Document:

smoky_8k-ex0401.htm

 

	
  

	
Exhibit 4.1

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON RESALE AND MAY NOT BE RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

Warrant

 

Smoky Market Foods, Inc.

 

Dated: March 5, 2010

 

450,000 Shares of Common Stock

This certifies that 70 Limited LLC or its permitted transferee (such person or any such permitted transferee is sometimes herein called the “Holder”) is entitled to purchase from Smoky Market Foods, Inc., a Nevada corporation (the “Company”), at the price and during the period as hereinafter specified, up to 450,000 shares (the “Shares”) of common stock, $.001 par value of the Company (the “Common Stock”), at a purchase price of $0.15 per share, subject to adjustment as described below (as so adjusted from time to time, the “Exercise Price”), at any time until the Expiration Date (as defined below).

1.           Exercise.  The rights represented by this Warrant (this “Warrant”) shall be exercisable at the Exercise Price, and during the periods as follows:

 

(a)           At any time and from time to time between the date hereof and the five year anniversary date hereof (the “Expiration Date”) inclusive, the Holder shall have the right to purchase all or any portion of the Shares at the Exercise Price.

 

(b)           After the Expiration Date, the Holder shall have no right to purchase all or any portion of the Shares hereunder.

 

2.           Payment for Shares; Issuance of Certificates; Net Exercise.

 

(a)           The rights represented by the Warrant may be exercised at any time within the periods above specified, in whole or in part, by (i) the surrender of the Warrant (with the purchase form at the end hereof properly executed) at the principal executive office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company) and (ii) payment to the Company of the Exercise Price for the number of Shares specified in the above-mentioned purchase form together with applicable stock transfer taxes, if any. The Warrant shall be deemed to have been exercised, in whole or in part to the extent specified, immediately prior to the close of business on the date the Warrant is surrendered and payment is made in accordance with the foregoing provisions of this Section 2, and the person or persons in whose name or names the certificates for the Shares shall be issuable upon such exercise shall become the holder or holders of record of such Shares at that time and date. The Shares and the certificates for the Shares so purchased shall be delivered to the Holder within a reasonable time, not exceeding five (5) business days, after the rights represented by this Warrant shall have been so exercised.

 

  

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3.           Transfer.  (a)  Any transfer of this Warrant shall be effected by the Holder by (i) executing the form of assignment at the end hereof and (ii) surrendering the Warrant for cancellation at the office or agency of the Company referred to in Section 2 hereof, accompanied by (y) a certificate (signed by an officer of the Holder, or other authorized representative reasonably satisfactory to the Company, if the Holder is an entity) stating that each transferee is a permitted transferee under this Section 3; and, if applicable, (z) an opinion of counsel, reasonably satisfactory in form and substance to the Company, to the effect that the Shares or the Warrant, as the case may be, may be sold or otherwise transferred without registration under the Securities Act of 1933, as amended (the “Act”).  Upon any transfer of this Warrant or any part thereof in accordance with the first sentence of this Section 3(a), the Company shall issue, in the name or names specified by the Holder (including the Holder), a new Warrant or Warrants of like tenor (including all substantive provisions hereof) and representing in the aggregate rights to purchase the same number of Shares as are purchasable hereunder at such time.

 

(b)           Any attempted transfer of this Warrant or any part thereof in violation of this Section 3 shall be null and void ab initio.

 

(c)           This Warrant may not be exercised and neither this Warrant nor any of the Shares, nor any interest in either, may be offered, sold, assigned, pledged, hypothecated, encumbered or in any other manner transferred or disposed of, in whole or in part, except in compliance with applicable United States federal and state securities laws and the terms and conditions hereof.  Each Warrant shall bear a legend in substantially the same form as the legend set forth on the first page of this Warrant.  Each certificate for Shares issued upon exercise of this Warrant, unless at the time of exercise such Shares are acquired pursuant to a registration statement that has been declared effective under the Act and applicable blue sky laws, shall bear a legend substantially in the following form:

 

	  	
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM.  SMOKY MARKET FOODS, INC. MAY REQUIRE AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT THAT A PROPOSED TRANSFER OR SALE IS IN COMPLIANCE WITH THE ACT.

	  

 

Any certificate for any Shares issued at any time in exchange or substitution for any certificate for any Shares bearing such legend (except a new certificate for any Shares issued after the acquisition of such Shares pursuant to a registration statement that has been declared effective under the Act) shall also bear such legend unless, in the opinion of counsel for the Company, the Shares represented thereby need no longer be subject to the restriction contained herein.  The provisions of this Section 3(c) shall be binding upon all subsequent holders of certificates for Shares bearing the above legend and all subsequent holders of this Warrant, if any.

 

4.           Shares to be Fully Paid.  The Company covenants and agrees that all Shares which may be purchased hereunder will, upon issuance and delivery against payment therefor of the requisite purchase price, be duly and validly issued, fully paid and nonassessable.

 

5.           No Voting or Dividend Rights.  The Warrant shall not entitle the Holder to any voting rights or any other rights, including without limitation notice of meetings of other actions or receipt of dividends or other distributions, as a stockholder of the Company.

 

  

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6.           Adjustment of Exercise Price.   The Exercise Price in effect at the time and the number and kind of securities purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the happening of certain events as follows:

 

(a)           In case the Company shall (i) declare a dividend or make a distribution on its outstanding Common Stock in Common Stock, (ii) subdivide or reclassify its outstanding Common Stock into a greater number of shares, (iii) combine or reclassify its outstanding Common Stock into a smaller number of shares, or (iv) enter into any transaction whereby the outstanding Common Stock of the Company are at any time changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation through reorganization, merger, consolidation, liquidation or recapitalization, then appropriate adjustments in the number of Shares (or other securities for which such Shares have previously been exchanged or converted) subject to this Warrant shall be made and the Exercise Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination, reclassification, reorganization, merger, consolidation, liquidation or recapitalization shall be proportionately adjusted so that the Holder of this Warrant exercised after such date shall be entitled to receive the aggregate number and kind of shares or other securities which, if this Warrant had been exercised by such Holder immediately prior to such date, the Holder would have been entitled to receive upon such dividend, distribution, subdivision, combination, reclassification, reorganization, merger, consolidation, liquidation or recapitalization. For example, if the Company declares a 2 for 1 stock subdivision (forward split) and the Exercise Price hereof immediately prior to such event was $7.00 per Share and the number of Shares issuable upon exercise of this Warrant was 85,500, the adjusted Exercise Price immediately after such event would be $3.50 per Share and the adjusted number of Shares issuable upon exercise of this Warrant would be 171,000. Such adjustment shall be made successively whenever any event listed above shall occur.

 

(b)           In the event that at any time, as a result of an adjustment made pursuant to the provisions of this Section 6, the Holder of the Warrant thereafter shall become entitled to receive any shares of the Company other than Common Stock, thereafter the number of such other shares so receivable upon exercise of the Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Sections 6(a)  above.

 

7.           Governing Law.  This Agreement shall be governed by and in accordance with the laws of the State of Nevada without regard to conflicts of laws principles thereof.

 

8.           Binding Effect on Successors.  In case of any consolidation of the Company with, or merger of the Company into, any other entity, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company at any time prior to the Expiration Date, then as a condition of such consolidation, merger or sale or conveyance, the Company shall give written notice of consolidation, merger, sale or conveyance to the Holder and, from and after the effective date of such consolidation, merger, sale or conveyance the Warrant shall represent only the right to receive the consideration that would have been issuable in respect of the Shares underlying the Warrant in such consolidation, merger, sale or conveyance had the Warrant been exercised in full immediately prior to such effective time and the Holder shall have no further rights under this Warrant other than the right to receive such consideration.

 

9.           Fractional Shares.  No fractional shares shall be issued upon exercise of this Warrant.  The Company shall, in lieu of issuing any fractional share, pay the holder entitled to such fraction a sum in cash equal to such fraction multiplied by the then effective Exercise Price.

 

10.           Lost Warrants.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an affidavit of loss and indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant, the Company, at its expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.

 

 

  

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11.           Headings.  The headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

 

12.           Modification and Waiver.  This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officers under its corporate seal.

 

Smoky Market Foods, Inc.

 

By: /s/ Edward Feintech      

Edward Feintech, Chief Executive Officer

 

 

 

  

4smoky_8k-ex1001.htm

 

	
  

	
Exhibit 10.1

SMOKY MARKET FOODS, INC.

NOTE AND WARRANT PURCHASE AGREEMENT

THIS NOTE AND WARRANT PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of March 5, 2010 by and between Smoky Market Foods, Inc., a Nevada corporation (the “Company”), and 70 Limited LLC, a limited liability company  (the “Investor”). 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 secured promissory note substantially in the form, and with the terms, attached hereto as Exhibit A in the principal amount of $150,000 (the “Note”), and (ii) warrants to purchase 450,000 shares of common stock of the Company substantially in the form, and with the terms, attached hereto as Exhibit B (the “Warrants”; together with the Note, the “Securities”). The purchase price for the Securities shall be the principal amount of the Note (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.  The Company will execute a security agreement in a form mutually satisfactory to the Company and the Investor to secure the Company’s obligations under the Note.

(b)      Closing. The closing (the “Closing”) of the purchase and sale of the Securities shall take place on a date within three (3) business days 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, duly executed and made out in favor of Investor.  Within five (5) business days of the Closing, the Company shall cause the original Note and Warrants 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).

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.

 

  

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(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.

(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 September 30, 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 Warrants):

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 Warrant, 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, by any person:

i.      The approximate or exact length of time that Investor will be required to remain a security holder of the Company;

ii.      The percentage of profit and/or amount of or type of consideration, profit or loss to be realized, if any, as a result of an investment in the Company; or

 

 

  

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iii.      The possibility that the past performance or experience on the part of the Company or any affiliate, or any officer, director, employee, or agent of the foregoing, might in any way indicate or predict the results of ownership of the Securities or the potential success of the Company’s operations.

(k)      Investor represents that he or she has read and considered fully the sections in the Disclosure Document identifying risk factors and investment considerations and understands that (i) any investment in the Securities is highly speculative and is subject to a high degree of risk, and (ii) there are substantial restrictions on the transferability of the Securities, and it may be impossible to liquidate an investment in the Securities in case of an emergency.

 

(l)      Investor acknowledges and agrees that a UCC financing statement will be filed with respect to Investor’s security interest in any collateral, including the Company’s equipment and the Company’s interest in a restaurant lease, described therein.  The security instrument will not be recorded in the office of any county recorder or similar office, and the Investor will not have a perfected security interest in any real property or other property for which such a recording or filing must be made to perfect or give notice of such security interest.

3.      Indemnification: Investor acknowledges that Investor understands the meaning and legal consequences of the representations and warranties set forth in Section 2 hereof and that the Company and the officers, directors, employees, and agents of the Company have relied and will rely upon such representations and warranties. Investor hereby agrees to indemnify and hold harmless the Company and each of its officers, directors, employees, and agents from and against any and all loss, claim, damage, liability, cost, or expense (including attorneys’ fees), joint or several, to which any such person may become subject due to or arising out of:

(a)      Any breach by Investor of any representation or warranty set forth in Section 2 above;

(b)      Any inaccuracy in the representations and warranties set forth in Section 2 above;

(c)      The disposition of any of the Securities by Investor contrary to the representations and warranties set forth in Section 2 above; and

(d)      Any action, suit, proceeding, demand, assessment, or judgment incident to or based upon any of the matters indemnified against.

Notwithstanding the foregoing, however, no representation, warranty, acknowledgement or agreement made herein by Investor shall in any manner be deemed to constitute a waiver of any rights granted to him under federal or state securities laws.

4.      Representations and Warranties of the Company: The Company represents and warrants to Investor that as of the date hereof:

(a)      The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has all requisite corporate power and lawful authority to own, lease and operate its assets, properties and business and to carry on its business as now being conducted.

(b)      The Company has the legal right and power and all authority necessary to accept and execute this Agreement, to issue and deliver the Securities, and to perform fully its obligations hereunder. This Agreement has been duly authorized and, upon proper acceptance and execution by an officer of the Company, will constitute a valid and binding agreement of the Company enforceable against it in accordance with its terms, except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or other laws affecting the enforcement of creditors’ rights generally and by principles of equity regarding the availability of remedies.

(c)      No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Agreement, except for qualifications or filings required under the Securities Act, the Securities Exchange Act and under state securities laws and stock exchange or stock quotation service regulations.

(d)      When issued, sold and delivered in accordance with the terms of the Warrants, the shares of common stock issuable thereunder will be duly and validly issued, fully-paid and nonassessable.

 

  

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(e)      The Company acknowledges that Investor will rely on the foregoing representations and warranties of the Company, and the Company hereby agrees to indemnify and hold harmless Investor from and against any and all loss, claim, damage, liability, or expense and any action in respect thereof to which Investor may become subject as a direct result of a breach by the Company of any such representations or warranties together with all reasonable costs and expenses (including attorneys’ fees) incurred by Investor in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against.

5.      Non-Transferability: Investor agrees not to transfer or assign this Agreement or any of his interest herein.

6.      Entire Agreement: This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof, supersedes any and all prior agreements and understandings of the parties, and may be amended only by a writing executed by all parties. No covenant, representation or condition not expressed in this Agreement shall affect or be deemed to interpret, change, or restrict the express provisions hereof.

7.      Expenses: Each of the Company and Investor will bear his/her/its own legal and other fees and expenses in connection with the transactions contemplated in this Agreement.

8.      Governing Law: This Agreement shall be governed and construed for all purposes in accordance with the laws (without giving effect to the principles governing conflicts of laws) of the State of Nevada. The parties hereby subject themselves to the jurisdiction of the federal and state courts located within the State of Nevada and agree that the exclusive venue and place of jurisdiction for any lawsuit arising under or related to this Agreement shall be the State of Nevada.

9.      Notices: Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery, on the date of receipt if sent by telecopier or overnight courier, charges prepaid, or five days after deposit in the United States mail, by registered or certified mail, postage prepaid, addressed (a) if to the Company, as set forth below the Company’s name on the signature page of this Agreement, and (b) if to Investor, at Investor’s address as set forth below Investor’s name on the signature page of this Agreement, or at such other address as the Company or Investor may designate by ten (10) days’ advance written notice to Investor or the Company, respectively.

10.      Survival of Representations and Warranties: The representations and warranties of the parties contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and Closing; provided, however, that such representations and warranties are only made as of the date of such execution and delivery and as of such Closing.

11.      Amendments: Any term or provision of this Agreement may be amended and the observance of any term, condition, or provision of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by a written instrument signed by the Company and Investor.

12.      Severability: If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were excluded and shall be enforceable in accordance with its terms.

13.      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.  A facsimile copy of this Agreement, or any counterpart hereto, shall be valid as an original.

14.      Headings / Gender: The headings of the Sections of this Agreement are for convenience and shall not by themselves determine the interpretation of this Agreement. Any masculine, feminine or neuter term in this Agreement shall be deemed to include each of the masculine, feminine and neuter gender.

15.      Incorporation by Reference: All statements, representations and other information set forth on the signature page hereof and all attachments and exhibits hereto are incorporated herein as integral terms of this Agreement.

 

 

  

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IN WITNESS WHEREOF, the parties hereto have executed or caused this Smoky Market Foods, Inc. Note and Warrant Purchase Agreement to be executed by their duly authorized representatives as of the date first written above.

 

 

“Company”

SMOKY MARKET FOODS, INC.,

a Nevada corporation

By:  /s/ Edward Feintech      

Edward Feintech, its CEO

Address:

804 Estates Dr., Suite 100

Aptos, California 95003

Fax: (831) 685-4782

“Investor”

70 Limited LLC

/s/               

By: 

Title:  _______________________________

 

Address:

3554 Wild Cherry Court

Las Vegas, NV

Fax: (702) 898-1974

 

 

 

  

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