EXHIBIT F
DEBT CONVERSION AGREEMENT
This DEBT CONVERSION AGREEMENT ("Agreement") made this 25th day of
August, 2003 ("Effective Date"), by and among SYNDICATED FOOD SERVICE
INTERNATIONAL, INC., a Florida corporation ("SYFS"), CHAN CAPITAL, LTD. ("CCL"),
MING MANAGEMENT, LTD. ("Ming") and FIDRA HOLDINGS, LTD. ("Fidra"). Together
Syndicated, Chan and Fidra shall be referred to as the Parties. Together Chan
and Fidra shall be referred to as the Holders.
WITNESSETH:
WHEREAS, pursuant to the US$3.5 million credit facility (the "Credit
Facility"), Chan Capital Ltd. ("CCL") has outstanding loans to Syndicated Food
Service International, Inc., the principal amount of US$1,500,000.00 , plus
accrued interest thereon at the rate of 10% per annum (the "Acquisition Loan").
Further that of the unpaid but accrued interest relating to the Acquisition
Loan, $100,000 has been capitalized bringing the total principal amount of the
Acquisition Loan to $1,600,000;
WHEREAS, to incent CCL to enter into the Credit Facility, Syndicated
issued certain warrants CCL and Ming to purchase in the aggregate, 2,500,000
shares of Syndicated common stock at a current per share exercise price of $0.50
which currently expire on December 31, 2003 (the "Warrants");
WHEREAS, certain loans were made by Fidra to Toho Holdings, Inc., a
wholly owned subsidiary of Syndicated ("Toho"), in the aggregate of US$500,000
(the "Toho Loan") as supported by certain mortgages and promissory notes dated
December 13, 1999 in the amount of $300,000, $143,577.94 and $56,422.06, and the
Parent Company Guarantee, to which Syndicated as of December 13, 1999,
unconditionally and irrevocably guaranteed performance against the Toho Loans;
WHEREAS, together the Acquisition Loan and Toho Loan shall
collectively be referred to as the Loans;
WHEREAS the Parties believe it is their respective best interest
that the Loans be converted into Syndicated common equity.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and promises contained in this Agreement, the receipt and legal
sufficiency of which are acknowledged and agreed to, the parties agree as
follows:
1. That the Holders will covert the Loans (the "Conversion") into
shares of Syndicated par value $0.001 common stock at a per share
conversion price of $0.30 for a total of 7,000,000 shares of stock
(the "Shares");
2. That as a condition precedent to the Holders taking the action
described in paragraph (a) above, Syndicated must raise a minimum of
$1,000,000 in private equity capital;
3. That if Syndicated has not raised the capital defined in item 2.
above on or before November 1, 2003, this Agreement is null and void
as of that date;
4. That upon the Conversion, the terms of the Warrants shall be amended
to reduce the per share exercise price from the current level of
fifty cents ($0.50) to twenty five cents ($0.25) and that the
current expiration date of December 31, 2003 shall be extended to
June 30, 2004;
5. That Fidra and Chan represent and acknowledge that they have
received, read and understand the disclosures made by Syndicated in
the Private Placement Summary and Corporate Overview (attached
hereto as Exhibit 1), and the Form 10-K (attached hereto as Exhibit
2) currently being prepared for filing with the U.S. Securities and
Exchange Commission, which documents provide a disclosure of certain
risk factors inherent with making an investment of this nature and
Syndicated's financial condition; and
6. That Fidra and Chan have read and executed the Subscription
Agreement (attached hereto as Exhibit 3) for the purchase of the
Shares.
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IN WITNESS WHEREOF, the parties have executed this Debt Conversion
Agreement as of the date set forth above.
CHAN CAPITAL, LTD.
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: President
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FIDRA HOLDINGS, LTD.
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: President
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SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Name: Xxxxxx X. Xxxxx, Xx.
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Title: CEO
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