<PAGE>
Exhibit 10.1
SMOKY MARKET FOODS, INC.
NOTE, SHARE AND WARRANT PURCHASE AGREEMENT
THIS NOTE, SHARE
AND WARRANT PURCHASE AGREEMENT (the "Agreement") is
made and entered into as of May 28, 2009 by and among Smoky Market
Foods, Inc.,
a Nevada corporation (the "Company"), and 70 LIMITED LLC, a Nevada
limited
liability company (the "Investor"), and, with respect to Section 5
of this
Agreement, The Jimma Lee Beam Revocable Trust (the "Trust").
RECITALS
A. Investor desires to acquire, and the Company desires to issue to
Investor,
additional securities of the Company, in accordance with the terms
and
conditions of this Agreement.
B. The Company issued that certain promissory note dated as of
September 30,
2008 in the principal amount of $500,000(the "First Prior Note") in
favor of the
Trust.
C. The Company issued that certain promissory note dated as of
January 26, 2009
in the principal amount of $150,000 in favor of Investor (together
with the
First Prior Note, the "Prior Notes").
D. The Trust and Investor are affiliates, and in connection with
the
transactions contemplated by this Agreement, the Trust and Investor
have agreed
to terminate the Prior Notes so that such Prior Notes are
superseded by the Note
(as defined below), as provided herein.
In consideration
of the mutual covenants set forth herein, and other
good and valuable consideration, the Company and Investor hereby
agree as
follows:
1. PURCHASE OF SECURITIES:
(a) PURCHASE OF
SECURITIES. Subject to the terms and conditions of this
Agreement, the Investor shall purchase, and the Company shall sell
and issue to
the Investor, at the Closing (as defined below), (i) a promissory
note
substantially in the form, and with the terms, attached hereto as
Exhibit A in
the principal amount of $2,152,500 (the "Note"), (ii) 11,587,926
shares of
common stock of the Company (the "Shares"), and (iii) warrants to
purchase
1,852,500 shares of common stock of the Company substantially in
the form
attached hereto as Exhibit B (the "Warrants"; together with the
Note and the
Shares, the "Securities"). The purchase price for the Securities
shall be
$1,500,000 in cash and cancellation of the Prior Notes (the
"Purchase Price").
The proceeds from the sale of the Securities are to be used toward
for working
capital and general corporate purposes, including the payment of
accounts
payable, legal and accounting fees, ongoing consulting and
employment expenses
and other purposes. The Company expects to raise additional
capital, on terms
that may be more or less favorable than those offered to Investor,
in the
immediate future. As reasonably requested by the Company, Investor
shall
complete a substitute W-9 or such other forms as the Company
requests in order
for it to comply with its reporting and other obligations.
(b) CLOSING. The
closing (the "Closing") of the purchase and sale of
the Securities shall take place on a date within one (1) business
day after the
date first set forth above, and the date of the Closing (the
"Closing Date")
shall be the date (which shall be within such three business day
period) the
Investor pays the Purchase Price by check or wire transfer to the
Company. On
the date the funds for the Purchase Price clear, the Company shall
cause to be
delivered to the Investor a facsimile copy of the Note and the
Warrants, duly
executed and made out in favor of Investor. Within five (5)
business days of the
Closing, the Company shall cause the original Note, the Warrants
and
certificates representing the Shares to be delivered to Investor at
the address
set forth on the signature page hereof. The Closing shall be deemed
to have
occurred at the offices of the Company. Failure of either party to
deliver the
items required by the preceding sentence when and as required
thereby shall
constitute a breach of this Agreement (and the other party shall be
entitled to
demand specific performance in addition to any other remedies
available at law
or in equity).
1
<PAGE>
2. REPRESENTATIONS AND WARRANTIES OF INVESTOR: Investor makes the
following
representations and warranties, with the intent that they be relied
upon by the
Company and each officer, director, employee and agent of the
Company in
determining Investor's suitability as a purchaser of the
Securities. Investor
hereby agrees that these representations and warranties shall
survive the
Investor's purchase of the Securities. By signing this Agreement,
Investor
represents that he has read and acknowledged the representations
set forth in
this Section 2.
(a) Investor is
the sole and true party in interest, is acquiring the
Securities for Investor's own account for investment, is not
purchasing the
Securities for the benefit of any other person, and has no present
intention of
holding or managing the Securities with others or of selling,
distributing or
otherwise disposing of any portion of the Securities.
(b) This Agreement
constitutes the Investor's valid and legally binding
obligation, enforceable in accordance with its terms subject to
applicable
bankruptcy, insolvency, and other similar laws affecting creditors'
rights, and
rules of law governing specific performance, and the Investor has
full power and
authority to enter into this Agreement.
(c) Investor is
domiciled in the State set forth on the signature page
hereof and has no present intention of becoming domiciled into, or
to otherwise
located in, any other state or jurisdiction, and is an "accredited
investor" as
defined in Rule 501(a) promulgated under the Securities Act (as
defined below).
Investor has filled in and executed an Investor Questionnaire in
the form
attached hereto as Exhibit C, and the information set forth in such
Investor
Questionnaire is true and correct as of the date hereof.
(d) Investor is
aware that an investment in the Securities is highly
speculative and subject to substantial risks. Investor has adequate
means of
providing for his current needs and possible contingencies, and is
able to bear
the high degree of economic risk of this investment, including, but
not limited
to, the possibility of the complete loss of Investor's entire
investment and the
limited transferability of the Securities, which may make the
liquidation of
this investment impossible for the indefinite future.
(e) Investor has
such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of an
investment in the Securities and making an informed investment
decision.
(f) Investor
understands that the Securities will not be registered
under the Securities Act of 1933, as amended (the "Securities
Act"), or any
state securities laws, in partial reliance upon exemptions from
registration for
certain private offerings. Investor understands and agrees that the
Securities,
or any interest therein, may not be resold or otherwise disposed of
by Investor
unless the resale of the Securities is subsequently registered
under the
Securities Act and under all applicable state securities laws or
unless the
Company receives an opinion of counsel, satisfactory to it that an
exemption
from registration is available. Further, Investor understands that
only the
Company can take action so as to register the Securities.
2
<PAGE>
(g) Investor
acknowledges and represents that Investor has received and
reviewed a copy of the Company's Annual Report on Form 10-K for the
year ended
December 31, 2008, together with its Quarterly Report on Form 10-Q
for the
quarter ended March 31, 2009 (the "Disclosure Document"), and any
amendments or
supplements thereto, has been given a reasonable opportunity to
review all
documents, books, and records of the Company pertaining to this
investment, has
been supplied with all additional information concerning the
Company and the
Securities that has been requested by Investor, has had a
reasonable opportunity
to ask questions of and receive answers from the Company or its
representatives
concerning this investment, and that all such questions have been
answered to
the full satisfaction of Investor.
(h) Investor has
received no representations, written or oral, from the
Company, a placement agent or any officer, director, employee,
attorney or agent
thereof, other than those contained in the Disclosure Document and
this
Agreement. In making the decision to purchase the Securities,
Investor has
relied solely upon Investor's review of the Disclosure Document,
this Agreement,
and independent investigations made by Investor or Investor's
representatives
without assistance of the Company.
(i) Investor understands and agrees that the following restrictions
and
limitations are applicable to his purchases and resales,
pledges,
hypothecations, or other transfers of the Securities (including for
purposes of
this subsection (i), any shares of common stock issuable upon
exercise of the
Shares):
i.
The Securities shall not be sold, pledged, hypothecated, or
otherwise transferred unless registered under the Securities Act
and applicable
state securities laws or an exemption from registration is
available;
ii. Each certificate or other document evidencing or
representing
the Securities shall be stamped or otherwise imprinted with a
legend in the form
set forth on the form of Note and Share, respectively, attached
hereto, or a
similar legend for any shares of common stock.
iii. Stop transfer instructions have been or will be placed on
the
Securities so as to restrict the resale, pledge, hypothecation, or
other
transfer thereof in accordance with the provisions hereof.
(j) Investor
represents and affirms that none of the following
information has ever been represented, guaranteed, or warranted to
Investor,
expressly or by implication,
