PREMIER CONCEPTS, INC. DBA/Impostors - Elegant Pretenders 3033 South Parker Road, Suite 120 Aurora, Colorado 80014 Phone: (303) 338-1800 Fax: (303) 338-5780 October 18, 2000
PREMIER CONCEPTS, INC.
DBA/Impostors - Elegant Pretenders
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
October 18, 2000
BY FEDERAL EXPRESS
(to all recipients)
XxxxxXxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx and/or
Chief Executive Officer
XxxxxXxxxx.xxx, Inc.
000 X. Xxxxxxxx Xxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx and/or
Chief Executive Officer
Re: Agreement and Plan of Merger dated as of February 7, 2000 by and among Premier
Concepts, Inc. ("Premier" or "Parent"), Amazemerger Co. ("Mergersub") and
XxxxxXxxxx.xxx, Inc. ("AmazeScape"), as amended by an Amendment to Agreement
and Plan of Merger dated April 19, 2000 by and among the same parties (the "Merger
Agreement")
Gentlemen:
Premier and Mergersub hereby terminate the Merger Agreement, effective immediately. This action is taken pursuant to both Sections 12.2 and 12.4 of the Merger Agreement, each of which provides an independent sufficient basis for terminating the Agreement.
With respect to termination pursuant to Section 12.4 of the Merger Agreement, the Expiration Date provided for in the Merger Agreement (originally May 15, 2000 and extended to July 15, 2000 by the April 19th amendment to the Merger Agreement) has long since passed. The Closing under the Merger Agreement has not occurred and there is not prospect for a Closing anytime soon. Both Premier and Xxxxxxxxx have done everything that is required of them under the Merger Agreement. The fact that the Closing has not occurred - nearly two months after the extended Expiration Date has come and gone - is a sufficient basis and a good reason for terminating the Agreement. The termination of the Merger Agreement pursuant to Section 12.4 is unconditionally effective without regard to AmazeScape's performance or non-performance of its duties under the Agreement.
In fact, AmazeScape has committed a number of breaches of the Merger Agreement. To mention one example, AmazeScape committed a material and substantial breach of the Merger Agreement in March 2000 by spending a major part of its available cash - cash expected to fund the development of the businesses of both companies after the merger was completed - to acquire an investment in {Broadspider}, a privately held start-up company mentioned in or related to AmazeScape's business plan as disclosed to us. This violated Sections 6.1(d)(iv), (ix) and (xi) of the Merger Agreement, among others. AmazeScape compounded its default by concealing the Broadspider acquisition from Premier and Mergersub while Premier filed an amendment to its registration statement for the merger with SEC - an amendment reviewed and approved by AmazeScape before the ink was dry on its Broadspider investment - that contains no mention of Broadspider, AmazeScape's large investment or the substantial and abrupt change in its business plan. This concealment continued for more than three months. This violated (at least) Sections 5.1 and 6.1(f) of the Merger Agreement. These breaches - by themselves and without regard to other breaches of the Merger Agreement by AmazeScape - amply justify termination of the Merger Agreement pursuant to Section 12.2.
In recent weeks we have witnessed - or first become aware of changes at AmazeScape that completely undermined the prospects for a successful merger. We learned that AmazeScape has terminated - or at least eliminated the authority of - its operating managers and is currently operating without professional management. We learned that progress to date on its business plan has been modest at best and are led to conclude that AmazeScape is not currently even prosecuting its business plan in a meaningful way. Certain ongoing problems, such as AmazeScape's failure to satisfy its obligations to major suppliers, suggest that AmazeScape's very existence is threatened. In short, it seems that many of the elements that once made AmazeScape an attractive business partner have been squandered and no longer exist.
This letter need not specify the other respects in which the actions of AmazeScape have violated the Merger Agreement or other failures by AmazeScape in performing its obligations under the Agreement. Premier and Mergersub do not waive any of their rights or any of the remedies available to them because of each and every breach of the Merger Agreement by AmazeScape, whether or not mentioned in this letter.
Both Premier and Xxxxxxxxx are currently evaluating the damages they suffered as a result of AmazeScape's breaches and will determine how to proceed after they have completed that evaluation.
Sincerely,
/s/ Xxxxxx Xxxxxxxxxxx
Xxxxxx
Xxxxxxxxxxx,
President of Premier Concepts, Inc.
and Amazemerger Co.
cc: Xxxxxx Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esquire
Xxxxxxxxxxx Xxxxxxx Xxxxxxx, Esquire
Xxxxxx Xxxxxx Xxxxxx & Xxxxxx, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 10136
Attention: Xxxxxx Xxxx Xxxxxxxx, Esquire
Xxxxxxxxxxx Xxxxxxx Xxxxxxx, Esquire
Xxxxxxx Xxxxxxxxx Xxxxx & Xxxxxx
27th Floor
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esquire
