Agent within the meaning of the Securities Act or the
Exchange Act and (ii) are in addition to any liabilities the Company
may otherwise have under other agreements, under common law or
otherwise.
(b) You will indemnify and hold harmless the Company, each of the
directors, officers, employees and agents of the Company, and each
person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages
or liabilities to which the Company or any such director, officer,
employee, agent or controlling person may become subject under the
Securities Act, the Exchange Act, Blue Sky Laws or other federal or
RH Investment Corporation
June ___, 2000
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state laws or regulations, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with your
written consent, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or in any Blue Sky Application,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or in any Blue Sky Application,
in reliance upon and in conformity with any written information
furnished to the Company by you specifically for use therein (but in no
event shall the assistance in the drafting of all or any portion of the
Registration Statement, any Preliminary Prospectus, the Prospectus,
such amendment or supplement or such other document of the type
referred above by you or your counsel constitute such information). You
agree to reimburse the Company and each such other indemnified person
for any legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action.
Your indemnification obligations as provided above (i) extend upon the
same terms and conditions to, and shall inure to the benefit of, the
Company and each of its respective officers, directors and each person,
if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act and (ii) are in addition to any liabilities
which you may otherwise have under other agreements, under common law
or otherwise.
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying
party under this Section 10, notify the indemnifying party in writing
of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve an indemnifying party from any
liability which it or he may have to any indemnified party otherwise
than under this Section 10. In case any such action is brought against
any indemnified party, and such indemnified party notifies an
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate in, and to the extent that it may wish,
to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any
such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it or he and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
to assume the defense of such action and upon approval by the
RH Investment Corporation
June ___, 2000
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indemnified party of counsel to the indemnifying party, the
indemnifying party will not be liable to such indemnified party under
this Section 10 for any legal expenses subsequently incurred by such
indemnified party as a result of or in connection with the defense of
such action, unless:
(1) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, in
the event that you and one or more of your directors, officers
or controlling persons are the indemnified parties);
(2) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of
commencement of the action; or
(3) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution under the
Securities Act or the Exchange Act in any case in which (1) any person
who would be entitled to indemnification pursuant to this Section 10 if
enforceable according to its terms makes a claim for indemnification
pursuant to this Section 10, but it is judicially determined (by the
entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that the express provisions of this
Section 10 provide for indemnification in such case, or (2)
contribution under the Securities Act or the Exchange Act may otherwise
be required, you shall contribute to the aggregate losses, claims,
damages or liabilities incurred (which shall, for all purposes of this
Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees) in either such case (after
contribution from others) an amount equal to the product determined by
multiplying the total amount of such losses, claims, damages or
liabilities by a fraction, the numerator of which equals the fees paid
to you under Section 4 plus the amount paid to you under Section 8, and
the denominator of which is equal to the aggregate proceeds of the sale
of Common Stock in the Offering (before deduction of commissions or
expenses), and the Company shall be responsible for the balance of such
losses, claims, damages or liabilities; provided, that with respect to
the rescission of the sale of any Common Stock, your liability shall
not exceed the compensation earned by you under this Agreement with
respect to the rescinded sale. If the foregoing allocation is not
permitted by law, there shall be considered, in determining the amount
of contribution to which the respective parties are entitled, the
relative benefits received by each party from the sale of Common Stock
(taking into account the portion of the proceeds of the Offering
RH Investment Corporation
June ___, 2000
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realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and you agree that it would not be equitable
if the amount of such contribution were determined by pro rata or pro
capita allocation. Neither you nor any person controlling you shall be
obligated to make contribution hereunder which in the aggregate exceeds
the total purchase price of Common Stock sold to subscribers procured
by you, less the aggregate amount of any damages which you and your
controlling persons have otherwise been required to pay in respect of
the same or any substantially similar claim. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who
is not guilty of such fraudulent misrepresentation. The foregoing
contribution agreement shall in no way affect the contribution
liabilities of any persons having liability under Section 11 of the
Securities Act other than those identified in this Section 10 as being
entitled to indemnification. Any of the officers, directors or
controlling persons of a Selected Placement Agent (including you) and
any officers, directors or controlling persons of the Company shall be
entitled to contribution to the same extent as you or the Company.
SECTION 11. EFFECTIVE DATE. This Agreement shall become effective immediately
upon execution as to Sections 4, 8 and 10 and, as to all other provisions, at
9:00 A.M., Los Angeles, California, time, on the day following the date upon
which the Registration Statement becomes effective, unless such a day is a
Saturday, Sunday or holiday (in which event this Agreement shall become
effective at such hour on the business day next succeeding such Saturday, Sunday
or holiday); notwithstanding the foregoing, this Agreement shall nevertheless
become effective at such earlier time after the Registration Statement becomes
effective as you may determine on and by notice to the Company (which notice may
be oral, to be confirmed promptly in writing).
SECTION 12. TERMINATION. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you or by
you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company or
you (except for the fees or expenses to be paid or reimbursed by the
Company pursuant to Sections 4 and 8 hereof or paid by the Company
pursuant to Section 10 hereof).
(b) This Agreement may also be terminated by you prior to the final Closing
Date if, in your judgment and discretion, the offer, offer for sale,
sale and delivery of the Common Stock is rendered impracticable or
inadvisable because:
RH Investment Corporation
June ___, 2000
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(1) additional material governmental restrictions or limitations,
not in force on the date hereof, shall have been imposed upon
trading in securities generally or minimum or maximum prices
shall have been generally established on the New York Stock
Exchange, the American Stock Exchange or over-the-counter, or
trading in securities generally shall have been suspended or
limited on either such exchange or over-the-counter or a
general banking moratorium shall have been established by
federal or New York authorities;
(2) an outbreak or escalation of hostilities or other national or
international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall
have accelerated to such extent as, in your judgment, to have
a material adverse effect on the general securities market or
make it impractical or inadvisable to proceed with the
Offering;
(3) any event shall have occurred or shall exist which makes
untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or which
is not reflected in the Registration Statement but should be
reflected therein in order to make the statements or
information contained therein not misleading in any material
respect;
(4) the Company shall have sustained a material loss, whether or
not insured, by reason of fire, earthquake, flood, accident or
other calamity or from any labor dispute or court or
governmental action or decree;
(5) the passage by the Congress of the United States or any state
legislative body of any act or measure, or the adoption or any
proposed adoption of any orders, rules, legislation or
regulations by any governmental body, any authoritative
accounting institute or board or any governmental executive
which is reasonably believed likely by the representative to
have a material impact on the business, financial condition or
financial statements of the Company, taken as a whole, or the
market for the Common Stock; or
(6) any material adverse change having occurred since the
respective dates as of which information is given in the
Registration Statement and the Prospectus in the condition
(financial or otherwise) of the Company, taken as a whole, or
in the earnings, affairs or business prospects of the Company,
taken as a whole, whether or not arising in the ordinary
course of business.
Any termination pursuant to this Section 12(b) shall be without
liability on the part of any Selected Placement Agent (including you)
to the Company, or on the part of the Company to any Selected Placement
Agent (including you), except for expenses or fees to be paid or
reimbursed by the Company pursuant to Section 4 and 8 hereof and except
as to indemnification as provided in Section 10 hereof.
RH Investment Corporation
June ___, 2000
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SECTION 13. PARTIES.
(a) This Agreement shall inure to the benefit of and be binding upon you,
the Company, and the respective successors and assigns of each.
(b) No purchaser of Common Stock from you shall be construed as a successor
or assign by reason merely of such purchase.
(c) Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or corporation, other than the parties
hereto and their respective successors and assigns and the controlling
persons, officers and directors and counsel referred to in this
Agreement, any legal or equitable right, remedy or claim under or in
respect to this Agreement or any provision herein contained.
SECTION 14. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
(a) All representations, warranties, covenants and agreements of the
Company and the Managing Placement Agent contained herein or in
certificates of officers delivered pursuant hereto, and the indemnity
agreement contained in Section 10 hereof, shall survive the delivery
and execution of this Agreement and the final Closing Date and shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any person controlling
you, any Selected Placement Agent or any controlling person thereof,
the Company or any of its officers, directors, or controlling persons.
(b) The indemnification provisions of Section 10 hereof are in addition to
any and all remedies or rights which either of the parties hereto may
have, including the right to xxx and recover damages for any breach of
any representation, warranty or covenant made or given by either of the
parties hereto to any other party.
SECTION 15. NOTICES. All communications hereunder will be in writing and will be
mailed, delivered, telegraphed or telecopied and confirmed as follows:
If to the Managing Placement Agent:
R.H. Investment Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
If to the Company:
Alpine Entertainment, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
RH Investment Corporation
June ___, 2000
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SECTION 16. INTEGRATION. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matters hereof and supersedes all
prior agreements and understandings among the parties both written and oral.
SECTION 17 PARTIAL UNENFORCEABILITY. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof.
SECTION 18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California.
RH Investment Corporation
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return the enclosed duplicate hereof, whereupon it will become a
binding agreement between us in accordance with its terms.
Very truly yours,
ALPINE ENTERTAINMENT, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Xxxx Xxxxxxx, President
Accepted and agreed to as of the day and year first above written.
RH INVESTMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx, Managing Director
