Continental Beverage and Nutrition, inc.
                                  (OTCBB:COBN)

                                                                January 19, 2006

Nick Payzant, CEO
US Modular
34-B Mauchly
Irvine, CA 92618

      Re:   Proposed Share Exchange/Merger of US Modular, LLC ("USM") and
            Continental Beverage and Nutrition, Inc.

Dear Nick:

Pursuant to our recent discussions, which have been facilitated by Sloan
Securities Corp. ("Sloan"), an NASD member and the exclusive advisor to
CONTINENTAL BEVERAGE AND NUTRITION, INC., a publicly held Delaware corporation
("COBN") trading on the OTC:BB under the symbol "COBN," COBN is pleased to
deliver this letter agreement ("Agreement") which sets forth the terms and
conditions of a share exchange/merger transaction (the "Transaction") between
COBN and USM, Inc, a California corporation (herein referred to as "USM" and
collectively with COBN, the "Parties"). For purposes of this Agreement, any
references to "we", "our" or "us" are references to COBN, and any references to
"you" are references to USM. Upon countersignature of this Agreement, it shall
serve as a binding Agreement between you and us, although we may elect to
subsequently execute and deliver a more formal agreement containing a full set
of the representations and warranties customarily found in agreements relating
to transactions such as the Transaction.

1)    Transaction. The parties shall complete a share exchange or merger the
      result of which will be to have USM become a wholly owned subsidiary of
      COBN and the combined entity shall be a company traded on the OTC:BB.
      Within 60 days of the execution of this Agreement the parties shall
      finalize the form of the Transaction. The parties also acknowledge that
      COBN is seeking to sell its operating business in a spin-off transaction,
      and that the subsidiary is not to be included in the valuation of COBN.
      COBN represents to USM that its publicly filed materials under the
      Securities Exchange Act of 1934, as amended are true accurate and complete
      and do not fail to state a fact necessary to make such information not
      misleading. USM represents to COBN that the information it has given to
      COBN to dates is true accurate and complete and do not fail to state a
      fact necessary to make such information not misleading. Upon completion of
      the Transaction, the Board of Directors of COBN shall resign and be
      replaced by the nominees of USM. In addition, COBN shall change take all
      actions necessary its name to any name designated by USM.

      a)    In connection with the Transaction, if the parties elect to proceed
            with a merger transaction, COBN may set up a wholly-owned subsidiary
            called USM Acquisition Corp. ("MergerSub"). MergerSub shall merge
            with USM, with MegerSub being the surviving entity. The shareholders
            of USM will exchange and/or convert their shares in USM for shares
            or other securities in COBN as set forth below. Options and warrants
            in USM stock shall be exchanged for options and warrants in COBN.

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Attn: Mr. Nick Payzant                                               Page 2 of 5


      b)    If the parties elect to proceed with a share exchange, they shall
            enter into an agreement pursuant to which COBN shall issue to USM
            ("USM Members") and their affiliates common stock, or other such
            securities as may be agreed to, on such terms as to effectuate the
            Result described below.

2)    Result of Transaction. Upon the closing of the Transaction, there shall be
      a combined entity traded on the OTC:BB which shall have the following
      proposed capitalization structure:

      a)    Capital Stock. At the closing of the Transaction, (i) shareholders
            of COBN (which shall include investors in the Offering - see section
            6D) shall own and control an aggregate of 37% of COBN (of which new
            Investors in the Offering shall own approximately 32% and Old
            Shareholders of COBN shall own approximately 5%); (ii) the USM
            Members shall own and control 63% of COBN subject to Section 7
            below.

      b)    Stock Options and Warrants. All existing USM options and warrants,
            or their equivalents, shall become options and warrants of COBN. At
            the Closing, each holder of USM options and warrants shall exchange
            their options and warrants for options and warrants to purchase
            shares of COBN capital stock on terms and conditions identical to
            the option and warrant terms and conditions, including any
            provisions concerning vesting and termination, prior to the
            Transaction.

3)    Share Exchange/Merger Agreement. The terms and provisions of the
      Transaction may be described in one or more supplements to this Agreement
      by and between the Parties which shall contain the terms and conditions
      set forth in this Agreement, as may be modified and amended by subsequent
      negotiations of the Parties, and such representations and warranties,
      covenants, indemnities and conditions that are usual and customary in a
      merger of this kind.

4)    Tax Free Reorganization. It is the intent of the Parties hereto that the
      transactions contemplated hereby to be memorialized by the Merger
      Agreement shall be structured so as to qualify as a tax free
      reorganization pursuant to the provisions of Section 368(a)1(b) or other
      suitable provision or provisions of the Internal Revenue Code.

5)    Conditions Precedent to With Transaction.

      a)    Due Diligence.

            i)    The obligation of COBN to proceed with the Transaction shall
                  be subject to due diligence review by COBN, its attorneys and
                  auditors, which shall be satisfactory to COBN, in its sole
                  discretion. COBN agrees to use commercially reasonable efforts
                  to complete its non-accounting, non-financial due diligence on
                  or before March 15, 2006.

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Attn: Mr. Nick Payzant                                               Page 3 of 5


            ii)   The obligation of USM to proceed with the Transaction shall be
                  subject to due diligence review by USM, its attorneys and
                  auditors, which shall be satisfactory to USM, in its sole
                  discretion. USM agrees to use commercially reasonable efforts
                  to complete its non-accounting, non-financial due diligence on
                  or before March 15, 2006.

      b)    Legal Compliance, Approvals and Consents. The Parties shall be
            satisfied that the Transaction shall not violate any Federal or
            state law, rule or regulation to which either party is subject, and
            COBN shall have received all necessary approvals and consents with
            respect to the Transaction including, without limitation, written
            authorization of its Board of Directors and shareholder approval, if
            required.

6)    Conditions Precedent to Closing. The Transaction is subject to traditional
      condition precedents contained in a Transaction of this kind including,
      proper documentation, necessary board and shareholder consents, due
      diligence and legal review. In addition, the closing shall be conditioned
      upon:

      a)    USM providing Audited financial statements for the last three fiscal
            years including 2005;

      b)    approval by the Members of USM for the Transaction;

      c)    approval by the shareholders of COBN of the Transaction (to the
            extent required by law) and for an increase in authorized common
            stock and/or the execution of a reverse split (if necessary) prior
            to closing of the Transaction;

      d)    COBN shall have raised a gross amount of $10 Million in cash or cash
            equivalents at a Pre-money valuation of $25MM (the "Offering")
            subject to Section 7 below;

      e)    Investors in the Offering shall consent that $1MM of the proceeds
            from the Offering shall be used to purchase shares from Nick
            Payzant, CEO of USM.

      f)    The merged entity shall be trading on the OTC:BB or another
            Nationally recognized Stock Exchange, as the parties hereto may
            agree to.

7)    Investment Adviser/Fee. Sloan Securities, a member of the NASD, shall act
      as exclusive investment banker with respect to the transaction and shall
      receive (i) a fee from COBN, pursuant to Sloan's agreement with COBN,
      which fee shall include an advisory fee equal to a warrant to purchase
      Three Percent (3%) of the total shares issued in the Offering or on an
      as-if converted fully-diluted basis, to the extent that the securities
      issued to the Investors in the Offering, are not common stock, as the case
      may be, post the Closing of the Transaction, for the proposed merger
      contained herein (the "IB Warrant"), and (ii) an investment banking fee of
      7% of gross proceeds for the Offering, prior to or at the closing of the
      Transaction, for such services.

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Attn: Mr. Nick Payzant                                               Page 4 of 5


8)    Confidentiality. The parties agree that to the extent permitted by law,
      they shall keep confidential the terms, existence and content of this
      Agreement and the proposed Transaction, and shall not disclose the same
      except to their attorneys, auditors, financial advisors, shareholders,
      officers and directors with a need to know, or pursuant to applicable law
      or court or administrative order, in which event, no disclosure will be
      made without the prior knowledge of the non-disclosing party, which shall
      also have an opportunity to review and comment on any proposed disclosure.
      COBN may also provide a copy of this Agreement and discuss it with Sloan,
      or the source of any other financing and their respective officers,
      directors, principals and counsel, provided that Sloan and such other
      financing source agree to abide by the provisions of this paragraph. USM,
      on the one hand, and COBN on the other hand, acknowledges and agrees that
      the willingness of the other to entertain the proposed Transaction, and
      closing of the Transaction are expressly conditioned on compliance by the
      other with the confidentiality provisions of this paragraph.

9)    Publicity. The parties acknowledge that, under existing circumstances, a
      public disclosure of the existence of this Agreement or the contemplated
      Transaction is currently necessary or legally required. The parties shall
      mutually agree upon the language and timing of any press release or other
      public announcement if any party determines, based on the advice of
      counsel, that a public announcement is required by law.

10)   Expenses. Each of the parties shall bear its own costs and expenses with
      respect to this Agreement.

11)   Governing Law. This Agreement has been made, negotiated and delivered in
      the State of California and shall be governed by, and construed in
      accordance with, the laws of said State, without giving effect to the
      principles thereof relating to the conflict of laws.

12)   Counterparts; Headings. This Agreement may be executed in counterparts,
      each of which shall be deemed to constitute an original and all of which,
      taken together, shall constitute one and the same document. The headings
      to paragraphs and subparagraphs of this Agreement are included for the
      convenience of the parties only and shall not have any effect on the
      meaning, construction or interpretation of this Agreement.

      The terms of this proposal which are set forth herein are based upon the
preliminary and limited review of certain information provided to us by you
concerning the business, assets, operations, condition and prospects of USM.
Therefore, we reserve the right to modify the tax, legal and/or accounting
structure of the Transaction and surviving corporation(s) and any another
relevant terms contained herein based upon the results of COBN's due diligence
investigation.

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Attn: Mr. Nick Payzant                                               Page 5 of 5


      We agree that each Party shall cause and or permit representatives of the
other Party to have full access to each Party's management, records, facilities,
accountants, auditors, attorneys and other advisors.

      If this Agreement is acceptable to you, please so signify by executing and
delivering a signed copy of this Agreement, and it shall become a binding
agreement between us.

Sincerely,


/s/ David Sackler
----------------------------------------
David Sackler, Chairman and CEO
Continental Beverage and Nutrition, Inc.


ACCEPTED AND AGREED
US Modular, LLC


By: /s/ Nick Payzant
    ------------------------------------
    Nick Payzant
    Chairman and CEO