AGREEMENT
This Agreement dated as of March __, 2001 (this "Agreement") by and
among American Jewelry Corp., a Delaware corporation (formerly known as United
Ventures Group, Inc., the "Company"), ________________________, ________
____________________, ___________________, ___________________________ and
_____________________ (each a "Holder" and collectively, the "Holders").
WITNESSETH
WHEREAS, reference is made to that certain Purchase Agreement,
dated as of the date hereof by and among the Holders and the Sellers identified
therein (the "Purchase Agreement"), providing that the Holders are purchasing
those certain 8% Convertible Debentures in the aggregate principal amount of
$1,000,000 (the "Debentures") from the Sellers in two tranches pursuant to the
Purchase Agreement; and
WHEREAS, the Company desires to amend and restate the
Debentures in certain respects; and
WHEREAS, unless otherwise defined herein, capitalized terms
shall have the meaning set forth in the Debentures.
NOW THEREFORE, in consideration of the covenants and promises
of the parties set forth in this Agreement and other good and valuable
consideration , the receipt and legal sufficiency of which is hereby
acknowledged, each of the parties hereby agree as follows:
AGREEMENT
1. Amendment to the Debentures
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The Debentures have been amended and restated in the form attached
hereto as Exhibit A.
2. Limitation of Conversion of the Debentures.
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The Holders hereby agree that they shall not, in the aggregate, convert
the Debentures into (i) more than 17 million shares of Common Stock during the
ninety day period commencing upon the Closing and ending ninety (90) days
thereafter, except as permitted by section (ii), (ii) more than 12 million
shares during the period commencing forty days after the Closing and ending
ninety days after the Closing (in addition to the conversions described in (i)),
(iii) more than 15 million shares of Common Stock for each of the two subsequent
ninety day periods thereafter (i.e., 91-180 days after the Closing being the
first 90 day period and 181-270 days after the Closing being the second
subsequent ninety day period). If the Company fails to deliver to a Holder a
certificate or certificates pursuant to Section (b) of the Debenture prior to
the 15th Trading Day after the Conversion Date, this paragraph 2 shall be null
and void with respect to such Holder. The Holder shall have the right to pursue
equitable relief to obtain such certificate
or certificates (including without limitation, a decree of specific performance
and/or injunctive relief).
The number of Debentures permitted to be converted by the Holders shall
be allocated among Cameron Worldwide Ltd., Rosebery Investments Limited, Xxxxxx
Trading Co., and Lawina International Ltd. ("Group 1") and YGD Incorporated
("Group 2") in proportion to the number of shares purchased by each Group
pursuant to the Purchase Agreement. For example, and for purposes of
illustration only, Group 1 purchased $750,000 in Debentures and Group 2
Purchased $250,000 in Debentures. With respect to subsection (i) above, Group
shall be permitted to convert Debentures into a maximum of 12,750,000 shares of
Common Stock and Group 2 shall be permitted to convert Debentures into a maximum
of 4,250,000 shares of Common Stock. To the extent that one group converts
Debentures into less than the maximum limitations described above, the other
group may not convert Debentures into more than its allotted shares of Common
Stock without the consent of the other group.
3. No Short Sales
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The Holders further covenant that neither they nor any of their
affiliates nor any entity managed by the Holders will engage in any short sales
of the Debentures or the shares of common stock of the Company or enter into any
agreement or arrangement designed to reduce the risks arising out of this
Agreement or transactions contemplated hereby. Notwithstanding anything
contained herein to the contrary, the Company and Holder acknowledge and agree
that sales of the Common Stock after the Conversion Date (as defined in the
Debenture) but prior to the date the Company actually delivers the stock
certificate representing shares of common stock shall not be considered a short
sale. This provision shall survive termination of this Agreement.
4. Change of Control
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In the event of the consummation of a Change of Control (as defined in
the Debenture), this agreement shall terminate and be deemed null and void.
5. Issuances of Convertible Debentures
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In the event that during twelve months from the date hereof, the
Company shall sell, or otherwise dispose of, securities convertible into shares
of Common Stock at a conversion or issuance price which is less than the market
price of the Common Stock at the time of issuance of such security or instrument
("Convertible Securities"), then the conversion limitations set forth in
paragraph 2 herein shall be null and void. Convertible Securities shall under no
circumstances include (i) options or warrants to employees, officers, directors
or consultants, (ii) currently outstanding securities, (iii) warrants to be
issued to Xxxxx Financial Inc., its successors or assigns; or (iv) warrants the
Company may issue after the date hereof which are exercisable to purchase
500,000 shares of Common Stock (approximately $50,000 of value); or (v) the
Debentures or Common Stock issuable upon conversion of the Debentures.
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6. Representations of the Company.
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In connection with the purchase of the Debentures and in consideration
for the Holders agreement provided herein, the Company makes the following
representations and warranties.
(a) Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Corporate Authority and Enforceability. The Company has the
requisite corporate power and authority to execute, deliver and perform this
Agreement and the Debentures. Each of this Agreement and the Debentures are the
valid and binding obligation of the Company enforceable in accordance with its
terms, except as enforceability is limited by (A) any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, or similar law
affecting creditors' rights generally, or (B) general principles of equity,
whether considered in a proceeding in equity or at law; or (C) applicable laws
and court decisions which may limit or render unenforceable certain terms and
provisions contained therein, but which in our opinion do not substantially
interfere with the practical realization of the benefits thereof, except for the
economic consequence of any procedural delay which may be imposed by, relate to
or result from such laws and court decisions.
(c) Validity of Debentures. The issuance of the Debentures has been
duly authorized and, when issued, sold and delivered in accordance with the
terms of the Purchase Agreement and for the consideration expressed herein, the
Debentures shall be validly issued, fully paid and non-assessable.
(d) Reservations of Shares. The Company shall reserve and keep
available at all times such number of shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue Common Stock upon
conversion of Debentures in accordance with the limitations on conversion set
forth herein.
Simultaneously with the Closing, the Company's counsel will deliver an
opinion of counsel as to the foregoing, in form and substance reasonably
acceptable to the Holders and their counsel.
7. Subsequent Filings of Registration Statements
---------------------------------------------
In the event that the Company files with the Securities and Exchange
Commission a registration statement to register any of its securities under the
Securities Act of 1933, as amended, on Form XX-0, X-0, X-0 (but not forms S-4 or
S-8 or any successor or similar form(s) (except registrations on such or similar
forms for registration of securities in connection with (i) an employee benefit
plan or dividend reinvestment plan or a merger, consolidation or other business
contributions, (ii) debt securities that are not convertible into Common Stock;
and (iii) securities issuable upon exercise of warrants issued to any of the
Holders, Xxxxx Financial Inc. (or any of their successors or assigns), the terms
contained in paragraph 2 shall terminate and be deemed null and void on the
thirtieth day following such filing.
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8. Miscellaneous
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(a) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Holders acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.
(ii) Each of the Company and the Holders (i) hereby
irrevocably submit to the jurisdiction of the courts of the State of New York
located in New York County and the Federal District Court for the Southern
District of New York for the purposes of any suit, action or proceeding arising
out of or relating to this Agreement and (ii) hereby waives, and agrees not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each of the Company and the Holders consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section shall affect or
limit any right to serve process in any other manner permitted by law.
(b) Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties with respect to the matters covered hereby and,
except as specifically set forth herein, neither the Company nor the Holders
make any representations, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
(c) Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received), telecopy or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:
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If to the Company: American Jewelry Corp.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
with copies to: Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq,
Telephone: 000-000-0000
Fax: 000-000-0000
If to the Holders: Xxxx and Xxxxxxxx
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
Any party hereto may from time to time change its address for notices
by giving at least ten (10) days written notice of such changed address to the
other party hereto.
(d) Waivers. No waiver by either party of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provisions,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
(e) Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns; provided,
however, that the parties hereto may not amend this Agreement or assign any
rights or obligations hereunder without the prior written consent of the Company
and the Holders. After the Closing, the assignment by a party to this Agreement
of any rights hereunder shall not affect the obligations of such party under
this Agreement.
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(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to the choice of law provisions.
(h) Entire Agreement. The Company and the Holders acknowledge and
agree that the Debentures and this Agreement entered into between the Company
and the Holders simultaneously herewith constitute the entire agreement between
the parties. The Holders have no liability or responsibility to the Company for
contractual agreements with respect to the Debentures except as provided for
herein and in the Debentures.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. In the event any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered
to the other parties within five days of the execution and delivery hereof.
(j) Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that such severability shall be ineffective if
it materially changes the economic benefit of this Agreement to any party.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first written above.
AMERICAN JEWELRY CORP.
By:
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