Exhibit 1.3
Draft 12/31/97
CONSULTING AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the ___ day of
___________, 1998 by and between Briarwood Investment Counsel, a
corporation ("Briarwood" or "Consultant"), and Connecticut Valley Sports,
Inc., a Delaware corporation (the "Company").
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Duties of Consultant. The Company shall retain Briarwood as its
consultant and investment banker, on a non-exclusive basis, pursuant to the
terms and conditions hereof. The Consultant shall, at the request of the
Company, upon reasonable notice, render the following services to the Company
from time to time.
(a) Consulting Services. The Consultant will provide such
financial consulting services and advice pertaining to the Company's business
affairs as the Company may from time to time reasonably request. Without
limiting the generality of the foregoing, the Consultant will assist the
Company in developing, studying and evaluating financing, merger and
acquisition proposals and assist in negotiations and discussions pertaining
thereto.
(b) Financing. The Consultant will assist and represent the
Company in obtaining both short and long-term financing if, as and when
requested by the Company. The Consultant will be entitled to additional
compensation under certain circumstances in accordance with the terms set
forth in Section 3 hereof.
The services described in this Section 1 shall be rendered by the
Consultant without any direct supervision by the Company and at such time and
place and in such manner (whether by conference, telephone, letter or
otherwise) as the Consultant may determine.
2. Term. Except as otherwise specified in Paragraph 4 hereof, this
Agreement shall be effective for a two (2) year period commencing on the date
hereof and ending __________, 2000.
3. Compensation.
(a) As compensation for the Consultant's services hereunder, the
Company shall pay to the Consultant a fee of Twenty-Five Thousand Dollars
($25,000) per year for the term of this Agreement, payable annually in
advance with the first payment due upon the First Closing date (as defined in
the Underwriting Agreement dated ___________, 1998 by and between Briarwood
and the Company (the "Underwriting Agreement")) and the remaining $25,000 due
on the first anniversary of the First Closing Date.
(b) In addition to the financial consulting services described in
Section 1 above, the Consultant may, at the request of the Company, bring the
Company in contact with persons, whether individuals or entities, that may be
suitable candidates for providing the Company with, or may lead the Company
to other individuals or entities that may provide the Company with, debt or
equity financing or that may be suitable candidates, or may lead the Company
to such suitable candidates, to purchase substantially all of the stock or
assets of the Company, merge with the Company, or enter into a joint venture
or other transaction with the Company. If, at any time during the term of
this Agreement, the Company enters into an agreement with any such persons or
their affiliates, or with any persons introduced to the Company by any such
persons or their affiliates, pursuant to which the Company obtains debt or
equity financing or pursuant to which substantially all of the Company's
stock or assets is purchased or the Company is merged with or into another
entity, or pursuant to which the Company enters into a joint venture or other
transaction, the Company will pay to the Consultant, in accordance with the
formula set forth below, additional compensation based on the aggregate
Transaction Value (as defined below) of such transaction (the "Transaction")
[; provided, that if a fee is payable by Company to a person introduced to
the Company by Consultant, the amount of such fee shall be deducted from the
fee payable to Consultant hereunder.] Nothing herein shall be deemed or
construed to obligate or require the Company to complete or consummate any
Transaction for which the Consultant would be compensated hereunder or to pay
the Consultant any fee or compensation for any Transaction which is not
consummated.
(c) The additional compensation to be paid will be paid upon the
closing of the Transaction, by certified check, in the following amounts:
5% of the first $5,000,000 of Transaction Value in the Transaction;
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4% of the Transaction Value in excess of $5,000,000 and up to
$6,000,000;
3% of the Transaction Value in excess of $6,000,000 and up to
$7,000,000;
2% of the Transaction Value in excess of $7,000,000 and up to
$8,000,000; and
1% of any Transaction Value in excess of $8,000,000.
(d) "Transaction Value" shall mean the aggregate value of all
cash, securities and other property (i) paid to the Company, its affiliates,
or their securityholders in connection with any Transaction involving an
investment in or acquisition of the Company or any affiliate (or the assets
of either), (ii) paid by the Company or any affiliate in any such Transaction
involving an investment in or acquisition of another party or its equity
holdings by the Company or any affiliate, or (iii) paid or contributed by the
Company or any affiliate and by the other party or parties in the event of
any such Transaction involving a joint venture or similar joint enterprise or
undertaking. The value of any such securities (whether debt or equity) or
other property shall be the fair market value thereof as determined by
agreement of the Consultant and the Company or by an independent appraiser
jointly selected by the Consultant and the Company. "Transaction Value" shall
also include the principal amount of any indebtedness assumed or forgiven as
part of a Transaction.
(e) All fees to be paid pursuant to this Agreement, except as
otherwise specified, are due and payable to Briarwood in cash or company
check at the closing or closings of any Transaction specified herein. In the
event that the consideration in respect of a Transaction is paid out over a
period of time, Briarwood shall be paid its pro-rata portion of such
consideration as the Company is paid. In the event that this Agreement shall
not be renewed or if terminated for any reason, notwithstanding any such
non-renewal or termination, Briarwood shall be entitled to a full fee as
provided under Paragraphs 3 and 4 hereof, for any Transaction for which the
discussions were initiated with a third party at the request of the Company
during the term of this Agreement and which is consummated within a period of
twelve months after non-renewal or termination of this Agreement.
4. Expenses of Briarwood. In addition to the fees payable hereunder
and regardless of whether any Transaction set
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forth in Paragraph 3 hereof is proposed or consummated, the Company shall
reimburse Briarwood for Briarwood's reasonable travel and out-of-pocket expenses
incurred in connection with the services performed by Briarwood pursuant to this
Agreement and at the request of the Company, including without limitation,
hotels, food and associated expenses and long-distance telephone calls [;
provided, that expenses in excess of $_______ in the aggregate or any single
expense in excess of $1,000 shall be approved by Company in advance].
5. Available Time. The Consultant shall make available such time as it,
in its sole discretion, shall deem appropriate for the performance of its
obligations under this Agreement.
6. Liability of Briarwood.
(a) The Company acknowledges that all opinions and advice (written or
oral) given by Briarwood to the Company in connection with Briarwood's
engagement are intended solely for the benefit and use of the Company in
considering the Transaction to which they relate, and the Company agrees that no
person or entity other than the Company shall be entitled to make use of or rely
upon the advice of Briarwood to be given hereunder, and no such opinion or
advice shall be used for any other purpose or reproduced, disseminated, quoted
or referred to at any time, in any manner or for any purpose, nor may the
Company make any public references to Briarwood, or use Briarwood's name in any
annual reports or any other reports or releases of the Company without
Briarwood's prior written consent or as required by law.
(b) The Company acknowledges that Briarwood makes no commitment
whatsoever as to making a market in the Company's securities or to recommending
or advising its clients to purchase the Company's securities. Research reports
or corporate finance reports that may be prepared by Briarwood will, when and if
prepared, be done solely on the merits or judgement of analysis of Briarwood or
any senior corporate finance personnel of Briarwood.
7. Briarwood's Services to Others. The Company acknowledges that
Briarwood or its affiliates are in the business of providing financial services
and consulting advice to others. Nothing herein contained shall be construed to
limit or restrict Briarwood in conducting such business with respect to others,
or in rendering such advice to others, except that Briarwood will not provide
services to others when such services may materially and adversely affect the
Company.
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8. Company Information.
(a) The Company recognizes and confirms that, in advising the Company
and in fulfilling its engagement hereunder, Briarwood will use and rely on data,
material and other information furnished to Briarwood by the Company. The
Company acknowledges and agrees that in performing its services under this
engagement, Briarwood may rely upon the data, material and other information
supplied by the Company without independently verifying the accuracy,
completeness or veracity of same.
(b) Except as required by applicable law, Briarwood shall keep
confidential all non-public information provided to it by the Company, and shall
not disclose such information to any third party without the Company's prior
written consent, other than such of its employees and advisors as Briarwood
reasonably determines to have a need to know, provided that Briarwood shall
instruct such employees and advisors to keep such information confidential and
Briarwood shall be liable for any breach of such confidentiality. In the event
that Briarwood is required by subpoena to disclose such information, the Company
shall be afforded an opportunity to seek an order preserving the confidentiality
of such information.
9. Indemnification.
(a) The Company shall indemnify and hold Briarwood harmless against
any and all liabilities, claims, lawsuits, including any and all awards and/or
judgments to which it may become subject under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the
"1934 Act") or any other federal or state statute, at common law or otherwise,
insofar as said liabilities, claims and lawsuits (including costs, expenses,
awards and/or judgments) arise out of or are in connection with the services
rendered by Briarwood or any transactions in connection with this Agreement,
except for any liabilities, claims and lawsuits (including awards and/or
judgments), arising out of acts or omissions of Briarwood. In addition, the
Company shall also indemnify and hold Briarwood harmless against any and all
costs and expenses, including reasonable counsel fees, incurred relating to the
foregoing.
Briarwood shall give the Company prompt notice of any such liability, claim
or lawsuit which Briarwood contends is the subject matter of the Company's
indemnification and the Company thereupon shall be granted the right to take any
and all necessary and proper action, at its sole cost and expense, with respect
to
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such liability, claim and lawsuit, including the right to settle, compromise and
dispose of such liability, claim or lawsuit, excepting therefrom any and all
proceedings or hearings before any regulatory bodies and/or authorities and
provided that no such settlement shall be made without the prior consent of
Briarwood.
Briarwood shall indemnify and hold the Company harmless against any and all
liabilities, claims and lawsuits, including any and all awards and/or judgments
to which it may become subject under the 1933 Act, the 1934 Act or any other
federal or state statute, at common law or otherwise, insofar as said
liabilities, claims and lawsuits (including costs, expenses, awards and/or
judgments) arise out of or are in connection with the services rendered by
Briarwood or any transactions in connection with this Agreement. In addition,
Briarwood shall also indemnify and hold the Company harmless against any and all
costs and expenses, including reasonable counsel fees, incurred relating to the
foregoing.
The Company shall give Briarwood prompt notice of any such liability, claim
or lawsuit which the Company contends is the subject matter of Briarwood's
indemnification and Briarwood thereupon shall be granted the right to take any
and all necessary and proper action, at its sole cost and expense, with respect
to such liability, claim or lawsuit, including the right to settle, compromise
or dispose of such liability, claim or lawsuit, excepting therefrom any and all
proceedings or hearings before any regulatory bodies and/or authorities and
provided that no such settlement shall be made without the prior consent of the
Company.
(b) In order to provide for just and equitable contribution in any
case in which (i) any person entitled to indemnification under this Paragraph 9
makes claim for indemnification pursuant hereto 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 this Paragraph 9 provides for indemnification in such case, or (ii)
contribution may be required on the part of any such person in circumstances for
which indemnification is provided under this Paragraph 9, then, and in each such
case, the Company and Briarwood shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after any
contribution from others) in such proportion taking into consideration the
relative benefits received by each party from the transactions undertaken in
connection with this Agreement (taking into account the portion of the proceeds
realized by each), the parties' relative knowledge and access to
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information concerning the matter with respect to which the claim was assessed,
the opportunity to correct and prevent any statement or omission and other
equitable considerations appropriate under the circumstances; and provided,
that, in any such case, no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Within fifteen (15) days after receipt by any party to this Agreement (or
its representative) 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 so to notify
the Contributing Party will not relieve it from any liability which it may have
to any other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party or his or its representative of the commencement thereof
within the aforesaid fifteen (15) days, the Contributing Party will be entitled
to participate therein with the notifying party and any other Contributing Party
similarly notified. Any such Contributing Party shall not be liable to any
party seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution without the written
consent of the Contributing Party. The indemnification provisions contained in
this Paragraph 9 are in addition to any other rights or remedies which either
party hereto may have with respect to the other or hereunder.
10. Briarwood an Independent Contractor. Briarwood shall perform its
services hereunder as an independent contractor and not as an employee of the
Company or an affiliate thereof. The parties hereto expressly understand and
agree that Briarwood shall have no authority to act for, represent or bind the
Company or any affiliate thereof in any manner, except as may be agreed to
expressly by the Company in writing from time to time.
11. Miscellaneous.
(a) This Agreement between the Company and Briarwood constitutes the
entire agreement and understanding of the parties hereto, and supersedes any and
all previous agreements and understandings, whether oral or written, between the
parties with respect to the matters set forth herein.
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(b) All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to Briarwood, shall be
mailed, delivered or telegraphed and confirmed to Briarwood Investment Counsel,
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention:
President, with a copy to Zimet, Haines, Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx Xxxxxx, Esq., and if to the
Company, shall be mailed, delivered or telegraphed and confirmed to Connecticut
Valley Sports, Inc., 0000 Xxxxxxx 00 Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, with a
copy to Gersten, Savage, Kaplowitz & Xxxxxxxxxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxx X. Xxxxxxxxx, Esq.
(c) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors, legal
representatives and permitted assigns. This Agreement shall not be assignable
by any party without the prior written consent of the other party.
(d) This Agreement may be executed in any number of counterparts,
each of which together shall constitute one and the same original document.
(e) No provision of this Agreement may be amended, modified or
waived, except in a writing signed by all of the parties hereto.
(f) This Agreement shall be construed in accordance with and governed
by the laws of the State of New York, without giving effect to its conflict of
law principles. The parties hereby agree that any dispute which may arise
between them arising out of or in connection with this Agreement shall be
adjudicated before a court located in New York City, and they hereby submit to
the exclusive jurisdiction of the courts of the State of New York located in New
York, New York and of the federal courts in the Southern District of New York
with respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum, relating to or arising out of
this Agreement, and consent to the service of process in any such action or
legal proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth in Paragraph 11(b) hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
BRIARWOOD INVESTMENT COUNSEL
By:_________________________
Name:
Title:
CONNECTICUT VALLEY SPORTS, INC.
By:_________________________
Name:
Title:
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