OH&S DRAFT 12/14/99
[FORM OF SOLICITATION AGENT AGREEMENT]
SOLICITATION AGENT AGREEMENT
January __, 2000
X.X. XXXXXXXXXX & CO., INC.,
as Solicitation Agent
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxx Sports, Inc. (the "Company") plans to issue to holders of its
common stock, par value $0.01 per share (the "Common Stock"), as of December __,
1999 (the "Record Date") rights (the "Rights") to purchase shares (the "Shares")
of Common Stock and a common stock purchase warrant (the "Warrants") to
purchase, if certain conditions are met, common stock from the Company of a new
or existing subsidiary that conducts substantially all of the Company's Internet
operations (the "Rights Offering"). The Rights Offering is being made upon the
terms and subject to the conditions set forth in the Prospectus and the
Subscription Certificate attached hereto as Exhibit A (collectively, the
"Solicitation Documents"). The Shares and the Warrants are collectively
sometimes referred to herein as the "Securities."
The Company hereby appoints X.X. Xxxxxxxxxx & Co., Inc. ("Xxxxxxxxxx")
as solicitation agent (the "Solicitation Agent") in connection with the Rights
Offering and authorizes the Solicitation Agent to act on its behalf in
accordance with this agreement (the "Agreement") and the terms of the
Solicitation Documents, which Solicitation Documents have been approved by the
Company and which the Solicitation Agent is authorized to use in connection with
the solicitation (the "Solicitation") to exercise the Rights. The Solicitation
Agent agrees to furnish no written material to holders in connection with the
Solicitation other than the Solicitation Documents.
1. Solicitation of Subscriptions.
(a) The Solicitation Agent will use its best efforts to solicit
the exercise of the Rights. The Solicitation Agent shall have no liability to
the Company hereunder or for any act or omission except for the gross negligence
or willful misconduct of the Solicitation Agent.
(b) The Company will not use or publish any material in connection
with the Solicitation, or refer to the Solicitation Agent in any such material,
without first obtaining the written consent of the Solicitation Agent. The
Company will promptly inform the Solicitation Agent of any events known to the
Company that might require any change in the Solicitation Documents. The Company
will promptly inform the Solicitation Agent of any litigation or administrative
action known to the Company with respect to the Solicitation.
(c) The Company agrees to furnish to the Solicitation Agent, to
the extent the same is available to the Company, the names and addresses of, and
the number of shares of Common Stock held by, the registered holders and
beneficial owners of the Common Stock or interests therein as of the Record
Date. The Solicitation Agent will use such information only in connection with
the Solicitation and will not furnish such information to any other person
except in connection with the Solicitation.
2. Compensation and Expenses.
(a) The Company shall pay to Xxxxxxxxxx, as compensation for its
services as Solicitation Agent, an advisory fee equal to three percent (3%) of
the gross proceeds received by the Company upon exercise of the Rights
(including, without limitaton, the exercise of rights from any standby group).
Separately, Xxxxxxxxxx may receive, for its services as Underwriter pursuant to
the Underwriting Agreement that may be executed between the parties on a
separate date, certain additional compensation to be set forth therein.
(b) Whether or not any Securities are purchased pursuant to the
Solicitation, the Company shall pay all expenses in connection with the
Solicitation. Such expenses shall include, but not be limited to the following:
the preparation, printing, duplicating, postage and mailing expenses related to
the Solicitation Documents and otherwise; registrar, subscription, information
and transfer agent fees; all filing fees for the Solicitation Documents;
advertising costs and expenses; "road show" and information meetings and
presentations; bound volumes and prospectus memorabilia costs; fees and expense
of its own counsel and accountants; issue and transfer taxes, if any, and all
other expenses in connection with the Solicitation. The expenses paid by the
Company shall also include Xxxxxxxxxx'x actual out-of-pocket expenses, legal
fees (such legal fees not to exceed $75,000 taken together with such fees
incurred in connection with the concurrent offering described in the
Registration Statement (defined below)) and expenses of Xxxxxxxxxx'x counsel and
"Blue Sky" legal fees and expenses. Xxxxxxxxxx'x counsel shall perform the
required "Blue Sky" legal services for the Company's account. In this connection
Blue Sky applications, to the extent required, shall be made in such states and
jurisdictions as shall be requested by Xxxxxxxxxx.
3. Representations and Warranties of the Company.
The Company represents and warrants to the Solicitation Agent as
follows:
(a) The Company is validly existing as a Delaware corporation in
good standing under the laws of the State of Delaware.
(b) The Company has duly taken all necessary corporate action to
authorize the making of the Solicitation and the execution, delivery and
performance of this Agreement; and this Agreement has been duly executed and
delivered by the Company.
(c) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and amendments
thereto, on Form S-1 (Registration No. 333-______________), including any
related preliminary prospectus or prospectuses (each a "Preliminary
Prospectus"), for the registration of the Securities, under the Securities Act
of 1933, as amended (the "Securities Act"), which registration statement and
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amendment or amendments have been prepared by the Company in conformity with the
requirements of the Securities Act, and the rules and regulations of the
Commission under the Securities Act. The Company will not file any other
amendment to such registration statement which the Underwriter shall have
objected to in writing after having been furnished with a copy thereof. Except
as the context may otherwise require, such registration statement, as amended,
on file with the Commission at the time it becomes effective (including the
prospectus, financial statements, schedules, exhibits and all other documents
filed as a part thereof or incorporated therein (including, but not limited to,
those documents or that information incorporated by reference therein) and all
information deemed to be a part thereof as of such time pursuant to paragraph
(b) of Rule 430A of the rules and regulations under the Securities Act), is
hereinafter called the "Registration Statement," and the form of prospectus in
the form first filed with the Commission pursuant to Rule 424(b) of the rules
and regulations under the Securities Act is hereinafter called the "Prospectus."
For purposes hereof, "Rules and Regulations" mean the rules and regulations
adopted by the Commission under either the Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable
(d) Neither the Commission nor any state regulatory authority has
issued any order preventing or suspending the use of any Preliminary Prospectus,
the Registration Statement or the Prospectus or any part of any thereof and no
proceedings for a stop order suspending the effectiveness of the Registration
Statement or any of the Company's securities have been instituted or are pending
or threatened. Each of the Preliminary Prospectus, the Registration Statement
and the Prospectus, at the respective times of filing thereof, conformed with
the requirements of the Act and the Rules and Regulations. The Solicitation
Documents do not and (as amended or supplemented, if amended or supplemented)
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading.
(e) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus, under "Capitalization" and
"Description of Securities" and will, at the time set forth therein, have the
adjusted capitalization set forth therein based upon the assumptions set forth
therein, and the Company is not a party to or bound by any instrument, agreement
or other arrangement providing for it to issue any capital stock, rights,
warrants, options or other securities, except for this Agreement as described in
the Prospectus. The Securities and all other securities issued or issuable by
the Company conform or, when issued and paid for, will conform, in all respects
to all statements with respect thereto contained in the Registration Statement
and the Prospectus. All issued and outstanding securities of the Company have
been duly authorized and validly issued and are fully paid and non-assessable
and the holders thereof have no rights of rescission with respect thereto, and
are not subject to personal liability by reason of being such holders; and none
of such securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual rights granted by
the Company. The Securities to be sold by the Company hereunder are not and will
not be subject to any preemptive or other similar rights of any stockholder,
have been duly authorized and, when issued, paid for and delivered in accordance
with the terms hereof, will be validly issued, fully paid and non-assessable and
will conform to the description thereof contained in the Prospectus; the holders
thereof will not be subject to any liability solely as such holders; all
corporate action required to be taken for the authorization, issue and sale of
the
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Securities has been duly and validly taken; and the certificates representing
the Securities will be in due and proper form.
(f) The making and consummation of the Solicitation and the
execution, delivery and performance by the Company of this Agreement do not and
will not conflict with, or result in the acceleration of any obligation under or
in a breach of, or constitute a default under, any of the provisions of any
material resolution, indenture, loan agreement or mortgage to which the Company
is a party or by which it is bound or to which any material part of its property
or assets is subject, and do not and will not contravene in any material
respect, any Federal, state or local law, rule or regulation known to the
Company, or any order applicable to the Company of any court or of any other
governmental agency or instrumentality having jurisdiction over it or any
material part of its property.
4. Certain Representations and Warranties by the Solicitation Agent.
The Solicitation Agent represents and warrants to the Company
that:
(a) All actions taken by it as Solicitation Agent will comply in
all material respects with all applicable laws, regulations and rules of the
United States, including, without limitation, the applicable rules and
regulations of the registered national securities exchanges of which the
Solicitation Agent is a member, the National Association of Securities Dealers,
Inc. and state securities laws.
(b) During the period of the Solicitation, none of the
Solicitation Agent nor any of its affiliates shall effect any transactions in
the Securities listed on the cover page of the Prospectus related to the
Solicitation, for the purpose of creating actual, or apparent, active trading
in, or raising or depressing the price of, the Securities.
5. Conditions of Obligation.
The obligation to act as Solicitation Agent hereunder shall at all
times be subject, in its discretion, to the conditions that:
(a) All representations, warranties and other statements of the
Company contained herein are now, and at all times during the Solicitation will
be, true and correct in all material respects.
(b) The Company at all times during the Solicitation shall have
performed all of its material obligations hereunder and theretofore required to
have been performed
(c) The Registration Statement shall be declared effective by the
Commission.
(d) Xxxxxxxxx, Xxxx & Brandeis LLP, legal counsel to the Company,
shall have furnished to the Solicitation Agent, concurrently with the execution
of this Agreement, an opinion, dated the date hereof, substantially in the form
of Exhibit B hereto.
6. Indemnification.
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(a) The Company agrees to indemnify and hold harmless the
Solicitation Agent and any person, if any, who controls the Solicitation Agent
within the meaning of Section 20 of the Securities Exchange Act of 1934, as
amended, or Section 15 of the Securities Act from and against any and all
claims, damages, losses, liabilities, costs or expenses (including attorneys'
fees) to which the Solicitation Agent may become subject by reason of or in
connection with (i) the Solicitation, (ii) the execution and delivery of this
Agreement or the performance, or failure to perform, by the Solicitation Agent
of its obligations hereunder, (iii) any breach by the Company of any warranty,
covenant, term or condition in, or the occurrence of any default under, this
Agreement, and (iv) any untrue statement or alleged untrue statement of a
material fact in the Solicitation Documents or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (v) any other event or transaction
contemplated by any of the foregoing; provided, however, the Solicitation Agent
shall not be indemnified for any claims, damages, losses, liabilities, costs or
expenses (i) caused by an untrue statement of a material fact or omission to
state a material fact by the Solicitation Agent or such controlling person of
the Solicitation Agent and (ii) to the extent, but only to the extent, caused by
the willful misconduct or gross negligence of the Solicitation Agent.
(b) The Company agrees to assume the defense of any action against
the Solicitation Agent based upon allegations of any such loss, claim, damage,
liability or action, including the retaining of counsel satisfactory to the
Solicitation Agent and the payment of counsel fees and all other expenses
relating to such defense; provided, however, that the Solicitation Agent may
retain separate counsel in any such action and may participate in the defense
thereof at the expense of the Solicitation Agent; and provided further, that if
the Solicitation Agent shall have been advised by counsel that there may be
legal defenses available to the Solicitation Agent which are different from or
additional to those available to the Company, then the Company shall not have
the right to assume the defense of the action on behalf of such Solicitation
Agent, and in such event the said fees and expenses of the Solicitation Agent in
defending such action shall be borne by the Company. The indemnity agreement
contained in Section 6(a) hereof will be in addition to any liability which the
Company may otherwise have.
Promptly after receipt by any indemnified party under this
Agreement of notice of the commencement of any action, suit or proceeding, such
party will, if a claim in respect thereof is to be made against the Company,
notify the Company of the commencement thereof, but the omission to notify the
Company will not relieve the Company from any liability which it may have to the
indemnified party.
(c) In order to provide for just and equitable contribution in any
case in which (a) the Solicitation Agent (or any person who controls the
Solicitation Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended) would otherwise
be entitled to indemnification pursuant to Section 6(a) hereof 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 Section 6(a) provides for indemnification in such
case or (b) contribution may be required on the part of the Solicitation Agent
or any such controlling person in circumstances for which indemnification is
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provided under Section 6(a); in each such case, the Company and the Solicitation
Agent shall contribute to the amount paid as a result of such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) (A) in such
proportion as is appropriate to reflect the relative benefits received by each
of the contributing parties on the one hand, and the party to be indemnified on
the other hand, from the Solicitation or (B) if the allocation provided by
clause (A) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (A)
above but also the relative fault of each of the contributing parties on the one
hand and the party to be indemnified on the other hand in connection with
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations;
provided, however, that, in any such case (x) the Solicitation Agent shall not
be required to contribute any amount in excess of the compensation paid to the
Solicitation Agent as compensation for its services as Solicitation Agent
pursuant to Section 2 hereof, and (y) no person guilty of a fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Promptly after receipt by any party to this Agreement of notice of
the commencement of any action, suit or proceeding, such party will, if a claim
for contribution in respect thereof is to be made against another party (the
"Contributing Party"), notify the Contributing Party of the commencement
thereof, but the omission to notify the Contributing Party will not relieve it
from any liability which it may have to any other party. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party of the commencement thereof, the Contributing Party will be
entitled to participate therein with the notifying party and any other
Contributing Party similarly notified.
7. Miscellaneous.
(a) The Company shall advise the Solicitation Agent promptly of
the occurrence of any event which, in the Company's judgment, could cause the
Company to withdraw, rescind or modify the Solicitation.
(b) This Agreement is made solely for the benefit of the
Solicitation Agent and the Company and their respective successors, assigns, and
legal representatives, and no other person shall acquire or have any right under
or by virtue of this agreement.
(c) Except as otherwise expressly provided in this Agreement,
whenever notice is required by the provisions of this Agreement to be given to
(i) the Company, such notice shall be in writing addressed to the Company, at
its office at Xxxxxxx Sports, Inc., 00 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Mr. Xxxxx Xxxxx, with a copy to, Xxxxxxxxx Xxxx &
Brandeis, LLP, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxx X. Xxxxxxxx, Esq.; and (ii) the Solicitation Agent, such notice shall
be in writing addressed to the Solicitation Agent, at X.X. Xxxxxxxxxx & Co.,
Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx.
Xxxxx X. Xxxxxxx, with a copy to Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxxxxx, Esq.
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(d) This Agreement contains the entire understanding of the
parties with respect to Xxxxxxxxxx acting as Solicitation Agent of the
Solicitation, superseding all prior agreements, understandings and negotiations
with respect to such activities by Xxxxxxxxxx, and shall be governed by and
construed in accordance with the laws of the State of New York. This Agreement
may be executed in any number of separate counterparts, each of which shall be
an original, but all such counterparts shall together constitute one and the
same agreement.
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Please sign and return to us a duplicate of this letter, whereupon it
will become a binding agreement.
Very truly yours,
XXXXXXX SPORTS, INC.
By:
----------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
The undersigned hereby confirms that the foregoing letter, as of the date
thereof, correctly sets forth the agreement between the Company and the
undersigned.
X.X. XXXXXXXXXX & CO., INC.
By:
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
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EXHIBIT A
Subscription Certificate and Prospectus
EXHIBIT B
January __, 2000
X.X. Xxxxxxxxxx & Co., Inc.,
as Solicitation Agent
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Xxxxxxx Sports, Inc. (the
"Company"), in connection with the issuance to holders of its common stock, par
value $0.01 per share (the "Common Stock") as of December __, 1999 (the "Record
Date") of rights to purchase shares (the "Shares") of Common Stock and a common
stock purchase warrant (the "Warrants") to purchase, if certain conditions are
met, common stock from the Company of a new or existing subsidiary that conducts
substantially all of the Company's Internet operations (the "Rights Offering").
The Shares and the Warrants are sometimes collectively referred to herein as the
"Securities."
Such Solicitation was made on the terms and subject to the
conditions set forth in those certain documents which are attached as Exhibit
A to the Solicitation Agent Agreement referred to below (said documents are
collectively referred to as the "Solicitation Documents").
In that connection, we have examined the Solicitation
Documents, a signed copy of the Solicitation Agent Agreement dated January __,
2000, between the Company and you providing for your services as Solicitation
Agent for the Solicitation (the "Solicitation Agent Agreement") and such other
documents as we have deemed appropriate for the purpose of this opinion.
Capitalized terms used, but not defined herein shall have the respective
meanings ascribed thereto in the Solicitation Agreement.
We have not undertaken any independent review or investigation
of the foregoing facts. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
the conformity to originals of all documents submitted to us as photocopies and
the authenticity of the originals of such photocopies. We have also assumed,
with your consent and without undertaking, or having any duty to undertake any
independent investigation, that the representations, warranties, statements and
information as to factual matters made in the agreements and documents mentioned
above or otherwise furnished to us are true and correct.
Based upon such examination and in reliance thereon and having
regard for legal considerations which we deem relevant, we are of the opinion
that:
(i) The Company is validly existing and in good
standing under laws of the State of Delaware.
(ii) The Company has duly taken all necessary
corporate action to authorize the making and consummation of the Solicitation
and the execution, delivery and performance of the Solicitation Agent Agreement,
and the Solicitation Agent Agreement has been duly executed and delivered by the
Company.
(iii) The making and consummation of the Solicitation
and the execution, delivery and performance by the Company of the Solicitation
Agent Agreement do not and will not violate or conflict with, result in a breach
of, constitute a default under, or result in the creation of any lien upon any
property of the Company under (a) the Certificate of Incorporation or the
By-Laws of the Company or (b) Applicable Law (defined below).
(iv) The Company has a duly authorized, issued and
outstanding capitalization and as set forth in the Prospectus under
"Capitalization," and except as set forth in the Prospectus, neither the Company
nor any of the Subsidiaries is a party to or bound by any instrument, agreement
or other arrangement providing for it to issue any capital stock, rights,
warrants, options or other securities, except for this Agreement and as
described in the Prospectus. The Securities and all other securities issued or
issuable by the Company conform, or when issued and paid for, will conform, in
all respects to the descriptions thereof contained in the Registration Statement
and the Prospectus. All issued and outstanding securities of each of the Company
and the Subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable; the holders thereof have no rights of rescission with
respect thereto and are not subject to personal liability by reason of being
such holders; and none of such securities were issued in violation of the
preemptive rights of any holders of any security of the Company or any of the
Subsidiaries or any similar contractual right granted by the Company or any of
the Subsidiaries. The Securities to be sold by the Company hereunder are not and
will not be subject to any preemptive or other similar rights of any
stockholder, have been duly authorized and, when issued, paid for and delivered
in accordance with the terms hereof and thereof, will be validly issued, fully
paid and non-assessable and conform to the descriptions thereof contained in the
Prospectus; the holders thereof will not be subject to any liability solely as
such holders; all corporate action required to be taken for the authorization,
issue and sale of the Securities has been duly and validly taken; and the
certificates representing the Securities are in due and proper form. No transfer
tax is payable by or on behalf of the Solicitation Agent in connection with (A)
the issuance by the Company of the Securities, (B) the purchase of the
Securities from the Company, (C) the consummation by the Company of any of its
obligations under this Agreement, or (D) resales of the Securities in connection
with the distribution contemplated hereby.
(v) The Registration Statement is effective under the
Act, and, if applicable, filing of all pricing information has been timely made
in the appropriate form under Rule 430A, and no stop order suspending the use of
the Preliminary Prospectus, the Registration Statement or the Prospectus or any
part of any thereof or suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending, threatened or contemplated under the Act.
(vi) Each of the Preliminary Prospectus, the
Registration Statement, and the Prospectus and any amendments or supplements
thereto (other than the financial statements and schedules and other financial
and statistical data included therein, as to which no opinion need be rendered)
comply as to form in all material respects with the requirements of the Act and
the Rules and Regulations.
The opinions herein are further subject to the following
limitations and qualifications:
(a) We express no opinion as to matters of law in jurisdictions
other than the State of New York and the federal laws of the United States.
(b) We express no opinion insofar as to compliance with applicable
anti-fraud statutes, rules or regulations of state, and federal law.
(c) We have assumed, without investigation, there was and will be
no misrepresentation, omission, fraud, duress, undue influence, bad faith or
deceit in connection with the Solicitation.
For purposes of rendering the opinions expressed above the term
"Applicable Laws" means those laws, rules or regulations of the State of New
York and the federal laws, rules or regulations of the United States of America
that, in our experience, are normally applicable to transactions of the type
contemplated by the Solicitation Documents.
We are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of any of the statements contained in the
Solicitation Documents and make no representation that we have independently
verified the accuracy, completeness or fairness of any such statements. In our
capacity as counsel to the Company, however, we had conferences and
teleconferences with the Company and representatives of the Solicitation Agent
and others, during which conferences and teleconferences the contents of the
Solicitation Documents and related matters were discussed. Based on our
participation in the above-mentioned conferences and in reliance thereon and on
the records, documents, certificates and opinions herein mentioned above, we
advise you that, during the course of our representation of the Company as
counsel on this matter, no information came to the attention of the attorneys in
our firm rendering legal services in connection with such representation which
caused us to believe that the Solicitation Documents at its date and as of the
date of this opinion contained or contains any untrue statements of a material
fact or omitted or omits 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.
This opinion is intended for your use and neither this opinion nor
any part hereof may be delivered to, used or relied upon by any other person or
entity, without our prior written consent.
This opinion is given as of the date hereof and we assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention or any changes in law
which may hereafter occur.
Very truly yours,
