BRIDGE LOAN AGREEMENT
THIS
BRIDGE LOAN AGREEMENT (this “Agreement”) is made this 24th day of
September, 2007, by and among KnowFat Franchise Company, Inc., a Delaware
corporation (“Borrower”), and UFood Franchise Company (f/k/a Axxent Media
Corporation), a Nevada corporation (“Lender”).
W
I T N E
S S E T H:
WHEREAS,
Lender and Borrower have agreed upon certain of the terms and conditions of
a
merger (the “Merger”) and related transactions (collectively, the
“Transactions”);
WHEREAS,
simultaneously herewith Lender is engaged in an offering (the “Note Offering”)
of its 9% Convertible Promissory Notes, which offering is being conducted
pursuant to the exemption from registration provided by Rule 506 of Regulation
D, Regulation S and/or Section 4(2) under the Securities Act of 1933, as amended
(the “Securities Act”); and
WHEREAS,
to provide Borrower with sufficient working capital to enable Borrower to
fulfill its obligations under certain contractual agreements incident to its
business while Lender and Borrower prepare the documentation necessary and
appropriate to consummate the Transactions and obtain all necessary approvals
from stockholders and third parties, Lender has agreed to utilize the net
proceeds of the Note Offering to provide Borrower with a temporary loan in
the
principal amount equal to the gross proceeds of the Note Offering to meet
working capital requirements agreed upon by Borrower and Lender;
NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Lender, intending to be legally bound, agree as follows:
ARTICLE
I – LOAN
1.1.
Loan.
Lender
agrees, on the terms and conditions of this Agreement, to make loans to Borrower
in the amount of up to Two Million Dollars ($2,000,000) (the “Loan”). Upon the
execution and delivery of this Agreement, Lender shall disburse One Million
Dollars ($1,000,000) of the Loan to Borrower. The aggregate Loan shall be
equivalent to the gross proceeds of the Note Offering, without regard to the
payment of any fees or expenses from such gross proceeds.
1.2.
The
Note.
Borrower has authorized the issuance promissory notes (each, a “Note”) made in
favor of Lender by Borrower, which shall be in the form set forth in
Exhibit
A
attached
hereto. Each disbursement of the Loan shall bear interest at the rate of nine
percent (9%) per annum, and shall be due and payable to the order of Lender
120
days after the date of such disbursement (the “Due Date”), unless such Due Date
is extended by Lender and Borrower in writing; provided, however, that from
and
after an Event of Default, as defined in Article IV hereof, such interest rate
shall increase to fifteen percent (15%) per annum.
1.3.
Payments.
Borrower will begin making consecutive monthly interest only payments on the
Loan of accrued interest commencing thirty (30) days after the date of a
disbursement and continuing through the Due Date, and Borrower shall repay
the
unpaid principal amount of the Loan on the Due Date, together with accrued
and
unpaid interest; provided, that upon the closing of the Merger, all amounts
outstanding under the Loan shall be forgiven, and the Note shall be cancelled
and deemed repaid in full.
1.4.
Conditions
to Loan.
Notwithstanding the foregoing, the obligation of Lender to disburse the Loan
to
Borrower is subject to the satisfaction of the following conditions, each of
which may be waived by Lender:
(a)
Borrower shall have obtained (and shall have provided copies thereof to Lender)
all waivers, consents or approvals from third parties, and to give all notices
to third parties, any the failure of which to obtain or to give notice would
result in a conflict with, result in a breach of, constitute (with or without
due notice or lapse of time or both) a default under, result in the acceleration
of obligations under, create in any party the right to terminate, modify or
cancel, or require any notice, consent or waiver under, any contract or
instrument to which Borrower or any of its subsidiaries is a party or by which
Borrower or any of its subsidiaries is bound or to which any of their assets
is
subject, except for any conflict, breach, default, acceleration, termination,
modification or cancellation in any contract or instrument which would not
have
a Company Material Adverse Effect (as hereinafter defined) and would not
adversely affect the consummation of the Loan or the other transactions
contemplated hereby, including but not limited to the Merger. Without limiting
the foregoing, Borrower shall have obtained all waivers, consents or approvals
from (i) TD Banknorth, N.A., (ii) Xxxxxx Xxxxxxx Ventures, LLC and (iii) Xxxx
Xxxxxxx in connection with the Loan, the Merger and the other transactions
contemplated hereby.
(b)
Borrower shall have received approval of the Merger by at least 95% of the
votes
of each class of outstanding capital stock of Borrower.
(c)
Borrower shall have entered into employment agreements with Messrs. Xxxxxx
Xxxxxxx, Xxxx Xxxxx and such other key employees, to be agreed upon between
Borrower and Lender, on terms satisfactory to Borrower, Lender and the
respective employees.
ARTICLE
II – REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower
represents and warrants to Lender as follows:
2.1.
Organization.
Each of
Borrower and its Subsidiaries, as defined below, is a corporation duly existing
under the laws of its jurisdiction of incorporation and qualified and licensed
to do business in any jurisdiction in which the conduct of its business or
its
ownership of property requires that it be so qualified, except where the failure
to be so qualified would not have a material adverse effect on the business,
operations, condition (financial or otherwise), property or prospects of
Borrower or any Subsidiary (as defined below), or the ability of Borrower and
any Subsidiary to carry out their respective obligations under the Loan
Documents (as defined in Section 2.3 below) (a “Company Material Adverse
Effect”).
2.2.
Subsidiaries.
Borrower’s only Subsidiaries are KFLG Watertown, Inc., KnowFat of Downtown
Crossing, Inc., and KnowFat of Landmark Center, Inc. For purposes of this
Agreement, a “Subsidiary” means any corporation, partnership, joint venture or
other entity in which Borrower has, directly or indirectly, an equity interest
representing 50% or more of the capital stock thereof or other equity interests
therein.
2.3.
Authorization.
All
corporate action on the part of Borrower (and its Subsidiaries, as applicable)
and its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance of all obligations of Borrower under this
Agreement, the Note and all other documents executed in connection with the
Loan
(collectively, the “Loan Documents”) to which any of them may be a party have
been taken. This Agreement, the Note and the other Loan Documents, when executed
and delivered by Borrower, shall constitute legal, valid and binding obligations
of Borrower, enforceable against Borrower in accordance with their terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights and the enforcement of
debtors’ obligations generally and by general principles of equity, regardless
of whether enforcement is pursuant to a proceeding in equity or at law.
2.4.
Absence
of Conflicts.
The
execution, delivery and performance of this Agreement and each of the other
Loan
Documents is not in conflict with nor does it constitute a breach of any
provision contained in Borrower’s organizational documents, nor will it
constitute an event of default under any material agreement to which Borrower
is
a party or by which Borrower is bound.
2.5.
Consents
and Approvals.
Borrower has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all governmental
authorities and agencies that are necessary for the continued operation of
Borrower’s business as currently conducted, or are required by law.
2.6.
Capitalization.
The
authorized and outstanding capital stock of Borrower is described on Schedule
2.6 attached hereto. Except as set forth on Schedule 2.6 or as contemplated
by
the Transactions, there are no subscriptions, convertible securities, options,
warrants or other rights (contingent or otherwise) currently outstanding to
purchase any of the authorized but unissued capital stock of Borrower. Except
as
set forth in Schedule 2.6 or as contemplated by the Transactions, Borrower
has
no obligation to issue shares of its capital stock, or subscriptions,
convertible securities, options, warrants, or other rights (contingent or
otherwise) to purchase any shares of its capital stock or to distribute to
holders of any of its equity securities, any evidence of indebtedness or asset.
No shares of Borrower capital stock are subject to a right of withdrawal or
a
right of rescission under any applicable securities law. Except as set forth
in
Schedule 2.6, there are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to Borrower. To the Knowledge (as defined
below) of Borrower, except as described in Schedule 2.6 or otherwise
contemplated by this Agreement, there are no agreements to which Borrower is
a
party or by which it is bound with respect to the voting (including without
limitation voting trusts or proxies), registration under any applicable
securities laws, or sale or transfer (including without limitation agreements
relating to pre-emptive rights, rights of first refusal, co-sale rights or
“drag-along” rights) of any securities of Borrower. Except as provided in
Schedule 2.6, to the Knowledge of Borrower, there are no agreements among other
parties, to which Borrower is not a party and by which it is not bound, with
respect to the voting (including without limitation voting trusts or proxies)
or
sale or transfer (including without limitation agreements relating to rights
of
first refusal, co-sale rights or “drag-along” rights) of any securities of
Borrower.
2.7.
Litigation.
Except
as disclosed on Schedule 2.7, there are no actions, suits, claims,
investigations, arbitrations or other legal or administrative proceedings,
to
the Knowledge of Borrower, threatened against Borrower at law or in equity,
and
to Borrower’s Knowledge, there is no basis for any of the foregoing. Except as
disclosed on Schedule 2.7, there are no unsatisfied judgments, penalties or
awards against or affecting Borrower or its businesses, properties or assets.
Except as disclosed on Schedule 2.7, Borrower is not in default, and no event
has occurred which with the passage of time or giving of notice or both would
constitute a default by Borrower with respect to any order, writ, injunction
or
decree known to or served upon Borrower of any court or of any foreign, federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign. Except as disclosed on Schedule
2.7, there is no action or suit by Borrower pending or threatened against
others. Except as disclosed on Schedule 2.7, Borrower has complied with all
laws, rules, regulations and orders applicable to its current business,
operations, properties, assets, products and services the violation of which
would have a Company Material Adverse Effect. There is no existing law, rule,
regulation or order, and Borrower has no Knowledge of any proposed law, rule,
regulation or order, whether foreign, federal or state, that would prohibit
or
materially restrict Borrower from, or otherwise materially adversely affect
Borrower in, conducting its businesses in any jurisdiction in which it is now
conducting business.
As
defined in this Agreement, “Knowledge” of Borrower means the actual knowledge by
a director or officer of Borrower of a particular fact or circumstance or such
knowledge as may reasonably be imputed to such person as a result of such
person’s actual knowledge of other facts or circumstances as well as any other
knowledge which such person would have possessed had such person made reasonable
inquiry of appropriate employees and agents of Borrower with respect to the
matter in question.
2.8.
Absence
of Certain Events.
To
Borrower’s Knowledge, there is no existing condition, event or series of events
which reasonably would be expected to have a Company Material Adverse Effect.
2.9.
Title
to Property and Assets.
Borrower does not own any real property. Except as set forth on Schedule 2.9,
Borrower has good and marketable title to all of its personal property and
assets free and clear of any material restriction, mortgage, deed of trust,
pledge, lien, security interest or other charge, claim or encumbrance which
would have a Company Material Adverse Effect. Except as set forth on Schedule
2.9, with respect to properties and assets it leases, Borrower is in material
compliance with such leases and holds a valid leasehold interest free of any
liens, claims or encumbrances which would have a Company Material Adverse
Effect.
2.10.
Governmental
Permits.
Borrower (including its Subsidiaries) holds all licenses, franchises, permits
and other governmental authorizations which are required for the conduct of
any
aspect of Borrower’s business, as presently conducted and as presently
contemplated to be conducted, including, but not limited to, all such business
operations contemplated by, or incident to, the Transactions. All such licenses,
franchises, permits and other governmental authorizations are valid and current,
and Borrower has not received any notice that any governmental authority intends
to cancel, terminate or not renew any such license, franchise, permit or other
governmental authorization. Borrower has conducted and is conducting its
business in material compliance with the requirements, standards, criteria
and
conditions set forth in such licenses, franchises, permits and other
governmental authorizations, and all laws and regulations applicable thereto,
and is not in violation of any of the foregoing. The consummation of the
transactions contemplated hereunder will not alter or impair or require changes
to any such license, franchise, permit or other governmental authorization.
ARTICLE
III – COVENANTS OF BORROWER
So
long
as the Note is outstanding, Borrower agrees that, unless Lender shall give
its
prior consent in writing:
3.1.
Ordinary
Course.
Borrower shall carry on its business in the ordinary course substantially as
conducted heretofore, and shall not engage in any transaction outside of the
ordinary course of business.
3.2.
Maintain
Properties.
Borrower shall maintain its properties and facilities in good working order
and
condition, reasonable wear and tear excepted.
3.3.
Performance
under Agreements.
Borrower shall perform all of its material obligations under agreements relating
to or affecting its assets, properties or rights.
3.4.
Cooperation
with Lender.
Borrower shall cooperate with Lender and shall use its reasonable best efforts
to complete and sign the merger agreement contemplated by the Merger and shall
use its reasonable best efforts to consummate the Transactions contemplated
thereby.
3.5.
Financial
Statements.
Borrower shall provide to Lender prior to the Due Date any such audited or
unaudited financial statements as may be required under applicable U.S.
Securities Exchange Commission (“SEC”) regulations for inclusion of such
statements in Lender’s SEC and other regulatory filings upon and following the
closing of the Merger.
3.6.
Maintenance
of Business Organization.
Borrower shall maintain and preserve its business organization intact and use
its reasonable best efforts to retain its present key employees and
relationships with suppliers, customers and others having business relationships
with Borrower.
3.7.
Compliance
with Permits.
Borrower shall maintain material compliance with all permits, laws, rules and
regulations, consent orders and all other orders of applicable courts,
regulatory agencies, and similar governmental authorities.
3.8.
Leases.
Borrower shall maintain its present leases in accordance with their respective
terms, and shall not enter into new or amended lease instruments.
3.9.
Payments.
Except
with respect to fees due to attorneys, accountants, and investment bankers
relating to the Transactions, including with respect to the Loan, Borrower
shall
not make any payment, or incur any obligation to make any payment in the
ordinary course of business in excess of $25,000 without the prior written
consent of Lender. Borrower shall use the proceeds from the Loan to meet the
working capital requirements set forth on Exhibit
B
attached
hereto.
3.10.
Loan
Documents.
Borrower shall comply in all respects with the terms of the Loan Documents.
3.11.
Mergers.
Except
as contemplated by the Transactions, Borrower shall not merge or consolidate
with or into any other corporation, or sell, assign, lease or otherwise dispose
of or voluntarily part with the control (whether in one transaction or in a
series of related transactions) of assets (whether now owned or hereafter
acquired) having a fair market value of more than $25,000 at the time(s) of
transfer, or sell, assign or otherwise dispose of (whether in one transaction
or
in a series of transactions) any of its accounts receivable (whether now in
existence or hereafter created) at a discount or with recourse, to any person,
except sales or other dispositions of assets in the ordinary course of business.
3.12.
Charter
Documents.
Borrower shall not make any amendment to its Certificate of Incorporation or
its
By-Laws.
3.13.
Senior
or Pari Passu Indebtedness.
Borrower shall not incur, create, assume, guaranty or permit to exist any
indebtedness in an amount equal to or greater than $100,000 that ranks senior
in
priority to, or pari passu with, the obligations under the Note and the other
Loan Documents, except for indebtedness existing or contemplated on the date
hereof and set forth in Schedule 3.13 attached hereto. The aggregate outstanding
trade debt of Borrower and its subsidiaries as of June 30, 2007 was $563,182.
3.14.
Liens.
Borrower shall not create, incur, assume or permit to exist any lien on any
property or assets (including stock or other securities of Borrower or any
of
its Subsidiaries) now owned or hereafter acquired by it or on any income
or
revenues or rights in respect of any thereof, except:
(a)
liens
on property or assets of Borrower and its Subsidiaries existing on the date
hereof and set forth in Schedule 3.14 attached hereto, provided that such liens
shall secure only those obligations
which
they secure on the date hereof;
(b)
any
lien created under the Loan Documents;
(c)
any
lien existing on any property or asset prior to the acquisition thereof by
Borrower or any of its Subsidiaries, provided that
1
such
lien is not created in contemplation of or in connection with such acquisition
and
1
such
lien does not apply to any other property or assets of Borrower or any of its
Subsidiaries;
(d)
liens
for taxes, assessments and governmental charges;
(e)
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s or
other like liens arising in the ordinary course of business and securing
obligations that are not due and payable;
(f)
pledges and deposits made in the ordinary course of business in compliance
with
workmen’s compensation, unemployment insurance and other social security laws or
regulations;
(g)
deposits to secure the performance of bids, trade contracts (other than for
indebtedness), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(h)
zoning restrictions, easements, licenses, covenants, conditions, rights-of-way,
restrictions on use of real property and other similar encumbrances incurred
in
the ordinary course of business and minor irregularities of title that, in
the
aggregate, are not substantial in amount and do not materially detract from
the
value of the property subject thereto or interfere with the ordinary conduct
of
the business of Borrower or any of its Subsidiaries;
(i)
purchase money security interests in real property, improvements thereto or
equipment hereafter acquired (or, in the case of improvements, constructed)
by
Borrower or any of its subsidiaries, provided that
5
such
security interests secure indebtedness permitted by this Agreement,
5
such
security interests are incurred, and the indebtedness secured thereby is
created, within 90 days after such acquisition (or construction),
5
the
indebtedness secured thereby does not exceed 85% of the lesser of the cost
or
the fair market value of such real property, improvements or equipment at the
time of such acquisition (or construction) and
5
such
security interests do not apply to any other property or assets of Borrower
or
any of its Subsidiaries;
(j)
liens
arising out of judgments or awards (other than any judgment that constitutes
an
Event of Default hereunder) in respect of which Borrower or any of its
Subsidiaries shall in good faith be prosecuting an appeal or proceedings for
review and in respect of which it shall have secured a subsisting stay of
execution pending such appeal or proceedings for review, provided Borrower
shall
have set aside on its books adequate reserves with respect to such judgment
or
award; and
(k)
deposits, liens or pledges to secure payments of workmen’s compensation and
other payments, public liability, unemployment and other insurance, old-age
pensions or other social security obligations, or the performance of bids,
tenders, leases, contracts (other than contracts for the payment of money),
public or statutory obligations, surety, stay or appeal bonds, or other similar
obligations arising in the ordinary course of business.
3.15.
Dividends
and Distributions.
In the
case of Borrower or any of its Subsidiaries, not declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its capital stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of its capital stock
or set aside any amount for any such purpose; provided, however, that Borrower
or any of its Subsidiaries may:
(a)
declare and pay dividends consisting entirely of its common stock,
(b)
repurchase shares of its capital stock from its employees in connection with
the
termination of such employees and
(c)
make
distributions consisting entirely of its common stock in connection with stock
splits of its capital stock.
3.16.
Subsidiary
Dividends.
Borrower shall not permit its Subsidiaries to, directly or indirectly, create
or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to:
(a)
pay
any dividends or make any other distributions on its capital stock or any other
interest or
(b)
make
or repay any loans or advances to Borrower.
3.17.
Limitation
on Certain Payments and Prepayments.
Borrower shall not:
(a)
pay
in cash any amount in respect of any indebtedness or preferred stock that may
at
the obligor’s option be paid in kind or in other securities; or
(b)
optionally prepay, repurchase or redeem or otherwise defease or segregate funds
with respect to any indebtedness of Borrower or any of its Subsidiaries, other
than for senior indebtedness existing on the date hereof and set forth in
Schedule 3.17 attached hereto, or indebtedness under the Loan Documents.
Within
three (3) business days following Borrower’s request for a waiver of any
provision of this Article III, Lender shall provide Borrower with their response
to such request.
ARTICLE
IV – DEFAULTS AND REMEDIES
4.1.
An
“Event of Default” occurs if:
(a)
Borrower defaults in the payment of any principal or interest of the Note when
the same shall become due, either by the terms thereof or otherwise as herein
provided; or
(b)
Borrower defaults, in whole or in part, in the performance or observance of
any
other material agreement, term or condition contained in the Note or the other
Loan Documents, and such breach shall not have been cured within ten (10) days
after receipt of written notice thereof; or
(c)
Borrower shall default in the payment of any principal of, or premium, if any,
or interest on, any other indebtedness in excess of $25,000 or obligation with
respect to borrowed money after expiration of any grace or cure period or shall
default in the performance of any material term of any instrument evidencing
such indebtedness or of any mortgage, indenture or agreement relating thereto
after expiration of any grace or cure period, and the effect of such default
is
to cause or to permit the holder or holders of such obligation to cause, such
indebtedness or obligation to become due and payable prior to its stated
maturity; or
(d)
the
Merger shall not have closed by the Due Date; or
(e)
Borrower pursuant to or within the meaning of any Bankruptcy Law (as defined
below):
(i)
commences a voluntary case,
(ii)
consents to the entry of an order for relief against it in an involuntary case,
(iii)
consents to the appointment of a Custodian (as defined below) of it or for
all
or substantially all of its property,
(iv)
makes a general assignment for the benefit of its creditors, or
(v)
is
the debtor in an involuntary case which is not dismissed within thirty
(30)
days
of the commencement thereof, or
(f)
a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
(i)
provides for relief against Borrower in an involuntary case,
(ii)
appoints a Custodian of Borrower for all or substantially all of its property,
or
(iii)
orders the liquidation of Borrower,
(g)
a
final judgment for the payment of money in an amount in excess of $25,000 shall
be rendered against Borrower (other than any judgment as to which a reputable
insurance company shall have accepted full liability in writing) and shall
remain undischarged for a period (during which execution shall not be
effectively stayed) of 20 days after the date on which the right to appeal
has
expired; or
(h)
an
event shall occur or there exist facts or circumstances which create or result
in a Company Material Adverse Effect;
then
and
in any such case (x) upon the occurrence of any Event of Default described
in
paragraphs (e) or (f), the unpaid principal amount of and accrued interest
on
the Notes shall automatically become due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by
Borrower, and (y) upon the occurrence of any other Event of Default, in addition
to any other rights, powers and remedies permitted by law or in equity, Lender
may, at its option, by notice in writing to Borrower, declare the Notes to
be,
and the Notes shall thereupon be and become, immediately due and payable,
together with interest accrued thereon and all other sums due hereunder, without
presentment, demand, protest or other notice of any kind, all of which are
waived by Borrower.
Upon
the
occurrence of any Event of Default, the holder of the Notes may proceed to
protect and enforce its rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in the Notes held by it, for an injunction against a
violation of any of the terms hereof or thereof, or for the pursuit of any
other
remedy which it may have by virtue of this Agreement or pursuant to applicable
law. Borrower shall pay to the holder of the Notes upon demand the reasonable
costs and expenses of collection and of any other actions referred to in this
Article, including without limitation reasonable attorneys’ fees, expenses and
disbursements.
No
course
of dealing and no delay on the part of the holder of the Notes in exercising
any
of its rights shall operate as a waiver thereof or otherwise prejudice the
rights of such holders, nor shall any single or partial exercise of any right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. No right, power or remedy
conferred hereby or by the Notes on the holder thereof shall be exclusive of
any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.
4.2.
For
purposes of this Article, the following definitions shall apply:
“Bankruptcy
Law” means Title 11, U.S. Code or any similar federal or state law for the
relief of debtors, or equivalent law of a non-U.S. jurisdiction.
“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under
any
Bankruptcy Law.
ARTICLE
V
– NOTICES
All
notices, requests and demands shall be given to or made upon the respective
parties hereto in writing, at such address as may be designated by it in a
written notice to the other party. All notices, requests, consents and demands
hereunder shall be effective when duly deposited in the mails (by overnight
delivery by a nationally-recognized overnight courier service or by United
States registered or certified mail, postage prepaid, return receipt requested)
with a copy via facsimile. Unless the parties designate otherwise, notices
should be addressed as follows:
If
to
Borrower:
KnowFat
Franchise Company, Inc.
000
Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn:
Xxxx Xxxxx, President and Co-Chief Executive Officer
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxxx
& Xxxx LLP 000 Xxxx Xxxx Xxxxxx Xxxxxxxx, XX 00000 Attn: Xxxxxxx X. Xxxxxx,
Esq. Facsimile: (000) 000-0000
If
to
Lender:
UFood
Franchise Company
00000-00xx
Xxxxxx
Xxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0 Xxxxxx
Attn:
Xxxxx Xxxx, President and Chief Executive Officer with a copy to:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, XX 00000 Attn: Xxxx X. Xxxxxxxxxx, Esq. Facsimile: (000) 000-0000
ARTICLE
VI – MISCELLANEOUS
6.1.
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to conflicts of laws principles thereof.
6.2.
Amendment.
This
Agreement may be amended, modified or terminated only by an instrument in
writing signed by all parties.
6.3.
No
Assignment.
Neither
this Agreement nor any right or obligation provided for herein may be assigned
by any party without the prior written consent of the other parties.
6.4.
Successors.
The
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of, and be enforceable by, the respective successors and assigns of
the
parties hereto.
6.5.
Counterparts.
This
Agreement may be executed in any number of counterparts, with the same effect
as
if all parties had signed the same document. All such counterparts shall be
deemed an original, shall be construed together and shall constitute one and
the
same instrument. This Agreement may be executed by facsimile signature.
6.6.
Construction.
The
language used in this Agreement shall be deemed to be the language chosen by
the
parties to express their mutual intent, and no rule of strict construction
shall
be applied against any party.
6.8.
Headings.
The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this Agreement.
6.8.
Severability.
Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of
the remaining terms and provisions hereof or the validity or enforceability
of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
parties agree that the court making the determination of invalidity or
unenforceability shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term
or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified.
IN
WITNESS WHEREOF, the parties hereto have caused this Bridge Loan Agreement
to
be
duly
executed as of the day and year first above written.
|
LENDER:
|
|
UFOOD
FRANCHISE COMPANY
|
|
By:
Name: Xxxxx Xxxx Title: Chief Executive Officer
|
|
BORROWER:
|
|
KNOWFAT
FRANCHISE COMPANY, INC.
|
|
By:
Name: Xxxxxx Xxxxxxx Title: Chairman and Co-Chief Executive Officer
|
|
By:
Name: Xxxx Xxxxx Title: President and Co-Chief Executive Officer
|
EXHIBIT
A
Promissory
Note
EXHIBIT
B
Use
of
Proceeds
| 1 |
Open
company-owned store at Xxxxx Airport
|
| 2 |
Sales
and marketing expenses related to new franchisees
|
| 3 |
Convert
existing KnowFat company-owned stores to UFood
|
| 4 |
Assist
Sacramento franchisee with opening of new location
|
| 5 |
General
corporate purposes
|
SCHEDULES
[Borrower
to prepare and attach the various Schedules called for by Articles II and III
of
this Agreement]
