FIRST STOCK PURCHASE AGREEMENT
This Agreement is made this 11th day of March, 1999, by and between
Premier Concepts, Inc., a Colorado corporation ("Premier"), and Equisition
Capital, LLC, a Delaware limited liability company ("Equisition").
In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties, intending to be legally bound, agree as follows:
1. Transactions at Closing
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1.1 Purchase and Sale of Stock. Subject to the terms and
conditions set forth herein, at Closing (defined below), Equisition hereby
agrees to purchase from Premier, and Premier hereby agrees to issue and sell
to Equisition 353,230 shares of Premier's common stock (the "Stock") for the
purchase price of $220,768.75 (constituting $5/8 ($.625) per share).
1.2 The Closing. The closing of such purchase and sale (the
"Closing") shall take place on March 11, 1999, or on such other date as may be
mutually agreed upon by Premier and Equisition.
2. Use of Proceeds. Premier shall use at least $175,000 of the
proceeds of this transaction, together with the proceeds of the transactions
contemplated by the Second Stock Purchase Agreement (defined on Exhibit A), to
engage MeridianTelesis, LLC, a Delaware limited liability company
("MeridianTelesis"), to establish and expand Premier's e-commerce capabilities
(such funds to be expended in accordance with a schedule determined by
MeridianTelesis based on discussions with Premier regarding the strategic
rollout of Premier's e-commerce platform). Premier shall use the remaining
proceeds of such transactions for expenses of the transactions (including
expenses associated with necessary filings and to secure stockholder approval
for the consummation of the Second Stock Purchase Agreement), to pay Infusion
Capital Partners, LLC, a Delaware limited liability company ("Infusion"),
pursuant to the Management Services Agreement (defined on Exhibit A), to
reduce the outstanding principal of Premier's bank debt, to acquire new stores
and renovate existing stores and for working capital (all in accordance with a
budget to be adopted by Premier satisfactory to Equisition and Infusion (the
"Proceeds Budget").
3. Conditions to Equisition's Obligations. The obligations of
Equisition to purchase and pay for the Stock and to consummate the Closing are
subject to the satisfaction or waiver as of the Closing of the following
conditions:
3.1 Due Diligence. Equisition shall have completed its due
diligence with respect to Premier and the transactions contemplated hereby,
and the results of such due diligence shall have been satisfactory to
Equisition in its sole discretion.
3.2 Other Agreements. Premier shall have entered into mutually
satisfactory agreements set forth on Exhibit A hereto with the parties
identified thereon, and each of such agreements shall be in full force and
effect as of the Closing.
3.3 Other Rights. Premier shall have taken all necessary actions
so that the terms and provisions set forth on Exhibit B (which are
incorporated into and made a part of this Agreement by this reference) shall
be valid, binding and enforceable against Premier.
3.4 Representations, Warranties and Covenants. Premier's
representations and warranties shall be true and correct at and as of the
Closing, and Premier shall have performed and complied with all agreements,
covenants and conditions contained herein (including, without limitation,
those on Exhibit B) and in the other agreements, instruments and documents to
be executed or delivered by Premier in connection herewith which are required
to be performed or complied with at or before the Closing.
3.5 No Defaults. There shall have occurred no breach, violation,
default, noncompliance, misrepresentation or untrue statement by Premier under
or in any of the agreements set forth on Exhibit A or the Agreement Regarding
Basic Terms dated February 26, 1999 between Premier and Infusion.
3.6 Adverse Proceedings. No action, suit, demand, proceeding,
appeal, order, investigation, inquiry or claim before any judicial, arbitral,
regulatory or governmental body shall be pending or threatened which, in the
judgment of Equisition, makes it inadvisable or undesirable to consummate the
transactions contemplated by this Agreement.
3.7 Legal Prohibitions. None of the transactions contemplated by
this Agreement shall be prohibited by any Applicable Law (defined below), and
the consummation of such transactions shall not subject Equisition to any
penalty, liability or onerous condition under or pursuant to any Applicable
Law. "Applicable Law" means, with respect to any Person, all provisions of
constitutions, statutes, rules, regulations, rulings, ordinances, codes,
requirements and orders of governmental bodies or regulatory agencies
applicable to or affecting such Person, and all orders, decisions, judgments
and decrees of all courts and arbitrators in proceedings or actions to which
the Person is a party or by which it (or any of its property) is bound.
3.8 Proceedings and Consents. Premier shall have taken all actions
and proceedings required in connection with the transactions contemplated
hereby to be consummated at or prior to the Closing (which shall be
satisfactory in form and substance to Equisition), and all necessary Consents
(defined below), filings and notices with respect to the transactions
contemplated by this Agreement shall have been obtained, made or given by
Premier. "Consent" means any consent, authorization, approval, order, decree,
permit, certification, license, registration or third party action of any
kind.
3.9 Receipt of Stock. Equisition shall have received evidence that
the Stock has been duly issued by Premier to Equisition. There shall have
occurred no event or action which could result in a dilution in the percentage
ownership in Premier to be acquired by Equisition.
3.10 Closing Documents. Premier shall have delivered to Equisition
the documents set forth on Exhibit C and such other documents, agreements,
Consents and other instruments relating to the transactions contemplated by
this Agreement as Equisition or its counsel may reasonably request.
Any condition specified in this Section 3 may be waived if expressly
consented to by Equisition, provided that no such waiver shall be effective
against Equisition, even if Closing occurs, unless it is set forth in a
writing executed by Equisition.
4. Conditions to Premier's Obligations. The obligations of Premier to
issue and sell the Stock to Equisition and to consummate the Closing are
subject to the satisfaction or waiver as of the Closing of the following
conditions:
4.1 Representations and Warranties. Equisition's representations
and warranties shall be true and correct at and as of the Closing.
4.2 Proceedings and Consents. All actions and proceedings taken or
required to be taken in connection with the transactions contemplated hereby
to be consummated at or prior to the Closing shall be satisfactory in form and
substance to Premier, and all necessary Consents, filings and notices to have
been obtained, made or given by Equisition with respect to the transactions
contemplated by this Agreement shall have been obtained, made or given by
Equisition.
4.3 Receipt of Purchase Price. Premier shall have received payment
for the Stock by wire transfer of immediately available funds in accordance
with written wire instructions provided by Premier.
4.4 Closing Documents. Equisition shall have delivered to Premier
an Officer's Certificate (defined on Exhibit C), dated the date of the
Closing, stating that the obligations of Equisition under Section 1 and the
conditions specified in this Section 4 have been fully satisfied.
5. Representations and Warranties of Premier. As a material inducement
to Equisition to enter into this Agreement, to purchase the Stock, and to
consummate the Closing, Premier hereby represents and warrants as follows:
5.1 Organization and Power. Premier is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Colorado and is qualified to do business in every jurisdiction in
which its ownership of property or conduct of business requires it to qualify.
Premier has all requisite power and authority necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted and to carry out the transactions contemplated by this
Agreement and the other agreements, instruments and documents to be executed
or delivered by Premier in connection with this Agreement.
5.2 Authorization. Premier has full power and authority (corporate
or otherwise) to enter into and carry out the terms of this Agreement and all
other agreements, instruments and documents contemplated hereby and to
consummate all transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and all other agreements,
instruments and documents contemplated hereby to which Premier is a party and
the consummation of all transactions contemplated hereby and thereby have been
duly authorized by Premier. This Agreement and all other agreements,
instruments and documents contemplated hereby to which Premier is a party
constitute the valid and binding obligations of Premier and are enforceable in
accordance with their respective terms.
5.3 No Breach. The execution and delivery by Premier of this
Agreement and all other agreements, instruments and documents contemplated
hereby to which Premier is a party, the offer, sale and issuance of the Stock
hereunder and the other securities contemplated hereby and the fulfillment of
and compliance with the respective terms hereof and thereof by Premier, do not
and shall not (a) conflict with or result in a breach of the terms, conditions
or provisions of, (b) constitute a default under, (c) result in the creation
of any lien, security interest, charge or encumbrance upon Premier's capital
stock or assets pursuant to, (d) give any third party the right to accelerate
any obligation under, (e) result in a violation of, or (f) require any
Consent, filing, exemption or other action pursuant to the Certificate of
Incorporation or Bylaws of Premier or any agreement, instrument or Applicable
Law to which Premier is subject or by which it is bound.
5.4 Subsidiaries. Premier does not own, directly or indirectly,
any shares of stock or other equity interests or security in any corporation,
partnership, limited liability company, association or other entity or
business enterprise (including individuals) (a "Person"), and Premier has no
obligation to make an investment or acquisition in any such Person.
5.5 Capital Stock and Related Matters
(i) As of the Closing and immediately thereafter, the
authorized capital stock of Premier shall consist of (i) twenty million
(20,000,000) shares of preferred stock, par value $.10 per share, of which
zero (0) shares shall be issued and outstanding and (ii) eight hundred fifty
million (850,000,000) shares of common stock, par value $.002 per share
(referred to herein as Premier's common stock), of which one million seven
hundred seventy-five thousand twenty-five (1,775,025) shares shall be issued
and outstanding, and the Stock shall constitute nineteen and nine tenths
percent (19.9%) of the then issued and outstanding shares of Premier's common
stock. Upon the Closing, all of the outstanding shares of the Company's
capital stock (including the Stock) shall be validly issued, fully paid and
nonassessable.
(ii) Except for Premier's Class A Warrants, Incentive Stock
Options, Non-Plan Options (referred to in (iii) below) and agreements to issue
no more than twenty-five thousand (25,000) shares of common stock, as of the
Closing, (a) Premier shall not have outstanding any stock, debt instrument or
securities convertible or exchangeable for any shares of its capital stock or
containing any profit participation features, (b) Premier shall not have
outstanding any rights or options to subscribe for or to purchase its capital
stock or any stock or securities convertible into or exchangeable for its
capital stock, (c) there shall be no anti-dilution or registration rights to
which any holder of securities of Premier is entitled and (d) Premier shall
not be subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any warrants,
options or other rights to acquire its capital stock.
(iii) As of the Closing and immediately thereafter (including
after giving effect to the Incentive Stock Options under the Executive
Employment Agreements (defined on Exhibit A), the number of shares of common
stock underlying the Class A Warrants shall be 1,858,334, under the Incentive
Stock Options shall be 350,000 and under the Non-Plan Options shall be 37,000,
and the average exercise price of the outstanding Incentive Stock Options and
the Non-Plan Options shall not exceed $2.05.
(iv) There are no statutory or contractual shareholders
preemptive rights or rights of refusal or similar rights with respect to
Premier's issuance and sale of the Stock hereunder or the issuance of common
stock upon exercise or conversion of the warrants and convertible preferred
stock to be issued pursuant to this Agreement, the Management Services
Agreement and the Second Stock Purchase Agreement.
(v) Premier has not violated, and has fully complied with, any
applicable federal or state securities laws in connection with the offer, sale
or issuance of any of its capital stock (including, without limitation, the
Stock). To the best of Premier's knowledge, there are no agreements between
its shareholders with respect to the voting or transfer of Premier's capital
stock or with respect to any other aspect of its affairs.
(vi) Premier has not granted any appreciation rights, phantom
rights or other rights or interests having profit participation or other
equity features or providing economic incentives or benefits based upon the
income or other measure of performance of Premier or any distribution on,
transaction involving or valuation of any capital stock of Premier.
5.6 Financial Statements. The books and records of Premier are in
all material respects complete and correct, have been prepared and maintained
in accordance with generally accepted accounting principles ("GAAP"),
consistently applied, and in accordance with sound business practices, and
they accurately reflect the basis for all disclosures made by Premier. The
financial statements attached hereto as Exhibit D ("Financial Statements")
include an audited balance sheet, statement of income and statement of changes
in financial position, all of which have been prepared in accordance with
GAAP, consistently applied, and fairly and accurately present the financial
condition and results of operations of Premier, as of the dates and for the
periods of time indicated.
5.7 Projections. All projections provided or made available to
Equisition by or on behalf of Premier have been prepared in good faith by
Premier (or by a third party acting on behalf of Premier and reasonably
believed by Premier to be competent as to the tasks performed) and are based
upon assumptions that were reasonable in light of the circumstances under
which they are made.
5.8 Material Adverse Changes. Since the date of the most recent
balance sheet included in the Financial Statements, (a) there has occurred no
material adverse change in (i) the existing or prospective business,
operations, assets or condition (financial or otherwise) of Premier or (ii)
relations with any employees or other personnel, joint venturer, customer,
supplier or party to a material contract of Premier (including, without
limitation, its store leases), (b) the business and affairs of Premier have
been conducted and carried on only in the ordinary course of business
consistent with past practices (and Premier has not engaged in any transaction
outside such ordinary course) and (c) the physical properties, inventory and
facilities owned or leased by Premier have suffered individually or in the
aggregate any material depletion, destruction or damage, regardless of whether
or not any loss suffered was insured. To Premier's knowledge, none of the
foregoing could reasonably be expected to occur, excluding changes in the
economy generally.
5.9 Undisclosed Matters. Except as set forth on the Financial
Statements:
(i) Premier has no obligation or liability (whether accrued,
absolute, contingent, unliquidated or otherwise, known or unknown, whether due
or to become due and regardless of when asserted) arising out of any
transaction, act, omission or state of fact existing at or prior to the
Closing, other than liabilities and obligations which arise on or after the
date of the Closing in the ordinary course of business (none of which is a
liability resulting from breach of contract, breach of warranty, tort,
infringement or any claim, asserted or unasserted), which either alone or in
the aggregate would have a material adverse effect on Premier.
(ii) The properties (real and otherwise) and assets (tangible
or intangible) owned or used by Premier or located on its premises are free
and clear of all liens, security interests, mortgages, pledges, assignments,
charges, assessments, adverse claims, easements, restrictions, title defects,
covenants, burdens and legal or equitable encumbrances of any kind.
(iii) There are no actions, suits, demands, proceedings,
orders, investigations, inquiries or claims pending or threatened against or
affecting Premier (or against or affecting any officer, director, employee
agents or other Person acting on behalf of Premier), at law or in equity, or
before or by any governmental department, commission, board, bureau, agency or
instrumentality (including, without limitation, any actions, suits,
proceedings or investigations with respect to the transactions contemplated by
this Agreement or any other agreement, instrument or document contemplated
hereby), and there is no judgment, order, decree or other ruling of any court,
arbitrator or governmental agency affecting Premier, which either alone or in
the aggregate would have a material adverse effect on Premier.
(iv) Premier has duly filed in proper form (or timely and
properly obtained an extension with respect to) all required federal, state,
local or foreign income, franchise, sales, use, property, excise, payroll and
other tax returns and has paid all taxes, fees, interest, penalties and
assessments of whatever nature due on or before the date of this Agreement,
and no audits of Premier's tax returns by any governmental authority are
pending or, to the knowledge of Premier, threatened.
(v) There are no pending, threatened or potential unasserted
claims (other than routine claims for benefits) by, on behalf of or against
any of the bonus, deferred compensation, stock option, severance and other
medical, life, insurance, profit-sharing, pension, retirement or other
employee benefit or welfare plans of or relating to Premier ("Plans"), and
none of the Plans provide benefits, including death or medical benefits
(whether or not insured), beyond retirement or other termination of service.
(vi) All obligations of Premier to pay salary, wages, benefits,
withholding, social security, unemployment insurance, business privilege or
payroll taxes have been paid or satisfied in full and there are outstanding no
such obligations, except for obligations which either alone or in the
aggregate would not have a material adverse effect on Premier or subject any
director, officer or employee of Premier to any liability.
(vii) There has been no loan, payment, transfer, assignment or
other disposition of assets or rights of any kind by Premier to, on account
of, or for the benefit of any Person affiliated with or otherwise related to
Premier, directly or indirectly, whether in the form of compensation,
dividends or other distributions in respect of shares of stock or otherwise,
and there is no outstanding offer or commitment to make, or any reasonable
expectation on the part of others that there will be, such a payment,
transfer, assignment or other disposition.
5.10 Premises. Premier has good and valid right, title or interest
in or to the real property, whether owned or leased, used for its existing
store locations. All such real property, buildings, equipment and other
tangible assets owned, leased or used by Premier (a) are in good operating
condition and are fit for use in the ordinary course of business, (b) do not
violate any present or proposed Applicable Laws, (c) are not subject to any
pending or threatened condemnation or eminent domain proceedings and (d) have
all Consents and all utilities and access rights necessary for full use in the
conduct of business as presently and proposed to be conducted.
5.11 Contracts and Leases. Premier is not a party or otherwise
bound by or subject to any written or oral material contract, agreement, lease
(including real property leases), license or commitment outside the ordinary
course of business. Premier has no reason to believe that any contract,
agreement, lease, license or commitment to which it is a party or otherwise
bound is likely to be terminated, canceled, adversely modified (including by
significant rent increase) or breached or that Premier's right, title and
interest therein may be challenged.
5.12 Proprietary Rights. Premier owns all right, title and interest
in and to, or has the right to use pursuant to a valid and binding license,
all Proprietary Rights (defined below) necessary for the operation of its
business as presently conducted and as presently proposed to be conducted.
"Proprietary Rights" means (in whatever form or medium) all patents and patent
applications, trademarks, service marks, trade dress, trade names and
corporate names and registrations and applications for registration thereof
(including, without limitation, "Imposters" and "Elegant Pretenders"),
copyrights and registrations and applications for registration thereof,
computer software, data and documentation, trade secrets and other
confidential information and other intellectual property rights and licenses.
Premier has not granted a license or other right to any third party with
respect to any Proprietary Rights. No loss or expiration of any Proprietary
Right or related group of Proprietary Rights is pending or, to Premier's
knowledge, threatened or is reasonably foreseeable, and Premier has made
reasonable and prudent efforts to maintain and protect the Proprietary Rights
which it owns and uses. To Premier's knowledge, no owners of any Proprietary
Rights licensed to Premier have failed to make reasonable and prudent efforts
to maintain and protect the Proprietary Rights which are subject to such
licenses. Except for those which arise in the ordinary course of Premier's
business and which either alone or in the aggregate would not have a material
adverse effect on Premier, there have been no claims made against Premier
asserting the invalidity, misuse or unenforceability of any of the Proprietary
Rights owned or used by Premier, and there are no reasonable grounds for any
such claim. Except for those which arise in the ordinary course of Premier's
business and which either alone or in the aggregate would not have a material
adverse effect on Premier, Premier has not received a notice of conflict with
the asserted rights of others, and the conduct of Premier's business
(including, without limitation, any particular product or product line) has
not infringed or misappropriated and does not infringe or misappropriate any
rights of other Persons, nor would any future conduct or product as presently
contemplated infringe any rights of other Persons and, to Premier's knowledge,
the Proprietary Rights owned or used by Premier have not been infringed or
misappropriated by other Persons.
5.13 Insurance. Premier maintains insurance policies with respect
to its assets and businesses against risks and liabilities to the extent and
in respect of amounts, types and risks insured, as are customary in Premier's
industries. All such policies are adequate to protect the assets and business
of Premier, and each policy is enforceable in accordance with its terms and in
full force and effect as of the date hereof. Premier is not in default with
respect to its obligations under any insurance policy maintained by it.
5.14 Compliance with Laws. To the best of Premier's knowledge,
Premier has complied with all Applicable Laws and has not received notice of,
nor does Premier have any reason to know of, any claim of default or violation
with respect to any Applicable Law (including, without limitation, laws
respecting (i) licensing or franchising, (ii) employment and employment
practices, such as those relating to Plans, wages, hours, collective
bargaining, unemployment insurance, workers compensation, OSHA, equal
opportunity, age and handicapped discrimination, immigration control, and the
payment and withholding of social security and other taxes, (iii) public
company registration and reporting requirements and other securities matters,
(iv) the environment and hazardous substances and (v) matters affecting
Premier's business generally).
5.15 Disclosure. Neither this Agreement nor any of the exhibits,
schedules, attachments, written statements, documents, certificates,
securities filings or reports or other items delivered or made available to
Equisition by or on behalf of Premier in connection with the transactions
contemplated hereby (including, without limitation, all publicly available
securities filings, forms and reports) contains any untrue statement of a
material fact or omits a material fact necessary to make each statement
contained herein or therein not misleading. There is no fact which Premier
has not disclosed to Equisition in writing and of which any officers,
directors or executive employees of Premier is aware and which has had or
could reasonably be anticipated to have a material adverse effect on Premier's
business or prospects. Premier, through its directors, officers and
employees, has exerted best efforts to verify all representations, warranties
or other statements, whether in this Agreement or otherwise made to
Equisition, and, to the knowledge of Premier, through such Persons, the
representations, warranties of Premier under this Agreement are true and
correct in all material aspects.
6. Representations and Warranties of Equisition. As a material
inducement to Premier to enter into this Agreement, to issue and sell the
Stock and to consummate the Closing, Equisition hereby represents and warrants
as follows:
6.1 Organization and Power. Equisition is duly organized, validly
existing and in good standing under the laws of the State of Delaware, and it
has all requisite power and authority and all material Consents necessary to
own and operate its properties, to carry on its businesses as now conducted
and presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement.
6.2 Authorization and Enforceability. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite company action, and no other company act or proceedings on its part
is necessary to authorize the execution, delivery or performance of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of Equisition and is
enforceable against it in accordance with its terms.
6.3 No Breach. The execution and delivery by Premier of this
Agreement and all other agreements contemplated hereby to which Equisition is
a party, the purchase hereunder of the Stock, and the fulfillment of and
compliance with the respective terms hereof and thereof by Equisition, do not
and shall not (a) conflict with or result in a breach of the terms, conditions
or provisions of, (b) constitute a default under, (c) result in the creation
of any lien, security interest, charge or encumbrance upon the assets of
Equisition pursuant to, (d) give any third party the right to accelerate any
obligations under, (e) result in a violation of, or (f) require any Consent or
other action by or notice, pursuant to, the Limited Liability Company
Agreement of Equisition or any agreement, instrument or Applicable Law to
which Equisition is subject.
6.4 Investment Representation. Equisition is acquiring the Stock
purchased hereunder for its own account with the present intention of holding
such securities for purposes of investment, and it has no intention of selling
such securities in a public distribution in violation of the Securities Act or
any applicable state securities laws; provided that nothing contained in this
Section 6.4 shall prevent Equisition and subsequent holders of the Stock or
any other securities issued by Premier from transferring such securities in
any manner in compliance with, or pursuant to the requirements of an exemption
from registration contained in, the Securities Act of 1933, as amended,
applicable state securities laws and/or the regulations adopted pursuant
thereto (including, without limitation, a distribution of the Stock to the
members of Equisition, which is hereby approved in advance by Premier).
7. Indemnification.
7.1 Losses of Equisition. In addition to all rights and remedies
available to Equisition at law or in equity, Premier shall indemnify
Equisition and its members, managers, officers, partners, agents, employees,
representatives and counsel and their respective successors, assigns, heirs or
legal representatives, and save and hold each of them harmless against and pay
on behalf of or reimburse such party as and when incurred for any loss
(including, without limitation, diminutions in value and consequential
damages), liability, demand, claim, action, cause of action, cost, damage,
deficiency, penalty, fine or expense, whether or not arising out of third
party claims (including, without limitation, interest, penalties, reasonable
attorneys' and other professionals' fees and expenses and all amounts paid in
the investigation, defense or settlement of any of the foregoing)
(collectively, "Losses"), which any such party may suffer, sustain or become
subject to as a result of, in connection with or arising out of:
(i) any misrepresentation or breach of warranty by Premier or
omission of a material fact from any representation or warranty by Premier in
this Agreement (including all Exhibits to this Agreement, and all
certificates, instruments and documents presented to Equisition by Premier
pursuant to the terms of this Agreement (including, without limitation, all
publicly available securities filings, forms and reports)) or any other
agreement, instrument or document executed or delivered in connection with
this Agreement;
(ii) any nonfulfillment of a condition or breach of any
covenant or agreement on the part of Premier under this Agreement or any
agreement, instrument or document executed or delivered in connection
herewith;
(iii) any action, suit, demand, proceeding, order,
investigation, inquiry or claim by any third party (including, without
limitation, governmental agencies) against or affecting Equisition or Premier
which, if successful, would give rise to or evidence the existence of or
relate to a breach of any of the representations, warranties or covenants of
Premier under this Agreement or any agreement, instrument or document executed
or delivered in connection herewith; and
(iv) any third party claim (whenever made) not disclosed on any
Exhibit hereto relating in any way to Premier, and any other third party claim
(whenever made) relating in any way to Premier, whether or not disclosed on
any Exhibit hereto, arising out of, relating to, resulting from or caused by
any transaction, status, event, condition, occurrence or situation occurring
or existing on or prior to the date of Closing or otherwise related to this
Agreement, the purchase or ownership of the Stock by Equisition and/or any use
made by Premier of all or any portion of the proceeds thereof.
7.2 Losses of Premier. In addition to all rights and remedies
available to Premier at law or in equity, Equisition shall indemnify Premier
and its directors, officers, partners, agents, employees, representatives and
counsel and their respective successors, assigns, heirs or legal
representatives, and save and hold each of them harmless against and pay on
behalf of or reimburse such party as and when incurred for any Loss which any
such party may suffer, sustain or become subject to as a result of, in
connection with or arising out of:
(i) any misrepresentation or breach of warranty by Equisition
or omission of a material fact from any representation or warranty by
Equisition in this Agreement (including all Exhibits to this Agreement, and
all certificates, instruments and documents presented to Equisition by
Premier pursuant to the terms of this Agreement (including, without
limitation, all publicly available securities filings, forms and reports)) or
any other agreement, instrument or document executed or delivered in
connection with this Agreement;
(ii) any nonfulfillment of a condition or breach of any
covenant or agreement on the part of Equisition under this Agreement or any
agreement, instrument or document executed or delivered in connection
herewith; and
(iii) any action, suit, demand, proceeding, order,
investigation, inquiry or claim by any third party (including, without
limitation, governmental agencies) against or affecting Premier which, if
successful, would give rise to or evidence the existence of or relate to a
breach of any of the representations, warranties or covenants of Equisition
under this Agreement or any agreement, instrument or document executed or
delivered in connection herewith.
7.3 Survival. All representations, warranties, covenants and other
agreements in this Agreement and in all other agreements, instruments and
documents executed or delivered in connection with this Agreement, and all
rights and remedies provided under or otherwise available in connection with
any of the foregoing (including, without limitation, the indemnification
rights provided in this Section 7), at law or in equity, shall survive the
execution and delivery of this Agreement and the other agreements, instruments
and documents executed or delivered in connection herewith and the
consummation of the transactions contemplated hereby and thereby, regardless
of any investigation, inquiry or examination made for or on behalf of, or any
knowledge of either party or any of their respective directors, officer,
partners, agents, employees, representatives or counsel thereof or the
acceptance by a party of any certification or opinion.
7.4 Defense of Claims. Any Person making a claim for
indemnification under this Section 7 (an "Indemnitee") shall notify the party
obligated to provide such indemnification (the "Indemnifier") of the claim in
writing promptly after receiving written notice of any action, lawsuit,
proceeding, investigation or other claim against it (if by a third party) or
discovering the liability, obligation or facts giving rise to such claim for
indemnification, describing the claim, the amount thereof (if known and
quantifiable), and the basis thereof; provided, that the failure to so notify
the Indemnifier shall not relieve the Indemnifier of its obligations hereunder
except to the extent such failure shall be proved to have caused the
Indemnifier to suffer a material loss. The Indemnifier shall be entitled to
participate in the defense of such action, lawsuit, proceeding, investigation
or other claim giving rise to the Indemnitee's claim for indemnification, at
the Indemnifier's expense, and at its option (subject to the limitations set
forth below), the Indemnifier shall be entitled to appoint lead counsel of
such defense, acceptable to the Indemnitee; provided that prior to, and as a
condition to, the Indemnifier's appointing lead counsel of such defense the
Indemnifier shall first (a) verify to the Indemnitee in writing, in form and
substance satisfactory to the Indemnitee, that the Indemnifier shall be fully
and unconditionally responsible (with no reservation of any rights) for all
liabilities and obligations relating to such claim for indemnification and
that it will provide full indemnification as required hereunder, and (b)
provide the Indemnitee with assurance, in form and substance satisfactory to
the Indemnitee in its sole judgment, that the Indemnifier is and will satisfy
any such liability; provided further, that:
(i) The Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice, with fees and
expenses of such separate counsel borne by the Indemnitee. Notwithstanding
the foregoing, the reasonable fees and expenses of such separate counsel
incurred prior to the date the Indemnifier effectively assumes control of such
defense shall be borne by the Indemnifier.
(ii) The Indemnifier shall not be entitled to assume or retain
control of such defense if (A) the claim for indemnification relates to or
arises in connection with any criminal proceeding, action, indictment,
allegation or investigation; (B) the Indemnitee reasonably believes an adverse
determination with respect to the action, suit, investigation, proceeding,
inquiry or other claim giving rise to the claim for indemnification could be
detrimental to or injure Indemnitee's reputation, an important relationship or
future business prospects or otherwise result in harm not readily calculable
in monetary terms, (C) the claim seeks an injunction or equitable relief
against the Indemnitee, (D) the Indemnitee reasonably believes that there is
an actual or potential conflict of interest involved in the representation of
the Indemnitee by the counsel selected by the Indemnifier, whether because of
differing interests between the Indemnifier and the Indemnitee or otherwise,
or (E) the Indemnitee reasonably believes that Premier has failed or is
failing to vigorously prosecute or defend such claim.
(iii) If the Indemnifier, with the consent of the Indemnitee,
shall control the defense of any such claim, the Indemnifier shall obtain the
prior written consent of the Indemnitee before entering into any settlement of
a claim or ceasing to defend such claim, if, pursuant to or as a result of
such settlement or cessation, an injunction or other equitable relief is
likely to be imposed against the Indemnitee or if such settlement does not
expressly and unconditionally release the Indemnitee from all liabilities and
obligations with respect to such claim, with prejudice.
8. Obligations at Second Funding. Upon and subject to the consummation
of the transactions contemplated by the Second Stock Purchase Agreement (the
"Second Funding"), Premier shall issue Equisition a warrant, in the form
attached as a exhibit to the Second Stock Purchase Agreement, to purchase that
portion of the aggregate shares under such warrant as shall be allocated to
Equisition by Infusion, Equisition and the investor under the Second Stock
Purchase Agreement.
9. Miscellaneous
9.1 Rights and Remedies. Except as otherwise expressly provided
herein, the rights and remedies of the parties under this Agreement (including
the right to terminate this Agreement and the right to indemnification) shall
be cumulative with and in addition to, not exclusive or in replacement of, any
other rights or remedies that may be available under any other agreement
between the parties, at law or in equity.
9.2 Forum Selection for Disputes. Each of the parties to this
Agreement hereby submits to the exclusive, personal jurisdiction of either the
Federal District Court for the Eastern District of Pennsylvania or the Court
of Common Pleas of Philadelphia County, Pennsylvania for all claims, disputes
or controversies involving the parties hereto and relating to this Agreement;
provided, however, nothing herein shall prevent a party hereto from asserting
a claim for indemnification or any other claim hereunder against the other
party hereto in connection with a third party action in the same jurisdiction
where a third party action has been brought. Each party hereby knowingly,
intelligently and voluntarily waives its right to contest the jurisdiction or
venue of either such court, whether on the grounds of inconvenience or
otherwise, and each party hereto knowingly, intelligently and voluntarily
waives its right to initiate a suit or action against the other party in any
other court or forum, except as expressly provided in Section 7.
9.3 Waiver of Jury Trial. IRREVOCABLY AND UNCONDITIONALLY, EACH OF
THE PARTIES HERETO HEREBY KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVES ITS
RIGHTS TO DEMAND TRIAL BY JURY IN ANY LITIGATION, SUIT OR OTHER ACTION BROUGHT
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT,
INSTRUMENT OR DOCUMENT EXECUTED PURSUANT TO, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY PROVISION OF ANY OF THE FOREGOING OR ANY OTHER MATTERS
INVOLVING BOTH OF THE PARTIES HERETO.
9.4 Notices and Other Communications. Any notice, consent, demand
or other communication required or permitted under this Agreement shall be
made in writing and shall be deemed to have been duly given if (a) sent by
personal delivery or facsimile, telecopier or similar transmission (and shall
be deemed given upon confirmation of receipt), (b) mailed by first class
registered or certified mail, return receipt requested, postage prepaid (and
shall be deemed delivered three (3) days after the date received for delivery
by the United States Postal Service, whether or not accepted by the addressee)
or (c) sent by nationally recognized next-day delivery courier that guaranties
delivery within twenty-four (24) hours, charges prepaid (and shall be deemed
delivered one business day after delivery to said courier), addressed to the
parties hereto at their respective addresses set forth under their names on
the signature pages hereto, marked in each case to the attention of the Chief
Executive Officer of the recipient; however, each party may change the person
to be notified on its behalf or the address of such person from time to time
by giving notice of such change at least ten (10) days in advance.
9.5 Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements and understandings of the parties,
oral or written, express or implied, in connection therewith.
9.6 Amendments and Waivers. Any provision of this Agreement may be
amended or modified, in whole or in part, and the compliance with any
provision of this Agreement may be waived only with the written consent of (a)
both parties hereto, in the case of an amendment or modification and (b) the
party waiving compliance with a provision, in the case of a waiver.
9.7 No Waiver. No waiver by any party hereto of any condition, or
the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed or
construed as a further or continuing waiver of any such condition or breach or
waiver of any other condition.
9.8 Severability. If any provision (or any part of any provision)
of this Agreement shall for any reason be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
determination shall not invalidate, impair or affect the remainder of this
Agreement, which shall continue in full force and effect. If such invalid,
illegal or unenforceable provision would be valid, legal and enforceable if
modified in scope, duration or otherwise, such provision shall be deemed
modified to the minimum extent necessary to render the same valid, legal and
enforceable.
9.9 Governing Law. This Agreement, its interpretation, performance
and enforcement, and the rights and remedies of the parties hereto, shall be
governed and construed by and in accordance with the laws of the Commonwealth
of Pennsylvania, without regard to principles of conflict of laws.
9.10 Binding Effect. Except as otherwise expressly provided, all
covenants and agreements contained in this Agreement or any other agreement,
instrument or document executed or delivered in connection herewith by or on
behalf of any of the parties hereto shall bind and inure to the benefit of
their respective successors, assigns, heirs and legal representatives, whether
so expressed or not. In addition, and whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
Equisition as a purchaser or holder of the Stock are also for the benefit of,
and enforceable by, any subsequent holder of such Stock.
9.11 Assignment. Neither party may assign any of its rights or
obligations under this Agreement without the prior written consent of the
other party, in such other party's sole discretion.
9.12 No Third Party Rights. This Agreement is not intended to, and
it shall not, provide any rights whatsoever to any third party, and no third
party shall have any right to assert a claim under or enforce this Agreement
against any party hereto.
9.13 Construction. The masculine form, wherever used herein, shall
be construed to include the feminine and the neuter, and vice versa, where
appropriate. The singular form, wherever used herein, shall be construed to
include the plural, and vice versa, where appropriate. The term "include"
(and correlative terms, such as "includes" and "including") shall not be
construed as a term of limitation in any context but shall be construed as if
followed by the words "without limitation." All references in this Agreement
to a "Section" shall be to the applicable section of this Agreement, unless
otherwise specially provided. The captions of Sections are for the
convenience of the parties only; they form no part of this Agreement and shall
not affect its interpretation.
9.14 Determining Days. In computing the number of days for purposes
hereof, all days shall be counted, including Saturdays, Sundays and legal
holidays in the Commonwealth of Pennsylvania (unless only business days are
specified); provided, however, that if the final day of any time period falls
on a Saturday, Sunday or legal holiday, the final day shall be deemed to be
the following day which is not a Saturday, Sunday or holiday. A "business
day" shall mean any day which is not a Saturday, Sunday or legal holiday in
the Commonwealth of Pennsylvania.
9.15 Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall be deemed to be an original and all
counterparts together shall constitute one and the same instrument. The
transmission of a signature by telecopier will be treated as delivery of an
executed original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
PREMIER CONCEPTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx, President and CEO
Address for Notices:
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
EQUISITION CAPITAL, LLC
By: /s/ Xxxxx X. X. Xxxxxx
-------------------------------------
Xxxxx X. X. Xxxxxx, President
Address for Notices:
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Exhibit A
Other Agreements
1. Registration and Anti-Dilution Agreements between Premier and each
of Equisition and Infusion (the "Registration Agreements").
2. E-Commerce Services Agreement between Premier and MeridianTelesis
(the "Meridian Services Agreement").
3. Management Services Agreement between Premier and Infusion (the
"Management Services Agreement").
4. Second Stock Purchase Agreement between Premier and Infusion (the
"Second Stock Purchase Agreement").
5. Employment Agreements between Premier and its CEO, CFO and COO (the
"Executive Employment Agreements").
Exhibit B
Board Election, Reporting Provisions and Other Rights
1. Board Election. Premier's Board of Directors shall be constituted
of four (4) Directors and shall be classified such that Equisition, voting
separately, shall be entitled to appoint or elect a number of Directors in
proportion to its stake in Premier (rounded down for partial members, but not
less than one). Premier will cause the first election of such person(s) to be
effective on the Closing Date and will compensate such Board members as it
compensates its other Board members. Equisition shall be entitled to remove
and replace such Director(s), with or without cause, at any time.
2. Reporting Requirements. Premier shall deliver to Equisition as long
as it holds at least ten percent (10%) of Premier's voting securities:
2.1 as soon as available but in any event within forty-five (45)
days (subject to a 5 day extension under Rule 12b-25) after the end of each
quarterly accounting period in each fiscal year, unaudited consolidating and
consolidated statements of operations and cash flows of Premier and its
subsidiaries for such quarterly period and for the period from the beginning
of the fiscal year to the end of such quarter, and consolidating and
consolidated balance sheets of Premier and its subsidiaries as of the end of
such quarterly period, setting forth in each case comparisons to the annual
budget and to the corresponding period in the preceding fiscal year, and all
such statements shall be prepared in accordance with generally accepted
accounting principles, consistently applied, subject to the exclusion of
footnote disclosure and normal year-end audit adjustments;
2.2 within ninety (90) days after the end of each fiscal year
(subject to a 15 day extension under Rule 12b-25), consolidating and
consolidated statements of operations and cash flows of Premier and its
subsidiaries for such fiscal year, and consolidating and consolidated balance
sheets of Premier and its subsidiaries as of the end of such fiscal year,
setting forth in each case comparisons to the annual budget and to the
preceding fiscal year, all prepared in accordance with generally accepted
accounting principles, consistently applied, and accompanied by (A) with
respect to the consolidated portions of such statements, an unqualified
opinion of an independent accounting firm of recognized standing and (B) a
copy of such firm's annual management letter to the Board; and
2.3 with reasonable promptness, such other information and
financial and operating data concerning Premier as may be regularly prepared
by Premier or as Equisition may reasonably request.
Each of the financial statements referred to in the foregoing paragraphs
shall be consistent with the books and records of Premier and shall be
prepared, and fairly present the financial condition of Premier,
in accordance with GAAP, consistently applied, subject in the case of
unaudited financial statements to lack of footnote disclosure and changes
resulting from normal year-end audit adjustments.
3. Inspection. Premier shall permit any representatives designated by
Equisition, upon reasonable notice and during normal business hours, to (i)
visit and inspect any of the properties of Premier, (ii) examine the
corporate, financial and other business records of Premier and make copies
thereof or extracts therefrom and (iii) discuss the affairs, finances and
accounts of any such corporations with the Directors, officers, employees,
independent accountants and counsel of Premier. Premier shall exert
reasonable best efforts to require persons not employed by Premier or
otherwise under Premier's control to cooperate fully with such
representatives.
4. Equitable Relief. Equisition shall be entitled to obtain any
equitable relief appropriate to enforce compliance with this Exhibit B and to
recover expenses, including attorneys' fees and disbursements incurred in
connection with such enforcement. The remedy provided in this Section 4 shall
be in addition to, not exclusive of, any other right or remedy available at
law or in equity, whether by statute, pursuant to an agreement with Premier or
otherwise.
5. Liability Limitation. In addition to any other provisions regarding
limitations of liability in Premier's Certificate of Incorporation, Bylaws or
otherwise applicable, to the maximum extent permitted by law, Premier does
hereby exonerate Equisition and its designee(s) serving on the Board of
Directors and all committees thereof from time to time, or any person or
entity being represented by or acting on behalf of any of the foregoing,
directly and indirectly, and their respective successors and assigns
(collectively, "Indemnitees"), and waives and releases any suit, claim, demand
or cause of action of any kind arising, from any action taken or failure to
take any action by an Indemnitee, unless such action or failure to take action
constitutes willful misconduct, and to the maximum extent permitted by law, no
Indemnitee shall be personally liable for monetary damages as such for any
action or failure to take action.
6. Indemnification. Each Indemnitee shall be indemnified and held
harmless by Premier for all actions taken by him or her and for all failure to
take action (regardless of the date of any such action or failure to take
action) to the fullest extent permitted by law and against all expense,
liability and loss (including without limitation attorneys' fees, judgment,
fines, taxes, penalties, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Indemnitee in connection with any
action, suit, claim or proceeding ("Proceeding"), except to the extent that
the act or failure to act giving rise to the claim for indemnification is
determined by a court of competent jurisdiction to have constituted willful
misconduct. The right to indemnification provided in this Section 6 shall
include the right to have the expenses incurred by the Indemnitee in defending
any Proceeding paid by Premier in advance of the final disposition of the
Proceeding to the fullest extent permitted by law; provided that, if law so
requires, the payment of such expenses incurred by the Indemnitee in advance
of the final disposition of a Proceeding shall be made upon delivery to
Premier of an undertaking, by or on behalf of the Indemnitee, to repay all
amounts so advanced without interest if it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified under this Section 6 or
otherwise. The undertaking required by the preceding sentence need not be
secured and shall be accepted without reference to financial ability to make
repayment. Indemnification pursuant to this Section 6 shall continue as to an
Indemnitee who has ceased to be a holder of Stock, a Director or an officer or
ceased to have any relationship with Premier and shall inure to the benefit of
the Indemnitee's heirs, executors and administrators. The rights to
indemnification and to the advancement of expenses provided in this Section 6
shall not be exclusive of any other rights that any person or entity may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or Directors or
otherwise.
7. Miscellaneous
7.1 The provisions of this Exhibit B relating to the limitation of
Indemnitees' liability, to indemnification and to the advancement of expenses
shall constitute a contract between Premier and each of the Indemnitees which
may be modified as to any Indemnitee only with that person's or entity's
consent or as specifically provided herein. Notwithstanding any provision in
the Certificate of Incorporation relating to amendment of the Certificate of
Incorporation generally, no repeal or amendment of this Exhibit B can be
effective without the prior written consent of Equisition, and any such
amendment or repeal which is adverse to any Indemnitee shall apply to such
Indemnitee only on a prospective basis and shall not reduce any limitation on
the personal liability of an Indemnitee or limit the rights of an Indemnitee
to indemnification or to the advancement of expenses with respect to any
action or failure to act occurring prior to the time of such repeal or
amendment.
7.2 In the case of any change in law which expands the liability of
an Indemnitee or limits the indemnification rights or the rights to
advancement of expenses which Premier may provide, the right to exoneration,
limited liability, indemnification and the advancement of expenses provided in
this Exhibit B shall continue as theretofore to the extent permitted by law.
Conversely, if change in law permits Premier to limit further the liability of
an Indemnitee or to provide broader indemnification rights or rights to the
advancement of expenses than Premier was permitted to provide prior to such
change, then liability thereupon shall be so limited and the rights to
indemnification and the advancement of expenses shall be so broadened to the
extent permitted by law.
7.3 If any right, power or privilege provided to Equisition does
not become valid and enforceable merely by this Exhibit B, (a) Premier and the
Board of Directors shall exert their best efforts to obtain such consents and
satisfy such other conditions as may be necessary for such right, power or
privilege to be valid and enforceable as provided herein (including, without
limitation, by filing any Certificate of Designation or making any amendment
to the Certificate of Incorporation or Bylaws), (b) such right, power or
privilege shall be provided to the fullest extent permitted by law, (c)
Premier and the Board of Directors shall take such actions as may be necessary
to provide Equisition with such other rights, powers and privileges as may
have the same substantive effect and accomplish the same purposes as the
invalid or unenforceable right, power or privilege and (d) any such invalidity
or unenforceability shall not invalidate or otherwise affect any other right,
power or privilege granted hereby.
Exhibit C
Additional Closing Documents
1. An Officer's Certificate (defined below), dated the date of the
Closing, stating that the obligations of Premier under Section 1 and the
conditions specified in this Section 3 have been fully satisfied. "Officer's
Certificate" means a certificate signed by Premier's president, chief
executive officer or chief financial officer, stating that (a) the officer
signing such certificate has made or has caused to be made such investigations
as are necessary in order to permit such officer to verify the accuracy of the
information set forth in such certificate and (b) to the best of such
officer's knowledge, such certificate does not misstate any material fact and
does not omit to state any fact necessary to make any information in the
certificate not misleading.
2. Certified copies of the resolutions duly adopted by Premier's Board
of Directors authorizing the execution, delivery and performance of
this Agreement and each of the other agreements contemplated hereby to which
Premier is a party, the issuance and sale of the Stock to Equisition
and the consummation of all other transactions contemplated by this Agreement
to be performed by Premier.
3. A copy of the Certificate of Incorporation of Premier, certified by
the Secretary of State of Colorado, and a copy of the Bylaws of Premier, each
as in effect at the Closing.
4. A good standing certificate for Premier issued by the Secretary of
State of Colorado and of each state in which Premier is qualified to do
business.
5. A certificate of incumbency signed by the Secretary of Premier,
certifying the names, titles and signatures of the Persons executing this
Agreement and the other agreements contemplated hereby.
6. Copies of all third party (including governmental) Consents required
to be obtained or filed on or before the date of Closing in connection with
the consummation of the transactions hereunder (including, without limitation,
all securities laws filings).
7. The Use of Proceeds Budget.
Exhibit D
Financial Statements
See attached pages.
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