EXHIBIT 2.2
GLOBAL ONE DISTRIBUTION & MERCHANDISING INC.
SELLING AGENCY AGREEMENT
2,000,000 SHARES HELD BY XXXXXX AND XXXXX XXXXXX
Xxxxxx Xxxxxxx & Xxxxx Incorporated Minneapolis, Minnesota
5500 Wayzata Boulevard August 11, 0000
Xxxxx 000 - 0xx Xxxxx
Xxxxxxxxxxx, XX 00000
Gentlemen:
The undersigned, Xxxxxx and Xxxxx Xxxxxx (the "Seller") and Global One
Distribution & Merchandising Inc., a Delaware corporation (the "Company") hereby
confirm their agreement with you (the "Selling Agent") as follows:
1. DESCRIPTION OF OFFERING.
The Seller proposes to offer and sell to private investors through
you, as its exclusive agent (the "Offering"), up to 2,000,000 shares of
the Company's Common Stock, no par value per share (the "Securities"), at
a price of $.52.5 per share.
2. APPOINTMENT OF AGENT.
On the basis of the warranties, representations and agreements of the
parties hereto, the Seller hereby appoints the Selling Agent, and the
Selling Agent hereby accepts such appointment, to act as the Seller's
exclusive agent in connection with the offer and sale of the Securities to
private investors, on a best efforts basis. The Selling Agent will use its
best efforts to sell the Securities, but there is no commitment by the
Selling Agent to purchase or sell all or any of the Securities. The
Selling Agent may utilize the services of sub-agents.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Selling Agent as follows:
(i) The Company has prepared a Disclosure Package consisting of
the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, a draft of the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1997 and a "Recent
Developments" description (all of which, together with any
supplements or amendments thereto is herein defined as the
"Disclosure Package") with respect to the Securities in
conformity with
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applicable requirements of the Securities Act of
1933, as amended (the "Act") and the rules and regulations
adopted under the Act (the "Rules and Regulations").
(ii) As of the commencement date of the Offering and until and as
of the date of any Closing (as hereinafter defined), the
Disclosure Package will (i) contain all material statements which
are required to be made therein in accordance with the Act and
the Rules and Regulations; (ii) in all material respects conform
to the applicable requirements of the Act and of the Rules and
Regulations; and (iii) not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(iii) The financial statements (including all related schedules
and notes) set forth in the Disclosure Package fairly represent
the financial condition and results of operations of the Company
as of the dates and for the periods indicated; and such
statements will have been prepared in accordance with generally
accepted accounting principles consistently applied throughout
the periods indicated.
(iv) The Company is duly incorporated and validly existing as a
corporation in good standing under the laws of the State of
Delaware, with power and authority to own its properties and
conduct its business, as described in the Disclosure Package.
(v) The Company is duly qualified to do business as a foreign
corporation and is in good standing in all states or
jurisdictions in which the ownership or lease of its property or
the conduct of its business requires such qualification and the
failure to be so qualified would have a materially adverse effect
on the Company's business.
(vi) The Company has full legal power, right and authority to
enter into this Agreement. This Agreement has been duly
authorized, executed and delivered on behalf of the Company and
it is the valid and binding obligation of the Company subject,
as to enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the rights
of creditors generally, to the exercise of judicial discretion
as to the availability of equitable remedies such as specific
performance and injunction and subject, as to enforcement of the
indemnification provisions, to limitations under applicable
securities laws.
(vii) Except as is set forth in the Disclosure Package, the
Company has all licenses, certificates, permits and other
approvals from governmental
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authorities necessary for the conduct of its business as it is
currently being carried on and as is described in the Disclosure
Package, except those which would not have a material adverse
effect or the Company if not obtained.
(viii) Since the respective dates as of which information is given
in the Disclosure Package and other than as herein or therein
contemplated (i) the Company has not incurred any material
liabilities or obligations, contingent or otherwise, not in the
ordinary course of business, (ii) the Company has not paid or
declared any dividend or other distribution with respect to its
outstanding capital stock, (iii) there has not been any change
in the capital stock or any material increase in the long-term
debt of the Company, or any issuance of shares of capital stock
of the Company or of options, warrants, or rights to purchase
capital stock of the Company, (iv) no material loss or damage
(whether or not insured) to the property of the Company has been
sustained, (v) no legal or governmental proceeding, domestic or
foreign, affecting the Company or the transactions contemplated
by this Agreement has been instituted or threatened, and (vi)
there has not been any material adverse change in the business,
condition (financial and other) or properties of the Company.
(ix) Neither the Seller nor the Company is in breach, default or
violation of, and the consummation of the transactions herein
contemplated will not result in any breach of, any of the terms
or conditions of, or constitute a default or violation under,
(i) with respect to the Company, the Certificate of Incorporation
or By-Laws of the Company, (ii) except as disclosed in the
Disclosure Package, any material indenture, agreement or other
instrument to which the Company or the Seller is now a party, or
(iii) any law or any order, rule or regulation applicable to the
Company or the Seller of any court or of any federal or state
regulatory body or administrative agency having jurisdiction
over the Company or the Seller or any of their property, except
such breaches, defaults or violations which would not have a
material adverse effect on the Company.
(x) No approval, authorization, consent or order of any
governmental or public board or body, other than in connection
with or in compliance with the provisions of the Act and the
securities laws of various jurisdictions, is legally required
for the sale of the Securities by the Company.
(xi) The Securities are validly issued, fully paid and
non-assessable.
(xii) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee
or agent's commission
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in connection with the execution and delivery of this Agreement
of the consummation of the transactions contemplated hereby.
The Seller represents and warrants to the Selling Agent as follows:
(xiii) The Seller has full legal power, right and capacity to
enter into this Agreement. This Agreement has been duly executed
and delivered on behalf of the Seller it is the valid and binding
obligation of the Seller subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the rights of creditors generally, to
the exercise of judicial discretion as to the availability of
equitable remedies such as specific performance and injunction
and subject, as to enforcement of the indemnification provisions,
to limitations under applicable securities laws.
(xiv) The Seller owns the Securities free and clear of any lien,
claim or encumbrance and purchasers of the Securities will
receive all right, title and interest in the Securities free
and clear of any lien, claim or encumbrance.
(xv) Other than as contemplated by this Agreement, the Seller
has not incurred any liability for any finder's or broker's fee
or agent's commission in connection with the execution and
delivery of this Agreement of the consummation of the
transactions contemplated hereby.
4. FURTHER AGREEMENTS OF THE COMPANY.
The Company covenants and agrees as follows:
(a) The Company will promptly deliver to the Selling Agent and its
counsel copies of the Disclosure Package and each amendment or
supplement thereto. The Selling Agent is authorized on behalf of
the Company and the Seller to use and distribute copies of the
Disclosure Package in connection with the sale of the Securities
as, and to the extent, permitted by Federal and applicable state
securities laws.
(b) Until the Closing (as defined herein), or earlier termination of
this Agreement, if any event relating to or affecting the Company, or
of which the Company shall be advised in writing by the Selling Agent,
shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or the Selling Agent, to supplement or amend
the Disclosure Package in order to make the Disclosure Package not
misleading in light of the circumstances existing at the time it is
delivered to a purchaser of the Securities, the Company will promptly
prepare an amended or supplemented Disclosure Package (in form
satisfactory to counsel for the Selling Agent) so that the amended or
supplemented Disclosure Package will not
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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 existing at the time the Disclosure
Package is delivered to such purchaser, not misleading.
(c) The Company shall pay, or cause to be paid, all expenses incident
to the performance of its obligations under this Agreement, including
all expenses incident to the delivery of the Securities; the fees and
expenses of counsel and accountants for the Company; and the cost of
all blue sky filings. At each Closing, the Company shall also pay
the actual hourly fees and expenses of counsel to the Selling Agent
in connection with this transaction and any previously billed fees of
counsel to Selling Agent. Such fees and expenses shall be deducted
from the net proceeds to be wired to Company pursuant to this
Agreement. The payment of such fees and expenses shall not be
conditioned upon the sale of any Securities.
(d) For a period of three years from the date hereof, the Company
will furnish to the Selling Agent (i) within 90 days after the end
of each fiscal year, a copy of the Company's audited financial
statements, together with a report thereon of its independent public
accountants, and (ii) within 45 days after the end of each of the
first three quarters of each fiscal year, quarterly financial
statements of the Company, such financial statements to consist of
a balance sheet as of the end of each such year or quarter, a
statement of income for such year or quarter and, if prepared by the
Company, a statement of changes in shareholders' equity and cash flow.
(e) The Company shall grant to purchasers of the Securities the
registration rights described on Exhibit A attached hereto.
5. OFFERING PERIOD.
Subject to applicable law, the Selling Agent shall commence the offer
and sale of the Securities to private investors on or as soon as is
reasonably practicable following the date hereof and, unless otherwise
terminated hereunder, shall continue to offer and sell the Securities to
private investors until the earlier of (i) the date on which all of the
Securities are sold, (ii) September 30, 1997, unless extended up to 30
additional days by mutual agreement of the Seller and Selling Agent; or
(iii) on such date as the Selling Agent terminates its obligations under
this Agreement as provided in Section 10 hereof. "Termination Date," as
used herein, shall refer to the date on which the offering is terminated
in accordance with the preceding sentence.
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6. DELIVERY; PAYMENT AND CLOSING.
(a) On or about August 30, 1997, a closing shall be held at the
offices of Xxxxxxx, Street and Deinard, Professional Association,
Minneapolis, Minnesota, unless some other time, date and place is
mutually agreed upon by the Company, the Seller and the Selling Agent
(the "Closing").
(b) All checks and other funds received in subscription for the
Securities shall be held by Selling Agent until the Closing of the
sale of such Securities. The parties acknowledge that at the Closing
$900,000 from the proceeds of the sale of the Securities (less any
fees or expenses payable by the Company hereunder) shall be wired to
the Company on behalf of the Seller to fund that certain loan
referred to in Section 7(a) hereof. Proceeds equal to $100,000
shall be wired to the Seller at the Closing.
7. CONDITIONS TO CLOSING.
The obligation of the Selling Agent to close the Offering shall be
conditioned upon the satisfaction of the following:
(a) The Seller shall have agreed to loan to the Company $900,000
pursuant to the terms of the Stock Purchase and Loan Agreement dated
as of August 1, 1997 by and between the Company, the Seller and MJK
(the "Loan Agreement") and the Company's promissory note dated of
even date herewith.
(b) The Seller shall have delivered 920,000 shares to the Company
for cancellation pursuant to the terms of the Loan Agreement.
(c) All other obligations of Seller and the Company under the Loan
Agreement and this Agreement shall have been performed.
(d) The receipt by the Selling Agent and the transfer agent of the
Company of a legal opinion of counsel to the Company, covering the
matters set forth on Exhibit B attached hereto.
(e) The receipt by Selling Agent of such other documents and
certificates as the Selling Agent may reasonably request.
8. SALES COMMISSIONS.
Except as otherwise provided herein, at each Closing, and conditioned
thereon, the Selling Agent shall receive from the Seller 4.77% ($.02.5 per
share) of the gross proceeds
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received from the sale of the Securities at such Closing as a commission
for acting as agent for the sale thereof. The commissions shall be payable
to or upon the order of the Selling Agent in immediately available
Minneapolis funds and shall be deducted from the proceeds wired to Seller
at the Closing.
9. INDEMNIFICATION.
The Company shall indemnify and hold harmless the Selling Agent, and
each person who controls (as such term is defined by Rule 405 under the
Act) the Selling Agent within the meaning of the Act, against any losses,
claims, damages or liabilities, joint and several, to which the Selling
Agent or such controlling persons may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Disclosure Package, 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 the Selling Agent
and each such controlling person for any legal or other expenses reasonably
incurred by such Selling Agent or such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action, as incurred. This indemnity agreement will be in addition to any
liability which the Company and the Seller may otherwise have.
10. TERMINATION.
The Selling Agent shall have the right to terminate its obligations
under this Agreement by giving the Company and the Seller notice as
hereinafter specified at any time on or prior to the Closing if the
Company or the Seller shall have failed, refused or been unable, at or
prior to the Closing, to perform any agreement on its part to be performed;
if there shall have been a breach of any warranty or representation
contained herein, or because any other conditions of the Selling Agent's
obligations set forth herein are not fulfilled. Subject to the provisions
of Section 4 hereof, any such termination shall be without liability of
any party to any other party.
11. REPRESENTATIONS AND AGREEMENTS TO SURVIVE.
The respective covenants, agreements, representations and warranties
of the Company, the Seller and the Selling Agent hereunder, as set forth
in, or made pursuant to this Agreement, shall remain in full force and
effect regardless of any investigation made by or on behalf of any such
party or any of its directors or officers or any controlling person, and
shall survive delivery of and payment for the Securities; and the
indemnification agreements contained in Section 9 shall also survive
any termination of this Agreement.
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12. NOTICES.
Except as otherwise expressly provided in this Agreement or duly
noticed hereunder, all notices and other communications hereunder shall be
in writing and, if given to the Selling Agent, shall be mailed, delivered
or telegraphed and confirmed to Xxxxxx Xxxxxxx & Xxxxx Incorporated, 0000
Xxxxxxx Xxxxxxxxx, Xxxxx 000-0xx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, with
a copy to its counsel, Xxxxxxx, Street and Deinard, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx X. Xxxxx or, if
given to the Company, shall be mailed, delivered or telegraphed and
confirmed to Global One Distribution & Merchandising Inc., 0000 Xxxxxxxxx
Xxxx, Xxxx Xxxxxxxxxx 00000.
13. MISCELLANEOUS.
This Agreement shall inure to the benefit of and be binding upon the
successors of the Selling Agent, the Seller and of the Company. 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 successors, and the controlling persons and directors and officers
referred to in Section 9 hereof, any legal or equitable right, remedy or
claim under or in respect to this Agreement or any provision hereof. The
term "successors" shall not include any purchaser of the Securities merely
by reason of such purchase. No subrogee of a benefited party shall be
entitled to any benefits hereunder.
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If the foregoing expresses our agreement with you, kindly confirm by signing
the acceptance on the enclosed counterpart hereof and return the same to us,
whereupon this letter and your acceptance shall become and constitute a binding
agreement between the Company and the Selling Agent in accordance with its
terms.
Very truly yours,
GLOBAL ONE DISTRIBUTION
& MERCHANDISING INC.
By: /s/XXXXXX XXXXXXX
---------------------------------------
Xxxxxx Xxxxxxx, Chief Executive Officer
THE SELLER
/s/ XXXXXX XXXXXX
----------------------------------------
Xxxxxx Xxxxxx
/s/ XXXXX XXXXXX
----------------------------------------
Xxxxx Xxxxxx
The terms set forth in the foregoing Selling Agency Agreement between Global One
Distribution & Merchandising Inc., Xxxxxx and Xxxxx Xxxxxx and Xxxxxx Xxxxxxx &
Xxxxx Incorporated are hereby accepted and confirmed.
XXXXXX XXXXXXX & XXXXX INCORPORATED
By: /s/ XXXXX X. XXXXXXX
--------------------
Xxxxx X. Xxxxxxx, Executive Vice President
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EXHIBIT A
MATTERS TO BE COVERED IN OPINION OF COUNSEL TO THE COMPANY
(1) The Company has been duly incorporated and is validly existing in good
standing under the laws of the State of Delaware; has the requisite corporate
power to own, lease and operate its properties and conduct its business as
described in the Disclosure Package.
(2) The Company has the corporate power to enter into the Selling Agency
Agreement, and the Selling Agency Agreement has been duly and validly
authorized, executed and delivered by or on behalf of the Company
(3) The transfer and sale of the Shares pursuant to the Selling Agency
Agreement is exempt from the registration and prospectus delivery requirements
of the Securities Act of 1933, as amended.
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