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
