Anti-Dilution Waiver Agreement
EXHIBIT
10.2
THIS ANTI-DILUTION WAIVER AGREEMENT
made as of this 31st day of October 2009 by and among United Energy Corp., a New
Jersey corporation (the “Company”), Sherleigh
Associates Inc. Profit Sharing Plan, (“Sherleigh”), Xxxx
Xxxxxx (“Silver”), Xxxxxx
Xxxxx (“Xxxxx”)
and Xxxxxx Xxxxxxx (“Xxxxxxx”).
WHEREAS, Silver, as assignee of
Sherleigh, is the holder of Series A, Series B, and Series C Warrants
(collectively, the “Silver Warrants”) to
purchase an aggregate of 5,682,667 shares (the “Silver Warrant
Shares”) of common stock (the “Common Stock”) of the
Company at the current exercise price of $.12 per share;
WHEREAS, Sherleigh is the holder of
three (3) shares of Series A Convertible Preferred Stock (the “Preferred Stock”)
currently convertible at a conversion price of $.12 per share into an aggregate
of 200,000 shares of Common Stock;
WHEREAS, Xxxxx is the holder of Series
A Warrants (collectively, the “Xxxxx Warrants”) to
purchase an aggregate of 1,296,251 shares (the “Xxxxx Warrant
Shares”) of Common Stock at the current exercise price of $.12 per
share;
WHEREAS, Kristen, as assignee of Xxxxx,
is the holder of Series A Warrants (collectively, the “Xxxxxxx Warrants”,
and together with the Silver Warrants and the Xxxxx Warrants, the “Warrants”) to
purchase an aggregate of 616,249 shares (the “Xxxxxxx Warrant
Shares”, and together with the Silver Warrant Shares and the Xxxxx
Warrant Shares, the “Warrant Shares”) of
Common Stock at the current exercise price of $.12 per share;
WHEREAS, pursuant to Section 9 of the
Warrants, in the event that the Company shall be deemed to have issued shares of
Common Stock at a price less than the then current exercise price of the
Warrants, the exercise price of the Warrants shall be reduced to such lower
price and the number of Warrant Shares shall be increased based upon a formula
set forth in such section;
WHEREAS, pursuant to Section 2(f) of
the Certificate of Designation (the “Certificate of
Designations”) regarding the Preferred Stock, in the event that the
Company shall be deemed to have issued shares of Common Stock at a price less
than the then current conversion price of the Preferred Stock, the conversion
price of the Preferred Stock shall be reduced to such lower price;
WHEREAS, the Company (a) has authorized
amendments (the “Amendments”) to its
outstanding secured convertible notes in the aggregate principal amount of
$302,883.34, among other things, reducing the conversion price thereof from $.12
per share to $.09 per share, (b) has authorized the issuance of secured
convertible notes (the “New Notes”) in the
aggregate principal amount of $150,000, which notes will be convertible into
shares of Common Stock at a conversion price of $.09 per share, and (c) in
connection with the issuance of the New Notes, has authorized the issuance of
new Warrants (the “Financing Warrants”)
to purchase an aggregate of 1,200,000 shares of Common Stock;
WHEREAS, each of Silver, Xxxxx and
Xxxxxxx has agreed to waive the provision of Section 9 of the Warrants solely
with respect to the increase of the number of Warrant Shares, based on the
formula as set forth in such Section that would otherwise apply as a result of
the issuance of the New Notes and the Financing Warrants, and as a result of the
Amendments;
WHEREAS, Sherleigh has agreed to waive
the provisions of Section 2(f) of the Preferred Stock solely with respect to the
application thereof as a result of the issuance of the New Notes and the
Financing Warrants, and as a result of the Amendments.
NOW, THEREFORE, in consideration of the
mutual covenants herein, it is agreed as follows:
1.
Exercise Price of
Warrants. Upon the issuance of the New Notes or the Financing
Warrants, or the consummation of the Amendments, the exercise price of the
Warrants shall be reduced from $ $.12 to $.09 per share.
2.
Warrant
Shares. Each of Silver, Xxxxx and Xxxxxxx hereby waives any
increase in the number of Warrant Shares that would otherwise apply as a result
of the issuance of the New Notes or the Financing Warrants, or as a result of
the Amendments.
3.
Preferred
Stock. Sherleigh hereby waives any decrease in the conversion
price of the Preferred Stock that would otherwise apply as a result of the
issuance of the New Notes or the Financing Warrants, or as a result of the
Amendments.
4.
Limited
Waivers. The foregoing waivers by Sherleigh, Silver, Xxxxx and
Kristen shall not be construed as a bar to or a waiver of any other or further
effect of the anti-dilution provisions of the Warrants or the Certificate of
Designations on any future occasion, whether similar in kind or otherwise and
shall not constitute a waiver, express or implied, of any of the rights and
remedies of Sherleigh, Silver, Xxxxx and Xxxxxxx arising under the terms of the
Warrants or the Preferred Stock on any future occasion or
otherwise.
5.
Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the all of the parties hereto.
6.
Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
7.
Entire
Agreement. This Agreement, including the exhibits and
schedules hereto, constitutes the entire agreement among the parties hereof with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.
8.
Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
9.
Applicable Law and
Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
10.
Counterparts.
This Agreement may be executed by fax transmission and in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
[signature
page follows]
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed as of the date first written
above.
| UNITED ENERGY CORP. | ||
| By: |
/s/ Xxxxxx Xxxxx
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Name:
Xxxxxx Xxxxx
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Title: CEO
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| SHERLEIGH ASSOCIATES INC. PROFIT SHARING PLAN | ||
| By: |
/s/ Xxxx Xxxxxx
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Name:
Xxxx Xxxxxx
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Title: Trustee
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/s/ Xxxx Xxxxxx
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Xxxx
Xxxxxx
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/s/ Xxxxxx Xxxxx
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Xxxxxx
Xxxxx
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/s/ Xxxxxx Xxxxxxx
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Xxxxxx
Xxxxxxx
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