SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X] Annual Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended October 31, 1995
OR
[ ] Transition Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File No.: 0-19000
JIM HJELM'S PRIVATE COLLECTION, LTD.
(Name of Small Business Issuer in its charter)
Delaware 13-3337553
(State or other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)
225 West 37th Street, 5th Floor, New York, New York 10018
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (212) 921-7058
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $.0002 per share
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained herein, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form-
10-
KSB or any amendment to this Form 10-KSB [X].
The issuer's revenues for its most recent fiscal year were $7,852,892.
The aggregate market value of the shares of Common Stock held by non-
affiliates as reported by NASDAQ on January 22, 1996 was approximately
$869,592.
As of January 23, 1996, the Registrant had outstanding 1,372,803 shares
of Common Stock, par value $.0002 per share.
The Proxy Statement of the registrant to be filed on or before February
28, 1996 is incorporated herein by reference.
<PAGE>
PART I
Item 1. Description of Business.
(a) Background. Jim Hjelm's Private Collection, Ltd. (the
"Company"), a Delaware corporation, was organized in April 1986 to
design, manufacture and market high quality (sometimes referred to
in the industry as "couture quality"), bridal wear and related
accessories.
The Company has two principal designers. Mr. Jim Hjelm has
been designing bridal gowns and related items for approximately 25
years. He began his career as a bridal designer with the House of
Bianchi, Boston, Massachusetts, another couture quality bridal gown
manufacturer. Mr. Hjelm then served as the head designer of
Priscilla of Boston, Boston, Massachusetts, for 18 years. From
1980 until he left in 1986 to organize the Company, he was a
principal designer for Galina Bouquet, New York, another couture
quality bridal gown manufacturer. While at Priscilla of Boston, he
personally designed the wedding gowns for the daughters of
President Johnson and President Nixon.
During its fiscal year ended October 31, 1993 ("Fiscal 1993")
the Company engaged Mr. Lazaro Perez as its second bridal gown
designer. Lazaro (the name under which Mr. Perez designs), had
previously designed for Riccio, and studied at Chicago's Ray
College of Design, where he won an award for "Best New Bridal
Designer." Lazaro's designs have enabled the Company to diversify
and add depth to its product lines. Lazaro's dresses are marketed
by the Company under the name "Lazaro."
Both Jim Hjelm and Lazaro are frequently featured in articles
and advertisements published in Bride's and Your New Home and
Modern Bride magazines. Major fashion department stores and bridal
boutiques have featured both designers and their work in
advertisements, in store customer showings, and in retail area
displays.
(b) Business. The Company is engaged in the design,
manufacture and distribution of bridal gowns, veils and bridesmaids
dresses. Until its fiscal year ended October 31, 1994 ("Fiscal
1994"), the Company's wholly-owned subsidiary, Exclusives For the
Bride, Inc., operated a retail store in San Antonio, Texas. In
July 1994, the Company discontinued this operation and sold the
assets to an unaffiliated party. See Item 7. "Financial
Statements" below.
<PAGE>
Manufacturing: The Company's couture lines of bridal gowns,
bridesmaid gowns, veils and related items (the "Private Collection"
and the "Lazaro" line) emphasize traditional styles characterized
by ankle or floor length gowns, with or without trains, and are
principally constructed in satin, silk and lace. The Company's
designs reflect the Company's emphasis on quality and design
originality. Wholesale prices for these lines of the Company's
bridesmaid gowns and bridal gowns range from $90 to $120 and $725
to $1,250, respectively, with suggested retail prices ranging from
between $180 and $240 for bridesmaid gowns and $1,500 to $2,500 for
bridal gowns.
The Company also produces a secondary line of less expensive
bridal gowns called "Visions" which employs the styling that is
comparable to the Company's couture lines, but is constructed from
less expensive fabrics. The wholesale prices for the "New
Traditions" range from $350 to $550 and the retail prices range
from $700 to $1,100.
The Company utilizes the effort of its employees and several
independent contractors to assemble its dresses. The Company
maintains strict quality control over the contractors and supplies
the contractors with cut pattern pieces. There are no written
agreements between the Company and these contractors, enabling the
Company to utilize each contractor on an as-needed basis. The
Company also makes custom alterations on its basic designs at a
customer's request. The Company charges the customer for custom
alterations.
The Company has identified quality bridal boutiques or bridal
departments in women's high fashion clothing stores to market its
products. During its fiscal year ended October 31, 1995 ("Fiscal
1995"), no customer accounted for more than ten percent of the
Company's sales.
The Company's lines of gowns for its next season are
introduced at fashion shows held at the Company's showroom or at
fashion shows held at a hotel. The Company also displays its
products at regional markets and seasonal bridal fashion shows
sponsored by its retail customers at the retail customer's
showroom, sometimes called "trunk shows." These trunk shows are
generally supported with local advertising paid for by the
Company's retail customer.
Both Jim Hjelm and Lazaro, its principal designers, personally
participate in the Company's marketing efforts by directly
contacting potential retail accounts, personally appearing at
seasonal bridal fashion shows and trunk shows, and otherwise being
available for showing the Company's lines of bridal products.
Management believes that its designers' personal participation in
the marketing of the Company's products enhances the Company's
ability to obtain retail accounts for its products. The Company
also employs a full-time sales manager and four salespeople.
The Company advertises in periodicals and other publications
dealing with the bridal industry in advance of and during each
bridal season. The Company's dresses have been advertised in
Bride's and Your New Home and Modern Bride magazines. This
advertising is directed toward displaying the Company's products in
a manner that enhances the general perception of the quality of the
Company's gowns and the Company's reputation.
The primary raw materials necessary for the Company's business
are quality fabrics such as silks, taffetas and laces. The Company
maintains a minimum inventory of these raw materials as it needs
for its orders. Other than as set forth below, the Company is
generally able to obtain necessary materials easily.
Prior to Fiscal 1994, the Company imported beaded lace from
Haiti. During Fiscal 1994, due to an embargo of goods, the Company
experienced difficulty in obtaining beaded lace from Haiti. The
Company has developed alternative suppliers of lace, both
domestically and abroad, in order to minimize the effect of
reliance on any one supplier on its production. However, although
the Company utilized these suppliers, the Company continued to
experience delays in receiving beaded lace. China has become a
major source of beaded lace. The United States has import quotas
on beaded lace from China which were filled in September 1994. The
Company was not able to receive any additional beaded lace from
China until January 1995, thus delaying the manufacture of several
styles of dresses. As a result, the Company was required to
utilize domestic manufacturers at higher costs in order to fill its
orders. Although the political situation in Haiti has stabilized,
the Company does not anticipate utilizing Haitian suppliers at the
level it did prior to the embargo because of the instability in
receiving supplies of beaded lace from Haiti. The Company's
present plan is to continue to use domestic and other international
suppliers for its purchases of beaded lace.
Although the bridal industry is generally seasonal, with
showings to retail buyers in advance of the Spring and Fall
seasons, the Company's business has only experienced slight
seasonal fluctuations, with a slight decrease in its fourth
quarter.
The couture-quality traditional bridal wear industry is highly
competitive. In marketing its bridalwear and bridesmaid gowns, the
Company competes directly with the House of Bianchi, Priscilla of
Boston, Galina Bouquet, the Diamond Collection, Watters & Watters,
Bari Jay, and others who currently market high fashion traditional
bridal wear. Competition with these firms is intense. Although the
Company's sales represent a small percentage of the bridal gown
market (less than one percent), the Company competes on the basis
of prestige, design, quality, service and price.
In its marketing efforts, the Company emphasizes the couture
quality of its products and the public recognition of Jim Hjelm and
Lazaro, including their experience and reputation in the industry.
In the Company's view, the ability of the Company to continue to
successfully compete is dependent upon the continued development
and maintenance of a line of high quality, fashionable bridal wear
and the promotion of the reputations of Jim Hjelm, Lazaro and other
recognized designers that the Company employs.
The Company employs approximately 40 full-time employees,
including three of its executive officers.
ITEM 2. Description of Property.
The Company's executive offices and manufacturing facility are
located at 225 West 37th Street, New York, New York. This space is
located in Manhattan's "garment center." which primarily contains
garment manufacturers and office space. The premises are occupied
pursuant to a lease with an unaffiliated party, which expires in
January 2003. The Company's manufacturing facility consists of a
fully-equipped design and production area, which includes cutting
tables, sewing machines and other equipment required to manufacture
the Company's products. The Company also maintains showroom space
at 501 Seventh Avenue, New York, New York pursuant to a lease with
an unaffiliated party, which expires in 2002. This space is solely
utilized to display the Company's products to buyers. The Company
maintains a permanent showroom in the Chicago bridal mart building
pursuant to a month-to-month lease with an unaffiliated party.
ITEM 3. Legal Proceedings.
The Company is not a party to any material pending legal
proceedings, and to the best knowledge of the Company, no such
proceedings have been threatened.
ITEM 4. Submission of Matters to a Vote of Security Holders.
During the Company's fourth fiscal quarter ended October 31,
1995, no matters were submitted to a vote of the security holders
of the Company.
<PAGE>
PART II
ITEM 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
(a) The Common Stock of the Company (the "Common Stock") is
traded in the Over-the-Counter market and is quoted on the NASDAQ
System. Effective November 15, 1994, in order to satisfy the
minimum bid price requirement for continued inclusion on NASDAQ,
the Common Stock was split 1 for 3. All numbers set forth below
reflect this event.
The following table sets forth, for the Company's last two
fiscal years, high and low bid quotations for the Common Stock.
The market quotations represent prices between dealers, do not
include retail markup, markdown, or commissions and may not
represent actual transactions.
Quarter Ended High Bid Low Bid
Fiscal 1994
January 31, 1994 3.093* 2.437*
April 30, 1994 3.18* 2.154*
July 31, 1994 3.00* 2.25*
October 31, 1994 2.061* 1.875*
Fiscal 1995
January 31, 1995 1.56 .32
April 30, 1995 1.08 .56
July 31, 1995 1.00 .40
October 31, 1995 2.00 1.00
*Estimated due to reverse stock split
On January 22, 1996, the closing bid and asked prices in the
Over-the-Counter market for the Common Stock as reported by NASDAQ
were $.875 and $1.00, respectfully.
(b) At January 23, 1996, there were approximately 201 holders
of record of the Common Stock. The Company believes that there are
significantly more beneficial holders of the Common Stock as many
of the shares of Common Stock are held in "street" name.
<PAGE>
(c) No cash dividends have been paid on the Common Stock, and
the Company does not anticipate paying cash dividends in the
foreseeable future.
ITEM 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations - Fiscal 1995 as Compared to Fiscal 1994
For Fiscal 1995, revenues were $7,852,892 as compared to
$5,812,585 in Fiscal 1994, an increase of $2,040,307 or 35.1%.
Management attributes the increase in sales to an increase in the
sales of the Lazaro line as well as an increase in its "Occasions"
line of bridesmaids' dresses.
The Company's gross profit margin decreased in Fiscal 1995 to
36.0% from 38.9% in Fiscal 1994. The Company attributes this
decrease to a shift in its product mix, as well as additional
production costs incurred as a result of a production delay with a
subcontractor in the Far East.
Selling, general and administrative ("SG&A") expenses
decreased to 32.9% of sales in Fiscal 1995 as compared to 35.4% of
sales in Fiscal 1994. This was due to the Company benefiting from
economies of scale due to the increase in sales volume.
The Company generated net income of $63,586 or $.05 per share
for Fiscal 1995 as compared to a net loss of $2,696 or $.00 per
share for Fiscal 1994. The net loss during Fiscal 1994 included a
one-time gain of $75,000 due to a change in accounting principle
relating to accounting for income taxes, which offset a loss of
$139,405 relating to a discontinued operation. The increase in net
income for Fiscal 1995 was due to increased sales, and no
comparable loss on discontinued operation.<PAGE>
Liquidity and Capital Resources
The Company's working capital increased to $1,203,642 at
October 31, 1995 from $883,014 at October 31, 1994, an increase of
$320,628. Its current ratio was 1.40 to 1.
During Fiscal 1995, net cash used in the Company's operating
activities was $543,908 as compared to net cash used by operating
activities in Fiscal 1994 of $238,060. Cash was used to finance
increased accounts receivable due to a higher sales volume.
Cash used in investment activities in Fiscal 1995 was $18,533
as compared to $26,912 in Fiscal 1994. This was due to greater
purchases of equipment during Fiscal 1995.
Net cash flows provided by financing activities in Fiscal 1995
was $560,000 as compared to cash flow from these activities in
Fiscal 1994 of $165,000. In Fiscal 1995, the Company increased its
short term borrowings by $330,000 as compared to the Company's
increase in its short-term borrowing by $65,000 in Fiscal 1994.
The Company also increased its proceeds from the sale of Common
Stock during Fiscal 1995 to $230,000 from $100,000 during Fiscal
1994.
As of October 31, 1995, the Company had withdrawn $1,000,000
under its line of credit (the "Credit Line") of up to $1,000,000
from Chemical Bank (the "Bank"). As security for any amounts which
may be lent to the Company under the Credit Line, the Company
granted a security interest to the Bank in its accounts receivable,
chattel paper and general intangibles (collectively, the
"Security"). As additional security, Mr. Hjelm and all of the
officers and directors of the Company executed personal guaranties
in favor of the Bank. Amounts lent to the Company under the Credit
Line bear interest at 2% above the Bank's current prime rate. In
December 1994, with the consent of the Bank, the Company obtained
a short-term line of credit of up to $200,000 from an investor to
furnish it with additional working capital (the "2nd Credit Line").
Interest under this line accrues at the rate of six percent above
the Bank's current prime rate. The Company granted the investor a
second security interest in its account receivables. In the event
either the Bank or the investor withdraw the Credit Line or the 2nd
Credit Line at an inopportune time, the Company would likely
experience serious working capital shortages and may not be able to
substitute the Credit Line or the 2nd Credit Line, as the case may
be, with a replacement on similar terms or at all. In September
1995, the Company obtained a loan from a shareholder in the amount
of $100,000, with interest accruing at the rate of 12% per annum.
The principal is due in five monthly installments commencing
January 15, 1996.
The Company has experienced periodic cash flow shortages in
the past. This has resulted in increases in its payables,
including payroll taxes. The Company has historically been able to
generate sufficient cash flow with the assistance of outside
borrowings available to it to finance its day-to-day operations.
The Company believes its current working capital will be sufficient
to finance its current operations. When necessary, the Company has
been able to successfully raise equity capital in the past. There
is no assurance, however, that if additional financing continues to
be required, that it will be available, or if available, that it
will be available on satisfactory terms.
ITEM 7. Financial Statements.
The financial statements listed below are included on pages-
F-1 through F-16 following the signature page.
Title of Document Page
Report of Independent Public Accountants F-1
Balance Sheet as of October 31, 1995 F-2-3
and October 31, 1994
Statements of Operations for the two years
ended October 31, 1995 and 1994 F-4-5
Statements of Shareholders' Equity for the
two years ended October 31, 1995 and 1994 F-6
Statements of Cash Flows for the two years
ended October 31, 1995 and 1994 F-7-8
Notes to Financial Statements F-9
ITEM 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
<PAGE>
PART III
The information required by Items 9, 10, 11 and 12 of this
Part will be incorporated by reference to the Proxy Statement of
the Company to be filed with the Securities and Exchange Commission
on or before February 28, 1996.
<PAGE>
PART IV
ITEM 13. Exhibits and Reports on Form 8-K.
(a) Exhibits.
3.1 The Company's Certificate of Incorporation, as amended,
dated December 30, 1994.
3.2 The Company's By-Laws are incorporated by reference to
Exhibit 3.03 of Registration Statement No. 33-10278 NY
filed on Form S-18 ("Form S-18").
10.1 Employment Agreement between Jim Hjelm and the Company
dated February 9, 1993, incorporated by reference to
Exhibit 10.1 of the Company's annual report on Form 10-
KSB filed for its fiscal year ended October 31, 1992
("1992 10-K").
10.2 Form of Stock Option Plan is incorporated by reference to
Exhibit 10.02 to the Form S-18.
10.3 Form of Subscription Agreement issued in the private
placement, together with form of Warrants, which are
exhibits thereto incorporated by reference to Exhibit
10.9 of the Company's Annual Report on Form 10-K filed
for the fiscal year ended October 31, 1991 ("1991 10-K").
10.4 Employment Agreement dated between the Company and Mr.
Lazaro Perez incorporated by reference to Exhibit 10.5 to
the Company's Annual Report on Form 10-KSB filed for the
fiscal year ended October 31, 1993 (the "1993 10K").
10.5 Promissory Note and Security Agreement dated November 21,
1994 evidencing loan from Carl Seaman incorporated by
reference to Exhibit 10.7 of the Company's Annual Report
on Form 10-K filed for the fiscal year ended October 31,
1994 ("1994 10-K").
10.6 Employment Agreement dated February 1, 1995 between the
Company and Mr. Joseph L. Murphy.
10.7 Subscription Agreement dated September 12, 1995 between
the Company and William J. Carroll.
<PAGE>
ITEM 13. Exhibits and Reports on Form 8-K.
Exhibits. (continued)
10.8 Promissory Note dated September 12, 1995 evidencing loan
from William J. Carroll.
10.9 Form of Subscription Agreement issued in the private
placement that ended May 31, 1995, together with form of
Registration Rights Agreement.
10.10 Form of Subscription Agreement issued in the private
placement that ends April 30, 1996, with form of
Registration Rights Agreement.
(b) Reports on Form 8-K.
During the last quarter of Fiscal 1995, the Company filed no
reports on Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
JIM HJELM'S PRIVATE COLLECTION, LTD.
Dated: January 28, 1996 By: /s/ Joseph L. Murphy
Joseph L. Murphy,
President
Pursuant to the requirement of the Securities Exchange Act of
1934, as amended, the Company has duly caused this report to be
signed on its behalf by the following persons on behalf of the
Company and in the capacities and on the dates indicated:
Name Capacity Date
/s/ Daniel M. Sullivan Chairman of the Board January 28, 1996
Daniel M. Sullivan of Directors
/s/ Joseph L. Murphy President and Director January 28, 1996
Joseph L. Murphy (principal executive and
financial officer)
/s/ Joseph E. O'Grady Secretary and Director January 28, 1996
Joseph E. O'Grady
hjelm\10KSB.95
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Jim Hjelm's Private Collection, Ltd.:
We have audited the accompanying balance sheets of Jim Hjelm's Private
Collection, Ltd. (a Delaware corporation) and subsidiary as of October
31, 1995 and 1994, and the related statements of operations,
shareholders' equity and cash flows for the years then ended, as
described in the accompanying index to Financial Statements. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Jim
Hjelm's Private Collection, Ltd. as of October 31, 1995 and 1994, and
the results of its operations and its cash flows for the two years
then ended in conformity with generally accepted accounting
principles.
As discussed in Note 2 to the financial statements, effective November
1, 1993 the Company changed its method of accounting for income taxes.
s/Arthur Andersen LLP
New York, New York
January 18, 1996
F-1
<PAGE>
<TABLE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Balance Sheets
October 31, 1995 and 1994
1995 1994
---- ----
<S> <C> <C>
Current assets:
Cash $ 36,645 $ 39,086
Accounts receivable, net of
allowance for doubtful
accounts and trade discounts
of $121,670 at October 31,
1995 and $71,670 at October
31, 1994 1,869,711 1,308,820
Inventories 1,795,840 1,725,597
Note receivable 8,505 47,496
Deferred income taxes 18,556 40,376
Prepaid expenses and other
current assets 471,630 492,640
--------- ---------
Total current assets 4,200,887 3,654,015
Property and equipment - at
cost, net of accumulated
depreciation and amortization
of $304,606 at October 31,
1995 and $256,492 at October
31, 1994 196,749 214,330
Other assets:
Deferred income taxes 27,000 27,000
Security deposits and other 101,711 117,377
--------- ---------
$4,526,347 $4,012,722
F-2
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Balance Sheets
October 31, 1995 and 1994
(continued)
1995 1994
---- ----
<S> <C> <C>
Current liabilities:
Notes payable $1,300,000 $ 970,000
Accounts payable 1,227,939 1,256,550
Payroll taxes payable 384,365 384,147
Other current liabilities 84,941 160,304
--------- ---------
Total current liabilities 2,997,245 2,771,001
Commitments and contingencies
(Note 9) 74,056 76,811
Shareholders' equity:
Preferred stock, $.0001 par
value: Authorized 1,000,000
shares, Issued and outstanding - -
- none
Common stock, $.0002 par
value: Authorized 3,333,333
shares, Issued and outstand-
ing - 1,372,803 at October
31, 1995 and 1,142,803 at
October 31, 1994 275 229
Additional paid-in capital 1,652,087 1,422,133
Accumulated deficit (139,701) (203,287)
--------- ---------
1,512,661 1,219,075
Less: Note receivable and
accrued interest 52,625 49,175
1,667 shares held in
treasury 4,990 4,990
----- -----
Total shareholders' equity 1,455,046 1,164,910
--------- ---------
$4,526,347 $4,012,722
The accompanying notes are an integral part of these
financial statements.
F-3
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Statements of Operations
For the years ended October 31, 1995 and 1994
1995 1994
---- ----
<S> <C> <C>
Net sales $7,852,892 $5,812,585
Cost of goods sold 5,028,570 3,549,565
--------- ---------
Gross profit 2,824,322 2,263,020
Selling, general and admin-
istrative expenses 2,584,711 2,056,543
--------- ---------
Income from continuing opera-
tions 239,611 206,477
Interest expense, net of interest
income of $3,450 and $4,455 for
1995 and 1994, respectively (135,193) (88,310)
Income from continuing opera-
tions before provision for
income taxes 104,418 118,167
Provision for income taxes (40,832) (56,458)
------- ------
Net income from continuing
operations before discontinued
operations and cumulative effect
of change in accounting principle 63,586 61,709
Loss from discontinued operations - (139,405)
net of income taxes ------- -------
Income (loss) before cumula-
tive effect of change in
accounting principle 63,586 (77,696)
Cumulative effect of change
in accounting principle - 75,000
-------- --------
Net income (loss) $63,586 ($2,696)
F-4
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Statements of Operations
For the years Ended October 31, 1995 and 1994
(continued)
1995 1994
---- ----
<S> <C> <C>
Net income (loss) per weighted
average number of common and
common equivalent share:
Income from continuing oper-
ations $0.05 $0.05
Loss from discontinued opera-
tions - ($0.12)
Cumulative effect of change
in accounting principle - $0.07
---- -----
Net income per share $0.05 nil
Weighted average number of
common and common equivalent
shares outstanding:
Primary 1,254,337 1,175,690
--------- ---------
Fully diluted 1,254,337 1,175,690
--------- ---------
The accompanying notes are an integral part of these
financial statements.
F-5
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Statements of Shareholders' Equity
For the years ended October 31, 1995 and 1994
Note
Additional Receivable Total
Common Paid-in Accumulatedand AccruedTreasuryShareholders'
Shares Amount Capital Deficit Interest Stock Equity
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, November 1, 19931,076,136$216 $1,322,146($200,591)($45,676) ($4,990) $1,071,105
Sale of Common Stock 66,667 13 99,987 100,000
Accrued Interest on Note
Receivable (3,499) (3,499)
Net Loss (2,696) (2,696)
-----------------------------------------------------------------------
Balance, October 31, 19941,142,803$229 $1,422,133($203,287)($49,175) ($4,990) $1,164,910
Sale of Common Stock 230,000 46 229,954 230,000
Accrued Interest on Note
Receivable (3,450) (3,450)
Net Income 63,586 63,586
-----------------------------------------------------------------------
Balance, October 31, 19951,372,803$275 $1,652,087(($139,701)($52,625)($4,990) $1,455,046
=======================================================================
The accompanying notes are an integral part of these
financial statements.
F-6
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Statements of Cash Flows
For the Years Ended October 31, 1995 and 1994
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income before cumulative effect of
change in accounting principle $63,586 $61,709
Adjustments to reconcile net income
to net cash used in operating activ-
ities:
Loss from discontinued operations (139,405)
Cumulative effect of change in
accounting principle 75,000
Depreciation and amortization 48,114 39,176
Allowance for doubtful accounts and
trade discounts 50,000 (39,233)
Accrued interest on note receivable (3,450) (3,499)
Changes in assets and liabilities:
Increase (decrease) in accounts
receivable (610,891) 67,859
Increase in inventories (70,243) (322,802)
Decrease (increase) in note
receivable 38,991 (47,496)
Decrease (increase) in prepaid ex-
penses and other current assets 21,010 (337,085)
Decrease (increase) in deferred
income taxes 21,820 (67,376)
Decrease (increase) in security
deposits and other assets 3,666 (1,462)
(Decrease) increase in accounts
payable (28,611) 211,807
Increase in payroll taxes payable 218 207,756
(Decrease) increase in other current
liabilities (75,363) 59,534
Decrease in other long term liabil-
ities (2,755) (2,543)
Net cash used in operating activ-
ities (543,908) (238,060)
------- -------
Cash flows from investing activities:
Purchase of property and equipment (30,533) (5,995)
Increase (decrease) in account
value of life insurance policy 12,000 (20,917)
Net cash used in investing activ-
ities (18,533) (26,912)
F-7
<PAGE>
<CAPTION>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Statements of Cash Flows
For the Years Ended October 31, 1995 and 1994
(continued)
1995 1994
---- ----
<S> <C> <C>
Cash flows from financing activities:
Net proceeds from
short term borrowings 330,000 65,000
Proceeds from sale of Common Stock 230,000 100,000
Net cash flows provided by financing
activities 560,000 165,000
Net decrease in cash (2,441) (99,972)
Cash, beginning of year 39,086 139,058
Cash, end of year $36,645 $39,086
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for:
Interest $128,706 $92,766
Income taxes $ 14,418 $10,864
The accompanying notes are an integral part of these
financial statements.
F-8
</TABLE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
Note 1. The Company
Jim Hjelm's Private Collection, Ltd. (the "Company") is
engaged in the design and manufacture of traditional, high
quality bridal wear and accessories. Products are sold to
specialty bridal shops located throughout the continental
United States.
As more fully discussed in Note 5 although management
believes there are no plans to do so, in the event that
either the bank or the shareholder withdraw their credit
lines at an inopportune time, the Company would likely
experience working capital problems and may not be able to
replace such financing on similar terms or at all.
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying 1994 financial statements include the
accounts of the Company and those of its wholly owned
subsidiary (collectively referred to as "Companies"). As
discussed in Note 10, during Fiscal 1994 this subsidiary
was sold. All significant intercompany accounts and
transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Inventories
Inventories are valued at the lower of cost (first-in,
first-out) or market including material, labor and
overhead.
Property and Equipment
Depreciation of property and equipment is computed using
the straight-line method over the estimated useful lives
of the respective assets, which range from five to ten
years. Amortization of leasehold improvements is computed
using the straight-line method over the lesser of the
lease term or estimated useful lives of the improvements.
Major additions and improvements are capitalized, and
repairs and maintenance are charged to operations as
incurred.
F-9
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
Prepaid expenses and other current assets
Prepaid expenses and other current assets of $471,630 at
October 31, 1995 and $492,640 at October 31, 1994 include
approximately $294,000 and $193,000, respectively of costs
relating to the design of the Company's new product lines
which are being amortized over a one year period.
Revenue Recognition
Revenue is recognized upon shipment and acceptance by the
customer.
Income Taxes
The Companies file a consolidated Federal income tax
return and separate returns for state and local income
taxes. During the year ended October 31, 1994 the Company
adopted Statement of Financial Accounting Standard
("SFAS") No. 109, "Accounting for Income Taxes," which
requires recognition of deferred tax liabilities and
assets for the estimated future tax effects of events that
have been recognized in the financial statements or income
tax returns. In addition, this accounting standard
requires the recognition of future tax benefits, such as
net operating loss carry-forwards, to the extent that the
realization of such benefits is more likely than not.
Financial statements of prior years have not been restated
and the cumulative effect of the accounting change has
been reflected in the year of adoption.
Earnings (Loss) Per Common and Common Equivalent Share
Earnings (loss) per common and common equivalent share are
based on the weighted average number of common and common
equivalent shares outstanding during the period. Common
equivalent shares are shares issuable upon the assumed
exercise of options and warrants using the modified
treasury stock method.
Reverse Stock Split
In November 1994, the Board of Directors declared a one-
for-three reverse stock split for shareholders of record
on November 15, 1994. Concurrent with the reverse stock
split the Company's Certificate of Incorporation was
amended to increase the par value of Common Stock from
$.0001 to $.0002 per share.
F-10
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
Note 3. Inventories
At October 31, 1995 and 1994, inventories consisted of:
1995 1994
---- ----
Raw materials $ 580,948 $ 725,698
Work-in-process 161,484 352,208
Finished goods 1,053,408 647,691
--------- -------
$1,795,840 $1,725,597
Note 4. Property and Equipment, Net
Property and equipment at October 31, 1995 and 1994, is
summarized as follows:
1995 1994
---- ----
Furniture and equip-
ment $232,914 $204,631
Leasehold improve-
ments 234,179 231,929
Leased equipment 34,262 34,262
------- -------
501,355 470,822
Less: Accumulated
depreciation and
amortization 304,606 256,492
------- -------
Property and equipment,
net $196,749 $214,330
Note 5. Notes Payable
Bank
The Company maintains a $1,000,000 revolving line of
credit with a bank, with interest on borrowings payable at
2% above the bank's prime rate, which was 8.75% at October
31, 1995. At October 31, 1995 and 1994, the Company had
borrowed $1,000,000 and $970,000 under the line,
respectively. Borrowings are collateralized by the
Company's accounts receivable, chattel paper, general
intangibles and the personal guarantees of Jim Hjelm,
officers and directors of the Company. Additional fees
are payable for periods in which a compensating balance of
ten percent of the average daily outstanding loan balance
is not maintained. No additional fees were due for the
periods presented.
F-11
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
Interest charged to operations under this revolving line
of credit amounted to $107,500 and $92,776 for the years
ended October 31, 1995 and 1994, respectively.
Other
In December, 1994 with consent of the Company's bank, the
Company obtained a short term line of credit up to
$200,000 from a shareholder. Interest under this line
accrues at a rate of 6% above the banks prime rate which
was 12.75% at October 31, 1995. Payment of principal is
subordinate to payment of the Company's revolving line of
credit. As of October 31, 1995, $200,000 was outstanding
on this line of credit.
Interest charged to operations under this line of credit
amounted to approximately $25,000 for the year ended
October 31, 1995.
In September, 1995 the Company borrowed $100,000 from a
shareholder. The rate of interest on this loan is 12%.
The loan is repayable in monthly installments of $20,000
commencing on January 15, 1996.
Note 6. Income Taxes
The provision for income taxes for the years ended October
31, 1995 and 1994, consist of the following:
1995 1994
---- ----
Current:
Federal $ - $ -
State and local 10,600 5,000
------ ------
10,600 5,000
Deferred: 30,232 51,458
------- ------
$40,832 $56,458
======== =======
F-12
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
A reconciliation of the statutory Federal income tax to
the effective income tax for the years ended October
31,1995 and 1994, is as follows:
1995 1994
---- ----
Statutory Federal income tax at
applicable rates $23,973 $29,335
State and local taxes, net of
Federal tax benefit 14,231 15,775
Utilization of investment tax
credits
Accrued penalties - 11,348
Other 2,628 -
------ ------
$40,832 $56,458
====== ======
The components of the net deferred tax asset at October
31, 1995 and 1994 are as follows:
1995 1994
---- ----
Gross deferred tax asset $250,618 $ 215,000
Valuation Allowance (41,000) (41,000)
-------- -------
209,618 174,000
Gross deferred tax liability (164,062) (106,624)
------- -------
Net deferred tax asset 45,556 67,376
Less longterm portion (27,000) (27,000)
------- ------
Current deferred tax asset $18,556 $40,376
======= ======
Deferred income taxes are provided on temporary
differences between financial statement and taxable
income. The primary sources of these differences are
prepaid expenses, deferred design costs and accrued
expenses. In addition, the deferred tax assets include the
benefit of net operating loss carry-forwards of
approximately $84,000 expiring in 2007. Realization of
deferred income taxes is dependent on generating
sufficient taxable income in the future. Although
realization is not assured, management believes it is more
likely than not that all of the deferred tax asset will be
realized. The amount of the deferred tax asset considered
realizable, however, could be reduced in the near term if
estimates of future taxable income are reduced.
F-13
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
Note 7. Shareholders' Equity
In January 1994, the Company completed a private sale of
66,667 unregistered shares of common stock (the "Shares")
for $100,000 to an unaffiliated investor. The investor
was granted registration rights of the Shares whereby the
Company agrees to use its best efforts to include the
Shares in any registration statement filed by the Company
to publicly offer the Company's securities within two
years from the date of the private sale.
In May 1995, the Company completed a second private sale
of 230,000 shares for $230,000 to two existing
shareholders, one of which is the President.
Stock Warrants
There were 15,000 warrants outstanding at October 31,
1993, which were granted in connection with a private
placement in 1991. These warrants were exercisable at
$6.00 and expired in June 1994.
Stock Options
The following table summarizes data relating to other
non-incentive options and incentive plan options:
Incentive Non-Incentive
--------- -------------
1995 1994 1995 1994
---- ---- ---- ----
Options outstanding
at the beginning of
the year 2,500 14,167 78,333 105,000
Options granted -0- -0- 197,500 -0-
Options expired -0- (11,667) (3,333) (6,667)
Options canceled -0- -0- -0- (20,000)
----- ------ ------ -------
Options outstanding
at the end of the
year 2,500 2,500 272,500 78,333
Options exercisable
at the end of the
year 2,500 2,500 90,625 75,555
The exercise prices of the options outstanding at October
31, 1995 and 1994 range from $.75 to $2.25.
F-14
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
Note 8. Related Party Transactions
Note Receivable - Sale of Stock
On October 15, 1990, the Company's former president
exercised a stock option to purchase 36,458 shares of the
Company's common stock at a purchase price of $.96 per
share. A $35,000 note was issued for the purchase. The
note together with interest accruing at a bank's prime
rate plus one percent per annum, is due on demand. The
outstanding principal and interest balance at October 31,
1995 and 1994 was $52,625 and $49,175, respectively.
Prepaid Expenses and Other Current Assets
The Company's former president borrowed an additional
$10,000 during the fourth quarter of Fiscal 1994, and the
Company's current president borrowed $18,000 during 1994.
The loans, together with interest accruing at a bank's
prime rate plus one percent per annum, is due on demand.
These loans had outstanding balances at October 31, 1995
of $3,500 and $0, respectively.
Note 9. Commitments and Contingencies
Lease Commitments
The Companies lease office, production, and retail
facilities under leases expiring in 1994 through 2003.
Minimum annual rentals under such leases are as follows:
Year Ending
October 31,
1996 164,630
1997 166,168
1998 157,200
1999 168,601
2000 168,600
Thereafter 451,204
1,276,403
Rent expense charged to operations for the foregoing lease
and short-term rentals for the years ended October 31,1995
and 1994, amounted to approximately $302,539 and $254,753,
respectively.
F-15
<PAGE>
JIM HJELM'S PRIVATE COLLECTION, LTD.
Notes to Financial Statements
For the Years Ended October 31, 1995 and 1994
(continued)
Employment Agreements
The Company has employment agreements with three of its
key employees terminating from December 1997 to January
2000. Total compensation payable under the terms of these
agreements for the year ended October 31, 1995 was
approximately $294,800. Future minimum commitments are as
follows:
1996 $332,300
1997 342,300
1998 218,000
1999 157,500
2000 40,000
The Company is currently in discussion with the Internal
Revenue Service ("IRS") regarding outstanding payroll tax
liabilities. Under these circumstances the IRS has the
right to place liens against the assets of the Company.
Management believes the financial statements include
adequate provisions for any penalties that may be
assessed.
Note 10. Discontinued Operations
During fiscal 1994, the Company sold its retail operation
in San Antonio, Texas, for an aggregate amount of
approximately $104,000. Approximately $56,000 was paid at
closing with the remaining balance to be paid over a six
month period following the transaction date. At October
31, 1995 the amount outstanding from the sale was $8,505.
This disposition has been accounted for as discontinued
operations. Revenues for the retail operation were
$210,078 for 1994. The loss reflected in the accompanying
financial statements include a loss of approximately
$60,000 relating to the disposition of the assets of the
retail operations, with a balance of $80,000 representing
losses from operating activities. These amounts are net
of a $75,000 tax benefit.
F-16
<PAGE>
Exhibit Index
3.1 The Company's Certificate of Incorporation, dated December
30, 1994.
10.6 Employment Agreement dated February 1, 1995 between the
Company and Mr. Joseph L. Murphy.
10.7 Subscription Agreement dated September 12, 1995 between
the Company and William J. Carroll.
10.8 Promissory Note dated September 12, 1995 evidencing loan
from William J. Carroll.
10.9 Form of Subscription Agreement issued in the private
placement that ended May 31, 1995, together with form of
Registration Rights Agreement.
10.10 Form of Subscription Agreement issued in the private
placement that ends April 30, 1996, together with form of
Registration Rights Agreement.
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
THE CERTIFICATE OF INCORPORATION
OF
JIM HJELM'S PRIVATE COLLECTION, LTD.
------------------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
------------------------------------------
We, Joseph L. Murphy, President, and Richard S. Kalin,
Assistant Secretary, of JIM HJELM'S PRIVATE COLLECTION, LTD., a
corporation organized and existing under the laws of the State of
Delaware, do hereby certify as follows:
FIRST, that the Certificate of Incorporation of said
corporation be amended as follows:
1. By striking out the whole of ARTICLE FOURTH, as it now exists
and inserting in lieu and instead thereof a new ARTICLE FOURTH,
reading as follows:
"The corporation shall have the authority
to issue up to Eleven Million (11,000,000)
shares, of which Ten million (10,000,000) shares
shall be Common Stock having a par value of
$.0002 per share ("Common Stock") and one
million shares shall be preferred stock, having
a par value of $.0001."
2. By adding ARTICLE SEVENTEENTH, reading as follows:
"The corporation hereby declares that
holders of record as of November 15, 1994 of
Common Stock, par value $.0001 per share, be
issued one share of Common Stock, par value
$.0002 per share, in exchange for each three
shares of Common Stock, par value $.0001 per
share, held of record by them on November 15,
1994. Any fractional shares resulting from such
reverse stock split shall be eliminated and no
fractional shares shall be issued."
<PAGE>
SECOND, that such amendment has been duly adopted in accordance
with the provisions of the General Corporation Law of the State of
Delaware by the written consent of the holders of not less than a
majority of the outstanding stock entitled to vote thereon and that
written notice of the corporate action has been given to those
stockholders who have not consented in writing, all in accordance
with the provision of Section 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, we have signed this certificate this 30
day of December, 1994.
s/Joseph L. Murphy
Joseph L. Murphy
President
s/Richard S. Kalin
Richard S. Kalin
Assistant Secretary
<PAGE>
EXHIBIT 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of this 1st day of February, 1995
between JIM HJELM'S PRIVATE COLLECTION, LTD., a Delaware corporation
(hereinafter called the "Company") with offices at 225 West 37th
Street, New York, New York 10018, and JOSEPH L. MURPHY, residing at
116 West 72nd Street, New York, New York 10023 (hereinafter called
the "Executive").
W I T N E S S E T H
WHEREAS, the Company is a publicly-held company which
manufactures and markets bridal gowns, bridesmaids' gowns and
accessories;
WHEREAS, the Executive is experienced in the general
administration of small publicly-held companies; and
WHEREAS, the Company and the Executive desire to enter into an
agreement to memorialize their understandings with regard to the
employment of the Executive by the Company.
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and promises contained herein, the parties hereby agree
as follows:
1. Employment Term. The Company hereby agrees to employ
the Executive and the Executive agrees to enter the employ of the
Company on the terms and conditions set forth below for a term
commencing on the date hereof (the "Commencement Date"), and
terminating January 31, 2000 unless sooner terminated as herein
provided (such term of this Agreement is herein referred to as the
"Term").
2. Duties. Subject to the authority, control and direction
of the Board of Directors of the Company, the Executive shall be
appointed President of the Company, and the Executive will perform
such duties and services commensurate with his position as President
of the Company, including such duties as may from time to time be
assigned to him by the Board of Directors.
3. Time Requirements. The Executive agrees that he will
devote 80% of his business time and attention during regular
business hours to the business affairs of the Company and that
during the period of such employment the Executive will not, without
the prior permission of the Board of Directors of the Company,
engage in any other business enterprise or enterprises which require
in excess of 20% of the Executive's time or attention. It is
understood that the Executive will perform certain of the services
contemplated in this Agreement outside of the Company's offices.
The foregoing shall not prevent the purchase, ownership or sale by
the Executive of investments or securities of publicly-held
companies and any other business which is not competitive and does
not have any business relations with the Company or any subsidiary
of the Company, provided the time or attention devoted by the
Executive to such activities does not interfere with the performance
of his duties hereunder.
4. Compensation. For the full, prompt and faithful
performance of all of the duties and services to be performed by
Executive hereunder, the Company agrees to pay, and the Executive
agrees to accept, the amounts set forth below.
(a) As a base compensation, the Executive shall be paid at
a rate of $120,000 per annum during the Term (the "Base
Compensation"), payable at such regular times and intervals as the
Company customarily pays its employees. Effective on each
anniversary date of this Agreement, the Board of Directors of
Company agrees to review the Executive's performance hereunder and,
based on such review, to grant to the Executive a bonus in an amount
which, in the discretion of the Board of Directors of the Company,
is deemed appropriate.
(b) Effective on each anniversary date of this Agreement
during the Term, the Company agrees to increase the Base
Compensation in an amount of $10,000.
(c) As additional compensation, the Company shall grant
to the Executive a five year option to purchase 50,000 shares of
Common Stock of the Company exercisable at 110% of the fair market
value of the Company's Common Stock on the date of this Agreement,
(the "Option"). The Option shall be exercisable at the rate of
12,500 shares per year commencing one year from the date hereof;
provided however, that if a change in more than 50% of the ownership
of the Company occurs during the term of the option, the option
shall accelerate and be exercisable as to the remaining unexercised
portion.
(d) The Company shall provide the Executive with health
benefits on the same terms as provided to other employees of the
Company.
(e) The compensation provided for herein shall be in
additional to any retirement, profit sharing, insurance (including
medical) or similar benefit which may at any time be payable to the
Executive pursuant to any plan or policy of the Company relating to
such benefits, which benefits shall be made available to the
Executive on the same basis as they are made available to other
similarly situated executives of the Company.
5. Vacation. The Executive shall be entitled to four weeks of
vacation per year during the Term, which shall be taken at such time
or times as shall be mutually determined by the Company and the
Executive. Such vacation if not taken may accrue and be carried
over into subsequent years.
6. Death. In the event of the death of the Executive
during the Term or any extension thereof, the employment of the
Executive hereunder shall terminate and come to an end on the last
day of the month three months following the death of the Executive.
The estate of the Executive (or such persons as the Executive shall
designate in writing) shall be entitled to receive, and the Company
agrees to pay, the Base Compensation of the Executive up to the end
of the three month period in which such death occurs.
7. Disability. In the event that the Executive shall,
because of illness or incapacity, physical or mental, be unable to
perform the duties and services to be performed by him hereunder for
a consecutive period of nine months, or twelve months during any
eighteen month period, the Company may terminate the employment of
the Executive hereunder after the expiration of such period. The
Executive shall be entitled to receive his base salary up to the
date of such termination.
8. Administration; Expenses. The Executive shall report to
the Board of Directors of the Company, or to a person designated by
the Board of Directors, at such intervals as may be determined from
time to time. The Executive shall be reimbursed by the Company for
all expenses reasonably incurred by him on behalf of the Company in
accordance with the Company's standard policies with respect
thereto.
9. Restrictive Covenants.
9.1 Inventions. Any program, discovery, process, design,
invention or improvement which the Executive makes or develops
during his employment by the Company, whether or not during regular
working hours or in connection with the Company's business or
research activities as then conducted or contemplated, shall belong
to the Company and shall be promptly disclosed to the Company.
During the Executive's employment and for a period of one year
thereafter, the Executive shall, without additional compensation,
execute and deliver to the Company any instruments of transfer and
take such other action as the Company may request to carry out the
provisions of this Section 9.1, including without limitation,
filing, at the Company's expense, patent applications for anything
covered by this Section 9.1 and the prompt assignment of the same to
the Company.
9.2 Covenant Not to Compete. The Executive covenants and
agrees that for a period of one year following the termination of
his employment with the Company other than as a result of a breach
of this Agreement by the Company, he shall not directly or
indirectly compete with the Company in the bridal marketplace or in
any other business in which the Company may at such time be engaged,
nor induce any person associated with or employed by the Company or
any subsidiary of the Company, to leave the employ of or terminate
his association with the Company, or any subsidiary of the Company,
or solicit the employment of any such person on his own behalf or on
behalf of any other business enterprise. In the event of
termination of this Agreement by virtue of a breach by the Company,
termination without cause or expiration of the Term, the aforesaid
covenant will be applicable for a period of six months from such
event.
9.3 Nondisclosure. The Executive covenants and agrees
for a period of two years following the termination of his
employment with the Company, he will not, directly or indirectly,
during or after the term of employment disclose to any person not
authorized by the Company to receive or use such information, except
for the sole benefit of the Company, any of the Company's
confidential or proprietary data, information, designs, styles, or
techniques, including customer lists. Notwithstanding the foregoing,
this applies solely to information that is not generally known to
anyone other than the Company, its Board of Directors or its
employees.
9.4 If any term of this Article 9 is found by any court
having jurisdiction to be too broad, then and in that case, such
term shall nevertheless remain effective, but shall be considered
amended (as to the time or area or otherwise, as the case may be) to
a point considered by said court as reasonable, and as so amended
shall be fully enforceable.
9.5 In the event that the Executive shall violate any
provision of this Agreement (including but not limited to the
provisions of this Article 9) the Executive hereby consents to the
granting of a temporary or permanent injunction against him by any
court of competent jurisdiction prohibiting him from violating any
provision of this Agreement. In any proceeding for an injunction,
the Executive agrees that his ability to answer in damages shall not
be a bar or interposed as a defense to the granting of such
temporary or permanent injunction against the Executive. The
Executive further agrees that the Company will not have an adequate
remedy at law in the event of any breach by Executive hereunder and
that the Company will suffer irreparable damage and injury if the
Executive breaches any of the provisions of this Agreement.
10. Termination for Cause. The Company may terminate the
Executive's employment without liability (other than for payments
accrued to the date of termination) if the Executive's employment is
terminated "for cause". The term "for cause" shall, for the
purposes of this Agreement, mean (i) a material breach by the
Executive of the provisions of this Agreement, (ii) the commission
by the Executive of a fraud against the Company or the conviction of
the Executive for aiding or abetting, or the commission of, a felony
or of a fraud or a crime involving moral turpitude or a business
crime, (iii) the knowing possession or use of illegal drugs or
prohibited substances, the excessive drinking of alcoholic beverages
which impairs the Executive's ability to perform his duties
hereunder, (iv) being under the influence of such drugs, substances
or alcohol during the Executive's hours of employment, or (v) any
violation of the Company's corporate policies described in the
Company's employee handbook, which handbook may supplemented or
amended by the Company from time to time, a copy of which has been
provided to the Executive. In the event of such termination for
cause, Executive shall be entitled to receive his base salary up to
the date of such termination.
11. No Impediments. The Executive warrants and represents
that he is free to enter into this Agreement and to perform the
services contemplated thereby and that such actions will not
constitute a breach of, or default under, any existing agreement.
12. No Waiver. The failure of any of the parties hereto to
enforce any provision hereof on any occasion shall not be deemed to
be a waiver of any preceding or succeeding breach of such provision
or of any other provision.
13. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto and no amendment,
modification or waiver of any provision herein shall be effective
unless in writing, executed by the party charged therewith.
14. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with and shall be governed by
the laws of the State of New York applicable to agreements to be
wholly performed therein.
15. Binding Effect. This Agreement shall bind and inure to
the benefit of the parties, their successors and assigns.
16. Assignment and Delegation of Duties. This Agreement may
not be assigned by the parties hereto except that the Company shall
have the right to assign this Agreement in connection with a sale or
transfer of all or substantially all of its assets, a merger or
consolidation. This Agreement is in the nature of a personal
services contract and the duties imposed hereby are non-delegable.
17. Paragraph Headings. The paragraph headings herein have
been inserted for convenience of reference only and shall in no way
modify or restrict any of the terms or provisions hereof.
18. Notices. Any notice under the provisions of this
Agreement shall be given by registered or certified mail, return
receipt requested, directed to the addresses set forth above, unless
notice of a new address has been sent pursuant to the terms of this
paragraph.
19. Unenforceability; Severability. If any provision of
this Agreement is found to be void or unenforceable by a court of
competent jurisdiction, the remaining provisions of this Agreement,
shall, nevertheless, be binding upon the parties with the same force
and effect as though the unenforceable part has been severed and
deleted.
20. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be deemed to be duplicate
originals.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
JIM HJELM'S PRIVATE COLLECTION, LTD.
By: /s/Daniel M. Sullivan
Daniel M. Sullivan
/s/Joseph L. Murphy
Joseph L. Murphy
hjelm\emplag.jlm
<PAGE>
EXHIBIT 10.7
JIM HJELM'S PRIVATE COLLECTION, LTD.
SUBSCRIPTION AGREEMENT
Jim Hjelm's Private Collection, Ltd.
1375 Broadway
New York, NY 10018
Dear Sirs:
The undersigned (the "Investor") hereby subscribes to purchase
for One Hundred Thousand ($100,000) Dollars (a) a promissory note of
Jim Hjelm's Private Collection, Ltd. (the "Company") in the
principal amount of One Hundred Thousand Dollars bearing interest as
twelve (12%) percent per annum and subject to the other terms and
condition set forth in a promissory note of the Company, the form of
which is set forth as Exhibit A attached hereto (the "Note"), and
(b) 25,000 unregistered shares of Common Stock of the Company (the
"Common Stock") (collectively the Note and the 25,000 shares of
Common Stock are referred to herein as the "Securities").
1. Subscription Payment. As payment for this subscription,
simultaneously with the execution hereof, the Investor is delivering
herewith a check payable to the order of Hjelm in the amount of One
Hundred Thousand ($100,000) Dollars.
2. Representations of the Investor. The Investor,
recognizing that the Company will be relying on the information and
on the representations set forth herein, hereby represents, warrants
and agrees as follows:
(a) The Investor understands that the offer and sale of
the Securities is being made by means of this Subscription
Agreement and is aware of the high degree of risk
associated with an investment in the Securities.
(b) The Investor is a person who is able to bear economic
risks including a loss of an investment in the
Securities.
(c) The Investor is purchasing the Securities pursuant to
this Subscription Agreement for his own account for
investment, and not with a view to or for resale in
connection with the distribution of the Securities (or
underlying securities), nor with any present intention of
selling or otherwise disposing of all or any part of the
Securities; provided, however, the Investor shall have the
right to transfer securities to third parties pursuant to
an exemption from registration under the Securities Act of
1933 (the "Act"). In connection with any such future
transfer, the Company will accept an acceptable opinion of
counsel to the Investor as to the existence of any
exemption. The Investor hereby acknowledges his
understanding that the Securities (or underlying
securities) are not being registered under the Act or any
state securities laws, on the ground that the issuance and
sale of the Securities to the Investor is exempt under the
Act and relevant state securities laws, as a small
offering and not involving a public offering. The
Investor agrees not to sell the Securities (or underlying
securities) unless they are subsequently registered or an
exemption from such registration is available.
The Investor further acknowledges his understanding that
the Company's reliance on such exemptions are, in part,
based upon the foregoing representations, warranties, and
agreements by the Investor and that the statutory basis
for such exemptions would not be present, if
notwithstanding such representations, warranties and
agreements, the undersigned were acquiring the Securities
for resale on the occurrence or non-occurrence of some
pre-determined event. In order to induce the Company to
issue and sell the Securities subscribed for hereby to the
Investor, it is agreed that the Company will have no
obligation to recognize the ownership, beneficial or
otherwise, of such Securities by anyone but the Investor,
except as set forth herein.
(d) All information contained in this Subscription and in
the Confidential Purchaser Questionnaire previously
furnished to the Company is correct and complete. Any
material change occurring in either this Subscription
Agreement or in the Confidential Purchaser Questionnaire
prior to acceptance of this subscription shall be promptly
reported to the Company. The Investor, in connection with
his investment in the Company, has sufficient knowledge
and experience in matters relating to business and
financial matters in general and he is capable of
evaluating the merits and risks of any investment in the
Company and of making an informed investment decision.
(e) The address set forth in this Subscription Agreement
is his true and correct primary residence, and he has no
present intention of becoming a resident of any other
state or jurisdiction.
(f) The Investor acknowledges and is aware that, except
as set forth herein, the Investor will not transfer or
assign this subscription, the Securities or any interest
therein; if and to the extent this subscription is
accepted, the assignment and transferability of the
Securities subscribed for by the Investor will be governed
by this Subscription Agreement and all applicable laws.
<PAGE>
(g) The Investor acknowledges and is aware that this
subscription is voidable by the Investor within three days
after the first tender of consideration is made by the
Investor to the Company, an agent of the Company or an
escrow agent. Subsequent to this three day period, the
Investor is not entitled to cancel, terminate or revoke
this subscription, and any agreements of the Investor in
connection herewith shall survive the death or disability
of the Investor.
(h) The Investor has been given access to full and fair
disclosure of all material information concerning the
Company, including copies of the Company's Form 10-KSB
Annual Report for its fiscal year ended October 31, 1994
and its Form 10-QSB Quarterly Report for its fiscal
quarter ended April 30, 1995. The Investor has also been
given the opportunity to ask questions of, and receive
answers from, management of the Company regarding the
terms and conditions of this Agreement, and the
transactions contemplated thereby, as well as the affairs
of the Company and related matters.
The Investor may have access to whatever additional
information concerning the Company, its financial
condition, business, prospects, management,
capitalization, and other similar matters, that the
Investor or his purchaser representative, if any, desires,
provided that the Company can acquire such information
without unreasonable effort or expense.
(i) The Investor has not been furnished with any other
materials or literature relating to the offer and sale of
the Units.
3. Indemnification. The Investor hereby agrees to
indemnify and hold harmless the Company, its respective officers,
directors, shareholders, employees, agents and attorneys of each
such entity against any and all losses, claims, demands, liabilities
and expenses (including reasonable legal or other expenses incurred
by each such person in connection with defending or investigating
any such claims or liabilities, whether or not resulting in any
liability to such person) to which any such indemnified party may
become subject under the Act, under any other statute, at common law
or otherwise, insofar as such losses, claims, demands, liabilities
and expenses (a) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in this
Subscription Agreement or (b) arise out of or are based upon any
breach of any representation, warranty or agreement contained
herein.
4. Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements contained herein
shall survive the delivery of, and payment for, the Securities.
<PAGE>
5. Acceptance of Subscription. The Company may accept this
Subscription Agreement at any time in its sole discretion for the
Securities subscribed for by executing a copy hereof as provided.
The Investor understands that the Company may, in its sole
discretion, reject this subscription or may accept only a portion of
this subscription.
6. Piggy Back Registration Rights.
The Company agrees to include the shares of Common Stock
subscribed for pursuant hereto in a registration statement to be
filed with the Securities and Exchange Commission one time and to
use its best efforts to cause said shares to be registered under the
Act the first time after the date hereof that the Company causes a
registration statement to be filed under the Act.
6. Miscellaneous.
(a) This Agreement and the Exhibit attached hereto may be
amended only by execution of a written instrument executed
by all parties hereto.
(b) This Agreement may not be assigned without the
express written consent of all parties hereto.
(c) Each party hereto agrees to execute any instrument
and to perform any acts which are or may become necessary
to effectuate this Agreement and to fulfill its terms.
(d) This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs,
personal representatives, successors and assigns.
(e) This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements,
understandings, negotiations and discussions, both written
and oral, between those parties hereto with respect to
such subject matter.
(f) This Agreement shall be interpreted pursuant to and
governed by the laws of the State of New York.
(g) The invalidity or unenforceability of any provision
of this Agreement shall not effect the validity or
enforceability of the remaining provisions.
(h) The warranties, representations and agreements made
herein shall survive the closing.
<PAGE>
(i) This Agreement may be executed in any manner of
counterparts and by the separate parties hereto in
separate counterparts, each of which shall be deemed to be
the one and the same instrument.
W.J. Carroll /s/W.J. Carroll
Investor Signature of Investor
Social Security Number or
Federal Taxpayer
Identification Number
####-##-#### Date: , 1995
Address of Investor
1617 Jean Lafitte Drive
Boca Grande, FL 33921
(813) 964-2265
Telephone Number
- -----------------------------------------------------------------The
foregoing subscription is accepted this day of , 1995.
By: JIM HJELM'S PRIVATE COLLECTION, LTD.
/s/Joseph L. Murphy
(Authorized Officer)
Joseph L. Murphy, President
hjelm\sub-agr.995
<PAGE>
EXHIBIT 10.8
PROMISSORY NOTE
$100,000.00 New York, New York
September 12, 1995
The undersigned, JIM HJELM'S PRIVATE COLLECTION, LTD.
(hereinafter collectively called "Maker" or "Obligor") promises to
pay to the order of William J. Carroll (hereinafter, together with
any holder hereof, called "Holder"), at the offices of the Maker or
at such other place as Holder may from time to time designate, the
principal sum of One Hundred Thousand ($100,000) Dollars, with
interest thereon from the date hereof at twelve percent (12%) per
annum.
The principal amount of this Note shall be repaid in five equal
monthly installments of Twenty Thousand ($20,000) Dollars,
commencing January 15, 1996 (each such monthly installment date
referred to herein as an "Installment Date"). All accrued and
unpaid interest on the unpaid principal balance hereof shall be paid
on each monthly installment date.
This Note, together with accrued and unpaid interest, if any,
shall be prepayable upon a Default as defined herein.
All payments hereunder shall first be credited to interest and
lawful charges then accrued and the remainder to principal.
The following shall be an event of default (a) nonpayment of
any interest or principal hereunder when due; (b) dissolution,
termination of existence, insolvency, or business failure or
appointment of a receiver for any part of the property of Maker,
assignment for the benefit of creditors by or the commencement of
any proceedings in bankruptcy or insolvency by or against Maker; (c)
the entry of a material judgment against Maker; (d) the issuing of
any attachment or garnishment, or the filing of any lien against any
property of Maker; or (e) the taking of possession of any
substantial part of the property of Maker at the insistence of any
governmental authority. Upon an event of default, the holder may
declare a Default and the unpaid
principal amount hereof shall immediately be due.
In addition to payment of interest and principal required under
this Note, on each occurrence that any amount of money due hereunder
on an Installment Date is not paid within ten (10) days from the
date due, the Company, as liquidated damages and not as a penalty,
shall issue to the Holder Ten Thousand (10,000) additional
unregistered shares of Common Stock of the Maker.
<PAGE>
Holder shall have all of the rights and remedies of a creditor
under applicable law. In the event that a Default is declared and
the Holder enforces his rights in a court of competent jurisdiction
located in the State of New York, Maker shall be liable for all
reasonable attorneys' fees and costs. This agreement shall be
governed by the laws of the State of New York.
No delay or omission on the part of Holder in exercising any
rights hereunder shall operate as a waiver of such or of any other
rights under this Note. Presentment, demand, protest, notice of
dishonor and all other notices are hereby waived by Obligor. Any
notice to Maker shall be sufficiently served for all purposes if
placed in the mail, postage prepaid, addressed to, or left upon the
premises at the address shown below or any other address shown on
Holder's records.
JIM HJELM'S PRIVATE COLLECTION, LTD.
By: /s/Joseph J. Murphy
Joseph L. Murphy, President
hjelm\pmnot1.995<PAGE>
EXHIBIT 10.9
SUBSCRIPTION AGREEMENT
JIM HJELM'S PRIVATE COLLECTION, LTD.
225 West 37th Street
New York, New York 10018
Dear Sirs:
Pursuant to the terms of the offer contained in the
Confidential Private Offering Memorandum dated April ___, 1995 (said
Memorandum, including the exhibits and attachments thereto, is
hereinafter called the "Memorandum"); the undersigned (the
"Investor") hereby tenders his subscription for and offers to
adcquire ____ units (the "Units"), each Unit consisting of 25,000
shares of Common Stock of Jim Hjelm's Private Collection, Ltd. (the
"Company"). This subscription is tendered in connection with a
private placement offering of up to 20 Units. This offering will
terminate on or before May 31, 1995 unless extended at the option of
the Company to June 30, 1995.
The Company represents and warrants to the Investor that (a)
the authorized number of shares of Common Stock (the "Common Stock")
of the Company is 3,333,333, and (b) the issued and outstanding
number of shares of Common Stock as of January 31, 1995 is 1,142,803
and the Company has reserved 140,833 shares for issuance under the
Company's stock option plans and other options.
1. Subscription Payment. As payment for this subscription,
simultaneously with the execution hereof, the Investor is either (i)
delivering herewith a check payable to the order of Jim Hjelm's
Private Collection, Ltd., or (ii) transferring funds by wire
pursuant to the instructions of the Company, in the amount of
$25,000 per Unit being subscribed for.
2. Representations of the Investor. The Investor,
recognizing that the Company will be relying on the information and
on the representations set forth herein, hereby represents, warrants
and agrees as follows:
(a) The Investor understands that the offer and sale of the
Units is being made by means of this Subscription Agreement,
and is aware of the high degree of risk associated with an
investment in the Units.
(b) The Investor is a person who is able to bear economic
risks including a loss of an investment in the Units.
<PAGE>
(c) The Investor is purchasing the shares of Common Stock
contained in the Units issued pursuant to this Subscription
Agreement (the "Shares") for his own account for investment,
and not with a view to or for sale in connection with the
distribution of the Shares nor with any present intention of
selling or otherwise disposing of all or any part of the
Shares; provided, however, the Investor shall have the right to
transfer the securities to third parties pursuant to an
exemption from registration under the Securities Act of 1933
(the "Act"). In connection with any such future transfer, the
Company will accept an acceptable opinion of counsel to the
Investor as to the existence of any exemption. The Investor
hereby acknowledges his understanding that the Shares are not
being registered under the Act or any state securities laws, on
the ground that the issuance and sale of the Units to the
Investor is exempt under the Act and relevant state securities
laws, as a small offering and not involving a public offering.
The Investor agrees not to sell the Shares unless they are
subsequently registered or an exemption from such registration
is available.
The Investor further acknowledges his understanding that the
Company's reliance on such exemptions are, in part, based upon
the foregoing representations, warranties, and agreements by
the Investor and that the statutory basis for such exemptions
would not be present, if notwithstanding such representations,
warranties and agreements, the undersigned were acquiring the
Units for resale on the occurrence or non-occurrence of some
predetermined event. In order to induce the Company to issue
and sell the Units subscribed for hereby to the Investor, it is
agreed that the Company will have no obligation to recognize
the ownership, beneficial or otherwise, of such Units by anyone
but the Investor, except as set forth herein.
(d) All information contained in this Subscription Agreement
and in the Confidential Purchaser Questionnaire being
simultaneously provided to the Investor, is correct and
complete. Any material change occurring in either this
Subscription Agreement or in the Confidential Purchaser
Questionnaire prior to acceptance of this subscription shall be
promptly reported to the Company. The Investor, in connection
with his investment in the Company, has sufficient knowledge
and experience in matters relating to business and financial
matters in general and he is capable of evaluating the merits
and risks of an investment in the Company and of making an
informed investment decision.
(e) The address set forth in this Subscription Agreement is
his true and correct primary residence, and he has no present
intention of becoming a resident of any other state or
jurisdiction.
(f) The Investor acknowledges and is aware that, except as set
forth herein, the Investor will not transfer or assign this
subscription, the Units or any interest therein; if and to the
extent this subscription is accepted, the assignment and
transferability of the Units subscribed for by the Investor
will be governed by this Subscription Agreement and all
applicable laws.
(g) The Investor acknowledges and is aware that this
subscription is voidable by the Investor within three days
after the first tender of consideration is made by the Investor
to the Company, an agent of the Company or an escrow agent.
Subsequent to this three day period, the Investor is not
entitled to cancel, terminate or revoke this subscription, and
any agreements of the Investor in connection herewith shall
survive the death or disability of the Investor.
(h) The Investor has been given access to full and fair
disclosure of all material information concerning the Company.
The Investor has also been given the opportunity to ask
questions of, and receive answers from, management of the
Company regarding the terms and conditions of this Agreement,
and the transactions contemplated thereby, as well as the
affairs of the Company and related matters.
The Investor may have access to whatever additional information
concerning the Company, its financial condition, business,
prospects, management, capitalization, and other similar
matters, that the Investor or his purchaser representative, if
any, desires, provided that the Company can acquire such
information without unreasonable effort or expense.
(i) The Investor has received and carefully reviewed the
Memorandum, and except for the Memorandum, the Investor has not
been furnished with any other materials or literature relating
to the offer and sale of the Units.
(j) The Investor has had the opportunity to obtain additional
information necessary to verify the accuracy of the information
referred to in subparagraphs (h) and (i) hereof.
3. Indemnification. The Investor hereby agrees to indemnify
and hold harmless the Company, its respective officers, directors,
shareholders, employees, agents and attorneys of each such entity
against any and all losses, claims, demands, liabilities and
expenses (including reasonable legal or other expenses incurred by
each such person in connection with defending or investigating any
such claims or liabilities, whether or not resulting in any
liability to such person) to which any such indemnified party may
become subject under the Act, under any other statute, at common law
or otherwise, insofar as such losses, claims, demands, liabilities
and expenses (a) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in this
Subscription Agreement or (b) arise out of or are based upon any
breach of any representation, warranty or agreement contained
herein.
4. Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements contained herein
shall survive the delivery of, and payment for, the Units.
5. Acceptance of Subscription. The Company may accept this
Subscription Agreement at any time for the Units subscribed for by
executing a copy hereof as provided and notifying the Investor. The
Investor understands that the Company may, in its sole discretion,
reject this subscription or may accept only a portion of this
subscription.
<PAGE>
SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement this _____ day of __________, 199 .
Organization Signature: Individual Signature:
Print Name of Subscriber
By:
Signature (s)
Print Name and Title of Print Name (s)
Person Signing
Print Name (s)
Number of Units Subscribed for:
(Please print information below
exactly as you wish it to appear in
the records of the Company)
Name and capacity in which Social Security Number of Indi-
subscription is made -- see dividual or other Taxpayer I.D.
below for particular Number
requirements
Address: Address for notices if different:
Number and Street Number and Street
City State Zip Code City State Zip Code
Please indicate form of ownership:
TENANTS-IN-COMMON JOINT TENANTS WITH RIGHT OF
(Both Parties must sign SURVIVORSHIP
above) (Both Parties must sign above)<PAGE>
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the day of , 199__,
between the person whose name and address appear on the signature page
attached hereto (individually a "Holder" or collectively with the
holders of the other units issued in the offering, as defined below,
the "Holders") and Jim Hjelm's Private Collection, Ltd., a Delaware
corporation having its principal place of business at 225 West 37th
Street, New York, New York 10018 (the "Company").
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Holders are purchasing from the Company an
aggregate of up to 20 Units (the "Units"), each unit consisting of
25,000 shares of Common Stock of the Company, par value $.0002 per
share (the "Common Stock") upon the terms contained in the
Confidential Private Placement Memorandum of the Company dated April
___, 1995 (the "Offering") of the Company; and
WHEREAS, the Company desires to grant to the Holder the
registration rights set forth herein with respect to the shares of
Common Stock issued in connection with the Offering (the "Registrable
Securities").
NOW, THEREFORE, the parties hereto mutually agree as
follows:
1. Registration. Upon the request of a majority of the
Holders at any time after ___________, 1995, the Company shall prepare
and file a registration statement (the "Registration Statement") with
the Securities and Exchange Commission, to include all of the
Registrable Securities in the Registration Statement. Within ten (10)
days of receipt of a proper request for registration pursuant hereto,
the Company shall notify all of the other Holders who shall have ten
(10) days from such notice to notify the Company of their desire to
include their Registrable Securities in such registration. The Company
will be required to maintain the effectiveness of the Registration
Statement until the earlier of (i) the date that all of the
Registrable Securities have been sold, or (ii) the date all of the
holders thereof receive an opinion of counsel to the Company that all
of the Registrable Securities may be freely traded without
registration under the Securities Act of 1933, as amended (the "Act").
2. Additional Terms. The following provisions shall be
applicable to the Registration Statement filed pursuant to Paragraph
1 of this Agreement:
(a) The Company will use its best efforts to cause the
Registration Statement covering Registrable Securities to become
effective as promptly as possible and, if any stop order shall be
issued by the Securities and Exchange Commission in connection
therewith, to use its reasonable efforts to obtain the removal of such
order. Following the effective date of such Registration Statement,
the Company shall, upon the request of the Holder forthwith supply
such reasonable number of copies of the Registration Statement,
preliminary prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to the Offering, as
shall be reasonably requested by the Holder to permit the Holder to
make a public distribution of his or her Registrable Securities. The
Company will use its reasonable efforts to qualify the Registrable
Securities for sale in such states as the Holder of Registrable
Securities shall reasonably request, provided that no such
qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign corporation doing
business in such jurisdiction. The obligations of the Company
hereunder with respect to the Holder's Registrable Securities are
expressly conditioned on the Holder's furnishing to the Company such
appropriate information concerning the Holder, the Holder's
Registrable Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably request.
(b) The Company shall bear the entire cost and expense
of any registration of the Registrable Securities; provided, however,
that the Holder shall be solely responsible for the fees of any
counsel retained by him or her in connection with such registration
and any transfer taxes or underwriting discounts or commissions
applicable to the Registrable Securities sold by him or her pursuant
thereto.
(c) The Company shall indemnify and hold harmless the
Holder and each underwriter, within the meaning of the Act, who may
purchase from or sell for the Holder, any Registrable Securities, from
and against any and all losses, claims, damages and liabilities caused
by any untrue statement of a material fact contained in the
Registration Statement, any other registration statement filed by the
Company under the Act, any post-effective amendment to such
registration statements, or any prospectus included therein required
to be filed or furnished by reason of this Agreement or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue
statement or omission or alleged omission based upon information
furnished or required to be furnished in writing to the Company by the
Holder or underwriter expressly for use therein; which indemnification
shall include each person, if any, who controls any such underwriter
within the meaning of the Act and each officer, director, employee and
agent of such underwriter; provided, however, that the Company shall
not be obligated to so indemnify the Holder or any such underwriter or
other person referred to above unless the Holder or underwriter or
other person, as the case may be, shall at the same time indemnify the
Company, its directors, each officer signing the Registration
Statement and each person, if any, who controls the Company within the
meaning of the Act, from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, any registration statement or any prospectus required to be
filed or furnished by reason of this Agreement or caused by any
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
insofar as such losses, claims, damages or liabilities are caused by
any untrue statement or alleged untrue statement or omission based
upon information furnished in writing to the Company by the Holder or
underwriter expressly for use therein.
(d) If for any reason the indemnification provided for
in the preceding subparagraph is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnified party and
the indemnifying party, but also the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant
equitable considerations.
(e) Neither the filing of a Registration Statement by
the Company pursuant to this Agreement nor the making of any request
for prospectuses by the Holder shall impose upon the Holder any
obligation to sell his or her Registrable Securities.
(f) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-effective
amendment to the registration statement or a supplement to the
prospectus included therein, shall promptly discontinue the sale of
his or her Registrable Securities until the Holder receives a copy of
a supplemented or amended prospectus from the Company, which the
Company shall provide as soon as practicable after such notice.
3. Governing Law.
(a) The Registrable Securities are being delivered in
New York. This Agreement shall be deemed to have been made and
delivered in the State of New York and shall be governed as to
validity, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York.
(b) The Company and the Holder (a) agree that any
legal suit, action or proceeding arising out of or relating to this
Agreement, or any other Agreement entered into pursuant to the
Offering shall be instituted exclusively in New York State Supreme
Court, County of New York, or in the United States District Court for
the Southern District of New York, (b) waives any objection which the
Company or such Holder may have now or hereafter to the venue of such
suit, action or proceeding, and (c) irrevocably consents to the
jurisdiction of the New York State Supreme Court, County of New York
and the United States District Court for the Southern District of New
York in any such suit, action or proceeding. The Company and the
Holder further agree to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in
the New York State Supreme Court, County of New York or in the United
States District Court for the Southern District of New York and agrees
that service of process upon the Company or the Holder mailed by
certified mail to the Company's or, as the case may be, the Holder's
address shall be deemed in every respect effective service of process
upon the Company or the Holder, as the case may be, in any suit,
action or proceeding.
4. Amendment. This Agreement may only be amended by a
written instrument executed by the Company and the Holder.
5. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the
parties, oral and written, with respect to the subject matter hereof.
6. Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
document.
7. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly
given when delivered by hand or mailed by registered or certified
mail, postage prepaid, return receipt requested, as follows:
If to the Holder, to his or her address set forth on the
signature page of this Agreement.
If to the Company, to the address set forth on the first
page of this Agreement.
8. Binding Effect; Benefits. The Holder may not assign his
or her rights hereunder. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns,
including, without limitation, the permitted transferee of the
Registrable Securities. Nothing herein contained, express or implied,
is intended to confer upon any person other than the parties hereto
and their respective heirs, legal representatives, successors and such
permitted assigns, any rights or remedies under or by reason of this
Agreement.
9. Headings. The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms or
provisions of this Agreement.
10. Severability. Any provision of this Agreement which is
held by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction(s) shall be, as to such
jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the date first above written.
JIM HJELM'S PRIVATE COLLECTION, LTD.
By:
Name: Joseph L. Murphy
Title: President
HOLDER:
Signature(s)
Print Name
Address:
hjelm\reg-rts.j25
<PAGE>
EXHIBIT 10.10
SUBSCRIPTION AGREEMENT
JIM HJELM'S PRIVATE COLLECTION, LTD.
225 West 37th Street
New York, New York 10018
Dear Sirs:
The undersigned (the "Investor") hereby tenders his subscription
for and offers to acquire units (the "Units"), each Unit
consisting of (i) 25,000 shares of Common Stock (the "Common Stock")
of Jim Hjelm's Private Collection, Ltd. (the "Company") and (ii) a
warrant to purchase 10,000 shares of Common Stock at $1.50 per share
until June 30, 1997. This subscription is tendered in connection with
a private offering of up to 20 Units pursuant to a Confidential
Private Offering Memorandum dated December 1, 1995 (the "Memorandum").
Unless sooner terminated by the Company, this offering will terminate
on or before February 28, 1996, unless extended at the option of the
Company to April 30, 1996.
The Company represents and warrants to the Investor that (a) the
authorized number of shares of Common Stock (the "Common Stock") of
the Company is 3,333,333, and (b) the issued and outstanding number of
shares of Common Stock as of September 28, 1995 is 1,372,803 and the
Company has reserved 172,157 shares for issuance under the Company's
stock option plans and other options.
1. Subscription Payment. As payment for this subscription,
simultaneously with the execution hereof, the Investor is either (i)
delivering herewith a check payable to the order of Jim Hjelm's
Private Collection, Ltd., or (ii) transferring funds by wire pursuant
to the instructions of the Company, in the amount of $25,000 per Unit
being subscribed for.
2. Representations of the Investor. The Investor, recognizing
that the Company will be relying on the information and on the
representations set forth herein, hereby represents, warrants and
agrees as follows:
(a) The Investor understands that the offer and sale of the
Units is being made by means of this Subscription Agreement, and
is aware of the high degree of risk associated with an investment
in the Units.
(b) The Investor is a person who is able to bear economic risks
including a loss of an investment in the Units.
(c) The Investor is purchasing the shares of Common Stock
contained in the Units issued pursuant to this Subscription
Agreement (the "Shares") for his own account for investment, and
not with a view to or for sale in connection with the
distribution of the Shares nor with any present intention of
selling or otherwise disposing of all or any part of the Shares;
provided, however, the Investor shall have the right to transfer
the securities to third parties pursuant to an exemption from
registration under the Securities Act of 1933 (the "Act"). In
connection with any such future transfer, the Company will accept
an acceptable opinion of counsel to the Investor as to the
existence of any exemption. The Investor hereby acknowledges his
understanding that the Shares are not being registered under the
Act or any state securities laws, on the ground that the issuance
and sale of the Units to the Investor is exempt under the Act and
relevant state securities laws, as a small offering and not
involving a public offering. The Investor agrees not to sell the
Shares unless they are subsequently registered or an exemption
from such registration is available.
The Investor further acknowledges his understanding that the
Company's reliance on such exemptions are, in part, based upon
the foregoing representations, warranties, and agreements by the
Investor and that the statutory basis for such exemptions would
not be present, if notwithstanding such representations,
warranties and agreements, the undersigned were acquiring the
Units for resale on the occurrence or non-occurrence of some
predetermined event. In order to induce the Company to issue and
sell the Units subscribed for hereby to the Investor, it is
agreed that the Company will have no obligation to recognize the
ownership, beneficial or otherwise, of such Units by anyone but
the Investor, except as set forth herein.
(d) All information contained in this Subscription Agreement and
in the Confidential Purchaser Questionnaire being simultaneously
provided to the Investor, is correct and complete. Any material
change occurring in either this Subscription Agreement or in the
Confidential Purchaser Questionnaire prior to acceptance of this
subscription shall be promptly reported to the Company. The
Investor, in connection with his investment in the Company, has
sufficient knowledge and experience in matters relating to
business and financial matters in general and he is capable of
evaluating the merits and risks of an investment in the Company
and of making an informed investment decision.
(e) The address set forth in this Subscription Agreement is his
true and correct primary residence, and he has no present
intention of becoming a resident of any other state or
jurisdiction.
(f) The Investor acknowledges and is aware that, except as set
forth herein, the Investor will not transfer or assign this
subscription, the Units or any interest therein; if and to the
extent this subscription is accepted, the assignment and
transferability of the Units subscribed for by the Investor will
be governed by this Subscription Agreement and all applicable
laws.
(g) The Investor acknowledges and is aware that this
subscription is voidable by the Investor within three days after
the first tender of consideration is made by the Investor to the
Company, an agent of the Company or an escrow agent. Subsequent
to this three day period, the Investor is not entitled to cancel,
terminate or revoke this subscription, and any agreements of the
Investor in connection herewith shall survive the death or
disability of the Investor.
(h) The Investor has been given access to full and fair
disclosure of all material information concerning the Company.
The Investor has also been given the opportunity to ask questions
of, and receive answers from, management of the Company regarding
the terms and conditions of this Agreement, and the transactions
contemplated thereby, as well as the affairs of the Company and
related matters.
The Investor may have access to whatever additional information
concerning the Company, its financial condition, business,
prospects, management, capitalization, and other similar matters,
that the Investor or his purchaser representative, if any,
desires, provided that the Company can acquire such information
without unreasonable effort or expense.
(i) The Investor has received and carefully reviewed the
Memorandum, and except for the Memorandum, the Investor has not
been furnished with any other materials or literature relating to
the offer and sale of the Units.
(j) The Investor has had the opportunity to obtain additional
information necessary to verify the accuracy of the information
referred to in subparagraphs (h) and (i) hereof.
3. Indemnification. The Investor hereby agrees to indemnify and
hold harmless the Company, its respective officers, directors,
shareholders, employees, agents and attorneys of each such entity
against any and all losses, claims, demands, liabilities and expenses
(including reasonable legal or other expenses incurred by each such
person in connection with defending or investigating any such claims
or liabilities, whether or not resulting in any liability to such
person) to which any such indemnified party may become subject under
the Act, under any other statute, at common law or otherwise, insofar
as such losses, claims, demands, liabilities and expenses (a) arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in this Subscription Agreement
or (b) arise out of or are based upon any breach of any
representation, warranty or agreement contained herein.
4. Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein shall
survive the delivery of, and payment for, the Units.
5. Acceptance of Subscription. The Company may accept this
Subscription Agreement at any time for the Units subscribed for by
executing a copy hereof as provided and notifying the Investor. The
Investor understands that the Company may, in its sole discretion,
reject this subscription or may accept only a portion of this
subscription.
<PAGE>
SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement this _____ day of __________, 199 .
Organization Signature: Individual Signature:
Print Name of Subscriber
By:
Signature (s)
Print Name and Title of Print Name (s)
Person Signing
Print Name (s)
Number of Units Subscribed for:
(Please print information below
exactly as you wish it to appear in
the records of the Company)
Name and capacity in which Social Security Number of Indi-
subscription is made -- see dividual or other Taxpayer I.D.
below for particular Number
requirements
Address: Address for notices if different:
Number and Street Number and Street
City State Zip Code City State Zip Code
Please indicate form of ownership:
TENANTS-IN-COMMON JOINT TENANTS WITH RIGHT OF
(Both Parties must sign SURVIVORSHIP
above) (Both Parties must sign above)
ACCEPTANCE OF SUBSCRIPTION
JIM HJELM'S PRIVATE COLLECTION LTD.
The foregoing subscription is hereby accepted by Jim Hjelm's
Private Collection, Ltd. this day of , for
Units.
By:
Name:
Title:
hjelm\subag995.doc
<PAGE>
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the day of , 199__,
between the person whose name and address appear on the signature page
attached hereto (individually a "Holder" or collectively with the
holders of the other units issued in the offering, as defined below,
the "Holders") and Jim Hjelm's Private Collection, Ltd., a Delaware
corporation having its principal place of business at 225 West 37th
Street, New York, New York 10018 (the "Company").
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Holders are purchasing from the Company an
aggregate of up to 20 Units (the "Units"), each unit consisting of (i)
25,000 shares of Common Stock of the Company, par value $.0002 per
share (the "Common Stock") and (ii) a warrant to purchase 10,000
shares of Common Stock exercisable at $1.50 per share until June 30,
1997; and
WHEREAS, the Company desires to grant to the Holder the
registration rights set forth herein with respect to the shares of
Common Stock issued in connection with the Offering (the "Registrable
Securities").
NOW, THEREFORE, the parties hereto mutually agree as
follows:
1. Registration. Upon the request of a majority of the
Holders at any time after June 30, 1996, the Company shall prepare and
file a registration statement (the "Registration Statement") with the
Securities and Exchange Commission, to include all of the Registrable
Securities in the Registration Statement. Within ten (10) days of
receipt of a proper request for registration pursuant hereto, the
Company shall notify all of the other Holders who shall have ten (10)
days from such notice to notify the Company of their desire to include
their Registrable Securities in such registration. The Company will be
required to maintain the effectiveness of the Registration Statement
until the earlier of (i) the date that all of the Registrable
Securities have been sold, or (ii) the date all of the holders thereof
receive an opinion of counsel to the Company that all of the
Registrable Securities may be freely traded without registration under
the Securities Act of 1933, as amended (the "Act").
2. Additional Terms. The following provisions shall be
applicable to the Registration Statement filed pursuant to Paragraph
1 of this Agreement:
(a) The Company will use its best efforts to cause the
Registration Statement covering Registrable Securities to become
effective as promptly as possible and, if any stop order shall be
issued by the Securities and Exchange Commission in connection
therewith, to use its reasonable efforts to obtain the removal of such
order. Following the effective date of such Registration Statement,
the Company shall, upon the request of the Holder forthwith supply
such reasonable number of copies of the Registration Statement,
preliminary prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to the Offering, as
shall be reasonably requested by the Holder to permit the Holder to
make a public distribution of his or her Registrable Securities. The
Company will use its reasonable efforts to qualify the Registrable
Securities for sale in such states as the Holder of Registrable
Securities shall reasonably request, provided that no such
qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign corporation doing
business in such jurisdiction. The obligations of the Company
hereunder with respect to the Holder's Registrable Securities are
expressly conditioned on the Holder's furnishing to the Company such
appropriate information concerning the Holder, the Holder's
Registrable Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably request.
(b) The Company shall bear the entire cost and expense
of any registration of the Registrable Securities; provided, however,
that the Holder shall be solely responsible for the fees of any
counsel retained by him or her in connection with such registration
and any transfer taxes or underwriting discounts or commissions
applicable to the Registrable Securities sold by him or her pursuant
thereto.
(c) The Company shall indemnify and hold harmless the
Holder and each underwriter, within the meaning of the Act, who may
purchase from or sell for the Holder, any Registrable Securities, from
and against any and all losses, claims, damages and liabilities caused
by any untrue statement of a material fact contained in the
Registration Statement, any other registration statement filed by the
Company under the Act, any post-effective amendment to such
registration statements, or any prospectus included therein required
to be filed or furnished by reason of this Agreement or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue
statement or omission or alleged omission based upon information
furnished or required to be furnished in writing to the Company by the
Holder or underwriter expressly for use therein; which indemnification
shall include each person, if any, who controls any such underwriter
within the meaning of the Act and each officer, director, employee and
agent of such underwriter; provided, however, that the Company shall
not be obligated to so indemnify the Holder or any such underwriter or
other person referred to above unless the Holder or underwriter or
other person, as the case may be, shall at the same time indemnify the
Company, its directors, each officer signing the Registration
Statement and each person, if any, who controls the Company within the
meaning of the Act, from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, any registration statement or any prospectus required to be
filed or furnished by reason of this Agreement or caused by any
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
insofar as such losses, claims, damages or liabilities are caused by
any untrue statement or alleged untrue statement or omission based
upon information furnished in writing to the Company by the Holder or
underwriter expressly for use therein.
(d) If for any reason the indemnification provided for
in the preceding subparagraph is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnified party and
the indemnifying party, but also the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant
equitable considerations.
(e) Neither the filing of a Registration Statement by
the Company pursuant to this Agreement nor the making of any request
for prospectuses by the Holder shall impose upon the Holder any
obligation to sell his or her Registrable Securities.
(f) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-effective
amendment to the registration statement or a supplement to the
prospectus included therein, shall promptly discontinue the sale of
his or her Registrable Securities until the Holder receives a copy of
a supplemented or amended prospectus from the Company, which the
Company shall provide as soon as practicable after such notice.
3. Governing Law.
(a) The Registrable Securities are being delivered in
New York. This Agreement shall be deemed to have been made and
delivered in the State of New York and shall be governed as to
validity, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York.
(b) The Company and the Holder (a) agree that any
legal suit, action or proceeding arising out of or relating to this
Agreement, or any other Agreement entered into pursuant to the
Offering shall be instituted exclusively in New York State Supreme
Court, County of New York, or in the United States District Court for
the Southern District of New York, (b) waives any objection which the
Company or such Holder may have now or hereafter to the venue of such
suit, action or proceeding, and (c) irrevocably consents to the
jurisdiction of the New York State Supreme Court, County of New York
and the United States District Court for the Southern District of New
York in any such suit, action or proceeding. The Company and the
Holder further agree to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in
the New York State Supreme Court, County of New York or in the United
States District Court for the Southern District of New York and agrees
that service of process upon the Company or the Holder mailed by
certified mail to the Company's or, as the case may be, the Holder's
address shall be deemed in every respect effective service of process
upon the Company or the Holder, as the case may be, in any suit,
action or proceeding.
4. Amendment. This Agreement may only be amended by a
written instrument executed by the Company and the Holder.
5. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the
parties, oral and written, with respect to the subject matter hereof.
6. Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
document.
7. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly
given when delivered by hand or mailed by registered or certified
mail, postage prepaid, return receipt requested, as follows:
If to the Holder, to his or her address set forth on the
signature page of this Agreement.
If to the Company, to the address set forth on the first
page of this Agreement.
8. Binding Effect; Benefits. The Holder may not assign his
or her rights hereunder. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns,
including, without limitation, the permitted transferee of the
Registrable Securities. Nothing herein contained, express or implied,
is intended to confer upon any person other than the parties hereto
and their respective heirs, legal representatives, successors and such
permitted assigns, any rights or remedies under or by reason of this
Agreement.
9. Headings. The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms or
provisions of this Agreement.
10. Severability. Any provision of this Agreement which is
held by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction(s) shall be, as to such
jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the date first above written.
JIM HJELM'S PRIVATE COLLECTION, LTD.
By:
Name: Joseph L. Murphy
Title: President
HOLDER:
Signature(s)
Print Name
Address:
hjelm\reg-rts.agr
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<CASH> 36,645
<SECURITIES> 0
<RECEIVABLES> 1,869,711
<ALLOWANCES> 121,670
<INVENTORY> 1,795,840
<CURRENT-ASSETS> 4,200,887
<PP&E> 196,749
<DEPRECIATION> 304,606
<TOTAL-ASSETS> 4,526,347
<CURRENT-LIABILITIES> 3,002,025
<BONDS> 0
0
0
<COMMON> 275
<OTHER-SE> 1,454,771
<TOTAL-LIABILITY-AND-EQUITY> 4,526,347
<SALES> 7,852,892
<TOTAL-REVENUES> 7,852,892
<CGS> 5,028,570
<TOTAL-COSTS> 2,584,711
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (135,193)
<INCOME-PRETAX> 104,418
<INCOME-TAX> 40,832
<INCOME-CONTINUING> 63,586
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,586
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
