AMENDMENT AND AGREEMENT
AMENDMENT
AND AGREEMENT
This
Amendment and Agreement (this “Amendment”),
dated
as of May 16, 2006, is entered into by and among HOUSE OF BRUSSELS CHOCOLATES,
INC., a Nevada corporation (the "Company"),
certain subsidiaries of the Company signatories below (collectively, the
“Subsidiaries”) and
LAURUS MASTER FUND, LTD., a Cayman Islands company ("Laurus"),
for
the purpose of amending the terms of that certain Secured Convertible Minimum
Borrowing Note, dated March 29, 2005, issued by the Company and certain
subsidiaries of the Company to Laurus (as amended, modified or supplemented
from
time to time, the “Minimum
Borrowing Note”),
and
setting forth other agreements among the Company, its Subsidiaries and Laurus.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Minimum Borrowing Note.
WHEREAS,
the Company, the Subsidiaries and Laurus have agreed to make certain changes
to
the Minimum Borrowing Note as set forth herein in order to, among other things,
provide the Company and the Subsidiaries with availability under its revolving
loan with Laurus.
NOW,
THEREFORE, in consideration of the above, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto agree as follows:
1. The
second sentence of Section 3.1 of the Minimum Borrowing Note is hereby amended
by deleting the last sentence of said Section and inserting the following new
sentence in lieu thereof:
“For
purposes hereof, subject to Section 3.6 hereof, the “Fixed
Conversion Price”
shall
mean (i) with respect to the first $100,000 principal amount of this Note
converted on or after May 16, 2006 (and all interest and fees related thereto),
$0.41 and (ii) with respect to the remaining principal amount of this Note
converted pursuant to the terms hereof (and all interest and fees related
thereto), $0.88.”
2. The
Company hereby agrees to, on the date hereof, if required by applicable law,
file a Rule 424(b) supplement or supplements (collectively, the “Post-Effective
Supplements”)
to its
Registration Statement with the Securities and Exchange Commission (the
“SEC”)
relating to the Minimum Borrowing Note (the “Registration
Statement”),
which
Post-Effective Supplement states the Fixed Conversion Price applicable to the
Minimum Borrowing Note after giving effect to this Amendment.
3. The
Company and Laurus hereby agree that the “Filing Date”, under and as defined in
the Registration Rights Agreement, dated as of with respect to the shares
issuable as a result of the changes to the Fixed Conversion Price of the Minimum
Borrowing Note set forth in Section 2 of this Amendment shall be the date that
is the earlier of (x) the filing with the Securities and Exchange Commission
of
the Company’s next resale registration statement with respect to its Common
Stock or (y) August 1, 2006.
4. This
Amendment shall be effective as of the date hereof following the execution
and
delivery of same by each of the Company and Laurus
5. Except
as
specifically set forth in this Amendment, there are no other amendments to
the
Minimum Borrowing Note, and all of the other forms, terms and provisions of
the
Minimum Borrowing Note remain in full force and effect.
6. Each
of
the Company and the Subsidiaries hereby represents and warrants to Laurus that
as of the date hereof, both before and after giving effect to this Amendment,
(i) no Event of Default (as defined in the Security Agreement referred to in
the
Minimum Borrowing Note) exists and is continuing and (ii) all representations,
warranties and covenants made by Company and the Subsidiaries in connection
with
the Security Agreement referred to in the Minimum Borrowing Note and/or any
Ancillary Agreement referred to in such Security Agreement are true, correct
and
complete and all of Company’s and its Subsidiaries’ covenant requirements have
been met. The Company hereby agrees to file an 8-K with the Securities and
Exchange Commission disclosing the transactions set forth in this Amendment
(the
“8-K”)
on the
date hereof. Laurus and the Company hereby agree that as promptly as practicable
following the filing by the Company of the 8-K, Laurus shall, so long as the
Registration Statement is effective at such time, convert into Common Stock
of
the Company, a principal amount of the Minimum Borrowing Note equal to $100,000,
at a conversion price of $0.41 per share of Common Stock.
7. This
Amendment shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of and be
enforceable by each of the parties hereto and its successors and permitted
assigns. THIS
AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAW OF THE STATE OF NEW YORK.
This
Amendment may be executed in any number of counterparts, each of which shall
be
an original, but all of which shall constitute one instrument.
IN
WITNESS WHEREOF,
each of
the Company, the Subsidiaries and Laurus has caused this Amendment to be
effective and signed in its name effective as of the date set forth
above.
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/s/
Xxxxx Xxxxxxxx
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By:
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HOUSE
OF BRUSSELS HOLDINGS LTD.
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/s/
Xxxxx Xxxxxxxx
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By:
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BRUSSELS
CHOCOLATES LTD.
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/s/
Xxxxx Xxxxxxxx
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By:
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HOUSE
OF BRUSSELS CHOCOLATES (USA) LTD.
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/s/
Xxxxx Xxxxxxxx
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By:
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DEBAS
CHOCOLATE INC.
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/s/
Xxxxx Xxxxxxxx
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By:
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CHOCOMED,
INC.
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/s/
Xxxxx Xxxxxxxx
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By:
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LAURUS
MASTER FUND, LTD.
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By:
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/s/ Xxxxx Grin | ||
