SHARE CONTRIBUTION
AGREEMENT
THIS SHARE CONTRIBUTION
AGREEMENT is made this 29th day of September, 2005 by
and among Universal Capital Management, Inc . (the
“Company”), David M. Bovi
(“Bovi”), and William R. Colucci
(“Colucci”).
BACKGROUND:
On March 31, 2005, BF Acquisition Group IV, Inc.
(“BF”) merged with and into the Company (the
“Merger”). In connection with the Merger, Colucci and
Bovi received, in exchange for their shares of BF, 150,000 and
200,000 shares, respectively, of the common stock of the Company.
The staff of the Securities and Exchange Commission (the
“Staff”) believes that the Merger may have violated
Section 57 of the Investment Company Act of 1940 (the “1940
Act”) by virtue of the relationship between Bovi or Colucci
on the one hand and the Company on the other hand.
The Staff also believes that the Merger may have
violated Section 23(b) of the 1940 Act by virtue of the fact that
the stockholder approval obtained by the Company in connection with
the Merger did not satisfy all of the requirements of the 1940
Act.
The parties to this Agreement do not agree with
the views of the Staff. Nonetheless, the parties to this Agreement
desire to avoid further discussions with the Staff regarding the
matter.
NOW, THEREFORE , for and in consideration of the mutual
covenants contained in this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
1.
Stockholder Approval.
The Company shall and hereby agrees
to submit for consideration by the stockholders of the Company, the
question of whether the Merger and the Merger Agreement should be
ratified, adopted, and approved by the holders of a majority of the
Company’s outstanding voting securities and the holders of a
majority of the Company’s outstanding voting securities that
are not affiliated persons of the Company (collectively, the
“Stockholder Approval Requirement”). In seeking such
ratification, adoption, and approval, the Company shall prepare,
file with the Securities and Exchange Commission, and distribute to
Company stockholders a proxy statement which describes the Merger
and the Staff’s inquiries regarding the Merger.
2.
Capital Contribution.
Messrs. Bovi and Colucci shall and
hereby agree, severally and not jointly, that if the Stockholder
Approval Requirement is satisfied on or before December 31,
2005, they sh
