LOAN AGREEMENT

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February 25, 2024

       LOAN AGREEMENT

THIS AGREEMENT is hereby entered into on this ………………day of …….……………. Two Thousand and ……………………………

BETWEEN

1.Fahim Niaz, whose address is [ insert Address], Danville, California hereinafter referred to as (“Lender”)

AND

  1. [ Mujeeb Hamid] whose address is [insert Address] hereinafter referred to as (“borrower”)

WHEREAS, Borrower has requested a loan in the amount of $250,000 (the “Loan”) from Lender.

WHEREAS, Lender has agreed to provide the Loan to Borrower, subject to the terms and conditions set forth herein.

Whereas, Mujeeb Hamid and Kirian Fitzgibbons have agreed to being the Personal Guarantors of the Loan.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the parties agree as follows:

  1. LOAN AMOUNT, INTEREST AND TERMS

The Lender, hereby agrees to lend the Borrower the principal sum of ($250,000) on June 1, 2023 (the “Loan”) for a period of 3 years. The loan must be repaid in full on June 1, 2026 to the Lender. The Borrower shall pay an annual rate of 24% interest on the principal sum of ($60,000) per annum in equal monthly installments of ($5,000) via automatic direct deposit to Fahim Niaz’s designated bank account, with the first interest payment due on the first day of the month following the disbursement of the Loan.

  1. PENALTY FOR MISSED PAYMENT

In the event that the Borrower fails to make any payment by the due date, the Borrower shall be subject to a penalty of ($5,000) if the payment is not received within ten (10) days after the first of the month. Moreover, if the Borrower misses two consecutive payments, the entire outstanding Loan amount shall become immediately due and payable, and the Borrower shall be responsible for a penalty of ($5,000) for each missed payment.

  1. PERSONAL GUARANTEE:

In consideration for the Loan, Mujeeb Hamid and Kirian Fitzgibbons shall execute a personal guarantee, wherein they agree to be personally liable for the Loan and pledge any personal and/or business assets they possess and own, including but not limited to cash, recurring revenue, subscription memberships, and assets of Combat Sports Academy and Hook’d gyms, as collateral for the repayment of the Loan.

  1. MONTHLY PAYMENTS AFTER 3 YEAR TERM:

In the event that the Borrower fails to fully repay the Loan to Fahim Niaz after the three-year term, the Borrower shall pay an annual rate of 38.4% interest on the principal sum ($96,000 per annum) in equal monthly installments of ($8,000) via automatic direct deposit to Fahim Niaz’s designated bank account or until a new agreement is renegotiated and accepted by all parties involved.

  1. LUMP SUM PAYMENTS:

If the Borrower wishes to make lump sum payments towards the loan principal, such payments may be made at any time during the loan term. However, if the Borrower chooses to make a partial payment towards the ($250,000) loan amount, the monthly payments of $5,000(annual rate of 24% interest on the original principal loan sum ($60,000) per annum shall continue until the outstanding balance of the Loan is fully paid. The monthly payments shall not be adjusted to reflect the partial loan principal payment.

  1. OWNERSHIP AND PROFIT SHARING:

Upon disbursement of the loan and in perpetuity, whether the loan is paid in full or outstanding, the following ownership and profit-sharing provisions shall apply:

  1. a) Fahim Niaz shall be given 5% ownership of Combat Sports Academy located in Dublin, California and soon to be located in Blackhawk Plaza, California, and 3% ownership of Hook’d Gym located in Walnut Creek, California.
  2. b) In the event that Hook’d Gym is closed or shutdown or sold, Fahim Niaz’s 3% ownership shall be added to Combat Sports Academy, with Fahim Niaz’s total ownership being 8%. This will be effective immediately after Hook’d is shut down.
  3. c) Mujeeb Hamid and Kirian Fitzgibbons attest that they are the only equal owners of Combat Sports Academy and Hook’d Gym, and with Fahim Niaz’s ownership, they will now own 47.5% each at Combat Sports Academy and 48.5% each at Hook’d Gym.
  4. d) Fahim Niaz shall receive a yearly profit-sharing for the fiscal year of 5% of Combat Sports Academy’s Net Income and 3% of Hook’d Gym’s Net Income], which will be paid in the first(1st) month of the new year.
  5. ASSIGNMENT OF LOAN:

The Loan amount may not be assigned to another party/individual/company without approval of Fahim Niaz.

  1. COLLECTION COSTS:

Should Borrower fail to make any payment due under this Note, Borrower shall be responsible for all costs incurred by Lender in the process of collecting said payment, including but not limited to reasonable attorney’s fees, court costs, and collection agency fees, regardless of whether or not legal action is taken.

  1. DEFAULT:

Should any of the following events of default occur, the Borrower including Kirian Fitzgibbons and/or any new owner of Combat Sports Academy shall be deemed in breach of this Note and all other obligations owed to the Lender shall become immediately due and payable, without demand or notice:

  1. a) Failure of the Borrower to make payment of the principal and any accrued interest when due;
  2. b) The liquidation, dissolution, incompetency, or death of the Borrower;

c)The filing of bankruptcy proceedings involving the Borrower as a debtor;

d)The appointment of a receiver or trustee for the Borrower or its property;

  1. e) The making of a general assignment for the benefit of the Borrower’s creditors;
  2. f) The insolvency of the Borrower;
  3. g) A misrepresentation made by the Borrower to the Lender for the purpose of obtaining or extending credit; or
  4. h) The sale of a substantial portion of the assets of the Borrower’s business.
  5. RIGHTS OF THE LENDER:

Lender shall have the following rights in relation to both Combat Sports Academy and Hook’d Gym:

  1. a) Access to the gyms: Lender shall have the right to access both gyms at any time.
  2. b) Access to software: Lender shall have access to any and all software that collects gym member information and payment methods at both gyms.

c)Access to accounting software: Lender shall have access to all accounting software systems and reports.

d)Access to bank statements: Lender shall have the right to request and receive bank statements when needed.

  1. e) Advance notice of changes: The Borrower shall provide Lender with at least seven (7) days’ notice of any of the following changes for both gyms:
  2. i) Change in business structure
  3. ii) Change in business location

iii) Addition or change in ownership

  1. iv) Borrowing of more money
  2. v) Purchase of equipment in excess of $10,000
  3. vi) Hiring of any full-time staff

vii) Change in business programming and schedule

viii)Change in business partnerships (such as partners renting part of the gym facilities)

  1. ix) Any change that will affect revenue, space requirements, etc.
  2. f) Right of first refusal: Lender shall have the right of first refusal if the Borrower intends to add or change ownership at either gym.
  3. h) In the event that the Lender is unavailable due to incapacitation, death or any other reason, the ownership and payment of both Combat Sports Academy and Hook’d Gym, as well as the loan amount, shall be transferred to the Lender’s wife, Amena Niaz, and children, who shall be considered beneficiaries of this agreement. It is understood that all terms and conditions of this agreement shall remain valid and enforceable, and must be adhered to accordingly.

The aforementioned rights of Lender shall continue in perpetuity, whether the loan is paid in full or remains outstanding.

  1. GOVERNING LAW:

This Agreement shall be governed by and construed in accordance with the laws of the State of California, and the parties agree to submit to the jurisdiction of the courts of Contra Costa County, California.

  1. DISPUTE RESOLUTION:

In the event of any dispute, controversy, or claim arising out of or relating to this contract, or the breach, termination, or invalidity thereof, either party may commence litigation. The parties agree that any such litigation shall be brought in a court of competent jurisdiction in the state of California. The parties waive any right to a trial by jury and agree that the matter shall be tried before a judge without a jury. The prevailing party in any such litigation shall be entitled to recover its costs, including reasonable attorney’s fees, from the non-prevailing party.

  1. HOLD HARMLESS PROVISION

The Borrower agrees to protect, indemnify, and hold the Lender harmless from any claims, lawsuits, actions, or liabilities arising from personal injury, death, or damage to property and equipment associated with Combat Sports Academy or Hook’d Gym. This provision includes all activities related to the Borrower’s business and any work or actions performed by any person in or around Combat Sports Academy or Hook’d Gym with the Borrower’s permission.

  1. NOTICES:

Any notices required or permitted under this Contract shall be in writing and shall be deemed given when delivered in person, by overnight courier, or by certified or registered mail, postage prepaid, to the addresses set forth above or to such other addresses as the parties may designate in writing.

  1. AMENDMENT AND WAIVER:

No modification or amendment to this Agreement shall be effective unless in writing and signed by both Parties. Any waiver of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach.

  1. ENTIRE AGREEMENT:

This Agreement constitutes the entire agreement between the Parties and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, between the Parties with respect to the subject matter of this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date and year first above written.

SIGNED by the parties:                                                           )

…………………………….                                                     ) _________________

(FAHIM NIAZ-LENDER)                                                       Signature

Date: ……………………….

Title:…………………………

AND

………………………………..                                             )_________________

(MUJEEB HAMID- PERSONAL GUARANTOR)                    Signature

Title:………………………..

 

………………………………..                                             )_________________

(KIRIAN FITZGIBBONS- PERSONAL GUARANTOR)           Signature

Title:………………………..

 

WITNESSES:

Name: ……………………….                                              )___________________

Title:…………………………                                                   Signature

Date:…………………………

 

Name: ……………………….                                             )_____________________

Title:…………………………                                                   Signature

Date:…………………………

 

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