UNDERWRITING AGREEMENT
March 6, 1997
Cohig & Associates, Inc.
As Representative of the Several
Underwriters Named in Schedule I Hereto
0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Premier Concepts, Inc., a Colorado corporation (the "Company"), hereby
confirms its agreement with you (the "Representative") and with the other
Underwriters, including the Representative, named in Schedule I hereto
(hereinafter "the Underwriters") as follows:
SECTION 1
DESCRIPTION OF SECURITIES
The Company proposes to issue and sell to the Underwriters shares (the
"Shares") of Common Stock, $.002 par value per share, and Redeemable Common
Stock Purchase Warrants (the "Warrants") (the Shares and the Warrants shall
collectively be referred to as the "Securities"). The Underwriters propose to
purchase 1,100,000 Shares ("Firm Shares") and 1,100,000 Warrants ("Firm
Warrants") (collectively, the "Firm Securities") at a purchase price of $3.75
per Share and $0.15 per Warrant. The Shares and the Warrants may be purchased by
the Underwriters only together on the basis of one Share and one Warrant. The
Underwriters shall also have options (the "Over-allotment Options") to purchase
up to an additional 165,000 Shares ("Over-allotment Shares") and/or 165,000
Warrants ("Over-allotment Warrants") (collectively, the "Over-allotment
Securities"), as provided in Section 3.1 hereof.
Each Warrant shall entitle the holder to purchase one share of Common Stock
at $5.00 per share until March 5, 2000. The Company may, after one year from
the Effective Date (hereafter defined) redeem the Warrants on forty-five (45)
days' written notice at a price of $.05 per Warrant at such time as the market
price of the Common Stock exceeds $7.50 per share for 20 of the 30 trading days
ending within 30 days preceding the date of the notice of redemption. To redeem
the Warrants, the Company must have in effect a current registration statement
registering the Common Stock issuable upon exercise of the Warrants. The shares
of Common Stock underlying the Warrants are referred to herein as the "Warrant
Shares."
The Company proposes to issue and sell to the Representative and its
designees on the Closing Date (hereinafter defined) for an aggregate purchase
price of $100, options ("Share Options") to purchase 110,000 shares of Common
Stock and options ("Warrant Options") to purchase 110,000 Warrants. Each Share
Option shall be exercisable at $4.50 per share; and each Warrant Option is
exercisable at $0.18 per warrant. The Share Options and the Warrant Options are
collectively referred to as the "Representative's Options." The terms of the
warrants receivable upon exercise of the Warrant Options (the "Representative's
Warrants"), including the exercise price, shall be identical to the terms of the
Warrants.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Underwriters to enter into this Agreement, the
Company hereby represents and warrants to and agrees with each Underwriter that:
2.1 REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form SB-2 (File No. 333-19901) has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations of the Securities and Exchange Commission
(the "Commission") thereunder, and said registration statement has been filed
with the Commission. Copies of such registration statement and any amendments,
and all forms of the related prospectuses contained therein, have been delivered
to the Representative. Such registration statement, including the prospectus,
Part II, and documents incorporated by reference therein and financial schedules
and exhibits thereto, as amended at the time when it shall become effective, is
herein referred to as the "Registration Statement," and the prospectus included
as part of the Registration Statement on file with the Commission when it shall
become effective or, if the procedure in Rule 430A of the Rules and Regulations
(as defined below) under the Securities Act is followed, the prospectus that
discloses all the information that was omitted from the prospectus on the
effective date pursuant to such Rule, and in either case, together with any
changes contained in any prospectus filed with the Commission by the Company
with your consent after the effective date of the Registration Statement, is
herein referred to as the "Final Prospectus." If the procedure in Rule 430A is
followed, the prospectus included as part of the Registration Statement on the
date when the Registration Statement became effective is referred to herein as
the "Effective Prospectus." Any prospectus included in the Registration
Statement and in any amendments thereto prior to the effective date of the
Registration Statement is referred to herein as a "Preliminary Prospectus." For
purposes of this Agreement, "Rules and Regulations" mean the rules and
regulations adopted by the Commission under the Securities Act.
Included in the Registration Statement are the Firm Securities and the
Over-allotment Securities; 632,500 shares of Common Stock reserved against
exercise of the Firm Warrants and the Over-allotment Warrants; 165,000 shares of
Common Stock and 110,000 Warrants reserved against exercise of the
Representative's Options; 102,041 shares of Common Stock to be issued upon
conversion of 416,670 shares of Series A Preferred Stock; and 483,334 Warrants
reoffered by certain Selling Shareholders, including 241,667 shares of Common
Stock underlying such Warrants.
As used in this Agreement, the term "Effective Date" refers to the date the
Commission declares the Registration Statement effective pursuant to Section 8
of the Securities Act.
2.2 ACCURACY OF REGISTRATION STATEMENT AND PROSPECTUS. The Commission has
not issued any order preventing or suspending the use of any Preliminary
Prospectus with respect to the Securities, and each Preliminary Prospectus has
conformed in all material respects with the requirements of the Securities Act
and the applicable Rules and Regulations and to the best of the Company's
knowledge has not included at the time of filing any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; except that the
foregoing shall not apply to statements in or
Premier Concepts, Inc. -2-
Underwriting Agreement
omissions from any Preliminary Prospectus in reliance upon, and in conformity
with, written information furnished to the Company by the Representative, or
from any Underwriter through the Representative, specifically for use in the
preparation thereof.
When the Registration Statement becomes effective and on the Closing Date
(hereinafter defined), the Registration Statement, the Effective Prospectus (and
on the Closing Date, the Final Prospectus) will contain all statements which are
required to be stated therein in accordance with the Securities Act and the
Rules and Regulations. No such document will contain 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; except that the
foregoing does not apply to information contained in or omitted from the
Registration Statement or the Effective Prospectus or Final Prospectus in
reliance upon written information furnished by the Representative, or by any
Underwriter through the Representative, specifically for use in the preparation
thereof. The Company will not at any time hereafter file any amendments to the
Registration Statement or in accordance with Rule 424(b) of the Rules and
Regulations of which the Representative shall not have been previously advised
in advance of filing or to which the Representative shall reasonably object in
writing.
2.3 FINANCIAL STATEMENTS. Xxxx + Associates, LLP, whose reports appear in
the Effective Prospectus and the Final Prospectus, are, and during the periods
covered by their reports were, independent accountants as required by the
Securities Act and the applicable Rules and Regulations. The financial
statements and schedules (including the related notes) included in the
Registration Statement, any Preliminary Prospectus or the Effective Prospectus
or the Final Prospectus, present fairly the financial position, the results of
operations, and changes in financial position of the entities purported to be
shown thereby at the dates and for the periods indicated; and such financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods indicated.
The financial information and related notes and schedules included in the
Registration Statement, any Preliminary Prospectus or the Final Prospectus
comply in all material respects with the requirements of the Securities Act and
the Rules and Regulations and present fairly the financial position of the
Company and its subsidiaries as of the dates indicated, and the results of
operation for the periods therein specified. Such financial information,
including the related notes and schedules, have been prepared on a basis
consistent with the historical financial statements included in the Registration
Statement, the Preliminary Prospectus and the Final Prospectus, except for the
adjustments specified herein, and give effect to assumptions made on a
reasonable basis to give effect to historical and proposed transactions
described in the Registration Statement, any Preliminary Prospectus and the
Final Prospectus. The financial information and statistical data, and other
data, set forth in the Final Prospectus under the captions "Prospectus Summary--
Financial and Operating Data," "Selected Financial Data," "Dilution" and
"Capitalization" are derived from and prepared on a basis consistent with such
financial information.
2.4 NO MATERIAL ADVERSE CHANGE. Except as may be reflected in or
contemplated by the Effective Prospectus or the Final Prospectus, subsequent to
the dates as of which information is given in the Effective Prospectus or the
Final Prospectus, and prior to the Closing Date, (a) there shall not have been
any material adverse change in the condition, financial or otherwise, of the
Company or in its business taken as a whole; (b) there shall not have been any
material transaction
Premier Concepts, Inc. -3-
Underwriting Agreement
entered into by the Company other than transactions in the ordinary course of
business; (c) the Company shall not have incurred any material liabilities,
obligations or claims, contingent or otherwise, which are not disclosed in
the Effective Prospectus or the Final Prospectus; (d) except in the ordinary
course of business and with the consent of the Representative, there shall
not have been nor will there be any change in the capital stock or long-term
debt (except current payments) of the Company; and (e) the Company has not
and will not have paid or declared any dividends or other distributions on
its capital stock.
2.5 NO DEFAULTS. Other than as disclosed in the Effective Prospectus or
the Final Prospectus, the Company is not in any default (which has not been
waived) in the performance of any obligation, agreement or condition contained
in any debenture, note or other evidence of indebtedness or any indenture or
loan agreement. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement will not conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default under, the
articles of incorporation, as amended, or by-laws of the Company; any note,
indenture, mortgage, deed of trust, or other material agreement or instrument to
which the Company is a party or by which it or any of its property is bound,
other than for which the Company has received a consent or waiver of such
conduct, breach or default or except where such default would not have a
material adverse effect on the business of the Company; or any existing law,
order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body, arbitration tribunal or court,
domestic or foreign, having jurisdiction over the Company or its property. The
consent, approval, authorization, or order of any court or governmental
instrumentality, agency or body is not required for the consummation of the
transactions herein contemplated except such as may be required under the
Securities Act or under the securities laws of any state or jurisdiction.
2.6 INCORPORATION AND STANDING. Each of the Company and its Subsidiaries
(as defined in Section 12.7 hereof) is, and at the Closing Date (hereinafter
defined) and the Over-allotment Closing Date (hereinafter defined) will be, duly
incorporated and validly existing in good standing as a corporation under the
laws of the jurisdiction of its organization, with full power and authority
(corporate and other) to own its property and conduct its business, present and
proposed, as described in the Effective Prospectus and the Final Prospectus; the
Company has full power and authority to enter into this Agreement; is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned or leased) or the
nature of its business makes such qualification necessary except where the
failure to be so qualified would not have a material adverse effect on the
Company; and each of the Company and its Subsidiaries holds all material
licenses, certificates, and permits from governmental authorities necessary for
the conduct of its business as described in the Effective Prospectus and Final
Prospectus.
2.7 CAPITALIZATION. The Company's authorized and outstanding
capitalization on the Effective Date and on the Closing Date (hereinafter
defined), and on the Over-allotment Closing Date (hereinafter defined) are and
will be as set forth under the caption "Capitalization" in the Effective
Prospectus and the Final Prospectus. The Common Stock, the Warrants, and the
Representative's Options conform to the description thereof contained under the
captions "Description of Securities" and "Underwriting" in the Effective
Prospectus and the Final Prospectus.
Premier Concepts, Inc. -4-
Underwriting Agreement
The outstanding shares of Common Stock have been, and the Securities, upon
issuance and delivery against payment therefor in the manner described
herein, will be, duly authorized and validly issued, fully paid and
nonassessable. No sales of securities have been made by the Company in
violation of the registration or anti-fraud provisions of the Securities Act
or in violation of any other federal law or laws of any state or jurisdiction.
2.8 LEGALITY OF SECURITIES. The Shares, the Warrants, the
Representative's Options, and the Common Stock and Representative's Warrants
issuable upon the exercise of the Representative's Options have been duly and
validly authorized and, when issued and delivered against payment therefor as
provided in this Agreement, will be validly issued, fully paid and
nonassessable. There are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Company's articles of incorporation,
by-laws or other governing documents or any agreement or other instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them may be bound. Neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or satisfied, for
or relating to the registration of any shares of Common Stock. All of the
outstanding shares of capital stock of each Subsidiary of the Company are
owned directly or indirectly by the Company, free and clear of any claim,
lien, encumbrance or security interest. The Warrants and the
Representative's Options, when sold and delivered, will constitute valid and
binding obligations of the Company enforceable in accordance with the terms
thereof. A sufficient number of shares of Common Stock of the Company has
been reserved for issuance upon exercise of the Warrants, the
Representative's Options and the Representative's Warrants.
2.9 PRIOR SALES. No unregistered securities of the Company, of an
affiliate or of a predecessor of the Company have been sold within three
years prior to the date hereof, except as disclosed in the Registration
Statement.
2.10 LITIGATION. Except as set forth in the Effective Prospectus and
the Final Prospectus, there is, and at the Closing Date there will be, no
action, suit or proceeding before any court, arbitration tribunal or
governmental agency pending, or to the knowledge of the Company, threatened,
which might result in judgments against the Company not adequately covered by
insurance or which collectively might result in any material adverse change
in the condition (financial or otherwise), the business or the prospects of
the Company, or which would materially affect the properties or assets of the
Company.
2.11 REPRESENTATIVE'S OPTIONS. Upon delivery of and payment for the
Representative's Options to be sold by the Company as set forth in Section
3.4 of this Agreement, the Representative and designees of the Representative
will receive good and marketable title thereto, free and clear of all liens,
encumbrances, charges and claims whatsoever; and the Company will have on the
Effective Date and at the time of delivery of such Representative's Options
the requisite power and authority to sell, transfer and deliver such
Representative's Options in the manner provided hereunder.
2.12 FINDER. The Company knows of no outstanding claims against it for
compensation for services in the nature of a finder's fee, origination fee or
financial consulting fee with respect
Premier Concepts, Inc. -5-
Underwriting Agreement
to the offer and sale of the Securities hereunder except as previously
disclosed in writing to the Representative.
2.13 EXHIBITS; CONTRACTS; AGREEMENTS. There are no contracts or other
documents which are required to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been so filed and each contract to which the Company is a party and to
which reference is made in the Effective Prospectus and the Final Prospectus
has been duly and validly executed by the Company and, to the best of the
Company's knowledge, is in full force and effect in all material respects in
accordance with its terms, and none of such contracts have been assigned by
the Company; and the Company knows of no present situation or condition or
fact which would prevent compliance with the terms of such contracts, as
amended to date. Except for amendments or modifications of such contracts in
the ordinary course of business, the Company has no intention of exercising
any right which it may have to cancel any of its obligations under any of
such contracts, and has no knowledge that any other party to any of such
contracts has any intention not to render full performance under such
contracts. All material terms of each contract, agreement, plan, arrangement
or understanding to which the Company is a party, or to which it may
reasonably be expected to become a party, have been fully disclosed in the
Effective Prospectus and Final Prospectus.
2.14 TAX RETURNS. The Company has filed all federal and state tax
returns which are required to be filed by it and has paid all taxes shown on
such returns and on all assessments received by it to the extent such taxes
have become due. All taxes with respect to which the Company is obligated
have been paid or adequate accruals have been set up to cover any such unpaid
taxes.
2.15 PROPERTY. Except as otherwise set forth in or contemplated by the
Effective Prospectus and the Final Prospectus, the Company and its
Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects,
except such as are described in the Effective Prospectus and the Final
Prospectus or such as do not materially effect the value of such property and
do not interfere with the use made or proposed to be made of such property by
the Company or such Subsidiaries; and any real property and buildings held
under lease by the Company and its Subsidiaries are held by them under valid,
existing, and enforceable leases with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such property
and buildings by the Company and such Subsidiaries.
2.16 AUTHORITY. The execution and delivery by the Company of this
Agreement has been duly authorized by all necessary corporate action and this
Agreement is the valid, binding and legally enforceable obligation of the
Company, except as rights to indemnity hereunder may be limited by federal or
state securities laws or public policy and except as enforceability may be
limited by bankruptcy, insolvency, or similar laws affecting creditors rights
generally and by general equitable principles.
2.17 LOCK-UP. The Company has obtained from each of its officers, his
or her written agreement that for a period of one year from the Effective
Date he/she will not, without the prior
Premier Concepts, Inc. -6-
Underwriting Agreement
written consent of the Representative, sell or otherwise dispose of any
shares of Common Stock of the Company owned directly or indirectly or
beneficially by him/her.
2.18 USE OF FORM SB-2. The Company is eligible to use Form SB-2 for
the offer and sale of the Securities.
2.19 GOVERNMENTAL COMPLIANCE. Neither the Company nor any Subsidiary is
in violation of any law, ordinance, governmental rule or regulation or court
decree to which it may be subject which violation might reasonably be
expected to have a material adverse effect on the condition (financial or
other), properties, prospective results of operations or net worth of the
Company and its Subsidiaries.
2.20 STABILIZATION. The Company has not taken and may not take,
directly or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares or the Warrants.
2.21 CUSIP NUMBER. The Company has obtained CUSIP numbers for the
Common Stock and the Warrants.
2.22 SUBSIDIARIES. The Company has no Subsidiaries and it has no
present intention of acquiring or forming any subsidiaries, except as
disclosed in the Effective Prospectus or the Final Prospectus.
2.23 BOOKS AND ACCOUNTS. The books, records and accounts of the Company
and each of its subsidiaries accurately and fairly reflect, in reasonable
detail, the transactions in and dispositions of the assets of the Company and
each of its subsidiaries. The systems of internal accounting controls
maintained by the Company and each of its subsidiaries are sufficient to
provide reasonable assurances that (w) transactions are executed in
accordance with management's general or specific authorization; (x)
transactions are recorded as necessary (A) to permit preparation of financial
statements in conformity with generally accepted accounting principles and
(B) to maintain accountability for assets; and (z) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
2.24 EMPLOYEES. No labor disturbance by the employees of the Company or
any of its subsidiaries exists or is imminent; and the Company is not aware
of any existing or imminent labor disturbance by the employees of any
principal suppliers, contract manufacturing organizations, manufacturers,
authorized dealers or distributors that might be expected to result in any
material adverse change in the condition (financial or otherwise), earnings,
operations, business or prospects of the Company and its subsidiaries,
considered as a whole. No collective-bargaining agreement exists with any of
the Company's or any of the Company's subsidiaries' employees and, to the
best knowledge of the Company, no such agreement is imminent.
2.25 POLITICAL CONTRIBUTIONS. Neither the Company nor any of its
subsidiaries has, directly or indirectly, at any time (x) made any
contributions to any candidate for political office, or
Premier Concepts, Inc. -7-
Underwriting Agreement
failed to disclose fully any such contribution, in violation of law; (y) made
any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or allowed by all applicable laws; or (z)
violated nor is it in violation of any provision of the Foreign Corrupt
Practices Act of 1977, as amended.
2.26 ENVIRONMENTAL LIABILITIES. Neither the Company nor any of its
subsidiaries has any liability, known or unknown, matured or not matured,
absolute or contingent, assessed or unassessed, imposed or based upon any
provision of, or has received notice of any potential liability under, any
foreign, federal, state or local law, rule or regulation or the common law,
or any tort, nuisance or absolute liability theory, or under any code, order,
decree, judgment or injunction applicable to the Company or any of its
subsidiaries relating to public health or safety, worker health or safety or
pollution, damage to or protection of the environment, including, without
limitation, laws relating to damage to natural resources, emissions,
discharges, releases or threatened releases of hazardous materials into the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), or otherwise relating to
the manufacture, processing, use treatment, storage, generation, disposal,
transport or handling of hazardous materials. As used herein, "hazardous
material" includes chemical substances, wastes, pollutants, contaminants,
hazardous or toxic substances, constituents, materials or wastes, whether
solid, gaseous or liquid in nature.
2.27 INVESTMENT COMPANY ACT. The Company is familiar with the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations thereunder, and has in the past conducted, and intends in the
future to conduct, its affairs in such a manner as to ensure that it will not
become an "investment company" within the meaning of the 1940 Act and such
rules and regulations.
2.28 PROPRIETARY RIGHTS. Each of the Company and each of its
Subsidiaries owns or possesses adequate rights to use all material trade
secrets, know-how, trademarks, service marks, trade names and copyrights
described or referred to in the Final Prospectus as owned by or used by any
of them, or which are necessary for the conduct of their business as
described in the Final Prospectus; and neither the Company nor any of its
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, tradenames or
copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse effect
on the business, properties, condition (financial or otherwise), prospects or
results of operations of the Company and its Subsidiaries, taken as a whole.
SECTION 3
PURCHASE AND SALE OF THE SECURITIES
3.1 PURCHASE OF SECURITIES AND OVER-ALLOTMENT OPTION. Subject to the
terms and conditions and upon the basis of the representations and warranties
herein set forth, the Company agrees to issue and sell to the Underwriters,
and each of the Underwriters agrees to purchase from the Company at a price
of $3.375 per Share and $0.135 per Warrant, severally and not jointly, the
number of Shares and Warrants set forth opposite their respective names in
Schedule I hereto. The Underwriters agree to offer the Shares and Warrants
to the public as set forth in the Final Prospectus.
Premier Concepts, Inc. -8-
Underwriting Agreement
The Company hereby grants to the Representative an option to purchase
from the Company, solely for the purpose of covering over-allotments in the
sale of Firm Securities, all or any portion of the Over-allotment Shares
and/or the Over-allotment Warrants for a period of forty-five (45) days after
the Effective Date at the purchase price set forth above. The Representative
shall notify the Company of its intention to exercise the Over-allotment
Option at least three (3) days prior to such exercise or exercises.
3.2 SUBSTITUTION OF UNDERWRITERS. If any Underwriter defaults in its
obligation to purchase the number of Securities which it has agreed to
purchase under this Agreement, the non-defaulting Underwriters shall be
obligated to purchase (pro rata in proportion to the number of Securities set
forth opposite the name of each non-defaulting Underwriter in Schedule I
hereto) the total number of Securities which the defaulting Underwriter
agreed but failed to purchase; except that the non-defaulting Underwriters
shall not be obligated to purchase any of the Securities if the total number
of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase exceeds 9.09% of the total number of Securities, and any
non-defaulting Underwriter shall not be obligated to purchase more than 110%
of the number of Securities set forth opposite its name in Schedule I hereto
purchasable by it pursuant to the terms of Section 3.1; and provided further
that the non-defaulting Underwriters shall not be obligated to purchase any
Securities which the defaulting Underwriter or Underwriters agreed to
purchase if such additional purchase would cause the Underwriter to be in
violation of the net capital rule of the Commission or other applicable law.
If the foregoing maximums are exceeded, the non-defaulting Underwriters, and
any other underwriters satisfactory to the Representative who so agree, shall
have the right, but will not be obligated, to purchase (in such proportions
as may be agreed upon among them) all the Securities. In any such case, the
Representative shall have the right to postpone the Closing determined as
provided in Section 3.3.2 hereof for not more than seven Business Days after
the date originally fixed as the Closing pursuant to said Section 3.3.2 in
order that any necessary changes in the Registration Statement, the
Prospectus or any other documents or arrangements may be made. If the
non-defaulting Underwriters or the other underwriters satisfactory to the
Representative do not elect to purchase the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase, this Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter or the Company except for the payment of expenses to be borne by
the Company and the Underwriters as provided in Section 3.5 and the indemnity
and contribution agreements of the Company and the Underwriters contained in
Section 6 hereof.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or to the non-defaulting Underwriters
for damages caused by its default hereunder.
3.3 PUBLIC OFFERING PRICE. After the Commission notifies the Company
that the Registration Statement has become effective, the Underwriters
propose to offer the Firm Securities to the public at an initial public
offering price of $3.75 per Share and $0.15 per Warrant as set forth in the
Final Prospectus. The Underwriters may allow such discounts and concessions
upon sales to selected dealers as may be determined from time to time by the
Representative.
3.3.1 PAYMENT FOR SECURITIES. Payment for the Securities
(including any Securities included in the Over-allotment Option which the
Representative agrees to purchase) shall be made to the Company or its
order by certified or official bank check or checks, in the amount of the
purchase price by or on behalf of the Representative at the
Premier Concepts, Inc. -9-
Underwriting Agreement
offices of the Representative in Englewood, Colorado, upon delivery
to the Representative or its designee of certificates for the Shares
and Warrants in definitive form in such numbers and registered in
such names as the Representative requests in writing at least three
full business days prior to such delivery. At the request of the
Representative, the Company shall deliver the Securities to the
Representative through the facilities of The Depository Trust Company
or as otherwise directed.
3.3.2 CLOSING. The time and date of delivery and payment
hereunder is herein called the "Closing Date" and shall take place at the
office of the Representative in Englewood, Colorado, or at such other
location as may be specified by the Representative, on the fourth Business
Day (as hereinafter defined) following the Effective Date; provided,
however, that such date may be extended for not more than an additional
seven business days by the Representative. Should the Representative elect
to exercise any part of the Over-allotment Option pursuant to Section 3.1
above, the time and date of delivery and payment for such Over-allotment
Shares and/or Over-allotment Warrants shall be the third Business Day
following such exercise of the Over-allotment Option, or each earlier date
as may be agreed upon by the Representative and the Company. Said date is
referred to as the "Over-allotment Closing Date."
3.3.3 INSPECTION OF CERTIFICATES. For the purpose of expediting
the checking and packaging of the certificates for the Securities, if
requested by the Representative, the Company agrees to make the
certificates available for inspection by the Representative at the main
office of the Representative in Englewood, Colorado, at least two full
business days prior to the proposed delivery date.
3.4 SALE OF REPRESENTATIVE'S OPTIONS. On the Closing Date the Company
will sell and deliver to the Representative and its designees, for a purchase
price of $100, Share Options and Warrant Options dated as of the date of the
Prospectus substantially in the form filed as an Exhibit to the Registration
Statement with such changes therein, if any, as may be agreed upon by the
Company and the Representative, to purchase 110,000 Shares at $4.50 per Share
and 110,000 Underwriters' Warrants at $0.18 per Warrant. The Company shall
not be obligated to sell and deliver the Representative's Options, and the
Representative will not be obligated to purchase and pay for the
Representative's Options, except upon payment for the Securities pursuant to
Subsection 3.3.1 hereof.
The Representative's Options shall be non-transferable for a period of
one (1) year following the Effective Date except to the Underwriters and
their respective officers or partners. The Representative's Options shall
also contain anti-dilution provisions for stock splits, recombinations and
reorganizations, a one-time demand registration provision, customary
piggyback registration rights, a right to convert the options to Shares and
Warrants in a "cashless exercise," and shall otherwise be in form and
substance satisfactory to the Representative. The Representative's Options
will be exercisable during the four year period commencing one (1) year after
the Effective Date.
3.5 REPRESENTATIVE'S EXPENSE ALLOWANCE. It is understood that the
Company shall reimburse the Representative, for itself alone and not on
behalf of the other Underwriters, for its expenses on a nonaccountable basis
in the amount of 3% ($128,700) of the gross proceeds from
Premier Concepts, Inc. -10-
Underwriting Agreement
the sale of the Shares and the Warrants ($0.1125 per Share and $.0045 per
Warrant) including proceeds from the sale of the Over-allotment Shares and/or
the Over-allotment Warrants (hereinafter the "Expense Allowance"). The
Representative acknowledges receipt of $30,000 paid pursuant to a corporate
consulting agreement, which will be deducted from the Expense Allowance. On
the Closing Date and, if applicable, on the Over-allotment Closing Date, the
Representative shall be entitled to withhold the unpaid balance of such
Expense Allowance. The Representative shall be solely responsible for all
expenses incurred by it in connection with the offering including, but not
limited to, the expenses of its own counsel except as set forth in Section
5.7 hereof. Notwithstanding the foregoing, if the Registration Statement
does not become effective, or the offering is never commenced after it
becomes effective, or if this Agreement is terminated as provided herein, the
Representative will retain so much of the Expense Allowance which has been or
should have been received by the Representative from the Company as is equal
to its actual accountable out-of-pocket expenses and reimburse the remainder,
if any, to the Company, provided that the amount to be reimbursed will not
exceed $30,000. The Representative's expenses shall include, but are not to
be limited to, a fee to compensate the Representative for the services and
time of Representative's counsel (internal and external), plus any additional
expenses and fees, including but not limited to, travel expenses, postage
expenses, duplication expenses, confirmation and other record preparation
expenses, long-distance telephone expenses, consultant and investigator
expenses and other expenses incurred by the Representative in connection with
the proposed offering.
3.6 REPRESENTATIONS OF THE PARTIES. The parties hereto respectively
represent that as of the Closing Date the representations herein contained
and the statements contained in all the certificates theretofore or
simultaneously delivered by any party to another, pursuant to this Agreement,
shall in all material respects be true and correct.
3.7 POST-CLOSING INFORMATION. The Representative covenants that
reasonably promptly after the Closing Date, it will supply the Company with
all information required from the Representative which must be supplied to
the Commission, if any, and such additional information as the Company may
reasonably request to be supplied to the securities authorities for such
states in which the Securities have been qualified for sale.
3.8 RE-OFFERS BY SELECTED DEALERS. On each sale by the Underwriters of
any of the Securities to selected dealers, the Representative shall require
the selected dealer purchasing any such Securities to agree to re-offer the
same on the terms and conditions of the offering set forth in the Final
Prospectus.
3.9 FINANCIAL CONSULTING AGREEMENT. Upon the closing of the proposed
offering, the Company shall enter into a Financial Consulting Agreement with
the Representative pursuant to which the Representative shall receive a
consulting fee of $2,500 per month, payable in advance at the time of
closing, for twelve (12) months from the Closing Date, for services which
shall include, but are not limited to, advising the Company in connection
with financial planning, corporate organization and structure, financial
matters in connection with the operation of the business of the Company,
private and public equity and debt refinancing, the Company's relations with
its securities holders, and the preparation and distribution of periodic
reports; and the Representative shall periodically provide to the Company an
analysis of the Company's financial statements.
Premier Concepts, Inc. -11-
Underwriting Agreement
SECTION 4
REGISTRATION STATEMENT AND PROSPECTUS
4.1 DELIVERY OF REGISTRATION STATEMENTS. The Company shall deliver to
the Representative without charge two (2) manually signed copies of the
Registration Statement, including all financial statements and exhibits filed
therewith and any amendments or supplements thereto, and shall deliver
without charge to the Representative ten (10) conformed copies of the
Registration Statement and any amendment or supplement thereto, including
such financial statements and exhibits. The signed copies of the
Registration Statement so furnished to the Representative will include
manually signed copies of any and all consents and certificates of the
independent public accountant certifying to the financial statements included
in the Registration Statement and signed copies of any and all opinions,
consents and certificates of any other persons whose profession gives
authority to statements made by them and who are named in the Registration
Statement as having prepared, certified, or reviewed any part thereof.
4.2 DELIVERY OF PRE-EFFECTIVE PROSPECTUS. The Company will cause to be
delivered to the Underwriters and to other broker-dealers, without charge,
prior to the Effective Date, as many copies of each Preliminary Prospectus
filed with the Commission bearing in red ink the statement required by Item
501(c)(8) of Regulation S-K (Reg. 229.501(c)(8)) as may be required by the
Representative. The Company consents to the use of such documents by the
Underwriters and by selected dealers prior to the Effective Date of the
Registration Statement.
4.3 DELIVERY OF PROSPECTUS. The Company will deliver, without charge,
copies of the Effective Prospectus and the Final Prospectus at such addresses
and in such quantities as may be required by the Underwriters for the
purposes contemplated by this Agreement and shall deliver said printed copies
of the Effective Prospectus and the Final Prospectus to the Underwriters and
to selected dealers within one business day after the Effective Date.
4.4 FURTHER AMENDMENTS AND SUPPLEMENTS. If during such period of time
as in the opinion of the Representative or its counsel the Final Prospectus
is required to be delivered under the Securities Act, any event occurs or any
event known to the Company relating to or affecting the Company shall occur
as a result of which the Final Prospectus as then amended or supplemented
would include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time after the Effective Date to amend or supplement the
Final Prospectus to comply with the Securities Act, the Company will
forthwith notify the Representative thereof and prepare and file with the
Commission such further amendment to the Registration Statement or supplement
the Final Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance. The Company shall furnish
and deliver to the Representative and to others whose names and addresses are
designated by the Representative, all at the cost of the Company, a
reasonable number of copies of the amended or supplemented Prospectus which
as so amended or supplemented will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the Prospectus not misleading in the light of the circumstances as of the
date of such Prospectus, amendment, or supplement, and which will comply in
all respects with the Securities Act. In the event the Underwriters are
required to deliver a Prospectus beyond completion of their participation in
the public offering, upon request the Company will prepare
Premier Concepts, Inc. -12-
Underwriting Agreement
promptly such Prospectus or Prospectuses as may be necessary to permit
continued compliance with the requirements of Section 10 of the Securities
Act.
4.5 USE OF PROSPECTUS. The Company authorizes the Underwriters and all
selected dealers to whom any of the Securities may be sold to use the
Effective Prospectus and the Final Prospectus, as from time to time amended
or supplemented, in connection with the offer and sale of the Securities and
in accordance with the applicable provisions of the Securities Act, the Rules
and Regulations and state Blue Sky or securities laws.
SECTION 5
COVENANTS OF THE COMPANY
The Company covenants and agrees with the Underwriters that:
5.1 OBJECTION OF REPRESENTATIVE TO AMENDMENTS OR SUPPLEMENTS. The
Company will not at any time, whether before or after the Effective Date,
file any amendment or supplement to the Registration Statement or Prospectus,
unless and until a copy of such amendment or supplement has been furnished
to the Representative a reasonable period of time prior to the proposed
filing thereof; or to which the Representative or counsel for the
Representative have reasonably objected, in writing, on the ground that such
amendment or supplement is not in compliance with the Securities Act or the
Rules and Regulations.
5.2 COMPANY'S BEST-EFFORTS TO CAUSE REGISTRATION STATEMENT TO BECOME
EFFECTIVE. The Company will use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the Rules
and Regulations is followed, comply with the provisions of and make all
requisite filings with the Commission pursuant to such Rule and to notify the
Representative promptly (in writing, if requested) of all such filings. The
Company shall promptly advise the Representative, and will confirm such
advice in writing (a) when the Registration Statement shall become effective
and when any amendment thereto shall have become effective and when any
amendment of or supplement to the Effective Prospectus or the Final
Prospectus shall be filed with the Commission; (b) when the Commission makes
a request or suggestion for any amendment to the Registration Statement or
the Effective Prospectus or the Final Prospectus or for additional
information and the nature and substance thereof; and (c) of the happening of
any event which in the judgment of the Company makes any material statement
in the Registration Statement or Effective Prospectus or the Final Prospectus
untrue or which requires the making of any changes in the Registration
Statement or the Effective Prospectus or Final Prospectus in order to make
the statements therein not misleading. The Company shall also promptly
notify the Representative, and confirm such notice in writing, when the
Company has knowledge of the issuance by the Commission of an order
suspending the effectiveness of the Registration Statement pursuant to
Section 8 of the Securities Act, suspending or preventing the use of any
Preliminary Prospectus or the Effective Prospectus or Final Prospectus or
suspending the qualification of the Securities for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such purpose.
The Company will use every reasonable effort to prevent the issuance of any
order suspending the effectiveness of the Registration Statement or refusing
or suspending the qualification of the Securities, and to obtain as soon as
possible a lifting of any such suspension order, the reversal of any such
refusal to qualify, and the termination of any such suspension.
Premier Concepts, Inc. -13-
Underwriting Agreement
5.3 PREPARATION AND FILING OF AMENDMENTS AND SUPPLEMENTS. The Company
agrees to prepare and file promptly with the Commission, upon request of the
Representative, such amendments or supplements to the Registration Statement
or Final Prospectus, in form satisfactory to counsel to the Company, as may
be necessary, in the opinion of counsel to the Representative and of counsel
to the Company; and it shall use its best efforts to cause the same to become
effective as promptly as possible.
5.4 BLUE SKY QUALIFICATION. The Company has used and will use its best
efforts to qualify (blue-sky) the sale of the Securities in those states as
may be agreed upon by the Company and the Representative. Copies of all
applications for the registration of securities and related documents (except
for the Registration Statement and Preliminary or Final Prospectus) filed by
the Representative's counsel with the various states have been supplied to
the Company's counsel, concurrently with their transmission to the various
states, and copies of all comments and orders received from the various
states have been and shall be immediately supplied to the Company's counsel.
Immediately prior to the Effective Date, counsel for the Representative shall
advise the Representative in writing of all states wherein the offering is
exempt or has been registered for sale, canceled, withdrawn or denied, the
date of such event(s) and the number of Securities registered for sale in
each such state. After settlement and closing, the Representative shall
notify its counsel of the number of Securities sold in each such jurisdiction.
5.5 FINANCIAL STATEMENTS. The Company at its own expense will prepare
and give such financial statements and other information to the Commission,
or the proper public bodies of the states in which the Securities may be
registered or qualified, as may be required by them.
5.6 REPORTS AND FINANCIAL STATEMENTS TO THE REPRESENTATIVE. During the
period ending three years from the Closing Date, the Company will deliver to
the Representative copies of each annual report of the Company, and will
deliver to the Representative, within 90 days after the close of each fiscal
year of the Company, a financial report of the Company and its Subsidiaries,
if any, on a consolidated basis, and a similar financial report of all
unconsolidated Subsidiaries, if any. All such reports will include a balance
sheet as of the end of the preceding fiscal year, a statement of operations,
a statement of cash flows and an analysis of shareholders' equity covering
such fiscal year, and all will be in reasonable detail and certified by
independent public accountants for the Company. These requirements will be
satisfied if the Company provides to the Representative copies of its Forms
10-K, Forms 10-Q and Forms 8-K (or other appropriate forms) when they are
filed with the Commission.
If the Company shall fail to furnish the Representative with financial
statements as herein provided, within the times specified herein, the
Representative, after giving reasonable notice of not less than 30 days (and
if the financial statements are not provided within such 30 day period),
shall have the right to have such financial statements prepared by
independent public accountants of its own choosing and the Company agrees to
furnish such independent public accountants such data and assistance and
access to such records as they may reasonably require to enable them to
prepare such statements and to pay their reasonable fees and expenses in
preparing the same.
Premier Concepts, Inc. -14-
Underwriting Agreement
During the period ending three years from the Closing Date the Company
shall also provide to the Representative copies of all other statements,
documents, or other information which the Company shall mail or otherwise
make available to any class of its security holders, or which it shall file
with the Commission; and, upon request in writing from the Representative,
the Company shall furnish to the Representative such other information as may
reasonably be requested and which may be properly disclosed to the
Representative with reference to the property, business and affairs of the
Company and its Subsidiaries, if any; provided such written request includes
an agreement to keep confidential any information which should not be
disclosed to the public.
5.7 EXPENSES PAID BY THE COMPANY. The Company will pay or cause to be
paid, whether or not the transactions contemplated hereunder are consummated
or the Registration Statement is prevented from becoming effective or this
Agreement is terminated, (a) all expenses (including stock transfer taxes)
incurred in connection with the delivery to the several Underwriters of the
Securities; (b) all fees and expenses (including, without limitation, fees
and expenses of the Company's accountants and counsel, but excluding fees and
expenses of counsel for the Underwriters other than those described in (9)
below) in connection with the preparation, printing, filing, delivery and
shipping of the Registration Statement (including financial statements
therein and all amendments and exhibits thereto), each Preliminary
Prospectus, the Effective Prospectus and the Final Prospectus as amended or
supplemented, and the printing, delivery and shipping of this Agreement and
other underwriting documents, including Underwriter's Questionnaires,
Underwriters' Powers of Attorney, Blue Sky Memoranda, Agreements Among
Underwriters, and Selected Dealer Agreements; (c) the filing fee of the
National Association of Securities Dealers, Inc.; (d) any applicable listing
fees; (e) the cost of printing certificates representing the Shares and
Warrants; (f) the cost and charges of any transfer agent or registrar, and
the Warrant agent; (g) the fees and expenses of the Representative's counsel
for qualifying the Securities under the blue sky laws of various
jurisdictions; and (h) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise provided for
in this Section. It is understood, however, that, except as provided in this
Section, the Underwriters shall pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Securities by them, and any advertising expenses connected with any
offers they may make.
5.8 REPORTS TO SHAREHOLDERS. During the period ending five years from
the Closing Date the Company will, as promptly as possible, but not later
than 180 days after the end of its annual fiscal year, render and distribute
reports to its shareholders which will include audited statements of its
operations and cash flows during such period and its balance sheet as of the
end of such period, as to which statements the Company's independent
certified public accountants shall have rendered an opinion.
5.9 SECTION 11(A) FINANCIALS. The Company will make generally
available to its security holders and will deliver to the Representative, as
soon as practicable, an earnings statement (as to which no opinion need be
rendered but which will satisfy the provisions of Section 11(a) of the
Securities Act) covering a period of at least 12 months beginning after the
Effective Date. Compliance by the Company with Rule 158 promulgated under the
Securities Act shall satisfy the requirements of this Section 5.9.
Premier Concepts, Inc. -15-
Underwriting Agreement
5.10 POST-EFFECTIVE AVAILABILITY OF PROSPECTUS. The Company will
comply, at its own expense, with all requirements imposed upon it by the
Securities Act, as now or hereafter amended, by the Rules and Regulations, as
from time to time may be in force, and by any order of the Commission, so far
as necessary to permit the continuance of sales or dealings in the Shares and
the Warrants and the exercise of the Warrants.
5.11 APPLICATION OF PROCEEDS. The Company will apply the net proceeds
from the sale of the Securities substantially in the manner specifically set
forth in the Final Prospectus. Any deviation from such application must be in
accordance with the Final Prospectus and may occur only after approval by the
board of directors of the Company and then only after the board of directors
has obtained the written opinion as to the propriety of any such deviation
provided by recognized legal counsel well versed in the federal and state
securities laws.
5.12 AGREEMENTS OF CERTAIN SHAREHOLDERS. The Company has delivered to
the Representative, prior to the execution of this Agreement, the agreement
of each officer, that for a period of one year from the Effective Date such
persons shall not sell, contract to sell, pledge, hypothecate, grant any
option to purchase or otherwise dispose of any portion of the shares of
Common Stock owned directly, indirectly or beneficially by such person prior
to the Effective Date, without the Representative's prior written consent.
5.13 DELIVERY OF DOCUMENTS. At the Closing, the Company has delivered
to the Representative true and correct copies of the articles of
incorporation of the Company and all amendments thereto; true and correct
copies of the by-laws of the Company and of the minutes of all meetings of
the directors and shareholders of the Company held prior to the Closing Date
which in any way relate to the subject matter of this Agreement. All such
copies shall be certified by the Secretary of the Company.
5.14 COOPERATION WITH REPRESENTATIVE'S DUE DILIGENCE. At all times
prior to the Closing Date, the Company will cooperate with the Representative
in such investigation as the Representative may make or cause to be made of
all the properties, management, business and operations of the Company, and
the Company will make available to the Representative in connection therewith
such information in its possession as the Representative may reasonably
request.
5.15 APPOINTMENT OF TRANSFER AGENT AND WARRANT AGENT. The Company has
appointed Corporate Stock Transfer, Inc., as Transfer Agent for the Common
Stock and Warrant Agent for the Warrants, subject to the closing of the
offering. The Company will not change or terminate such appointment for a
period of three years from the Effective Date without first obtaining the
written consent of the Representative, which consent shall not be
unreasonably withheld.
5.16 COMPLIANCE WITH CONDITIONS PRECEDENT. The Company will use all
reasonable efforts to comply or cause to be complied with the conditions
precedent to the several obligations of the Underwriters in Section 8 hereof.
Premier Concepts, Inc. -16-
Underwriting Agreement
5.17 FILING OF FORM SR. If required under the Securities Act, the
Company agrees to file with the Commission all required reports on Form SR in
accordance with the provisions of Rule 463 promulgated under the Securities
Act and to provide a copy of such reports to the Representative and its
counsel.
5.18 BOUND VOLUME. The Company shall supply to the Representative and
the Representative's counsel, at the Company's cost, three bound volumes each
of all of the public offering materials within a reasonable time after the
closing, not to exceed three months.
5.19 LISTING IN XXXXX'X AND STANDARD & POOR'S. The Company is listed in
Xxxxx'x Over-The-Counter Manual or Standard & Poor's Standard Corporation
Records, and it agrees to maintain such listings.
5.20 NASDAQ. The Company has received approval to have the Common Stock
and Warrants quoted on NASDAQ as of the Effective Date and it shall continue
such listing on NASDAQ or on a national securities exchange during the entire
period each such security is outstanding; provided that the Company is in
compliance with NASDAQ maintenance requirements. The NASDAQ symbols shall be
mutually agreeable to the Company and the Representative.
5.21 SECONDARY TRADING QUALIFICATION. The Company agrees to use its
best efforts to qualify the Common Stock and Warrants for secondary trading
as soon as legally possible in such states as are requested by the
Representative from time to time, including, without limitation, California
and Texas.
5.22 RIGHT OF INSPECTION. For a period of three years after the
Effective Date, the Representative, at the Representative's expense, will
have the right to have a person or persons selected by the Representative
review the books and records of the Company upon seven days' written notice
and at reasonable times. Such person or persons will be required to execute a
confidentiality agreement which will, in part, prohibit disclosure of
information to any party except the Representative, which information shall
be held in confidence unless otherwise specifically agreed to by the Company
in writing.
5.23 OUTSIDE DIRECTORS, COMMITTEES, EXECUTIVE COMPENSATION. The Company
shall use its best efforts to have at least two members elected to its board
of directors who are not officers or employees of the Company ("outside
directors") on the Effective Date of the Registration Statement, and to cause
two such outside directors to be nominated as directors for two additional
one-year terms. The Company will form independent audit and compensation
committees which shall be comprised of at least three of the Company's
directors, at least a majority of whom shall be outside directors.
5.24 REGISTRATION UNDER THE EXCHANGE ACT. The Company currently files
reports pursuant to Section 15(d) of the Exchange Act as of the Effective Date.
The Common Stock and Warrants will be registered under Section 12(g) of the
Exchange Act. The Company has filed a Registration Statement under Section
12(g) of the Exchange Act with respect to the Common Stock and Warrants. The
Company has delivered a copy of such filing to the Representative and to legal
Premier Concepts, Inc. -17-
Underwriting Agreement
counsel for the Representative. The Company shall use its best efforts to
cause the registration statement under the Exchange Act to become effective
not later than the Effective Date, or as soon thereafter as possible.
SECTION 6
INDEMNIFICATION AND CONTRIBUTION
6.1 INDEMNIFICATION BY COMPANY. The Company shall indemnify and hold
harmless each Underwriter and their respective officers, directors, employees
and agents against any and all loss, claim, damage or liability, joint or
several, to which such Underwriter or such person ("covered person") may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, or liability (or action with respect thereto) arises out of or
is based upon (a) any violation of any registration requirements; (b) any
improper use of sales literature by the Company; (c) any untrue statement or
alleged untrue statement made by the Company in Section 2 hereof; (d) any
untrue statement or alleged untrue statement of a material fact contained (i)
in the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus, or the Final Prospectus or any amendment or supplement thereto,
or (ii) in any application or other document, executed by the Company
specifically for such application or based upon written information furnished
by the Company, filed in order to qualify the Securities under the securities
laws of the states where filings were made (any such application, document,
or information being hereinafter called "Blue Sky Application"); or (e) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus, or the Final Prospectus or
any amendment or supplement thereto or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and shall reimburse each Underwriter or covered
person for any legal or other reasonable expenses incurred by such
Underwriter or covered person in connection with investigating or defending
against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action, notwithstanding the possibility
that payments for such expenses might later be held to be improper, in which
case the person receiving them shall promptly refund them; except that the
Company shall not be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage, or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on
behalf of any Underwriter specifically for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus
and the Final Prospectus or any amendment or supplement thereto, or any Blue
Sky Application.
6.2 INDEMNIFICATION BY UNDERWRITERS. Each Underwriter severally, but
not jointly, shall indemnify and hold harmless the Company against any and
all loss, claim, damage or liability, joint or several, to which the Company
may become subject under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability (or action in respect thereto) arises out of
or are based upon (a) any untrue statement or alleged untrue statement of a
material fact contained (i) in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or any amendment
or supplement thereto or (ii) in any Blue Sky Application; or (b) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or the Final Prospectus or
any amendment or supplement thereto or in
Premier Concepts, Inc. -18-
Underwriting Agreement
any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading; except that such
indemnification shall be available in each such case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon information and in
conformity with written information furnished to the Company through the
Representative or on behalf of such Underwriter specifically for use in the
preparation thereof; and shall reimburse any legal or other expenses
reasonably incurred by the Company in connection with the investigation or
defending against any such loss, claim, damage, liability, or action.
6.3 RIGHT TO PROVIDE DEFENSE. Promptly after receipt by an indemnified
party under Section 6.1 or 6.2 above of written notice of the commencement of
any action, the indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under such section, notify the
indemnifying party in writing of the claim or the commencement of that
action; the failure to notify the indemnifying party shall not relieve it of
any liability which it may have to an indemnified party, except to the extent
that the indemnifying party did not otherwise have knowledge of the
commencement of the action and the indemnifying party's ability to defend
against the action was prejudiced by such failure. Such failure shall not
relieve the indemnifying party from any other liability which it may have to
the indemnified party or any person identified in Section 6.4 below. If any
such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election
to assume the defense of such claim or action, the indemnifying party shall
not be liable to the indemnified party under such section for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; except
that the Representative shall have the right to employ counsel to represent
the Representative and those other Underwriters who may be subject to
liability arising out of any claim in respect of which indemnity may be
sought by the Underwriters against the Company under such section if, in the
Representative's reasonable judgment, it is advisable for the Representative
and those Underwriters to be represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company.
6.4 CONTRIBUTION. If the indemnification provided for in Sections 6.1
and 6.2 of this Agreement is unavailable or insufficient to hold harmless an
indemnified party, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages, or liabilities referred to in Sections 6.1 or 6.2 above (a)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
from the offering of the Securities; or (b) if the allocation provided by
clause (a) above is not permitted by applicable law, in such proportion as is
appropriate to reflect the relative benefits referred to in clause (a) above
but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, or liabilities, as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Underwriters shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting
Premier Concepts, Inc. -19-
Underwriting Agreement
discounts and un-itemized expenses received by the Underwriters, in each case
as set forth in the table on the cover page of the Final Prospectus.
Relative fault shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or the
Underwriter and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such untrue statement or
omission. For purposes of this Section 6.4, the term "damages" shall include
any counsel fees or other expenses reasonably incurred by the Company or the
Underwriters in connection with investigating or defending any action or
claim which is the subject of the contribution provisions of this Section
6.4. Notwithstanding the provisions of this Section 6.4, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such
untrue statements or omissions. No person adjudged guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Under this Section 6.4, each Underwriter's
obligations to contribute are several in proportion to their respective
underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it shall promptly
give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in Section 6.4 hereof).
6.5 EXTENSION OF OBLIGATIONS. The obligations of the Company under
this Section 6 shall be in addition to any other liability which the Company
may otherwise have, and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Underwriter within the meaning of the
Securities Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability that the respective Underwriters may
otherwise have, and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named
in the Registration Statement as about to become a director of the Company),
to each officer of the Company who has signed the Registration Statement, and
to each person, if any, who controls the Company within the meaning of the
Securities Act.
6.6 REIMBURSEMENT OF UNDERWRITERS. In addition to its obligations
under Section 6.1 of this Agreement, the Company agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any loss, claim, damage, or
liability described in Section 6.1 of this Agreement, it will reimburse the
Underwriters, and each of them, on a monthly basis (or more often, if
requested) for all reasonable legal or other expenses incurred in connection
with investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any portion, or all, of
any such interim reimbursement payments are so held to have been improper,
the Underwriters receiving
Premier Concepts, Inc. -20-
Underwriting Agreement
the same shall promptly return such amounts to the Company together with
interest, compounded daily, determined on the basis of the prime rate (or
other commercial lending rate for borrowers of the highest credit rating)
announced from time to time by Norwest Bank of Denver, Denver, Colorado (the
"Prime Rate"). Any such interim reimbursement payments that are not made to
the Underwriters within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request until the date paid.
6.7 REIMBURSEMENT OF THE COMPANY. In addition to their obligations
under Section 6.2 of this Agreement, the Underwriters agree that, as an
interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any loss, claim,
damage or liability described in Section 6.2 of this Agreement, they will
reimburse the Company on a monthly basis (or more often, if requested) for
all reasonable legal or other expenses incurred by the Company in connection
with investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Underwriters'
obligation to reimburse the Company for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any portion, or all, of any such
interim reimbursement payments are so held to have been improper, the Company
shall promptly return such amounts to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any
such interim reimbursement payments that are not made to the Company within
30 days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request until the date paid.
SECTION 7
EFFECTIVENESS OF AGREEMENT
This Agreement shall become effective (a) at 10:00 a.m., Colorado time,
on the first full business day after the Effective Date, or (b) upon release
by the Representative of the Securities for sale after the Effective Date,
whichever shall first occur. The Representative shall notify the Company
immediately after the Representative shall have taken any action, by release
or otherwise, whereby this Agreement shall have become effective. For
purposes of this Agreement, the release of the initial public offering of the
Firm Securities for sale to the public shall be deemed to have been made when
the Representative releases, by telegram or otherwise, firm offers of the
Firm Securities to securities dealers or release for publication of a
newspaper advertisement relating to the Firm Securities, whichever occurs
first. This Agreement shall, nevertheless, become effective at such time
earlier than the time specified above, after the Effective Date, as the
Representative may determine by notice to the Company.
SECTION 8
CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS
The obligations of the several Underwriters hereunder to purchase the
Securities and to make payment to the Company hereunder on the Closing Date
and on the Over-allotment Closing Date, if any, shall be subject to the
accuracy, as of the Closing Date and the Over-allotment Closing Date, of each
of the representations and warranties on the part of the Company herein
contained, to the performance by the Company of all its agreements herein
contained, to the
Premier Concepts, Inc. -21-
Underwriting Agreement
fulfillment of or compliance by the Company with all covenants and conditions
hereof, and to the following additional conditions:
8.1 EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement and all post-effective amendments thereto filed with the Commission
prior to the Closing Date or the Over-allotment Closing Date shall have
become effective and any and all filings required by Rule 424 and Rule 430A
of the Rules and Regulations shall have been made; no stop order suspending
the effectiveness of the Registration Statement or any amendment or
supplement thereto shall have been issued; no proceeding for that purpose
shall have been initiated or threatened by the Commission or be pending; any
request for additional information on the part of the Commission (to be
included in the Registration Statement or Final Prospectus or otherwise)
shall have been complied with to the satisfaction of the Commission; and
neither the Registration Statement, the Effective Prospectus or Final
Prospectus, nor any amendment thereto shall have been filed to which counsel
to the Representative shall have reasonably objected in writing or have not
given their consent.
8.2 ACCURACY OF REGISTRATION STATEMENT. The Representative shall not
have advised the Company that the Registration Statement or the Effective
Prospectus or Final Prospectus or any amendment thereof or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel to
the Representative, is material, or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein, or
is necessary to make the statements therein not misleading.
8.3 CASUALTY AND OTHER CALAMITY. Since the Effective Date the Company
shall not have sustained any loss on account of fire, explosion, flood,
accident, calamity or any other cause, of such character as materially
adversely affects its business or property considered as an entire entity,
whether or not such loss is covered by insurance, and no officer or director
of the Company shall have suffered any injury, sickness or disability of a
nature which would materially adversely affect his or her ability to properly
function as an officer or director of the Company.
8.4 LITIGATION AND OTHER PROCEEDINGS. Other than as disclosed in the
Registration Statement or Prospectus, there shall be no litigation instituted
or threatened against the Company and there shall be no proceeding instituted
or threatened against the Company before or by any federal or state
commission, regulatory body or administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
would materially adversely affect the business, management, licenses,
operations or financial condition or income of the Company considered as an
entity.
8.5 LACK OF MATERIAL CHANGE. Except as contemplated herein or as set
forth in the Registration Statement and Final Prospectus, during the period
subsequent to the date of the last audited balance sheet included in the
Registration Statement, the Company (a) shall have conducted its business in
the usual and ordinary manner as the same was being conducted on the date of
the last audited balance sheet included in the Registration Statement, and
(b) except in the ordinary course of its business, the Company shall not have
incurred any liabilities, claims or obligations (direct or contingent) or
disposed of any of its assets, or entered into any material transaction or
suffered or experienced any substantially adverse change in its condition,
financial or otherwise. The capital stock and surplus accounts of the
Company shall be substantially the
Premier Concepts, Inc. -22-
Underwriting Agreement
same as at the date of the last audited balance sheet included in the
Registration Statement, without considering the proceeds from the sale of the
Securities, other than as may be set forth in the Final Prospectus, and
except as the surplus reflects the result of continued profits or losses from
operations consistent with prior periods.
8.6 REVIEW BY REPRESENTATIVE'S COUNSEL. The authorization of the
Shares, the Warrants, the Warrant Shares, the Representative's Options and
the Common Stock and Warrants issuable upon the exercise of the
Representative's Options, the Registration Statement, the Effective
Prospectus and the Final Prospectus and all corporate proceedings and other
legal matters incident thereto and to this Agreement shall be reasonably
satisfactory in all respects to counsel to the Representative.
8.7 OPINION OF COUNSEL. The Company shall have furnished to the
Representative the opinion, dated the Closing Date and, if applicable, the
Over-allotment Closing Date, addressed to the Representative, from Xxxxxx &
Xxxx, counsel to the Company, to the effect that based upon a review by them
of the Registration Statement, Effective Prospectus and the Final Prospectus,
the Company's articles of incorporation, by-laws, and relevant corporate
proceedings and contracts, and examination of such statutes they deem
necessary and such other investigation by such counsel as they deem necessary
to express such opinion:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Colorado, and
has the corporate power and authority to own its properties and to carry on
its business as described in the Registration Statement and Effective
Prospectus and the Final Prospectus.
(b) The Company is duly qualified and in good standing as a foreign
corporation authorized to do business in all jurisdictions in which the
character of the properties owned or held under lease or the nature of the
business conducted requires such qualification except where the failure to
qualify would not have a material adverse effect on the business of the
Company.
(c) The authorized and outstanding capital stock of the Company is as
set forth in the Effective Prospectus and Final Prospectus; the Common
Stock of the Company, the Warrants, and the Representative's Options
conform in all material respects to the statements concerning them in the
Effective Prospectus and Final Prospectus; the outstanding Common Stock of
the Company contains no preemptive rights; the Shares, the Warrants, and
the Representative's Options have been, and the Common Stock issuable upon
exercise of the Share Options and the Representative's Options, will be,
duly and validly authorized and, upon issuance thereof and payment therefor
in accordance with this Agreement, validly issued, fully paid and
nonassessable, and will not be subject to the preemptive rights of any
shareholder of the Company.
(d) A sufficient number of shares of Common Stock have been duly
reserved for issuance upon the exercise of the Warrants, the
Representative's Options and the Warrants issuable upon exercise of the
Representative's Options.
Premier Concepts, Inc. -23-
Underwriting Agreement
(e) To such counsel's knowledge, no consents, approvals,
authorizations or orders of agencies, officers or other regulatory
authorities are required for the valid authorization, issuance or sale of
the Common Stock, the Warrants and the Representative's Options
contemplated by this Agreement, except for those consents, approvals,
authorizations, and orders which the Company has obtained and which are in
full force and effect under the Securities Act, the Exchange Act, and under
applicable state securities laws in connection with the purchase and
distribution of such securities by the Underwriters, and the clearance of
the underwriting compensation by the NASD.
(f) The issuance and sale of the Securities and the Representative's
Options, the consummation of the transactions herein contemplated, and the
compliance with the terms of this Agreement will not conflict with or
result in a breach of any of the terms, conditions, or provisions of or
constitute a default under the articles of incorporation or by-laws of the
Company; nor, to such counsel's knowledge, will they conflict with or
result in a breach of any of the terms, conditions, or provisions of any
note, indenture, mortgage, deed of trust, or other agreement or instrument
to which the Company is a party or by which the Company or any of its
property is bound, other than for which the Company has received a consent
or waiver of such conflict, breach or default, or where such conflict or
breach would not have a material adverse effect on the business of the
Company; or any existing law (provided this paragraph shall not relate to
federal or state securities laws), order, rule, regulation, writ,
injunction, or decree known to such counsel of any government, governmental
instrumentality, agency, body, arbitration tribunal, or court, domestic or
foreign, having jurisdiction over the Company or its property.
(g) On the basis of a reasonable inquiry by such counsel, including
participation in conferences with representatives of the Company and its
accountants at which the contents of the Registration Statement and the
Effective Prospectus and the Final Prospectus and related matters were
discussed, and without expressing any opinion as to the financial
statements or other financial data contained therein: (i) nothing has come
to such counsel's attention which leads them to believe that the
Registration Statement and the Final Prospectus, as amended or supplemented
by any amendments or supplements thereto made by the Company prior to the
Closing Date, do not comply as to form in all material respects with the
requirements of the Securities Act; (ii) nothing has come to their
attention which leads them to believe that the Registration Statement or
the Final Prospectus, as amended or supplemented by any such amendments or
supplements thereto, contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; (iii) they do not know of any contract or
other document required to be described in or filed as an exhibit to the
Registration Statement which is not so described or filed; and (iv) the
Registration Statement has become effective under the Securities Act, and,
to the best of their knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated by the
Commission.
(h) This Agreement has been duly authorized and executed by the
Company and is a valid and binding agreement of the Company, except as
rights to indemnity
Premier Concepts, Inc. -24-
Underwriting Agreement
hereunder may be limited by federal or state securities laws or public
policy and except as enforceability may be limited by bankruptcy,
insolvency, or similar laws affecting creditors rights generally and by
general equitable principles.
(i) Except as disclosed in the Registration Statement, the Effective
Prospectus, and the Final Prospectus, the Company is not in default of any
of the material contracts, licenses, leases or agreements to which it is a
party, and the offering of the Shares, the Warrants and the
Representative's Options will not cause the Company to become in default of
any of its material contracts, licenses, leases or agreements.
(j) To such counsel's knowledge the Company is not currently offering
any securities for sale except as described in the Registration Statement.
(k) Counsel has no knowledge of any promoter, affiliate, parent or
subsidiaries of the Company except as are described in the Registration
Statement and Final Prospectus.
(l) To the knowledge of counsel, and without making any statement as
to title, except as described in the Registration Statement, the Company
owns all properties described in the Registration Statement as being owned
by it; the properties are free and clear of all liens, charges,
encumbrances or restrictions; all of the leases, subleases and other
agreements under which the Company holds its properties are in full force
and effect; the Company is not in default under any of the material terms
or provisions of any of the leases, subleases or other agreements; and
there are no claims against the Company concerning its rights under the
leases, subleases and other agreements and concerning its right to
continued possession of its properties.
(m) To the knowledge of counsel, the Company has been issued by the
appropriate federal, state and local regulatory authorities the required
licenses, certificates, authorizations or permits necessary to conduct its
business as described in the Registration Statement and to retain
possession of its properties. Counsel is unaware of any notice of any
proceeding relating to the revocation or modification of any of these
certificates or permits.
(n) To the knowledge of counsel, the Company has paid all taxes which
are shown as due and owing on the financial statements included in the
Registration Statement and Final Prospectus.
As to all factual matters, including without limitation the issuance of
stock certificates and receipt of payment therefor, the states in which the
Company transacts business, and the adoption of resolutions reflected by the
Company's minute book, such counsel may rely on the certificate of an
appropriate officer of the Company. Counsel's opinion as to the validity and
enforceability of any and all contracts and agreements referenced herein may
exclude any opinion as to the validity or enforceability of any indemnification
or contribution provisions thereof, or as the validity or enforceability of any
such contract or agreement may be limited by bankruptcy or other laws relating
to or affecting creditors' rights generally and by equitable principles.
Premier Concepts, Inc. -25-
Underwriting Agreement
8.8 ACCOUNTANT'S LETTER. The Representative shall have received letters
addressed to it dated the Effective Date, the Closing Date and, if applicable,
the Over-allotment Closing Date, respectively, and a draft of such letter at
least five days prior to the Effective Date, the Closing Date and, if
applicable, the Over-allotment Closing Date, from Xxxx + Associates, L.L.C.,
confirming that they are independent public accountants with respect to the
Company within the meaning of the Act and the published Rules and Regulations.
In the letter dated the date of this Agreement, they shall state their
conclusions and findings with respect to such financial, accounting, and
statistical information and other matters contained in the Registration
Statement as have been approved by the Representative prior to the execution of
this Agreement. In the letter dated the Closing Date (and if applicable, the
Over-allotment Closing Date), they shall state as of such date (or, with respect
to matters involving changes or developments since the respective dates as of
which specified financial information is given in the Final Prospectus, as of a
date not more than five days prior to the date of such letter) their conclusions
and findings with respect to the financial information and other matters covered
by their letter dated the date of this Agreement, the purpose of the letter to
be delivered on the Closing Date (and, if applicable, the Over-allotment Closing
Date) being to update in all respects the conclusions and findings set forth in
the prior letter or letters. The Representative shall be furnished without
charge, in addition to the original signed copies, such number of signed or
photostatic or conformed copies of such letters as the Representative shall
reasonably request.
8.9 OFFICER'S CERTIFICATE. The Company shall furnish to the
Representative certificates, each signed by the President and Chief Financial
Officer of the Company, one dated as of the Effective Date, one dated as of the
Closing Date, and, if applicable, one dated as of the Over-allotment Closing
Date, to the effect that:
(a) The representations and warranties of the Company in this
Agreement are true and correct at and as of the date of the certificate, and the
Company has complied with all the agreements and has satisfied all the
conditions on its part to be performed or satisfied at or prior to the date of
the certificate.
(b) The Registration Statement has become effective and to the best
of the knowledge of the respective signers no order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that purpose
has been initiated or is threatened by the Commission.
(c) The respective signers have each examined the Registration
Statement and the Final Prospectus and any amendments and supplements thereto,
and to the best of their knowledge the Registration Statement and the Final
Prospectus and any amendments and supplements thereto contain all statements
required to be stated therein, do 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 and, since the Effective
Date, there has occurred no event required to be set forth in an amended or a
supplemented Prospectus which has not been so set forth.
8.10 TENDER OF DELIVERY OF SECURITIES. All of the Securities being offered
by the Company and being purchased from the Company by the Underwriters, and the
Representative's
Premier Concepts, Inc. -26-
Underwriting Agreement
Options being purchased from the Company by the Representative, shall be
tendered for delivery in accordance with the terms and provisions of this
Agreement.
8.11 BLUE-SKY REGISTRATION OR QUALIFICATION. The Shares and the Warrants
shall be registered or qualified in such states as the Representative and the
Company may agree pursuant to Section 5.4, and each such registration or
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Over-allotment Closing Date. On the
Effective Date, on the Closing Date and, if applicable, the Over-allotment
Closing Date, the Representative shall receive from counsel for the
Representative, written information which contains the following:
(a) the names of the states in which applications to register or
qualify the Shares, the Warrants and the Warrant Shares have been filed;
(b) the status of such registrations or qualifications in such states
as of the date of such letter;
(c) a list containing the name of each such state in which the
Shares, the Warrants and the Warrant Shares may be legally offered and sold by a
dealer licensed in such state and the number of each which may be legally
offered and sold in the offering in each such state as of the date of such
letter;
(d) with respect to the written information provided on the Effective
Date, a representation that such counsel will promptly update such written
information if counsel receives actual notice of any material changes in the
information provided therein between the Effective Date and the Closing Date
and, if applicable, Over-allotment Closing Date;
(e) the names of the states in which the offer and sale of the Shares
and Warrants in the offering is exempt from registration or qualification; and
(f) a statement that the Underwriters and selected dealers in the
offering may rely upon the information contained therein.
8.12 APPROVAL OF REPRESENTATIVE'S COUNSEL. All opinions, letters,
certificates and evidence mentioned above or elsewhere in this Agreement shall
be deemed to be in compliance with the provisions hereof only if they are in
form and substance satisfactory to counsel to the Representative, whose approval
shall not be unreasonably withheld. The suggested form of such documents shall
be provided to the counsel for the Representative at least three business days
before the dates they are to be provided, that is, the Effective Date, the
Closing Date, and the Over-allotment Closing Date, if applicable.
8.13 OFFICERS' CERTIFICATE AS A COMPANY REPRESENTATION. Any certificate
signed by an officer of the Company and delivered to the Representative or
counsel for the Representative shall be deemed a representation and warranty by
the Company to the Underwriters as to the statements made therein.
8.14 OPINION OF REPRESENTATIVE'S COUNSEL. The Representative shall have
received from Xxxxx & Xxxxxx, P.C., counsel for the Representative, an opinion
dated the Closing Date, with respect to the issuance and sale of the Securities,
and such other related matters as the
Premier Concepts, Inc. -27-
Underwriting Agreement
Representative may reasonably require, and the Company shall have furnished
such counsel with all documents which they may request for the purpose of
enabling them to pass upon such matter.
SECTION 9
TERMINATION
9.1 TERMINATION BECAUSE OF NONCOMPLIANCE. This Agreement may be
terminated in its entirety by the Representative by notice to the Company prior
to its effectiveness in the event that the Company shall have failed or been
unable to comply with any of the terms, conditions or provisions of this
Agreement which the Company is required by this Agreement to be performed,
complied with or fulfilled (including but not limited to those specified in
Sections 2, 3, 4, 5, and 8 hereof) within the respective times herein provided
for, unless compliance therewith or performance or satisfaction thereof shall
have been expressly waived by the Representative in writing.
9.2 MARKET OUT TERMINATION. This Agreement may be terminated by the
Representative by notice to the Company at any time if, in the sole judgment of
the Representative, payment for and delivery of the Securities is rendered
impracticable or inadvisable because of:
(a) Material adverse changes in the Company's business, business
prospects, management, earnings, properties or conditions, financial or
otherwise, which are outside the ordinary course of business;
(b) Any action, suit, or proceedings, at law or in equity, hereafter
threatened or filed against the Company by any person or entity, or by any
federal, state or other commission, board or agency wherein any unfavorable
result or decision could materially adversely affect the business, business
prospects, properties, financial condition or income or earnings of the Company;
(c) Additional material governmental restrictions not in force and
effect on the date hereof shall have been imposed upon the trading in securities
generally, or new offering or trading restrictions shall have been generally
established by a registered securities exchange, the Commission, NASD or other
applicable regulatory authority, or trading in securities generally on any such
exchange, NASDAQ or otherwise, shall have been suspended, or a general
moratorium shall have been established by federal or state authorities;
(d) Substantial and material changes in the condition of the market
beyond normal fluctuations such that it would be undesirable, impracticable or
inadvisable in the judgment of the Representative to proceed with this Agreement
or with the public offering of the Securities;
(e) Any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the judgment
of the Representative, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Securities; or
Premier Concepts, Inc. -28-
Underwriting Agreement
(f) Any suspension of trading in the securities of the Company in
the over-the-counter market or the interruption or termination of quotations
of any security of the Company on the NASDAQ System.
9.3 EFFECT OF TERMINATION HEREUNDER. Any termination of this Agreement
pursuant to this Section 9 shall be without liability of any character
(including, but not limited to, loss of anticipated profits or consequential
damages) on the part of any party hereto, except that the Company shall
remain obligated to pay the costs and expenses provided to be paid by it
specified in Sections 3.5 and 5.7; and the Company and the Underwriters shall
be obligated to pay, respectively, all losses, claims, damages or
liabilities, joint or several, under Sections 6.1 or 6.4 in the case of the
Company and Sections 6.2 or 6.4 in the case of the Underwriters.
SECTION 10
REPRESENTATIVE'S REPRESENTATIONS AND WARRANTIES
The Representative represents and warrants to and agrees with the Company
that:
10.1 REGISTRATION AS BROKER-DEALER AND MEMBER OF NASD. The
Representative is registered as a broker-dealer with the Commission and is
registered as a securities broker-dealer in all states in which it will sell
Securities and is a member in good standing of the National Association of
Securities Dealers, Inc.
10.2 NO PENDING PROCEEDINGS. There is not now pending or threatened
against the Representative any action or proceeding of which it has been
advised, either in any court of competent jurisdiction, before the Commission
or any state securities regulatory authority concerning activities as a
broker or dealer which are foreseen as affecting the Representative's
capacity to complete the terms of this Agreement.
10.3 COMPANY'S RIGHT TO TERMINATE. In the event any action or
proceeding of the type referred to in Section 10.2 above shall be instituted
or threatened against the Representative at any time prior to the Effective
Date hereunder, or in the event there shall be filed by or against the
Representative in any court pursuant to any federal, state, local or
municipal statute, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee of its assets
or if it makes an assignment for the benefit of creditors, the Company shall
have the right on three days' written notice to the Representative to
terminate this Agreement without any liability to the Representative or the
Company of any kind except for the payment of all expenses as provided herein.
10.4 REPRESENTATIVE'S COVENANTS. The Representative covenants and
agrees with the Company that (a) it will not offer or sell the Securities in
any state or other jurisdiction where it has not been advised in writing by
legal counsel for the Company that the Securities are qualified for the offer
and sale therein or exempt from such requirements; (b) it will not make any
representation to any person in connection with the offer and sale of the
Securities covered hereby except as set forth in the Registration Statement
or as authorized in writing by the Company and the Representative; (c) it
will comply in good faith with all laws, rules and regulations applicable to
the
Premier Concepts, Inc. -29-
Underwriting Agreement
distribution of the securities, including the Conduct Rules of the NASD; and
(d) the Representative has the authority to execute this Agreement on behalf
of all of the Underwriters.
SECTION 11
NOTICE
Except as otherwise expressly provided in this Agreement:
11.1 NOTICE TO THE COMPANY. Whenever notice is required by the
provisions of this Underwriting Agreement to be given to the Company, such
notice shall be in writing addressed to the Company as follows:
Premier Concepts, Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, President
with a copy to:
Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxx
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
11.2 NOTICE TO THE REPRESENTATIVE. Whenever notice is required by the
provisions of this Agreement to be given to the Representative, such notice
shall be given in writing addressed to the Representative as follows:
Cohig & Associates, Inc.
0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Executive Vice President
with a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxxx & Xxxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
11.3 EFFECTIVE DATE OF NOTICES. Such notices shall be effective on the
date of delivery set forth on the receipt if the notice is sent by registered
or certified mail or any expedited delivery, or, if sent regular mail, three
days from the day of mailing.
Premier Concepts, Inc. -30-
Underwriting Agreement
SECTION 12
MISCELLANEOUS
12.1 BENEFIT. This Agreement is made solely for the benefit of the
Representative, other Underwriters , the Company, their respective officers,
directors and controlling persons referred to in Section 15 of the Securities
Act and such other persons as are identified in this Agreement, and their
respective successors and assigns, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successor" or the
term "successors and assigns" as used in this Agreement shall not include any
purchasers, as such, of any of the Securities.
12.2 SURVIVAL. The respective indemnities, agreements, representations,
warranties, and covenants of the Company or its officers and the
Representative or the Underwriters as set forth in or made pursuant to this
Agreement and the indemnity and contribution agreements contained in Section
6 hereof of the Company and the Underwriters (as defined in Section 6) shall
survive and remain in full force and effect, regardless of (a) any
investigation made by or on behalf of the Company or the Underwriters or any
such officer or director thereof or any controlling person of the Company or
of the Underwriters, (b) delivery of or payment for the Securities, and (c)
the Closing Date and, if applicable, the Over-allotment Closing Date, and any
successor of the Company or the Underwriters or any controlling person,
officer or director thereof, as the case may be, shall be entitled to the
benefits hereof.
12.3 GOVERNING LAW. The validity, interpretation and construction of
this Agreement and of each part hereof will be governed by the laws of the
State of Colorado.
12.4 ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties hereto, and supersedes all agreements and
understandings including, but not limited to, the Letter of Intent dated
April 29, 1996.
12.5 REPRESENTATIVE'S INFORMATION. The statements with respect to the
public offering of the Securities on the inside and outside of both the front
and back cover pages of the Prospectus and under the caption "Underwriting"
in the Final Prospectus constitute the written information furnished by or on
behalf of the Representative referred to in Section 2.2 hereof, in Section
6.1 hereof and Section 6.2 hereof.
12.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together will constitute one and the same instrument.
12.7 DEFINITION OF "BUSINESS DAY" AND "SUBSIDIARY". For purposes of
this Agreement, (a) "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "Subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
Premier Concepts, Inc. -31-
Underwriting Agreement
Please confirm that the foregoing correctly sets forth the Agreement
between you and the Company.
Very truly yours,
ATTEST:
PREMIER CONCEPTS, INC.
By By
-------------------------------- ---------------------------------
Secretary Xxxxxx X. Xxxxxxxxx, President
WE HEREBY CONFIRM AS OF THE DATE HEREOF THAT THE ABOVE SETS FORTH THE
AGREEMENT BETWEEN THE COMPANY AND US.
COHIG & ASSOCIATES, INC.
(for itself and as Representative of
the several Underwriters named in
Schedule I hereto)
By
---------------------------------
Premier Concepts, Inc. -32-
Underwriting Agreement
PREMIER CONCEPTS, INC.
(A Colorado Corporation)
SCHEDULE I
This Schedule sets forth the name of each Underwriter referred to in the
Underwriting Agreement and the number of Shares and Warrants to be purchased
by each Underwriter.
Number
Name of Shares and Warrants
---- ----------------------
Cohig & Associates, Inc. 800,000
Xxxxxxx Xxxxxxxx Securities
Corporation 150,000
Xxxxxxx Investment Company, Inc. 150,000
---------
Total 1,100,000
---------
---------
Premier Concepts, Inc. -33-
Underwriting Agreement
