RAGEN MACKENZIE GROUP INC, S-4/A, 1998-06-10

RAGEN MACKENZIE GROUP INC
S-4/A, 1998-06-10
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 10, 1998
REGISTRATION NO. 333-50421
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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RAGEN MACKENZIE GROUP INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<TABLE>
<S> <C> <C>
WASHINGTON 6211 91-1898738
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

999 THIRD AVENUE, SUITE 4300
SEATTLE, WASHINGTON 98104
(206) 343-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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V. LAWRENCE BENSUSSEN
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
RAGEN MACKENZIE GROUP INCORPORATED
999 THIRD AVENUE, SUITE 4300
SEATTLE, WASHINGTON 98104
PHONE: (206) 343-5000
FAX: (206) 464-0901
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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Copies to:
STEWART M. LANDEFELD
DAVID F. MCSHEA
MICHAEL C. PIRAINO
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
PHONE: (206) 583-8888
FAX: (206) 583-8500

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Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE AND ALL OTHER
CONDITIONS TO THE REORGANIZATION (THE "REORGANIZATION") OF THE REGISTRANT AND
ITS SUBSIDIARIES, INCLUDING RAGEN MACKENZIE INCORPORATED, A WASHINGTON
CORPORATION, PURSUANT TO THE AGREEMENT AND PLAN OF MERGER DESCRIBED IN THE
ENCLOSED PROXY STATEMENT/PROSPECTUS HAVE BEEN SATISFIED OR WAIVED.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this Form is a post effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act (the "WBCA") authorize a court to award, or a corporation's
board of directors to grant, indemnification to directors and officers on
terms sufficiently broad to permit indemnification under certain circumstances
for liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 10 of the registrant's Bylaws (the "Bylaws")
provides for indemnification of the registrant's directors, officers,
employees and agents to the maximum extent permitted by Washington law.

Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or
limit a director's personal liability to the corporation or its shareholders
for monetary damages for conduct as a director, except in certain
circumstances involving acts or omissions, intentional misconduct by a
director or knowing violations of law by a director or distributions illegal
under Washington law, or any transaction from which the director will
personally receive a benefit in money, property or services to which the
director is no legally entitled. Article 8 of the registrant's Articles of
Incorporation (the "Articles of Incorporation") contains provisions
implementing, to the fullest extent permitted by Washington law, such
limitations on a director's liability to the registrant and its shareholders.

The above discussion of the WBCA and the registrant's Bylaws and Articles of
Incorporation is not intended to be exhaustive and is qualified in its
entirety by reference to such statute, the Bylaws and the Articles of
Incorporation.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
10.11+ Ragen MacKenzie Group Incorporated 1998 Stock Incentive Compensation
Plan.
10.12+ ABC Brokerage Accounting System Agreement between Pershing Division
of Donaldson, Lufkin & Jenrette Securities Corporation and Ragen
MacKenzie Incorporated, dated April 1, 1997.
10.13+ Employment Agreement between Ragen MacKenzie Incorporated and Mark
A. McClure, dated June 16, 1994, as amended by an addendum dated
June 3, 1997.
10.14+ Ragen MacKenzie Group Incorporated Employee Stock Purchase Plan
10.15+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Mark
McClure dated June 16, 1994.
10.16+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Mark
McClure dated February 25, 1997.
10.17+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Stan
Freimuth dated April 29, 1996.
10.18+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Stan
Freimuth dated June 11, 1996.
21.1+ Subsidiaries of the registrant
23.1+ Consent of Perkins Coie LLP (contained in opinion filed as Exhibit
5.1 hereto)
23.2+ Consent of Deloitte & Touche LLP
23.3+ Consent of Arthur W. Harrigan, Jr.
23.4+ Consent of Kirby L. Cramer
23.5+ Consent of Peter B. Madoff
23.6+ Consent of Gregory B. Maffei
24.1+ Power of Attorney
27.1+ Financial Data Schedule
99.1+ Form of Proxy
</TABLE>
- --------
+ Previously filed.

ITEM 22. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.

(b) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being

II-2
<PAGE>

registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form S-4, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.

(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 3 to this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Seattle, State of Washington, on the 10th day of June, 1998.

RAGEN MACKENZIE GROUP INCORPORATED

/s/ Robert J. Mortell, Jr.
By: _________________________________
Robert J. Mortell, Jr.
President and Chief Operating
Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 3 to this Registration Statement has been signed by the
following persons in the capacities indicated below on the 10th day of June,
1998.

<TABLE>
<CAPTION>
SIGNATURE TITLE
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<C> <S>
Lesa A. Sroufe * Chairman of the Board and Chief
______________________________________ Executive Officer (Principal
Lesa A. Sroufe Executive Officer)

/s/ Robert J. Mortell, Jr. President, Chief Operating Officer,
______________________________________ Treasurer and Director
Robert J. Mortell, Jr.

V. Lawrence Bensussen * Senior Vice President, Chief Financial
______________________________________ Officer and Secretary (Principal
V. Lawrence Bensussen Financial and Accounting Officer)

Mark A. McClure* Executive Vice President and Director
______________________________________
Mark A. McClure

John L. MacKenzie* Director
______________________________________
John L. MacKenzie

/s/ Robert J. Mortell, Jr.
*By: __________________________________
Robert J. Mortell, Jr.
Attorney-in-Fact

</TABLE>

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<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<C> <S>
2.1+ Agreement and Plan of Merger dated as of May 29, 1998, as amended
June 8, 1998 (attached to Proxy Statement/Prospectus as Annex A).
3.1+ Articles of Incorporation of Ragen MacKenzie Group Incorporated
(attached to Proxy Statement/Prospectus as Annex B).
3.2+ Bylaws of Ragen MacKenzie Group Incorporated (attached to Proxy
Statement/Prospectus as Annex B).
5.1+ Opinion of Perkins Coie LLP as to the legality of the securities
being registered.
8.1 Opinion of Perkins Coie LLP regarding tax matters.
10.1+ Master Note of Ragen MacKenzie Incorporated in favor of Bank America
National Trust and Savings Association, dated July 9, 1997.
10.2+ Security Agreement between Ragen MacKenzie Incorporated and Bank
America National Trust and Savings Association, dated October 14,
1995.
10.3+ Lease Agreement between Wright-Carlyle Seattle and Ragen MacKenzie
Incorporated, dated November 8, 1983, as amended December 19, 1988,
August 24, 1992, June 1, 1993, July 20, 1995, April 30, 1997 and
June 6, 1997.
10.4+ Form of Noncompetition and Nonsolicitation Agreement executed as of
April 14, 1998 by the registrant and each of Lesa A. Sroufe, Robert
J. Mortell, Jr., Mark A. McClure, V. Lawrence Bensussen and John L.
MacKenzie.
10.5+ Severance and Correspondent Clearing Agreement between Ragen
MacKenzie Incorporated and Brooks G. Ragen, executed April 17, 1998.
10.6+ Agreement and Release between Ragen MacKenzie Incorporated and Scott
McAdams, dated March 22, 1998.
10.7+ Ragen MacKenzie Incorporated 1989 Stock Option Plan.
10.8+ Ragen MacKenzie Incorporated 1993 Stock Option Plan.
10.9+ Ragen MacKenzie Incorporated 1996 Stock Incentive Compensation Plan.
10.10+ Ragen MacKenzie Incorporated 1997 Share Repurchase Plan.
10.11+ Ragen MacKenzie Group Incorporated 1998 Stock Incentive Compensation
Plan.
10.12+ ABC Brokerage Accounting System Agreement between Pershing Division
of Donaldson, Lufkin & Jenrette Securities Corporation and Ragen
MacKenzie Incorporated, dated April 1, 1997.
10.13+ Employment Agreement between Ragen MacKenzie Incorporated and Mark
A. McClure, dated June 16, 1994, as amended by an addendum dated
June 3, 1997.
10.14+ Ragen MacKenzie Group Incorporated Employee Stock Purchase Plan
10.15+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Mark
McClure dated June 16, 1994.
10.16+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Mark
McClure dated February 25, 1997.
10.17+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Stan
Freimuth dated April 29, 1996.
10.18+ Ragen MacKenzie Incorporated Agreement to Grant Stock Option to Stan
Freimuth dated June 11, 1996.
21.1+ Subsidiaries of the registrant
23.1+ Consent of Perkins Coie LLP (contained in opinion filed as Exhibit
5.1 hereto)
23.2+ Consent of Deloitte & Touche LLP
23.3+ Consent of Arthur W. Harrigan, Jr.
23.4+ Consent of Kirby L. Cramer
23.5+ Consent of Peter B. Madoff
23.6+ Consent of Gregory B. Maffei
24.1+ Power of Attorney
27.1+ Financial Data Schedule
99.1+ Form of Proxy
</TABLE>
- --------
+ Previously filed.

<PAGE>

June 10, 1998

Ragen MacKenzie Incorporated
999 Third Avenue, Suite 4300
Seattle, Washington 98104
ATTN: V. Lawrence Bensussen
Senior Vice President and Chief Financial
Officer

RE: AGREEMENT AND PLAN OF MERGER BETWEEN RMI AND HOLDING COMPANY

Ladies and Gentlemen:

We have been asked, as counsel to Ragen MacKenzie Incorporated, a
Washington corporation ("RMI"), to render this opinion regarding the material
U.S. federal income tax consequences to RMI shareholders of the merger (the
"Merger") of RMGI Merger Corp. (the "Subsidiary"), a Washington corporation and
100% subsidiary of Ragen MacKenzie Group Incorporated (the "Holding Company"),
with and into RMI pursuant to that certain Agreement and Plan of Merger, dated
as of May 29, 1998, as amended June 8, 1998, by and between RMI, the Subsidiary
and the Holding Company (the "Agreement"). Capitalized terms not otherwise
defined herein shall have the same meanings given to them in the Agreement or,
if not defined therein, as described in the Registration Statement on Form S-4
initially filed with the Securities and Exchange Commission on April 17, 1998
relating to the Merger, as amended from time to time (the "S-4").

In connection with our opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the relevant documents related to the Merger, including the Agreement and the S-
4 (collectively, the "Documents"). Furthermore, we have examined that certain
RMI Tax Matters Certificate, dated as of the date hereof, the form of which is
attached hereto as Exhibit A (the "RMI Tax Certificate").

Our opinion is conditioned on, among other things, the initial and
continuing accuracy of the facts, information, covenants and representations set
forth in the Documents referred to above and the factual representations given
by RMI in the RMI Tax Certificate. In rendering our opinion we have assumed and
relied upon the accuracy of all information and representations in the Documents
and all factual representations in the RMI Tax Certificate and the performance
of all undertakings contained in the reviewed Documents and RMI Tax Certificate
as set forth above, the conformity of all copies to the original documents, and
the genuineness of all signatures. We have not attempted to verify independently
the accuracy of any information in any such document, and we have assumed that
such documents accurately and completely set forth all material facts
<PAGE>

relevant to this opinion. If any of these facts or assumptions are not correct,
please advise us at once as our advice may be affected by a change in such facts
or assumptions.

Opinion. It is our opinion that, subject to the foregoing and the
limitations set forth in the S-4 or discussed below, the material federal income
tax consequences of the Merger for a holder of RMI Stock who is a citizen or
resident of the United States are as follows:

(i) The Merger will be treated as a reorganization under Section 368
of the Code or as an exchange under Section 351(a) of the Code,

(ii) No gain or loss will be recognized by a shareholder of RMI
solely as a result of the conversion of RMI Stock solely into Reorganization
Common Stock pursuant to the Merger,

(iii) The tax basis of the Reorganization Common Stock received by
each shareholder pursuant to the Merger will be same as such shareholder's tax
basis in RMI Stock converted in the Merger,

(iv) The holding period of such Reorganization Common Stock will
include the period during which such shareholder held RMI Stock converted in the
Merger, and

(v) An RMI shareholder who exercises dissenters' rights under
applicable law with respect to a share of RMI Stock and receives a cash payment
for such stock will generally recognize capital gain or loss (if such stock was
held as a capital asset at the Effective Time of the Merger) measured by the
difference between the amount of cash received and the shareholder's basis in
such share, provided such payment is not essentially equivalent to a dividend
within the meaning of Section 302 of the Code. A sale of RMI Stock incident to
an exercise of dissenters' rights will generally not be essentially equivalent
to a dividend if, as a result of such exercise, the dissenting shareholder owns
no shares of Reorganization Common Stock (either actually or constructively
within the meaning of Section 318 of the Code).

However, as discussed above and as indicated in the S-4, if any of the
assumptions set forth above or representations in the Documents or factual
representations in the RMI Tax Certificate prove incorrect, then the conclusions
set forth above may not be accurate, with the consequences discussed in the S-4
under the heading "PROPOSAL 1: THE REORGANIZATION - Material Federal Income Tax
Consequences."

Limitations. Our opinion is limited to the specific matters and subject to
the qualifications described in the S-4 under the caption "PROPOSAL 1: THE
REORGANIZATION - Material Federal Income Tax Consequences." We give no opinion
with respect to other tax matters, whether federal, state or local, that may
relate to the Merger. Our opinion may not address issues that are material to
an individual shareholder based on his or her particular tax situation. No
ruling will be requested from

<PAGE>

the Internal Revenue Service ("IRS") regarding the Merger. Our opinion is not
binding on the IRS and does not constitute a guarantee that the IRS will not
challenge the tax treatment of the Merger.

In rendering our opinion, we have considered the applicable provisions of
the Code, Treasury Regulations promulgated thereunder and the pertinent judicial
and administrative authorities. We caution that our opinion is based on the
federal income tax laws as they exist on the date hereof. It is possible that
subsequent changes in the tax law could be enacted and applied retroactively to
the Merger and that such changes could result in a materially different result
than the result described in the opinions above. We do not assume the
obligation to tell the Company of any such changes.

This opinion is furnished in connection with the Merger. We consent to the
reference to our firm under the caption "SUMMARY--Material Federal Income Tax
Consequences" and "PROPOSAL 1: THE REORGANIZATION--Material Federal Income Tax
Consequences" and to the filing of this opinion as an exhibit to the S-4.

Very truly yours,

/s/ Perkins Coie LLP
PERKINS COIE LLP

<PAGE>

EXHIBIT A

RAGEN MACKENZIE INCORPORATED
TAX MATTERS CERTIFICATE

Ragen MacKenzie Incorporated, a Washington corporation ("RMI"), submits
this certificate (this "Certificate") to be relied upon in, and as a condition
for, Perkins Coie's deliverance of its opinions regarding the tax consequences
of the proposed Merger (the "Merger") of RMGI Merger Corp. ("Merger Sub"), a
newly formed Washington corporation that is wholly owned by Ragen MacKenzie
Group Incorporated, a Washington corporation ("Holding Company), into RMI
pursuant to an Agreement and Plan of Merger by and among RMI, Holding Company
and Merger Sub, dated as of May 29, 1998, as amended June 8, 1998, (the "Merger
Agreement"). Capitalized terms not otherwise defined here have the meaning
stated in the Merger Agreement or if not defined there, in the Registration
Statement on Form S-4 with the Securities and Exchange Commission initially
filed on April 17, 1998 (the "S-4").

RMI certifies that the facts and assumptions relating to the Merger,
insofar as they relate to RMI, the Holding Company and Merger Sub, that are
described in the opinion letter from Perkins Coie to RMI dated the date hereof
(a copy of which you acknowledge has been provided to you), and the following
statements, are true, correct and complete in all material respects as of the
date of this letter:

1. The fair market value of the Reorganization Common Stock and other
consideration received by each shareholder will be approximately equal to the
fair market value of the RMI Stock surrendered in the Merger.

2. There is no plan or intention by Holding Company to acquire, directly
or through parties related to Holding Company (within the meaning of Section
1.368-1(e)(1) and (2) of the Treasury Regulations), including through Holding
Company's redemption right under its Articles of Incorporation, and there is no
plan or intention by the RMI shareholders to sell to Holding Company or parties
related to Holding Company, an amount of shares of Reorganization Common Stock
issued in the Merger that would reduce the RMI shareholder's ownership of stock
to a number of shares having a value, as of the date of the acquisition, of less
than 50 percent of the value of all of the formerly outstanding stock of RMI as
of the same date. For purposes of this representation, shares of RMI Stock
surrendered by dissenters or exchanged for cash in lieu of fractional shares of
Reorganization Common Stock will be treated as outstanding stock of RMI on the
Merger date. Furthermore, shares of RMI Stock and shares of Reorganization
Common Stock held by the RMI shareholders as of April 17, 1998 and otherwise
sold, redeemed or disposed of prior or subsequent to the Merger (other than
shares of RMI Stock exchanged for Common Stock upon a Conversion Event) will be
considered in making these representations.

3. Following the Merger, RMI will hold at least 90 percent of the fair
market value of its net assets and at least 70 percent of the fair market value
of its gross assets and at least 90 percent of the fair market value of Merger
Sub's net assets and at least 70 percent of

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<PAGE>

the fair market value of Merger Sub's gross assets held immediately prior to the
Merger. For purposes of this representation, amounts paid by RMI or Merger Sub
to dissenters, amounts paid by RMI or Merger Sub to shareholders who receive
cash or other property, amounts used by RMI or Merger Sub to pay reorganization
expenses, and all redemptions and distributions (except for regular, normal
dividends) made by RMI will be included as assets of RMI or Merger Sub,
respectively, immediately prior to the Merger.

4. Merger Sub is a transitory corporation that was formed solely to
effect the transactions described herein and that has conducted no trade or
business activities. At all times prior to the Merger RMI will own 100 percent
of the stock of Merger Sub.

5. RMI has no plan or intention to issue additional shares of its stock
after the Merger that would result in Holding Company losing "control" of RMI.
For purposes of this Certificate, "control" is represented by the ownership of
stock possessing at least eighty percent (80%) of the total combined voting
power of all classes of Reorganization Common Stock entitled to vote and at
least eighty percent (80%) of the total number of shares of all other classes of
Reorganization Common Stock.

6. Holding Company has no plan or intention to reacquire any of its stock
issued in the Merger (including pursuant to its redemption right contained in
the Articles of Incorporation).

7. After the Merger, Holding Company will own 100 percent (100%) of the
outstanding equity interests in RMI. Holding Company has no plan or intention
to liquidate RMI; to merge RMI with or into another corporation; to sell or
otherwise dispose of the stock of RMI except for transfers of stock to
corporations controlled by Holding Company; or to cause RMI to sell or otherwise
dispose of any of its assets or of any of the assets acquired from Merger Sub,
except for dispositions made in the ordinary course of business or transfers of
assets to a corporation of which RMI has "control."

8. Merger Sub will have no liabilities assumed by RMI, and will not
transfer to RMI any assets subject to liabilities, in the Merger.

9. Following the Merger, RMI will continue its historic business or use a
significant portion of its historic business assets in a business.

10. Holding Company, Merger Sub and RMI, on the one hand, and the
shareholders of RMI, on the other hand, will pay their respective expenses, if
any, incurred in connection with the Merger.

11. There is no intercorporate indebtedness existing between Holding
Company and RMI or between Merger Sub and RMI that was issued, acquired, or will
be settled at a discount, as a result of the Merger.

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<PAGE>

12. In the Merger, shares of RMI Stock representing control of RMI will be
exchanged solely for Reorganization Common Stock. For purposes of this
representation, shares of RMI stock exchanged for cash or other property
originating with Holding Company will be treated as outstanding RMI stock on the
date of the Merger.

13. Immediately following the Merger, RMI will not have outstanding any
warrants, options, convertible securities, or any other type of right pursuant
to which any person could acquire stock in RMI that, if exercised or converted,
would affecting Holding Company's acquisition or retention of "control" of RMI.

14. Holding Company does not own, nor has it owned during the past five
years, any shares of the stock of RMI.

15. None of RMI, Merger Sub or Holding Company is a regulated investment
company under Section 851 of the Code, real estate investment trust, or both (i)
a corporation fifty percent (50%) or more of the fair market value of whose
total assets are stock and securities, and eighty percent (80%) or more of the
fair market value of whose total assets are assets held for investment, and (ii)
a corporation more than twenty-five percent (25%) of the total assets of which
are invested in the stock and securities of any one issuer and not more than
fifty percent (50%) of the total assets of which are invested in the stock and
securities of any five issuers. In making the percentage determinations under
the preceding sentence, stock and securities in any subsidiary corporation are
disregarded and the parent corporation is deemed to own its ratable share of the
subsidiary's assets, and a corporation is considered a subsidiary if the parent
owns fifty percent (50%) or more of the combined voting power of all classes of
stock entitled to vote or fifty percent (50%) or more of the total value of
shares of all classes of stock outstanding. Furthermore, cash and cash items
(including receivables), Government securities and assets acquired for purposes
of avoiding characterization as a corporation under this representation are
disregarded. Finally, assets are held "primarily for investment" if they are
held for the taxpayer's benefit from (A) gain from appreciation in value, (B)
production of income or (C) both.

16. On the date of the Merger, the fair market value of the assets of RMI
will exceed the sum of its liabilities, plus the amount of liabilities, if any,
to which the assets are subject.

17. None of RMI, Merger Sub or Holding Company are under the jurisdiction
of a court in a Title 11 or similar case within the meaning of Section
368(a)(3)(A) of the Internal Revenue Code.

18. After the Merger Holding Company will first issue Common Stock only in
a transaction that is a "Conversion Event."

19. None of the compensation to be received by any RMI shareholder-
employee from the Holding Company will be separate consideration for, or
allocable to, any of such

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<PAGE>

shareholder-employee's shares of RMI Stock; none of the Reorganization Common
Stock received by any RMI shareholder-employee will be separate consideration
for, or allocable to, any employment agreement or services rendered by such
shareholder-employee; and the compensation paid to any shareholder-employee will
be for services actually rendered and commensurate with amounts paid to third
parties bargaining at arm's-length for similar services.

20. The Merger is being undertaken by RMI, Merger Sub and Holding Company
primarily for reasons germane to their business and none of RMI, Merger Sub or
Holding Company has as one of its significant reasons for the Merger the
avoidance of federal income taxes.

21. Following the Merger, Holding Company will remain in existence and
retain the Reorganization Common Stock and will cause RMI to continue to conduct
the trade or business it conducted immediately prior to the Merger.

22. Holding Company has no plan or intention to dispose of the RMI shares.

23. The RMI Stock outstanding prior to the Merger will be converted solely
in Reorganization Common Stock. No RMI Stock will be redeemed for cash or other
property furnished by Holding Company (other than Common Stock upon a Conversion
Event), and Holding Company will provide no other consideration to the RMI
shareholders as part of the Merger.

24. None of the Reorganization Common Stock will be issued by Holding
Company for services rendered to or for the benefit of Holding Company in
connection with the Merger.

25. In connection with the Merger, Holding Company will not issue
Reorganization Common Stock for indebtedness of Holding Company that is not
evidenced by a security, or for interest on indebtedness of Holding Company.

26. The RMI Stock converted into Reorganization Common Stock in the Merger
is not subject to any liability of the RMI shareholders and no liability of any
RMI shareholder will be assumed by Holding Company in the Merger.

27. The RMI shareholders will not retain any rights in the RMI Stock
converted into Reorganization Common Stock in the Merger.

28. There is no indebtedness between the RMI shareholders and Holding
Company, and there will be no indebtedness created in favor of the RMI
shareholders as a result of the Merger.

29. There is no plan or intention on the part of Holding Company to redeem
or otherwise reacquire any Reorganization Common Stock issued in the Merger.

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<PAGE>

30. Taking into account any planned issuance of additional shares of
Reorganization Common Stock; any issuance of Reorganization Common Stock in
consideration for services; the exercise of any Reorganization Common Stock
rights, warrants, or subscriptions; the participation of the RMI Shareholders in
the proposed public offering of Reorganization Common Stock; and the sale,
exchange, transfer by gift, or other disposition of any Reorganization Common
Stock received in connection with the Merger, after the Merger the RMI
shareholders will own Reorganization Common Stock (or, upon a Conversion Event,
Common Stock) representing "control" of Holding Company. For these purposes the
issuance of any shares by Holding Company in exchange for cash in a subsequent
"qualified underwriting transaction" will be ignored, and a "qualified
underwriting transaction" is a transaction in which a corporation issues stock
for cash in an underwriting in which either the underwriter is an agent of the
corporation or the underwriter's ownership of the stock is transitory.

31. To the actual knowledge of management of RMI and Holding Company, no
RMI shareholder is under the jurisdiction of a court in a title 11 or similar
case, and the Reorganization Common Stock received by the RMI shareholders in
the Merger will not be used to satisfy the indebtedness of any such debtor.

32. The factual statements of or about RMI or Merger Sub contained in the
S-4 Registration Statement are true, and correct in all material respects.
Furthermore, the representations, warranties, and covenants of RMI and Merger
Sub contained in the Merger Agreement are true and correct in all material
respects.

33. The undersigned will reaffirm as of the Effective Time the contents of
this Certificate in a writing to be dated and delivered to Perkins Coie
immediately prior to the Effective Time. Furthermore, between the date of this
Certificate and the Effective Time, the undersigned will immediately notify
Perkins Coie of any change or event that would cause this Certificate to be
untrue or inaccurate in any respect.

IN WITNESS WHEREOF, RMI has caused this Certificate to be duly executed on
this ____ day of June, 1998.

RAGEN MACKENZIE INCORPORATED

By
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Name

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Title

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