EXHIBIT 10.1
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NOTE PURCHASE AGREEMENT
BY AND BETWEEN
CONTINENTAL BEVERAGE AND NUTRITION, INC.
AND
CORNELL CAPITAL PARTNERS, L.P.
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Dated April 22, 2005
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (the "Agreement") is made as of the 22nd
day of April, 2005, by and between Continental Beverage and Nutrition, Inc., a
Delaware corporation (the "Company"), and Cornell Capital Partners, L.P. (the
"Investor").
W I T N E S S E T H:
WHEREAS, the Company desires to sell to the Investor, and the Investor
desires to purchase from the Company, an 8% senior secured convertible
promissory note in the principal amount of $400,000 (the "Note"), in the form
attached as Exhibit A hereto, pursuant to the provisions of this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
1. Purchase and Sale of Note.
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1.1 Issuance and Sale of Note. Subject to the terms and
conditions of this Agreement, the Investor agrees to purchase at the Closing (as
hereafter defined), and the Company agrees to issue and sell to the Investor at
the Closing, the Note for an aggregate purchase price of Four Hundred Thousand
($400,000.00) Dollars (the "Purchase Price").
1.2 Closing.
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(a) The purchase and sale of the Note (the
"Closing") shall take place at the offices of Xxxxx Securities Corp., 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. (or remotely
via the exchange of documents and signatures), on April 22, 2005, or at such
other time and place as the Company and the Investor mutually agree upon orally
or in writing.
(b) At the Closing, the Company shall deliver to
the Investor, the Note, against payment of the Purchase Price by wire transfer
to the Company.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor, except as set forth on a
Schedule of Exceptions to Representations and Warranties attached hereto as
Exhibit B (the "Schedule of Exceptions") or as disclosed in any current SEC
filings, the following:
2.1 Subsidiaries. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
association or other entity. The Company is not a party to any joint venture,
partnership, or similar arrangement.
2.2 Organization, Good Standing, and Qualification. The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware, and has all requisite corporate power
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and authority to carry on its business as now conducted. The Company is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure so to qualify would have a Material Adverse Effect (as
hereafter defined) on the Company's business or properties.
2.3 Capitalization and Voting Rights. The number of
authorized, issued and outstanding capital stock of the Company is set forth in
Exhibit B. Except as disclosed in Exhibit B, no securities of the Company are
entitled to preemptive or similar rights, nor is any holder of securities of the
Company entitled to preemptive or similar rights arising out of any agreement or
understanding with the Company by virtue of any of the Transaction Documents
(defined hereinafter). Except as disclosed in Exhibit B, there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, except as a
result of the purchase and sale of the Securities, or rights or obligations
convertible into or exchangeable for, or giving any Person (as defined below)
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company is or may
become bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock.
2.4 Authorization. All corporate action on the part of
the Company, its officers, directors, and shareholders necessary for the
authorization, execution, and delivery of this Agreement, the Note, the
Registration Rights Agreement and the Security Agreement (as herein defined)
(collectively, the "Transaction Documents"), the performance of all obligations
of the Company hereunder and thereunder and the authorization, issuance (or
reservation for issuance), and delivery of the Note being sold hereunder and the
Common Stock issuable upon conversion of the Note (collectively, the
"Securities"), has been taken or will be taken prior to the Closing, and the
Transaction Documents constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Transaction Documents may
be limited by applicable federal or state laws.
2.5 Valid Issuance of Note and Common Stock. The Note
being purchased by the Investor hereunder, when issued, sold, and delivered in
accordance with the terms hereof for the consideration provided for herein, will
be duly and validly issued, and, based in part upon the representations of the
Investor in this Agreement, will be issued in compliance with all applicable
federal and state securities laws. The Common Stock issuable upon conversion of
the Note has been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Note, shall be duly and validly issued, fully
paid and nonassessable, and issued in compliance with all applicable securities
laws, as presently in effect, of the United States and each of the states whose
securities laws govern the issuance of the Note hereunder.
2.6 Filings, Consents and Approvals. The Company is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
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state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than (i) if determined by Company counsel, a proper Form D in
accordance with Regulation D promulgated under the Securities Act of 1933, as
amended (the "Act"), and applicable Blue Sky filings and (ii) in all other cases
where the failure to obtain such consent, waiver, authorization or order, or to
give such notice or make such filing or registration could not have or result
in, individually or in the aggregate, a material adverse effect on the business,
prospects, operations, affairs, financial condition, assets or properties of the
Company taken as a whole ("Material Adverse Effect").
2.7 Litigation. Except as set forth of Exhibit B, there
is no action, suit, proceeding, claim or investigation pending or, to the
knowledge of the Company, currently threatened against the Company which
questions the validity of the Transaction Documents, or the right of the Company
to enter into any of them, or to consummate the transactions contemplated hereby
or thereby, or which might result, either individually or in the aggregate, in a
Material Adverse Effect or in any change in the current equity ownership of the
Company, nor is the Company aware that there is any basis for the foregoing. The
foregoing includes, without limitation, actions, pending or threatened (or any
basis therefor known to the Company), involving the prior employment of any of
the Company's employees, their use in connection with the Company's business of
any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment, or decree of any court or government agency or
instrumentality.
2.8 Compliance with Other Instruments. The Company is not
in violation or default of any provisions of its Certificate of Incorporation or
Bylaws or, to its knowledge, of any instrument, judgment, order, writ, decree,
mortgage, indenture, lease, license or contract to which it is a party or by
which it is bound or, to its knowledge, of any provision of federal, state, or
local statute, rule, or regulation applicable to the Company, except as would
not reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect. The execution, delivery, and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby will not
result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract, or an
event which results in the creation of any lien, charge, or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations, or any of its assets or
properties, except as would not reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect.
2.9 Permits. The Company has all franchises, permits,
licenses, and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could have a Materially Adverse
Effect and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. The
Company is not in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
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2.10 Compliance with Laws. The conduct of business by the
Company as presently and proposed to be conducted is not subject to continuing
oversight, supervision, regulation or examination by any governmental official
or body of the United States or any other jurisdiction wherein the Company
conducts or proposes to conduct such business, except such regulation as is
applicable to commercial enterprises generally. The Company has not received any
notice of any violation of or noncompliance with, any federal, state, local or
foreign laws, ordinances, regulations and orders (including, without limitation,
those relating to environmental protection, occupational safety and health,
federal securities laws, equal employment opportunity, consumer protection,
credit reporting, "truth-in-lending", and warranties and trade practices)
applicable to its business, the violation of, or noncompliance with, which would
have a materially adverse effect on either the Company's business or operations,
and the Company knows of no facts or set of circumstances which would give rise
to such a notice.
2.11 Disclosure. This Agreement, the other Transaction
Documents and any other statements or certificates made or delivered in
connection herewith or therewith, when taken together with the Disclosure
Materials (as defined below), do not contain any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein
or therein not misleading.
2.12 SEC Reports; Financial Statements. Except as set
forth in the Schedule of Exceptions, the Company has filed all reports required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials being collectively referred to herein as the "SEC Reports" and,
together with the Schedule of Exceptions to this Agreement, the "Disclosure
Materials") on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. All material
agreements to which the Company is a party or to which the property or assets of
the Company are subject have been filed as exhibits to the SEC Reports to the
extent required. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved ("GAAP"), except as may be otherwise specified
in such financial statements or the notes thereto, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments. Additionally,
since the adoption of the Xxxxxxxx-Xxxxx Act of 2002 (the "New Act"), the
Company has complied in all material respects with the laws, rules and
regulation under the New Act.
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3. Representations and Warranties of the Investor. The Investor
hereby represents and warrants that:
3.1 Authorization. The Transaction Documents constitute
valid and legally binding obligations of the Investor enforceable in accordance
with their terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
3.2 Purchase Entirely for Own Account. The Note to be
purchased by the Investor and the Common Stock issuable upon conversion of the
Note (collectively, the "Securities") will be acquired for investment for the
Investor's own account and not with a view to the resale or distribution of any
part thereof. The Investor represents that it has full power and authority to
enter into this Agreement.
3.3 Disclosure of Information. The Investor acknowledges
that it has received all the information that it has requested relating to the
Company and the purchase of the Note. The Investor further represents that it
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Note. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 of this Agreement or the right of the Investor to rely
thereon.
3.4 Accredited Investor. The Investor is an "accredited
investor" within the meaning of Rule 501 of Regulation D of the Securities and
Exchange Commission (the "SEC"), as presently in effect.
3.5 Restricted Securities. Investor understands that the
Note (and the shares of Common Stock, or if applicable Preferred Stock, issuable
upon conversion of the Note) that it is purchasing is characterized as
"restricted securities" under the federal securities laws inasmuch as it is
being acquired from the Company in a transaction not involving a public
offering, and that under such laws and applicable regulations such securities
may be resold without registration under the Act, only in certain limited
circumstances. In this connection, the Investor represents that it is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.6 Legends. It is understood that the certificate
evidencing the Note (and the Common Stock issuable upon conversion of the Note)
may bear one or all of the following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS
SET FORTH IN THIS CERTIFICATE. THE SECURITIES REPRESENTED
HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF
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IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO
COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE,
TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
3.7 Hedging Transactions. The Investor's trading
activities with respect to the Company's Common Stock shall be in
compliance with all applicable federal and state securities laws, rules
and regulations and the rules and regulations of the principal market
on which the Company's Common Stock is listed or traded. Neither the
Investor nor its affiliates has an open short position in the Common
Stock of the Company, and the Investor agrees that without the prior
written consent of the Company, prior to the earlier of the (i)
maturity date of the Note or (ii) date the Note is converted into
equity securities or (iii) date the shares issuable upon conversion of
the Note are registered pursuant to an effective registration statement
under the Securities Act of 1933, as amended, it shall not, and that it
will cause its affiliates not to, engage in any short sales with
respect to the Common Stock. Nothing in this Agreement or otherwise
shall limit or prohibit the Investor from selling any Common Stock
after it has submitted a conversion notice to the Company.
4. Conditions of the Investor's Obligations at Closing. The
obligations of the Investor under subsection 1.1 of this Agreement is subject to
the fulfillment on or before the Closing of each of the following conditions:
4.1 Representations and Warranties. The representations
and warranties of the Company contained in Section 2 hereof shall be true on and
as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
4.2 Performance. The Company shall have performed and
complied with all agreements, obligations, and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
4.3 Compliance Certificate. The President of the Company
shall deliver to the Investor, at the Closing, a certificate certifying that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor and counsel to the Investor, and they shall have
received all such counterpart original and certified or other copies of such
documents as they may reasonably request.
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4.5 Assistant Secretary's Certificate. The Company shall
have delivered to the Investor a certificate executed by the Assistant Secretary
of the Company dated as of the Closing certifying the following matters: (a) the
resolutions adopted by the Company's Board of Directors relating to the
transactions contemplated by this Agreement; and (b) the Certificate of
Incorporation and Bylaws of the Company.
4.6 Delivery of Note. The Company shall have delivered
the Note to the Investor, as specified in Section 1.
4.7 Ancillary Agreements. The Company and the Investor
shall have entered into a registration rights agreement dated of even date
herewith, a form of which is attached hereto as Exhibit C (the "Registration
Rights Agreement") and a security agreement dated of even date herewith, a form
of which is attached hereto as Exhibit D (the "Security Agreement").
4.8 Opinion of Counsel. The Purchasers shall have
received an opinion of counsel to the Company substantially in the form attached
hereto as Exhibit E.
4.9 Conversion of Accrued Salary, Notes and Preferred
Stock. The Company shall have delivered to the Investor agreements in form and
substance reasonably acceptable to the Investor providing for:
(a) the conversion of all accrued but unpaid
salary of Xxxxx Xxxxxxx (approximately $711,700 as of the date hereof) into
shares of the Company's Common Stock or options to purchase shares of common
stock at the prevailing price of the common stock at the time of an Acquisition
Transaction (as hereinafter defined) but in no event less than $0.10 per share;
(b) the conversion of all principal and interest
under those promissory notes held by Xxxxx Xxxxxxx (approximately $271,884 as of
the date hereof) and Xxxx Xxxxxxxxxx (approximately $139,000) into shares of the
Company's Common Stock at the prevailing price of the common stock at the time
of an Acquisition Transaction but in no event less than $0.10 per share; and
(c) the conversion of all issued and outstanding
shares of preferred stock held by CES Consulting Corp. into an aggregate of
2,002,230 shares of the Company's Common Stock on or before the Closing.
(d) For the purpose of this Section 4.9,
"Acquisition Transaction" shall mean: (i) any merger, share exchange,
consolidation, reorganization or other business combination pursuant to which
the businesses of Target is combined with that of the Company; (ii) the
acquisition, directly or indirectly, by the Company of all or a substantial
portion of the assets or common equity of Target by way of negotiated purchase
or otherwise; or (iii) the acquisition, directly or indirectly, by Target of all
or a substantial portion of the assets or common equity of the Company by way of
negotiated purchase or otherwise. The term Acquisition Transaction shall include
any reverse merger transaction the Company undertakes.
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4.10 Insider Lock-Up Agreements. The Company shall have
delivered to the Investor agreements in form and substance reasonably acceptable
to the Investor providing for the lock-up of the shares held by Xxxxx Xxxxxxx,
Xxxxx Xxxxxxx and Xxxx Xxxxxxxxxx and their respective affiliates.
4.11 Other Payments. Concurrent with the Closing, the
Company shall pay the Xxxxx Compensation and Yorkville Fee (as such terms are
defined in Section 7.7 hereto) and the Legal Expense Obligation (as defined in
Section 7.8 hereto).
5. Conditions of the Company's Obligations at Closing. The
obligations of the Company to the Investor under this Agreement is subject to
the fulfillment on or before any Closing of each of the following conditions by
the Investor:
5.1 Representations and Warranties. The representations
and warranties of the Investor contained in Section 3 shall be true on and as of
such Closing with the same effect as though such representations and warranties
had been made on and as of such Closing.
5.2 Payment of Purchase Price. The Investor shall have
delivered the Purchase Price specified in Section 1.2.
5.3 Ancillary Agreements. The Company and the
Investor(s) shall have entered into the Registration Rights Agreement and the
Security Agreement.
6. Indemnification. The Company agrees to indemnify and hold
harmless Investor and any of Investor's general partners, employees, officers,
directors, members, agents and other representatives (collectively, the
"Indemnitees"), against any investigations, proceedings, claims or actions and
for any expenses, damages, liabilities or losses (joint or several) arising out
of any actions or omissions by the Company that result in any such
investigations, proceedings, claims or actions, to which the Indemnitees may
become subject, whether under the act or any rules or regulations promulgated
thereunder, the Securities Exchange Act of 1934, as amended (the "Exchange Act")
or any rules or regulations promulgated thereunder, or any state law or
regulation, or common law, arising out of, related to or in any way attributable
to the Indemnitee's investment in the Company, including, but not limited to,
investigations, proceedings, claims or actions and any expenses, losses, damages
or liabilities (or actions in respect thereof) that arise out of or are based
upon any breach of any representation, warranty, agreement, obligation or
covenant of the Company contained herein. The Company also agrees to reimburse
the Indemnitees for any legal or other expenses reasonably incurred in
connection with investigating or defending any such investigations, proceedings,
claims or actions, as such expenses or other costs are incurred.
7. Miscellaneous.
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7.1 Survival of Warranties. All of the representations
and warranties made herein shall survive the execution and delivery of this
Agreement. The Investor is entitled to rely, and the parties hereby acknowledge
that the Investor has so relied, upon the truth, accuracy and completeness of
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each of the representations and warranties of the Company contained herein,
irrespective of any independent investigation made by Investor. The Company is
entitled to rely, and the parties hereby acknowledge that the Company has so
relied, upon the truth, accuracy and completeness of each of the representations
and warranties of the Investor contained herein, irrespective of any independent
investigation made by the Company.
7.2 Successors and Assigns. This Agreement is personal to
each of the parties and may not be assigned without the written consent of the
other parties; provided, however, that any of the Investors shall be permitted
to assign its rights under this Agreement and the Ancillary Agreements to any
affiliate of such Investor.
7.3 Governing Law. This Agreement shall be governed by
and construed under the laws of the State of New York as applied to agreements
among New York residents entered into and to be performed entirely within New
York. The Company (1) agrees that any legal suit, action or proceeding arising
out of or relating to this Agreement shall be instituted exclusively in New York
State Supreme Court, County of New York, or in the United States District Court
for the Southern District of New York, (2) waives any objection which the
Company may have now or hereafter to the venue of any such suit, action or
proceeding, and (3) irrevocably consents to the jurisdiction of the New York
State Supreme Court, County of New York, and the United States District Court
for the Southern District of New York in any such suit, action or proceeding.
The Company further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the New
York State Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York and agrees that service of process
upon the Company mailed by certified mail to the Company's address shall be
deemed in every respect effective service of process upon the Company, in any
such suit, action or proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
7.4 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement,
once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
7.5 Titles and Subtitles. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by courier, overnight delivery service or confirmed
facsimile, or forty-eight (48) hours after being deposited in the U.S. mail as
certified or registered mail with postage prepaid, if such notice is addressed
to the party to be notified at such party's address or facsimile number as set
forth below or as subsequently modified by written notice. Any party may change
its address for such communications by giving notice thereof to the other
parties in conformity with this Section.
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7.7 Finder's Fee, Etc. Each party represents that it
neither is nor will be obligated for any finders' or brokers' fee or commission
in connection with this transaction; provided, however, that the Company is
obligated to pay (i) a cash fee equal to 10% of the principal amount of Note
issued hereby to Xxxxx Securities Corp. ("Xxxxx Compensation") pursuant to that
certain investment banking agreement dated February 17, 2005 and (ii) an
advisory fee equal to 10% of the principal amount of Note issued hereby to
Yorkville Asset Management, LLC ("Yorkville Fee").
7.8 Transaction Expenses; Enforcement of Transaction
Documents. The Company and each Investor shall pay their respective costs and
expenses incurred with respect to the negotiation, execution, delivery and
performance of this Agreement; provided, however, that if the Closing is
effected, the Company shall promptly make payment to (i) a law firm designated
by Xxxxx Securities Corp., for up to $12,500, of legal fees and expenses and
(ii) a law firm designated by the Investor, for up to $5,000, of legal fees and
expenses (collectively, "Legal Expense Obligation"). If any action at law or in
equity is necessary to enforce or interpret the terms of the Transaction
Documents, the prevailing party shall be entitled to reasonable attorney's fees,
costs, and necessary disbursements in addition to any other relief to which such
party may be entitled.
7.9 Amendments and Waivers. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any securities purchased under this Agreement at the
time outstanding (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.
7.10 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.11 Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
Balance of page intentional left blank
Signature Page follows
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONTINENTAL BEVERAGE & NUTRITION, INC.
By: /s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxx, CEO & President
INVESTOR
CORNELL CAPITAL PARTNERS, L.P.
By:
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Name:
Title:
Address:
Facsimile Number
EXHIBIT A
FORM OF PROMISSORY NOTE
EXHIBIT B
SCHEDULE OF EXCEPTIONS
Section 2.3 - Capitalization and Voting Rights
The following represents the capitalization of the Company as of the date
hereof, on a fully diluted basis.
Currently Issued and Outstanding shares of Common Stock 20,702,193
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Convertible Securities:
Xxxxx Xxxxxxx (preferred stock conversion) 2,002,230
Xxxxx Xxxxxxx (note conversion) 2,718,840
Xxxx Xxxxxxxxxx (note conversion) 1,395,000
Xxxxx Xxxxxxx (salary conversion) 7,117,000
Xxxxx Stock Loan Conversion 40,000,000
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Total Convertible Securities 57,233,070
Total Fully Diluted Shares of Common Stock 73,935,263
Section 2.7 Litigation.
COBN Schedule of Judgments/Liens and current Litigation
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(status in parenthesis)
o Federal Tax Lien in the amount of $16,943.23 filed in Nassau County, NY
(in negotiations)
o State Tax Lien in the amount of $2,597.46 filed in Nassau County, NY (in
negotiations)
o Judgment in favor of Xxxxxxxx Xxxxxxx, CPA, in the amount of $12,043.80
filed in Nassau County, NY (settled in principal- $5,500.00)
o Judgment in favor of Xxxxxxx Xxxxxxxxx, Inc, d/b/a Xxxxxxx & Xxxxxxxxx, in
the amount of $4,545.56 filed in Nassau County, NY (in negotiations)
o Judgment in favor of Xxxxxxx Drive Partners, LLC, in the amount of
$28,505.68 filed in Nassau County, NY (settled - $10,000.00)
o Judgment in favor of the Counties of Xxxxxx and Washington, NY, in the
amount of $4,256.32 filed in Xxxxxx County, NY. (in negotiations)
o Litigation w/Xxxxxxxxx Xxxxxxxxx for $24,000.00 (settled in principal at
$13,500.00)
o Litigation w/Granite Springs for $15,00.00 (settled for $3,500.00)
o Litigation w/Adirondack Beverages for $45,000 (settled for $10,000.00,
negotiated to $9,000.00 - paid in full)
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT D
FORM OF SECURITY AGREEMENT
EXHIBIT E
FORM OF OPINION
(i) The Company has been duly organized as a corporation and is validly
existing in good standing under the laws of the jurisdiction of its
incorporation.
(ii) The execution and delivery by the Company of the Transaction
Documents and the consummation by the Company of the transactions
contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company, and the Transaction
Documents have been duly executed and delivered by the Company. Each
of the Transaction Documents constitutes the valid and binding
obligation of the Company, enforceable against the Company in
accordance with its respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other
equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Transaction Documents may be limited by
applicable federal or state laws.
(iii) To the knowledge of counsel, none of the execution and delivery of,
or performance by the Company under, any of the Transaction
Documents or the consummation of the transactions therein
contemplated, will conflict with, or result in the creation or
imposition of any lien, charge or other encumbrance upon any of the
properties or assets of the Company pursuant to, the terms of any
indenture, mortgage, deed of trust, note agreement or other
instrument pursuant to which the Company is a party or by which the
Company may be bound or to which any of its assets, properties or
business is or may be subject, except as would not reasonably be
expected, singly or in the aggregate, to have a Material Adverse
Effect. None of the execution and delivery of, or performance by the
Company under, any of the Transaction Documents or the consummation
of the transactions therein contemplated, will conflict with any
term of the Certificate of Incorporation or By-Laws of the Company,
or any statute, rule, regulation or ordinance, or any material
license, permit, judgment, decree or order, which, expressly by its
terms is known by us to be applicable to the Company or any of its
assets, properties or businesses, except as would not reasonably be
expected, singly or in the aggregate, to have a Material Adverse
Effect.
(iv) Other than as described in the SEC Reports, we are not aware of any
legal or regulatory, administrative or governmental charges,
actions, proceedings, claims, hearings, investigations before or by
any court, governmental authority, or instrumentality pending or
threatened against the Company, or involving its assets or
properties which, if determined adversely to the Company, could
reasonably be expected to have a Material Adverse Effect on the
Company or could be expected to adversely affect any of the
transactions contemplated by the Transaction Documents or the
validity or enforceability thereof.
(v) The Security Agreement creates in favor of the Holder (as defined in
the Security Agreement) an enforceable security interest in the
Collateral (as defined in the Security Agreement). The Financing
Statement is in proper form so as to comply with the filing
requirements of the Uniform Commercial Code as in effect of the
State of Delaware (the "Delaware UCC"). Subject to the operation and
effect of the Delaware UCC, the Holders will have a perfected
interest in the Company's right, title and interest in the
Collateral: (a) when the Financing Statement properly describing the
Collateral, authenticated by the Company, as debtor, as required,
and showing the Holders as secured party, has been duly accepted and
filed in the filing office of the Secretary of State of the State of
Delaware, and when value has been given by the Holders to the
Company; and (b) to the extent that perfection of a security
interest in the Collateral may be accomplished by filing the
Financing Statement pursuant to the Delaware UCC and the Uniform
Commercial Code in effect in the State of New York.
(vi) Based in part upon the representations made by the Investors in the
Securities Purchase Agreement, the offer, sale and issuance of the
Notes and Warrants to be issued in conformity with the terms of the
Securities Purchase Agreement constitute transactions exempt from
the registration requirements of Section 5 of the Securities Act.
