House of Taylor Jewelry gets $10m financing

08 May '06

2 min read

House of Taylor Jewelry Inc, a Los Angeles-based international jewelry company that serves fine jewelry retailers worldwide, has entered into a definitive purchase agreement with institutional and other accredited investors pursuant to which those investors have agreed to purchase from the company senior, secured convertible notes and warrants for an aggregate principal amount of approx. $10 million before deductions for offering fees and expenses.

The proceeds will be used primarily to fund inventory purchases, marketing, corporate partnering initiatives and other general working capital purposes.

The notes bear interest at the annual rate of 9.75 percent, payable quarterly, commencing July 1st 2006 and are convertible into approx. 2,540,000 shares of common stock at an initial conversion price of $4.00 per share.

The warrants allow the holders to purchase 1,905,000 shares of common stock and may be exercised at any time commencing November 2006 at $5.00 per share. The warrants have a term of 60 months.

The principal shareholders of the company, representing approx. 80 percent of the outstanding shares, have also entered into a voting agreement with the company agreeing to vote their shares in favor of the transaction and all its terms at the company's next meeting of shareholders to be held no later than July 31st 2006.

Management and other principal shareholders of the company participated in this private offering on the sameterms as other investors.

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