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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
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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 Sloan Securities
Corp., 444
Madison Avenue, 23rd Floor, New York, New York 10022 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 Sarbanes-Oxley 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
regardi
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