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EXHIBIT 1.3
GLOBAL OUTDOORS, INC.
FORM OF SELECTED BROKER-DEALER AGREEMENT
____________, 1997
Gentlemen:
Global Outdoors, Inc. (the "Company"), incorporated under the laws of
Alaska hereby confirms its agreement with you, as follows:
1. Description of the Offering. The Company proposes to sell a maximum of
625,000 and a minimum of 25,000 of its authorized but unissued Units consisting
of two common shares, par value $0.02 per share, and one Class F Warrant at
$8.00 per Unit. If the minimum of 25,000 Units have not been sold within 120
days of the date of the Prospectus and any extension thereto, the offering will
terminate and all funds received from purchasers of Units will be promptly
returned to them without interest or deduction therefrom. The Company may
terminate the Offering at any time after the 25,000 Units have been sold, and
the Company reserves the right to reject any orders in whole or in part, for
the purchase of any of the offered Units. Persons purchasing Units and
becoming shareholders and Warrant holders of the Company are herein referred to
as "Shareholders." The Company and the Offering are more fully described in
the Prospectus described in Paragraph 2(a). All terms used herein, unless
specifically defined herein, shall have the meanings as ascribed in the
Prospectus. For the purposes of this Agreement an "affiliate" of any person
shall have the meaning ascribed in Rule 405 of the Rules and Regulations of the
Securities and Exchange Commission (the "Commission").
2. Representation and Warranties of the Company. The Company represents,
covenants, warrants and agrees with you for your benefit that:
(a) The Company has prepared or caused to be prepared a Prospectus
(the "Prospectus"), which furnishes all information required to be furnished to
offerees under the Securities Act of 1933, as amended (the "1933 Act"). The
Prospectus does not contain an untrue statement of any material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading;
(b) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a material breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute (except federal and state securities laws, compliance with which is
elsewhere provided for in particular detail), indenture, mortgage or other
agreement or instrument to which the Company is a party or by which it is
bound, or any order, rule or regulation directed to the Company, or its
affiliates by any court or governmental agency or body having jurisdiction over
it or its affiliates; and no other consent, approval, authorization or action
is required for the consummation of the transactions herein contemplated other
than such as have been obtained;
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(c) The Units, consisting of Common Shares and Class F Warrants, to
be issued will conform in all material respects to all statements concerning
them contained in the Prospectus, and the Units, when issued, will be duly
authorized, validly and legally issued, not subject to assessment or further
payment to the Company except as to the Warrants;
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Alaska with full
power and authority to own its properties and conduct its business as described
in the Prospectus;
(e) The Company will become qualified to do business as a foreign
corporation or similar entity in those jurisdictions where such qualification is
necessary, and will take such other action as is necessary, and will take such
other action as is necessary in any jurisdiction where the Company engages in
business or owns property;
(f) Since the respective dates as of which information is given in
the Prospectus and other than as therein contemplated, the Company has not, nor
during the period of the Offering will it have incurred any material liabilities
or obligations contingent or otherwise, except in the ordinary course of
business, and there has not been, and during the period of the Offering there
will not have been, any material adverse change in the condition of the Company,
financial or otherwise;
(g) The Company will notify you immediately and confirm the notice in
writing of the issuance by the Securities and Exchange Commission or by any
state securities administration of any stop order suspending the effectiveness
of any qualification of the Units for sale or enjoining the sale of the Units or
of the initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any such stop order and, if
any such stop order shall at any time be issued, to obtain the lifting thereof
at the earliest possible moment; and
(h) During the course of the Offering, and to the extent any
representations other than those set forth in the Prospectus are made by the
Company and its affiliates, they will not make any untrue statements of a
material fact or omit to state a material fact required to be stated or
necessary to make any statement made, in light of the circumstances in which
they are made, not misleading concerning the Offering or any matters set forth
in or contemplated by the Prospectus.
3. Representations and warranties of Selected Broker-Dealer. You
represent and warrant to the Company and to each other Broker-Dealer firm
who has or may enter into a Selected Broker-Dealer Agreement with the Company
that:
(a) You are a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which you are incorporated,
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 has been duly authorized, executed and delivered
by you and is a valid and binding agreement on your part;
(c) The consummation of the transactions contemplated herein and
those contemplated by the Prospectus will not result in any breach of any of the
terms or conditions of or constitute a default under any indenture, agreement or
other instrument to which you are a party, to violate any law or any order,
directed to you, of any court or any federal or state regulatory body or
administrative agency having jurisdiction over you or over your property;
(d) You are duly registered pursuant to the provisions of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), as a Broker-
Dealer and you are a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD") and are duly registered as a Broker-Dealer in
those states in which you are required to be so registered in order to carry out
the Offering contemplated by the Prospectus;
(e) Pursuant to your appointment made in Paragraph 6 below, insofar
as is under your control, you will in good faith use your best efforts to
conduct the Offering in a manner intended to be in compliance with the
Prospectus. Furthermore, you agree to comply with all applicable federal laws
including, but not limited to, the 1933 Act and 1934 Act and the Rules and
Regulations of the Commission thereunder; the laws of the state or other
jurisdictions in which Units may be offered or sold; and the Rules of Business
Conduct of the NASD. Further, you agree that you will not offer or sell the
Units in any state or jurisdiction except in those jurisdictions in which they
may lawfully be sold. You also acknowledge you understand that you shall not be
entitled to any compensation hereunder for any period during which you have been
suspended or expelled from membership in NASD; and
(f) By accepting this Agreement, you assume full responsibility for
through and proper training of your employees and other agents and
representatives concerning the selling methods to be used in connection with the
Public Offering of the Units, giving special emphasis to the principles of full
and fair disclosure to prospective investors and the prohibitions against
"Free-Riding and Withholding" as set forth the Interpretation in the Rules of
Business Conduct of the Association.
(g) You undertake to comply with Rules of Business Conduct contained
in Section 2000 of the NASD Manual.
4. Covenants of the Company. The Company represents, covenants,
warrants and agrees with you for your benefit that:
(a) The Company has delivered or will deliver to you such number of
Prospectuses as you may reasonably require from time to time during the course
of the Offering;
(b) Until the Closing Date, if any event affecting the Company or any
of its affiliates shall occur which, in the Company's or your opinion should be
set forth in a supplement or an amendment to the Prospectus, the Company will
forthwith at its own expense prepare and
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furnish to you a reasonable number of copies of a supplement or amendment to
the Prospectus so that it, as so supplemented or amended, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and
(c) The Company will apply the net proceeds from the sale of the
Units substantially in accordance with the terms and conditions of the
Prospectus.
5. State Securities Registration. The Company further covenants, warrants
and agrees that:
(a) It will use its best efforts to either take all necessary action
and file all necessary forms and documents in order to qualify or register all
625,000 Units in the various states in which the Units are proposed to be
offered and to register such number of Units for sale as you shall from time to
time request during the course of the Offering or will take any necessary action
and file any and all forms which are required to obtain an exemption from such
qualification or registration in such states as you and the Company mutually
agree upon;
(b) In each jurisdiction where the Units have been registered or
qualified or offered in an exempt transaction as provided above, the Company
will make and file such statements, documents, materials and reports in each
year and take all other actions as are or may be required to be made or filed by
the Company by the laws of such jurisdictions, and you will similarly make and
file such statements and reports as are required of you after receipt by you of
written advice of such requirements by the Company; and
(c) The Company will promptly provide to you for delivery to all
offerees and purchasers and their representatives any additional information,
documents and instruments which you or the Company deems necessary to comply
with the rules, regulations and judicial and administrative interpretations
respecting compliance with such exemptions or qualifications and registration
requirements in those states where the Units are to be offered or sold.
6. Selling Agreement. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth:
(a) The Company hereby engages you as its agent to sell the Units in
accordance with the terms of the Prospectus and this Agreement, and you agree to
use your best efforts to sell the Units. You may, however, discharge your
responsibilities under this Agreement by forming a group of securities dealers
to find purchasers for the Units. Any allocation of Units among you that the
other Broker-Dealers selected by you shall be made by you;
(b) As compensation for the Selected Broker-Dealer's services
hereunder, the Company shall allow to the Selected Broker-Dealer a sales
commission or discount of $0.16 per Unit and a $0.16 per Unit nonaccountable
expense allowance on Offered Units sold from referrals by the Company hereunder
and a sales commission or discount of $0.80 per Unit and a $0.16 per Unit
nonaccountable expense allowance on all other Offered Units sold hereunder. The
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nonaccountable expense allowance is limited to a maximum of $20,000 on all
Offered Units sold. It shall be conclusively presumed that the following
persons who purchase offered Units are from referrals by the Company: Any past
or present shareholder of the Company; any member of Gold Prospectors
Association of America, any subscriber to the Gold Prospector Magazine; any
member of Lost Dutchmans Mining Association; any viewer of The Outdoor Channel;
and any shareholder of the Company. At the Closing, the company will sell to
the Selected Broker-Dealer for $0.001 per Warrant, Warrants (the "Selected
Broker-Dealer's Warrants") entitling the Selected Broker-Dealer to purchase one
Unit for each ten Units sold in the public offering for the first 125,000 Units
sold. Thereafter, the Selected Broker-Dealer shall be entitled to purchase one
Unit for each 20 Units sold. The Selected Broker-Dealer's Warrants will be
exercisable ninety (90) days after the date of the definitive Prospectus and
for two years thereafter. The exercise price of the Selected Broker-Dealer's
Warrants shall be $4.80 per Unit. Such payment shall be made to you by the
Company at the time of Closing. You may reallow any portion of you commission
to other Broker-Dealers with whom you may have contracted for the sale of the
Units, which payment shall be made as compensation for their services;
(c) The above-described commission shall be considered compensation
for your brokerage services rendered during the course of the Offering pursuant
to this Agreement. You will not be considered to have any continuing or future
duty or obligation of any kind to the Company or to any of the shareholders as a
consequence of this right. You have not assumed, will not assume nor be
permitted to assume any duties, responsibilities or obligations regarding the
management, operations or any of the business affairs of the Company after the
Closing Date. You shall be held harmless by the Company from and against any
claim, suit, loss, damage, liability or action by or of the Company based upon
or arising out of the assertion by it that you have any continuing duty or
obligation after the Closing Date to the Company or any shareholder arising out
of your right to receive or your receipt of the commission;
(d) Unless a minimum of 25,000 Units are sold and paid for under the
terms hereof within 120 days of the date of the Prospectus and any extension
thereto, the Offering shall be terminated, in which event no fee shall be
payable to you and all funds advanced by subscribers shall be returned to them
without interest. Prior to the Closing Date, all proceeds received by you from
the sale of shares will be held in an escrow account until Closing in accordance
with Paragraph 8 hereof; and
(e) Closing of the sale of Units shall be within five business days
following the date of the termination of your offering efforts specified in
subparagraph (d) hereof ("Closing Date").
7. Delivery of Funds. YOU SHALL TRANSMIT PROMPTLY (BY NOON OF THE FIRST
BUSINESS DAY FOLLOWING RECEIPT), AND ONLY TO THE ESCROW AGENT, ALL FUNDS
RECEIVED FROM THE PURCHASERS IN THE PUBLIC OFFERING (WITHOUT DEDUCTION FOR ANY
COMMISSION OR CONCESSION), IN COMPLIANCE WITH RULE 15c2-4 UNDER THE 1934 ACT
AND A CONFIRMATION OR A RECORD OF EACH SALE WHICH SHALL SET FORTH THE NAME,
RESIDENCE ADDRESS AND SOCIAL SECURITY NUMBER OF EACH INDIVIDUAL PURCHASER, THE
NUMBER OF
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UNITS PURCHASED AND, IF THERE SHALL BE MORE THAN ONE REGISTERED OWNER, WHETHER
THE CERTIFICATE OR CERTIFICATES EVIDENCING THE UNITS PURCHASED ARE TO BE ISSUED
TO THE PURCHASERS IN JOINT TENANCY OR OTHERWISE. On the Closing Date, you
shall report in writing to the Company the number of Units which have been sold
in each state and the number of persons in each state who purchased Units from
you. Any sale may be rejected by the Company and, if so rejected, all funds
paid by the purchaser which have been received by the Escrow Agent from you,
shall be returned to the purchaser by the Escrow Agent. In such event, the
Escrow Agent shall return to the purchaser (within 5 business days after
notification of rejection) the full purchase price paid for the Units
subscribed for by the purchaser.
8. Escrow of Proceeds. The proceeds from the sale of the minimum of
25,000 Units in the Public Offering consisting of $200,000 will be escrowed (the
"Escrow Deposit"). If the Escrow Deposit has not been deposited with the Escrow
Agent within 120 days from the date of the Prospectus and any extension thereto,
the full amount paid will be refunded to the purchaser by the Escrow Agent. No
certificate evidencing the Units will be issued unless and until the Escrow
Deposit has been deposited with the Escrow Agent and such funds released and the
net proceeds thereof delivered to the Company at the Closing. If the Escrow
Deposit is deposited within the time period provided above, all amounts to be
deposited will be delivered to the Company. No commission will be paid by the
Company to you unless and until the Escrow Deposit shall have been deposited
with the Escrow Agent and such funds releases and the net proceeds thereof
delivered to the Company.
9. Form of Payment of Subscriptions. PAYMENTS FOR ALL 625,000 UNITS SHALL
ACCOMPANY ALL CONFIRMATIONS AND APPLICATIONS, AND SHALL BE DELIVERED TO THE
ESCROW AGENT. All checks and other orders for payment of subscriptions to Units
in the Public Offering shall be made payable to: "Global Outdoors, Inc., Escrow
Account."
10. Expenses of Sale. The Company will pay all expenses incident to the
performance of its obligations, including but not limited to the fees and
expenses of the Company's counsel and accountants and the cost of qualifying the
offer and sale of the securities in various states or obtaining an exemption
from state registration requirements. Except as may be reimbursed or paid to
you under Paragraph 6(b) hereof, you will pay all expenses incident to your
obligations including your expenses directly related to the offering of the
shares and your counsel fees.
11. Conditions of Your Obligations. Your obligations hereunder shall be
subject to the accuracy of and compliance with, as of the date hereof and on the
Closing Date, of the representations and warranties contained in Paragraphs 2, 4
and 5 hereof, to the performance by the Company of its obligations hereunder
required to be performed on or before the Closing Date, and to the following
further conditions:
(a) This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company and the
Company has adequate
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authorization and has taken all action necessary to authorize the
indemnification provisions contained in Paragraph 13 herein; and
(b) To the best of the knowledge of Xxxxxxx X. Xxxxxxx XX, counsel to
the Company, there is not in existence, pending or threatened any action, suit
or proceeding to which the Company is a party, except as set forth in the
Prospectus, before any court or governmental agency or body, which might, if
decided adversely, affect the subject matter of this Agreement or the financial
condition, business or prospects of the Company.
12. Conditions to Company's Obligations. The obligations of the Company
shall be subject to the accuracy as of the date hereof and on the Closing Date
of the representations and warranties contained in Paragraph 3 hereof, to the
performance by you of your obligations hereunder required to be performed on or
before the Closing Date. It is understood and agreed that neither you nor any
of your representatives nor any other Broker-Dealer is authorized to make any
representations on behalf of the Company other than those contained in the
Offering Circular or to act as the agent of the Company in any other capacity
except as expressly set forth herein, and you shall deliver to the Company on
the Closing Date a certificate executed by a responsible officer of your firm to
the effect that you have complied with the foregoing to the best of the
knowledge of the officer executing the certificate.
13. Indemnification.
(a) The Company will indemnify and hold you harmless against any
losses, claims, damages or liabilities, joint or several, to which you may
become subject under the Act, the various state securities acts or otherwise,
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 Prospectus, any other offering
documentation prepared on behalf of the Company or any amendment or supplement
thereto, 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; and will reimburse you for any legal or
other expenses reasonably incurred in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that 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 Prospectus,
in any other offering documentation prepared on behalf of the Company or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you specifically for use in the
preparation thereof.
The foregoing indemnity agreement shall extend upon the same terms and
conditions to, and shall inure to the benefit of, your officers and directors,
and each person, if any who "controls" you within the meaning of the Act.
(b) You will indemnify and hold harmless the Company against any
losses, claims, damages, liabilities, joint or several, to which any of them may
become subject, under the Act or otherwise insofar as such losses, claims,
damages or liabilities (or actions in respect
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thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus, in any other
offering documentation prepared on behalf of the Company or any amendment or
supplement thereto, or arise out of or are based upon the 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 Prospectus, in any other offering
documentation prepared on behalf of the Company or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by you specifically for use in the preparation
thereof. You also will reimburse the Company for such legal or other expenses
reasonably incurred in connection with investigating or defending such loss,
claim, damage, liability or action as to which you are required to indemnify
the Company.
The foregoing indemnity agreement shall extend upon the same terms and
conditions to, and shall inure to benefit of, the officers, directors and each
person, if any, who "controls" the Company within the meaning of the Act.
(c) Promptly after receipt by an indemnified person of notice of the
commencement of any action, such indemnified personal shall, if a claim in
respect thereof is to be made against the indemnifying party under such
subparagraph, notify the indemnifying party in writing of the commencement
thereof; but the omission to so notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subparagraph. In case any such action shall be brought against such
indemnified party, and it shall notify the indemnifying party of the
commencement hereof, the indemnifying party shall be entitled to participate in,
and, to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel selected by the
indemnifying party but satisfactory to such indemnified party, and after the
indemnified party shall have received notice from the agreed upon counsel that
the defense under such paragraph has been assumed, the indemnifying party shall
not be responsible for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other than reasonable
cost of investigation.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for above is for any reason
held by a court of competent jurisdiction to be unenforceable as to the Company
or you, the Company and you shall contribute to the aggregate losses and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceedings or any claims asserted which would have been covered
by the foregoing indemnification provisions to which the Company and you may be
subject in such proportion so that you shall be responsible for that portion
represented by the percentage that the aggregate amounts received by you
pursuant to Section 6 of the Agreement bear to the aggregate of the capital
contribution made to the Company, the Company is responsible for the balance;
provided, however, that in no case shall you be responsible for any amount in
excess of the fees paid to you pursuant to Section 6 of this Agreement.
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14. Representation and Agreements to Survive Delivery. All representation,
warranties, and agreements of the Company and you herein or in certificates
delivered pursuant hereto, and the indemnity and contribution agreements
contained in Paragraph 13 hereof, shall survive the delivery, execution and
Closing hereof and shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of you or any controlling
person, the Company, or any of its officers, directors, partners, or any
controlling persons, and shall survive delivery of the Units hereunder. The
indemnification and contribution provisions of Paragraph 13 hereof are in
addition to any and all remedies or rights any 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 one or more parties to any
other party.
15. Termination. You shall have the right to terminate this Agreement by
giving notice as hereinafter specified any time at or prior to the Closing Date
if:
(a) The Company shall have failed, refused, or been unable to fully
comply with any of the provisions of this Agreement its parts to be performed
prior to the Closing Date, or if any of the agreements, conditions, covenants,
representations or warranties of the Company herein contained should have been
performed or fulfilled within the times specified;
(b) Prior to the Closing Date, the Congress of the United States or
any state legislative body passes any act or measure, or any order, rule or
regulation is adopted by any governmental body or any authoritative accounting
institute or board, or any governmental executive, which is believed in good
faith by you to have a material impact on the markets for securities in general,
or if a general banking moratorium should have been declared;
(c) Prior to the Closing Date, there should have occurred the
outbreak of any war or any other event or calamity which, in your reasonable
judgement, materially disrupts the financial markets of the United States; or
(d) Prior to the Closing Date, any materially adverse change occurs,
since the date of this Agreement, in the conditions (financial or other),
business, operations, income, properties, earnings, affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business.
If you elect to terminate this Agreement the Company shall be notified
promptly by you by telephone or telegram, and confirmed by letter.
16. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall
be mailed, delivered or telegraphed and confirmed by you at your address listed
below and if sent to the Company shall be mailed, delivered or telegraphed and
confirmed to it at the address contained in the Prospectus. You or the Company
may change such address for receiving notices by written notice to the other
parties.
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17. Parties. This Agreement shall inure to the benefit of and be binding
upon you, the Company and each of your and its respective successors and assigns
and, if expressly applicable, its affiliates. 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, affiliates, and the controlling persons, officers and directors
referred to in Paragraph 13, any legal or equitable right, remedy or claim under
or in respect to this Agreement or any provision herein contained; this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto, and their
respective successors, assigns, affiliates, and said controlling persons and
officers and directors and for the benefit of no other person or corporation. No
purchaser of any of the Units from you shall be construed a successor or assign
by reason merely of such purchase.
18. Severability. Every provision in this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder hereof.
19. Captions. The captions or headings in this Agreement are inserted for
convenience and identification only and are in no way intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provisions hereof.
20. Applicable Law. This Agreement shall be governed by and construed
under Colorado law.
21. Prior Agreements. This Agreement supersedes all prior agreements, oral
or written, covering the same subject matter.
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If the foregoing correctly sets forth our understanding, please so indicate
in the space provided below for that purpose whereupon this letter shall
constitute a binding agreement among us.
Very truly yours,
GLOBAL OUTDOORS, INC.
By: _____________________________
Xxxxxxx X. Xxxxxxx XX,
General Counsel
ACCEPTED AS OF THE DATE FIRST
ABOVE WRITTEN:
_________________________________
Selected Broker-Dealer
By: _____________________________
Authorized Representative
_________________________________
Street Address
_________________________________
City, State, Zip Code
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