XXXX XXXXX/XXXXXXX XXXXX CONSENT
Reference is made to that certain Loan Agreement, dated as of July 26,
2004, between Xxxx Xxxxx ("Lender") and NuVim, Inc. ("Borrower") ("Loan
Agreement"), those certain Notes issued by Borrower to Lender pursuant to the
Loan Agreement totaling $1 million (the "Notes"), as a portion of such Notes
were converted pursuant to a Conversion Agreement dated as of April 30, 2005,
between Lender and Borrower, pursuant to which a portion of the amount
outstanding under the Notes was converted to common stock of Borrower, resulting
in an outstanding principal amount remaining under the Notes of $500,000.
Reference is also made to those certain Warrants issued to Lender in
accordance with the Amendment of Services Agreement dated as of July 26, 2004
(the "Warrants"). Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Loan Agreement.
This Consent (this "Consent"), dated as of December 21, 2005, is by and
among Lender, Xxxxxxx Xxxxx ("Xxxxx"), the assignee of fifty-percent of Lender's
rights under the Loan Agreement and Notes, as amended from time to time,
pursuant to that certain Participation Agreement, dated August 11, 2004, between
Lender and Xxxxx, and Borrower.
Under the terms of the Loan Agreement, as amended, Lender is entitled to
repayment of the amounts due there under upon Borrower receiving additional
capital, whether in the form of equity, debt or otherwise. Borrower currently
desires to enter into arrangements with Midtown Partners, Inc. (the "Midtown
Partner's Financing"), pursuant to which Borrower will receive proceeds of a
financing in an amount of approximately $150,000. To induce Lender and Xxxxx to
waive their right to the proceeds of such funding, and as a condition to Lender
and Xxxxx granting such waiver, Borrower, intending to be legally bound, hereby
represents, warrants, understands, certifies, acknowledges and agrees, for the
express and intended benefit of Lender and Xxxxx, as follows:
SECTION 1. CONFIRMATION OF BORROWER'S OBLIGATIONS TO LENDER AND XXXXX; RETENTION
OF FIRST PRIORITY OF REPAYMENT.
Borrower hereby acknowledges its debt to Lender and Xxxxx under the Notes
of a collective amount of $500,000 plus accrued interest, and that Lender and
Xxxxx are entitled to repayment in cash of such outstanding amount out of any
cash proceeds of financing or funding realized by Borrower. Borrower further
confirms the first priority is the repayment of amounts due under the Notes, and
that it has not granted and shall not grant to any other party the right to
receive any payment or repayment of amounts due from Borrower, other than in the
ordinary course of business. Borrower further acknowledges and agrees that
payments to any other lender or past due amounts to any third party (other than
SMBI) shall continue to be subordinate to payments to Lender.
SECTION 2. USE OF PROCEEDS; PAYMENT TO SMBI.
Borrower hereby represents that the amount of $_________ is owed by
Borrower to Xxxxxx Milk Biologics Inc. ("SMBI"), for payment of outstanding
amounts due with respect to supplies from SMBI and amounts to be paid to SMBI as
payment for the "NuVim" trademark. Borrower hereby represents and covenants that
it shall use the proceeds of the Midtown Partner's Financing or other amounts
raised by Borrower through the sale of its tax losses to make payment in full to
SMBI no later than January 16, 2006 of all amounts owing by Borrower to SMBI so
as satisfy outstanding amounts due to SMBI, to secure full right, title and
interest in Borrower of the "NuVim" trademark, and to maintain Borrower's rights
under the various agreements between Borrower and SMBI.
SECTION 3. AMENDMENT OF NOTES.
Borrower hereby amends the Notes to provide for an annual interest rate of
12% for all amounts outstanding there under (including interest accrued to date)
and an interest rate of 18% per annum upon any event of default.
SECTION 4. EQUITY.
Borrower acknowledges that Lender possesses Warrants, and that Borrower
will be issuing warrants to the Midtown Partner's lenders at a conversion price
lower than Lender's conversion price. Borrower shall use its best efforts to
provide Lender with a reduced exercise price for the exercise of Lender's
Warrants in connection with any future financing of Borrower.
SECTION 5. NUVIM POWDER LLC.
Borrower acknowledges that as an inducement to Lender to enter into the
Loan Agreement, Borrower agreed to provide Lender with an interest in NuVim
Powder LLC. Borrower hereby confirms Section 3.01(f) of the Loan Agreement that
states that NuVim Powder LLC is the exclusive distributor of the NuVim product
in powdered form.
SECTION 6. INDEMNIFICATION.
Borrower hereby agrees to fully indemnify and hold harmless in all
respects Lender and Xxxxx from and against any and all claims, liabilities,
expenses and other obligations (including attorneys' fees), including, without
limitation, those expenses and liabilities arising pursuant to, or which arise
from, or in connection with, a breach of the provisions of the Loan Agreement or
this Consent by Borrower.
SECTION 7. MISCELLANEOUS.
This Consent may be amended only by an instrument in writing signed by all
of the parties hereto.
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Except as expressly set forth in this Consent, this Consent shall be
binding upon, and shall be enforceable by and inure solely to the benefit of,
the parties hereto and their respective successors and assigns; provided,
however, that neither this Consent nor any of the rights or obligations of any
of the parties hereto may be assigned or delegated by any of such parties
without the prior written consent of the other parties. Any attempted assignment
or delegation without such consent shall be void and of no effect.
The headings contained in this Consent are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Consent.
References to Sections refer to sections of this Consent unless otherwise
stated.
If any term or other provision of this Consent is invalid, illegal or
incapable of being enforced by any law or public policy, all other conditions
and provisions of this Consent will nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto will negotiate in good faith to modify
this Consent so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
This Consent (together with all other documents and instruments referred
to herein) constitutes the entire agreement among the parties with respect to
the subject matter hereof, and supersedes all other prior agreements and
undertakings, both written and oral, among the parties with respect to such
subject matter.
THIS CONSENT AND THE OTHER AGREEMENTS, INSTRUMENTS AND DOCUMENTS
CONTEMPLATED HEREBY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (EXCLUSIVE OF CONFLICTS OF LAW PRINCIPLES) AND THE
FEDERAL LAWS OF THE UNITED STATES OF AMERICA. COURTS WITHIN THE STATE OF NEW
YORK WILL HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE
PARTIES HERETO, WHETHER IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS
CONSENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE
PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH
COURTS. EACH OF THE PARTIES HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH
DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (i)
SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS; (ii)
SUCH PARTY AND SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY
SUCH COURTS OR (iii) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN
INCONVENIENT FORUM.
This Consent may be executed by facsimile or otherwise, in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed will be deemed to be a manually signed original, and all
of which taken together will constitute one and the same agreement.
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This Consent was negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring this Consent to be construed or interpreted against any party shall
not apply to any construction or interpretation hereof.
No failure or delay on the part of any party hereto in the exercise of any
right hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor will any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Consent are cumulative to, and not alternative to or exclusive to,
and not exclusive of, any rights or remedies otherwise available.
The undersigned parties hereby agree as provided in this Consent, and the
undersigned Lender and Xxxxx hereby waive their right to receive the proceeds of
the Midtown Partner's Financing, subject to the satisfactions of the terms and
conditions of, and in reliance upon the representations, warranties and
covenants contained in, this Consent.
NUVIM, INC.
By:
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Name:
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Title:
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` Xxxxxxx Xxxxx
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Xxxx Xxxxx
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