Document:

Registration Rights Agreement

 Exhibit 4(b) 
 REGISTRATION RIGHTS AGREEMENT 
 REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of June 22, 2006, by and among Universal Food & Beverage Company, a Nevada corporation, with headquarters located at 3830 Commerce Drive, St. Charles, Illinois 60174
(the ”Company”), and the undersigned buyers (each, a “Buyer”, and collectively, the “Buyers”). 
 WHEREAS: 
 A. In connection with the Securities Purchase Agreement by and among the parties hereto of
even date herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement, (A) to issue and sell, at a Closing (as defined in
the Securities Purchase Agreement), to each Buyer (i) senior secured convertible notes of the Company (the “ Notes”) which will, among other things, be convertible into shares of the Company’s common stock, $0.01 par value
per share (the “Common Stock”) (as converted, the “Conversion Shares”), in accordance with the terms of the Notes, and (ii) warrants (the “Warrants”) which will be exercisable to purchase
shares of Common Stock (as exercised collectively, the “Warrant Shares”). 
 B. To induce the Buyers to execute and deliver
the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the
“1933 Act”), and applicable state securities laws. 
 NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows: 
 1. Definitions. 
 Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
 a. “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are
authorized or required by law to remain closed. 
 b. “Closing Date” shall have the meaning set forth in the Securities
Purchase Agreement. 
 c. “Effective Date” means the date that the Registration Statement has been declared effective by the
SEC. 

 d. “Effectiveness Deadline” means the date which is 90 days after the Company has filed
all delinquent filings required under the 1934 Act, which deadline for making such filings shall in no event be later than 270 days from the Closing Date (the “1934 Act Compliance Date”). 
 e. “Filing Deadline” means 30 days after the 1934 Act Compliance Date. 
 f. “Investor” means a Buyer or any transferee or assignee of the Notes or Warrants, as applicable, to whom a Buyer assigns its rights
under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9. 
 g. “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. 
 h. “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in
compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by the SEC. 
 i. “Registrable Securities” means (i) the Conversion Shares issued or issuable upon conversion of the Notes, (ii) the Warrant Shares issued or issuable upon exercise of the Warrants and (iii) any shares of
capital stock of the Company issued or issuable, with respect to the Conversion Shares, the Notes, the Warrant Shares and the Warrants as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on conversions of the Notes or exercises of the Warrants. 
 j. “Registration Statement” means a
registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities. 
 k.
“Required Holders” means the holders of at least 75% of the Registrable Securities. 
 l. “Required Registration
Amount” means 110% of the sum of (i) the maximum number of Conversion Shares issued and issuable pursuant to the Notes as of the trading day immediately preceding the applicable date of determination and (ii) the maximum number of
Warrant Shares issued and issuable pursuant to the Warrants as of the trading day immediately preceding the applicable date of determination, all subject to adjustment as provided in Section 2(e) (without regard to any limitations on conversion
of the Notes or exercise of the Warrants). 
 m. “Rule 415” means Rule 415 promulgated under the 1933 Act or any successor
rule providing for offering securities on a continuous or delayed basis. 
  

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 n. “SEC” means the United States Securities and Exchange Commission. 
 2. Registration. 
 a. Mandatory
Registration. The Company shall use its best efforts to prepare, and, as soon as practicable, but in no event later than the Filing Deadline, file with the SEC the Registration Statement on Form SB-2 covering the resale of all of the Registrable
Securities. The Registration Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the Required Registration Amount determined as of the date the Registration Statement is initially filed
with the SEC. The Registration Statement shall contain (except if otherwise directed by the Required Holders) the “Selling Shareholders” and “Plan of Distribution” sections in substantially the form attached hereto
as Exhibit B. The Company shall use its best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline. By 9:30 am on the Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement. 
 b. Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and any increase in
the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of
Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each transferee that becomes an Investor shall be allocated a
pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor. Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which
ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration
Statement. In no event shall the Company include any securities other than Registrable Securities and the Securities listed on Schedule 2(a) hereto on any Registration Statement without the prior written consent of the Required Holders.

 c. Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel to review
and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Schulte Roth & Zabel LLP or such other counsel as thereafter designated by the Required Holders. The Company and Legal Counsel
shall reasonably cooperate with each other in regards to the performance of the Company’s obligations under this Agreement. 
 d.
Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC, or if earlier, until the end of the Registration Period (as defined below).

  

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 e. Sufficient Number of Shares Registered. In the event the number of shares available under a
Registration Statement filed pursuant to Section 2(a) is insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated portion of the Registrable Securities
pursuant to Section 2(b), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least the Required Registration
Amount as of the trading day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor
arises. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. For purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under the Registration Statement is less than the product
determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90. The calculation set forth in the foregoing sentence shall be made without regard to any limitations on the conversion of the Notes or the exercise
of the Warrants and such calculation shall assume that the Notes are then convertible into shares of Common Stock at the then prevailing Conversion Rate (as defined in the Notes) and that the Warrants are then exercisable for shares of Common Stock
at the then prevailing Exercise Price (as defined in the Warrants). 
 f. Effect of Failure to File and Obtain and Maintain Effectiveness
of Registration Statement. If (i) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the Filing Deadline (a “Filing Failure”) or (B) not declared effective by the SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any day after the Effective Date
sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such Registration Statement (including,
without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register a sufficient number of shares of Common
Stock) (a “Maintenance Failure”) then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of
any other remedies available at law or in equity), the Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to three percent (3.0%) of the aggregate Purchase Price (as such
term is defined in the Securities Purchase Agreement) of such Investor’s Registrable Securities included in such Registration Statement on each of the following dates: (i) the day of a Filing Failure and on every thirtieth day (pro rated
for periods totaling less than thirty days) after a Filing Failure until such Filing Failure is cured; (ii) the day of an Effectiveness Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) after an
Effectiveness Failure until such Effectiveness Failure is cured; and (iii) the initial day of a Maintenance Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) after a Maintenance Failure until such 

  

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Maintenance Failure is cured. The payments to which a holder shall be entitled pursuant to this Section 2(f) are referred to herein as
“Registration Delay Payments.” Registration Delay Payments shall be paid on the day of the Filing Failure, Effectiveness Failure and the initial day of a Maintenance Failure, as applicable, and thereafter on the earlier of
(I) the thirtieth day after the event or failure giving rise to the Registration Delay Payments has occurred and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the
Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of two percent (2.0%) per month (prorated for partial months) until paid in full. Notwithstanding anything
herein or in the Securities Purchase Agreement to the contrary, (i) no Registration Delay Payments shall be due and payable with respect to the Warrants or the Warrant Shares and (ii) in no event shall the aggregate amount of Registration
Delay Payments (other than Registration Delay Payments payable pursuant to events that are within the control of the Company) exceed, in the aggregate, 10% of the aggregate Purchase Price of the Notes. 
 3. Related Obligations. 
 At such time
as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations: 
 a. The Company shall
promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use its reasonable best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as
practicable after such filing (but in no event later than the Effectiveness Deadline). The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which all of the
Investors (other than any Investors who are “affiliates” of the Company as such term is used in Rule 144(k) promulgated under the Securities Act) may sell all of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under the 1933 Act or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the
“Registration Period”). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. The Company shall submit to the SEC, within
two (2) Business Days after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration
Statement, as the case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c) (which approval is immediately sought), a request for acceleration of effectiveness of such Registration Statement to a time and date not later
than 48 hours after the submission of such request; provided however, the Company may delay the submission of the request for acceleration (or delay the effectiveness of such Registration Statement) for up to thirty (30) days if the Company has
material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Board of Directors of the 

  

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Company relying upon the opinion of counsel, in the best interests of the Company; provided, further however, that the Company shall promptly notify the
Investors in writing of the existence of material non-public information giving rise to a delay in effectiveness (provided that the Company shall not disclose the content of such material non-public information to the Investors); and provided
further that any delay by the Company in accordance with this sentence shall not affect the entitlement of a holder to any Registration Delay Payment determined in accordance with Section 2(f). 
 b. Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including post-effective amendments)
and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and
supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-Q and Form 10-QSB, Form 10-K and Form 10-KSB or any
analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement. 
 c. The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at least five (5) Business Days
prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K and Form 10-KSB, Quarterly Reports on Form 10-Q and 10-QSB, Current Reports on Form 8-K, and any
similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel reasonably objects. The Company
shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall
furnish to Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and
filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon
the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations pursuant to this Section 3. 
  

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 d. The Company shall furnish to each Investor whose Registrable Securities are included in any
Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents
incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may
reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor. 
 e.
Subject to Section 3(r) of this Agreement, the Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable
Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject
itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for such purpose. 
 f. The Company shall notify Legal Counsel
and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice
contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission and deliver ten (10) copies of such
supplement or amendment to Legal Counsel and each Investor (or such other number of copies as Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and
each Investor by facsimile or e-mail on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for 

  

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amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would be appropriate (subject to Section 3(r) hereof). 
 g.
Subject to Section 3(r), the Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose. 
 h. If any Investor is required under applicable securities law to be described in the Registration Statement as an underwriter, at the reasonable request
of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date,
from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

 i. Upon the written request of any Investor in connection with any Investor’s due diligence requirements, if any, the Company shall
make available for inspection by (i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to
supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in
such Records has been made generally available to the public other than by disclosure in violation of this or any other Transaction Document. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a
court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations. 
  

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 j. The Company shall hold in confidence and not make any disclosure of information concerning an Investor
provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information. 
 k. The Company shall use its best efforts either to (i) cause all of the Registrable
Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) secure designation and quotation of all of the Registrable Securities covered by a Registration Statement on The Nasdaq National Market, or (iii) if, despite the Company’s best efforts to
satisfy the preceding clauses (i) and (ii) the Company is unsuccessful in satisfying the preceding clauses (i) and (ii), to secure the inclusion for quotation on The Nasdaq Capital Market or the American Stock Exchange for such
Registrable Securities and, without limiting the generality of the foregoing, to use its best efforts to arrange for at least two market makers to register with the National Association of Securities Dealers, Inc. (“NASD”) as such
with respect to such Registrable Securities. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k). 
 l. The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request. 
 m. If requested by an Investor, the Company shall as soon as practicable after
receipt of notice from such Investor and subject to Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale
and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities. 
  

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 n. The Company shall use its best efforts to cause the Registrable Securities covered by a Registration
Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. 
 o. The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of the Registration Statement. 
 p. The Company shall otherwise use its best efforts to
comply with all applicable rules and regulations of the SEC in connection with any registration hereunder. 
 q. Within two (2) Business
Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A. 
 r. Notwithstanding anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required
(a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will
not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed five (5) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of twenty (20) days and the first day of any Grace Period must be at
least two (2) trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date
the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of
Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving
rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in
accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part of
the applicable Registration Statement (unless an exemption from such prospectus delivery requirement exists), prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled. 
  

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 4. Obligations of the Investors. 
 a. At least five (5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor in
writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations
of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents
in connection with such registration as the Company may reasonably request. 
 b. Each Investor, by such Investor’s acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of
such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement. 
 c. Each
Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of 3(f) or
receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first sentence of 3(f) and for which the Investor has not yet settled. 
 d. Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the
Registration Statement. 
 5. Expenses of Registration. 
 All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall also reimburse the Investors for the fees and disbursements of Legal
Counsel in connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000. 
  

 11 

 6. Indemnification. 
 In the event any Registrable Securities are included in a Registration Statement under this Agreement: 
 a.
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls
any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts
paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before
any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading,
(iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the
Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such 

  

 12 

 
indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer
of the Registrable Securities by the Investors pursuant to Section 9. 
 b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any
of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any legal or other
expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the
untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. 
 c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a
Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory
to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding; provided
further, that the indemnifying party 

  

 13 

 
shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified
Party. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a 66 2/3% of the Registrable Securities included in the Registration Statement to which
the Claim relates. The Indemnified Party or Indemnified Person shall cooperate reasonably with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times
as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation,
and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such
action. 
 d. No Person involved in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) in connection with such sale shall be entitled to indemnification from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent misrepresentation. 
 e. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred. 
 f. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

 7. Contribution. 
 To
the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable 

  

 14 

 
Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale
shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to
the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement. 
 8. Reports Under the 1934 Act. 
 With a view to making available to the Investors the benefits of Rule 144 promulgated under
the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), from and after the earlier of (i) the
1934 Act Compliance Date and (ii) the one year anniversary of the Closing Date, the Company agrees to: 
 a. make and keep public
information available, as those terms are understood and defined in Rule 144; 
 b. file with the SEC in a timely manner all reports and
other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s obligations under Section 4(c) of
the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and 
 c. furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration. 
 9. Assignment of Registration Rights. 
 The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such Investor’s
Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer
shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement; and (vi) such transfer shall have been conducted in accordance with all applicable federal and state securities laws. 
  

 15 

 10. Amendment of Registration Rights. 
 Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment
shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to this Agreement. 
 11. Miscellaneous. 
 a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the record owner of such
Registrable Securities. 
 b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be: 
 If to the Company: 
 Universal Food & Beverage Company 
 3830 Commerce Drive 
 St. Charles, Illinois 60174 
 Telephone: (630) 584-8670 
 Facsimile: (630) 584-8674 
 Attention: Chief Executive Officer 
 With a
copy (for informational purposes only) to: 
 Holland & Knight, LLP 
 One MidAmerica Plaza, Suite 1000 
 Oakbrook
Terrace, IL 60133 
 Telephone: (630) 954-2100 
 Facsimile: (630) 954-2112 
 Attention: Carl A. Neumann, Esq. 
  

 16 

 If to the Transfer Agent: 
 Interwest Transfer Co., Inc. 
 1981 East 4800 South, Suite 100 
 Salt Lake City, UT 84117 
 Telephone:
(801) 272-9294 
 Facsimile: (801) 277-3147 
 Attention: Melina Orth 
 If to Legal Counsel: 
 Schulte Roth & Zabel LLP 
 919
Third Avenue 
 New York, New York 10022 
 Telephone: (212) 756-2000 
 Facsimile: (212) 593-5955 
 Attention: Eleazer N. Klein, Esq. 
 If to a Buyer, to its
address and facsimile number set forth on the Schedule of Buyers attached hereto, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of
such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by
a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively. 
 c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof. 
 d. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan,
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any 

  

 17 

 
way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

e. This Agreement, the other Transaction Documents (as defined in the Securities Purchase Agreement) and the instruments referenced herein and therein
constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This
Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. 
 f. Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto. 
 g. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. 
 h. This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this
Agreement. 
 i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby. 
 j. All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless
otherwise specified in this Agreement, by the Required Holders. 
 k. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party, determined as if all of the Notes held by Investors then outstanding have been converted into Registrable Securities and all
Warrants then outstanding have been exercised for Registrable Securities without regard to any limitations on conversion of the Notes or on exercises of the Warrants. 
  

 18 

 l. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 m. The obligations
of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein,
and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions contemplated herein. 
 * * * * * * 
  

 19 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written above. 
  

			
	 COMPANY:
  
 UNIVERSAL FOOD & BEVERAGE COMPANY

		
	By:	 	 /s/ August J. Liguori

	Name:	 	August J. Liguori
	Title:	 	Chief Executive Officer
	  
  
 [BUYERS’ SIGNATURES]

  

 1 

 EXHIBIT A 
 FORM OF NOTICE OF EFFECTIVENESS 
 OF REGISTRATION STATEMENT 
 Interwest Transfer Co., Inc. 
 1981 East 4800 South, Suite 100 
 Salt Lake City, UT 84117 
 Attention:  Melina Orth 
  

	 	Re:	Universal Food & Beverage Company 

 Ladies and Gentlemen:

 [We are][I am] counsel to Universal Food & Beverage Company, a Nevada corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into by and among the Company and the buyers named therein (collectively, the
“Holders”) pursuant to which the Company issued to the Holders senior secured convertible notes (the “Notes”) convertible into the Company’s common stock, $0.01 par value (the ”Common
Stock”) and warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the
“Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issuable upon
conversion of the Notes and the shares of Common Stock issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on                     , 200  , the Company filed a Registration Statement on Form SB-2 (File
No. 333-                    ) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders as a selling shareholder thereunder. 
 In
connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. 
 This letter shall serve as our standing instruction to you that the shares of Common Stock are freely transferable by the Holders pursuant to the
Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
June 22, 2006. 
  

			
	Very truly yours,
	
	[ISSUER’S COUNSEL]
		
	By:	 	  

  

	CC:	[LIST NAMES OF HOLDERS] 

  

 2 

 EXHIBIT B 
 SELLING SHAREHOLDERS 
 The shares of Common Stock being offered by the selling shareholders are
issuable upon conversion of the convertible notes and upon exercise of the warrants. For additional information regarding the issuance of those convertible notes and warrants, see “Private Placement of Convertible Notes and Warrants”
above. We are registering the shares of Common Stock in order to permit the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the Convertible Notes and the Warrants issued pursuant to the Securities
Purchase Agreement to our knowledge, the selling shareholders have not had any material relationship with us within the past three years. 
 The table below lists the selling shareholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the selling shareholders. The second column lists the number of shares of Common Stock
beneficially owned by each selling shareholder, based on its ownership of the convertible notes and warrants, as of                     ,
200  , assuming conversion of all convertible notes and exercise of the warrants held by the selling shareholders on that date, without regard to any limitations on conversions or exercise. 
 The third column lists the shares of Common Stock being offered by this prospectus by the selling shareholders. 
 In accordance with the terms of a registration rights agreement with the selling shareholders, this prospectus generally covers the resale of at least
110%, of the sum of (i) the number of shares of Common Stock issuable upon conversion of the convertible notes (and the interest accrued and payable thereunder) as of the trading day immediately preceding the date the registration statement is
initially filed with the SEC, (ii) the number of shares of Common Stock issuable upon exercise of the related warrants as of the trading day immediately preceding the date the registration statement is initially filed with the SEC and
(iii) the number of shares of Common Stock issued or issuable pursuant to the term of the applicable convertible notes as of the trading day immediately preceding the date the registration statement is initially filed with the SEC.
Because the conversion price of the convertible notes and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The
fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus. 
 Under the terms of
the convertible notes and the warrants, a selling shareholder may not convert the convertible notes or exercise the warrants to the extent such conversion or exercise would cause such selling shareholder, together with its affiliates, to
beneficially own a number of shares of Common Stock which would exceed 9.99% of our then outstanding shares of Common Stock following such conversion or exercise, excluding for purposes of such determination shares of Common Stock issuable upon
conversion of the convertible notes which have not been converted and upon exercise of the warrants which have not been exercised. The number of shares in the second column does not reflect this limitation. The selling shareholders may sell all,
some or none of their shares in this offering. See “Plan of Distribution.” 
  

 3 

							
	 Name of Selling Stockholder
	 	 Number of Shares of
 Common Stock Owned
 Prior to
Offering
	 	 Maximum Number of Shares
 of Common Stock to be Sold
Pursuant to this Prospectus
	 	 Number of Shares of
 Common Stock Owned
 After
Offering

	 [Buyers]
	 		 		 	

  

 1 

 PLAN OF DISTRIBUTION 
 We are registering the shares of Common Stock issuable upon conversion of the convertible notes and upon exercise of the warrants to permit the resale of these shares of Common Stock by the holders of the convertible
notes and warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the shares of Common Stock. We will bear all fees and expenses incident to our obligation to
register the shares of Common Stock. 
 The selling shareholders may sell all or a portion of the shares of Common Stock beneficially owned
by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for
underwriting discounts or commissions or agent’s commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of
sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, 
  

	 	•	 	on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; 

  

	 	•	 	in the over-the-counter market; 

  

	 	•	 	in transactions otherwise than on these exchanges or systems or in the over-the-counter market; 

  

	 	•	 	through the writing of options, whether such options are listed on an options exchange or otherwise; 

  

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	 	privately negotiated transactions; 

  

	 	•	 	short sales; 

  

	 	•	 	sales pursuant to Rule 144; 

  

 2 

	 	•	 	broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	 	a combination of any such methods of sale; and 

  

	 	•	 	any other method permitted pursuant to applicable law. 

 If the selling shareholders effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholders or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the selling shareholders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of Common Stock short and deliver shares of Common Stock covered
by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may sell such shares.

 The selling shareholders may pledge or grant a security interest in some or all of the convertible notes or warrants or shares of Common
Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under
this prospectus. The selling shareholders also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for
purposes of this prospectus. 
 The selling shareholders and any broker-dealer participating in the distribution of the shares of Common
Stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under
the Securities Act. At the time a particular offering of the shares of Common Stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of Common Stock being offered and the terms of
the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or reallowed or paid
to broker-dealers. 
 Under the securities laws of some states, the shares of Common Stock may be sold in such states only through registered
or licensed brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is
complied with. 
  

 3 

 There can be no assurance that any selling shareholder will sell any or all of the shares of Common Stock
registered pursuant to the shelf registration statement, of which this prospectus forms a part. 
 The selling shareholders and any other
person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of Common Stock by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of
Common Stock to engage in market-making activities with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock. 
 We will pay all expenses of the registration of the shares of Common Stock pursuant
to the registration rights agreement, estimated to be $[            ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreement, or we may be entitled
to contribution. 
 Once sold under the registration statement, of which this prospectus forms a part, the shares of Common Stock will be
freely tradable in the hands of persons other than our affiliates. 
  

 4Securities Purchase Agreement

 Exhibit 10(a) 
 SECURITIES PURCHASE AGREEMENT 
 SECURITIES PURCHASE AGREEMENT (the
“Agreement”), dated as June 22, 2006, by and among Universal Food & Beverage Company, a Nevada corporation, with headquarters located at 3830 Commerce Drive, St. Charles, Illinois 60174
(the ”Company”), and the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”). 
 WHEREAS: 
 A. The Company and each
Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D
(“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act. 
 B. The Company has authorized a new series of senior secured convertible notes of the Company, which Notes shall be convertible into the Company’s common stock, $0.01 par value per share (the “Common
Stock”), in accordance with the terms of the Notes. 
 C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, (i) at the Closing (as defined below) Notes in substantially the form attached hereto as Exhibit A, in an aggregate principal amount as set forth opposite such Buyer’s name in column
(3) on the Schedule of Buyers attached hereto (which aggregate amount for all Buyers shall be $3,150,000) (the “Notes”) (the Notes as converted, collectively, the “Conversion Shares”) and (ii) warrants in
substantially the form attached hereto as Exhibit B (the “Warrants”), to acquire up to that number of additional shares of Common Stock set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers
(as exercised, collectively, the “Warrant Shares”). 
 D. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company will
agree to provide certain registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement) under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

 E. The Notes, the Conversion Shares, the Warrants and the Warrant Shares are collectively are referred to herein as the
“Securities”. 
 F. The Notes will rank senior to all outstanding and future indebtedness of the Company, subject to
Permitted Indebtedness (as defined in the Notes) and will be secured by a perfected security interest in all of the assets of the Company (subject only to the security interest granted in connection with Existing Indebtedness) and the stock and
assets of each of the 

 
Company’s Subsidiaries (as defined below), as evidenced by the pledge agreement attached hereto as Exhibit D (the “Pledge
Agreement”) and the Security Agreement attached hereto as Exhibit E (the “Security Agreement”) and the guarantee from each Subsidiary in the form attached hereto as Exhibit F (the
“Guarantees”, and together with the Pledge Agreement and the Security Agreement, collectively the “Security Documents”). 
 NOW, THEREFORE, the Company and each Buyer hereby agree as follows: 
 1. PURCHASE AND SALE
OF NOTES AND WARRANTS. 
 (a) Notes and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections
6(a) and 7(a) below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below), (x) a principal amount of Notes, as is set forth
opposite such Buyer’s name in column (3) on the Schedule of Buyers and (y) Warrants to acquire up to that number of Warrant Shares as is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers (the
“Closing”). 
 (b) Closing. The Closing shall occur at the offices of Schulte Roth & Zabel LLP, 919 Third
Avenue, New York, New York 10022. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York City time, on the date hereof, subject to notification of satisfaction (or waiver) of the conditions to the
Closing set forth in Sections 6 and 7 below (or such later date as is mutually agreed to by the Company and each Buyer). As used herein, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized or required by law to remain closed. 
 (c) Purchase Price. The purchase price for each Buyer
(the “Purchase Price”) of the Notes to be purchased by each such Buyer at each Closing shall be equal to $1.00 for each $1.00 of principal amount of Notes being purchased by such Buyer at such Closing. 
 (d) Form of Payment. On the Closing Date, (A) each Buyer shall pay its aggregate Purchase Price to the Company for the Notes and the Warrants
to be issued and sold to such Buyer at such Closing, (i) by wire transfer of immediately available funds in accordance with the Company’s written wire instructions or (ii) by exchange of bridge notes issued by the Company to one or
more of the Buyers on or after June 1, 2006 and prior to the date hereof and (B) the Company shall deliver to each Buyer the Notes (in such principal amount as such Buyer shall request), along with the Warrants (in the ), each duly
executed on behalf of the Company and registered in the name of such Buyer or its designee. 
 2. BUYER’S REPRESENTATIONS AND
WARRANTIES. 
 Each Buyer represents and warrants with respect to only itself that: 
 (a) Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. 
  

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 (b) No Public Sale or Distribution. Such Buyer is acquiring the Notes and the Warrants and upon
conversion of the Notes and exercise of the Warrants (other than pursuant to a Cashless Exercise (as defined in the Warrants)) will acquire the Conversion Shares issuable upon conversion of the Notes and the Warrant Shares issuable upon exercise of
the Warrants, in each case, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; provided, however, that by
making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities. 
 (c) Accredited Investor Status. Such Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D. 
 (d) Reliance on Exemptions. Such Buyer understands that the Securities are being offered
and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with,
the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities. 
 (e) Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor
any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations and warranties contained herein. Such
Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its
acquisition of the Securities. 
 (f) No Governmental Review. Such Buyer understands that no United States federal or state agency or
any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of
the offering of the Securities. 
 (g) Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights
Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder,
(B) such Buyer shall have delivered to the Company an opinion of counsel, by counsel reasonably acceptable to the Company and in form and substance reasonably satisfactory to the Company, to the effect that such Securities to 

  

 - 3 - 

 
be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the
Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”);
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the
Person (as defined in Section 3(s)) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of
the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
The Securities may be pledged pursuant to an available exemption from registration under the 1933 Act in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section 2(g). 
 (h) Legends. Such Buyer understands that the certificates or other instruments representing the Notes and the Warrants and, until such time as the resale of the Conversion Shares and the Warrant Shares have been registered under the
1933 Act as contemplated by the Registration Rights Agreement, the stock certificates representing the Conversion Shares and the Warrant Shares, except as set forth below, shall bear any legend as required by the “blue sky” laws of any
state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates): 
 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 or RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 
  

 - 4 - 

 The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder
of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder
provides the Company with an opinion of counsel, by counsel reasonably acceptable to the Company (with Schulte Roth & Zabel LLP and Feldman Weinstein & Smith LLP being deemed acceptable) and in form and substance reasonably
satisfactory to the Company, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the 1933 Act, or (iii) such holder provides the Company with reasonable
assurance that the Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A. 
 (i) Validity; Enforcement.
This Agreement, the Registration Rights Agreement and the Security Documents to which such Buyer is a party have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding
obligations of such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 
 (j) No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and the Security Documents to which such Buyer is a party and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder. 
 (k) Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers. 
 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 
 The Company represents and warrants to each of the Buyers
that: 
 (a) Organization and Qualification. The Company and its “Subsidiaries” (which for purposes of this Agreement
means any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest) are entities duly organized and validly existing in good standing under the laws of the jurisdiction in which they
are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which 

  

 - 5 - 

 
its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of
operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, or on the transactions contemplated hereby and by the other Transaction Documents or by the agreements and instruments to be entered
into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under the Transaction Documents (as defined below). The Company has no Subsidiaries, except as set forth on Schedule 3(a).
Universal Food and Beverage Company, the Company’s Subsidiary incorporated in the State of Delaware (the “Delaware Subsidiary”), owns no more than $500 in assets and has no more than $500 in liabilities and the Company hereby
covenants and agrees that it will cause the Delaware Subsidiary not to transact any business or operations other than its liquidation and dissolution. 
 (b) Authorization; Enforcement; Validity. Except as set forth on Schedule 3(b), the Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement,
the Notes, the Warrants, the Registration Rights Agreement, the Security Documents, the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)), and each of the other agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof and thereof. Except as set forth on Schedule 3(b), the execution and
delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes, the reservation for issuance and the issuance of
the Conversion Shares issuable upon conversion of the Notes, the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants, and the granting of a security interest in the
Collateral (as defined in the Security Documents) have been duly authorized by the Company’s Board of Directors and (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement and any other filings as may be required by any state securities agencies) no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. 
 (c) Issuance of Securities. Except as set forth on Schedule 3(c), the issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the terms of the Transaction Documents shall be free from
all taxes, liens and charges with respect to the issue thereof. As of the applicable Closing, the Company shall have reserved from its duly authorized capital stock not less than the sum of 110% of the maximum number of shares of Common Stock
issuable (i) upon conversion of the Notes issuable at such Closing and issued in any prior Closing (assuming for purposes hereof, that the Notes are convertible at the Conversion 

  

 - 6 - 

 
Price and without taking into account any limitations on the conversion of the Notes set forth in the Notes) and (ii) upon exercise of the Warrants
issuable at such Closing and issued in any prior Closing (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants). Upon issuance or conversion in accordance with the Notes or exercise in accordance with
the Warrants, as the case may be, the Conversion Shares and the Warrant Shares, respectively, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations and warranties of the Buyers set forth in Section 2 of this Agreement, the offer and issuance by
the Company of the Securities is exempt from registration under the 1933 Act. 
 (d) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the Warrants and reservation for issuance
and the issuance of the Conversion Shares and the Warrant Shares) and the granting of a security interest in the Collateral will not (i) result in a violation of the Certificate of Incorporation (as defined in Section 3(r)) of the Company
or any of its Subsidiaries, any capital stock of the Company or Bylaws (as defined in Section 3(r)) of the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the OTC Bulletin Board (the “Principal Market”) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected. 
 (e)
Consents. Except as disclosed on Schedule 3(e), neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or
any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof,
except for the following consents, authorizations, orders, filings and registrations (none of which is required to be filed or obtained before the applicable Closing): (i) the filing of appropriate UCC financing statements with the appropriate
states and other authorities pursuant to the Pledge and Security Agreement, (ii) the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement and (iii) the filing
of a listing application for the Conversion Shares and Warrant Shares with the Principal Market, which shall be done pursuant to the rules of the Principal Market. The Company and its Subsidiaries are unaware of any facts or circumstances that might
prevent the Company from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. The Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts
that would reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. 
  

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 (f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer is (i) an officer or director of the
Company, (ii) an “affiliate” of the Company (as defined in Rule 144 of the 1933 Act) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based
solely on the independent evaluation by the Company and its representatives. 
 (g) No General Solicitation; Placement Agent’s
Fees. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale
of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by any Buyer or its investment advisor) relating to or
arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim. The Company has not engaged any placement agent or other agent in connection with the sale of the Securities. 
 (h)
No Integrated Offering. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of any of the Securities under the 1933 Act or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated, which in any case, would require registration
of any of the Securities under the 1933 Act. None of the Company, its Subsidiaries, their affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of
the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings. 
 (i) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Notes, and, the Warrant Shares issuable upon exercise of the Warrants will increase in certain circumstances. The Company
further acknowledges that its obligation to issue Conversion Shares upon conversion of the Notes in accordance with this Agreement and the Notes and its obligation to issue the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company. 
  

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 (j) Application of Takeover Protections; Rights Agreement. The Company and its Board of Directors
have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of
the Securities and any Buyer’s ownership of the Securities. The Company has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.

 (k) SEC Documents; Financial Statements. Except as set forth on Schedule 3(k), during the two (2) years prior to the
date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and
all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Buyers or
their respective representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system that have been requested by each Buyer. Except as set forth on Schedule 3(k), as of their respective dates, the
SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, 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 the light of the circumstances under which they were made, not
misleading. Except as set forth on Schedule 3(k), as of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. . Except as set forth on Schedule 3(k), such financial statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Buyers which is not included in the SEC Documents, including, without limitation, information referred to in
Section 2(e) of this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made and not
misleading. 
 (l) Absence of Certain Changes. Except as disclosed in Schedule 3(l), since the date of the Company’s most
recent audited financial statements contained in a Form 10-KSB, there has been no material adverse change and no material adverse development in the business, 

  

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assets, properties, operations, condition (financial or otherwise), results of operations or prospects of the Company or its Subsidiaries. Except as
disclosed in Schedule 3(l), since the date of the Company’s most recent audited financials statements contained in a Form 10-KSB, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually or in
the aggregate, in excess of $50,000 outside of the ordinary course of business or (iii) had capital expenditures, individually or in the aggregate, in excess of $50,000. The Company has not taken any steps to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Except as set
forth on Schedule 3(l), the Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at each Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(l), “Insolvent” means, with respect to any Person (as defined in Section 3(s)), (i) the present fair saleable value of such Person’s assets is less than the
amount required to pay such Person total Indebtedness (as defined in Section 3(s)), (ii) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and
matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be conducted. 
 (m) No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to the Company, its Subsidiaries or their respective business, properties, prospects, operations or financial
condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been
publicly announced. 
 (n) Conduct of Business; Regulatory Permits. Except as set forth on Schedule 3(n), neither the Company
nor its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation and certificate of designations of any outstanding series of preferred stock of the Company or Bylaws or their organizational charter or bylaws,
respectively. Except as set forth on Schedule 3(n), neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or its Subsidiaries,
and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Without limiting the generality of the foregoing, except as disclosed on Schedule 3(n), the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of
any facts or circumstances that would reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. Except as disclosed on Schedule 3(n), during the two (2) years prior to the date
hereof, (i) the Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication,
written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The 

  

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Company and its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. 
 (o) Foreign Corrupt
Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic government official or employee. 
 (p) Sarbanes-Oxley Act.
Except as set forth on Schedule 3(p), the Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations
promulgated by the SEC thereunder that are effective as of the date hereof. 
 (q) Transactions With Affiliates. Except as disclosed
on Schedule 3(q), none of the officers, directors or employees of the Company or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as
employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.

 (r) Equity Capitalization. As of the date hereof, the authorized capital stock of the Company consists of 300,000,000 shares of
Common Stock, of which as of the date hereof, 37,439,536 are issued and outstanding and 101,843,611 shares are reserved for issuance pursuant to securities (other than the Notes and the Warrants) exercisable or exchangeable for, or convertible into,
shares of Common Stock and (ii) 30,000 shares of preferred stock, of which as of the date hereof, 20,240 are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(r), as of the date hereof: (i) none of the Company’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by
the Company; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital
stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of 

  

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the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any
material amounts, either singly or in the aggregate, filed in connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement); (vi) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no
securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement; and (ix) the Company and its Subsidiaries have no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or would not have a Material Adverse Effect. The Company has furnished to the Buyers true, correct and complete copies
of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the date hereof (the
“Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto. 
 (s) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(s), neither the Company nor any of its Subsidiaries (i) has
any outstanding Indebtedness, (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be
expected to result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. Schedule 3(s) provides a detailed description of the material terms of any such outstanding Indebtedness. For purposes of this Agreement: (x) “Indebtedness” of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in
accordance with generally accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets 

  

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acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby,
is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency thereof. 
 (t) Absence of Litigation. Except as set forth on
Schedule 3(t), there is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or its Subsidiaries’ officers or directors. 
 (u) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage
sought or applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. 
 (v) Employee Relations.
(i) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive
officer of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such
officer’s employment with the Company or any such Subsidiary. No executive officer of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement, non-competition 

  

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agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the
Company or any such Subsidiary to any liability with respect to any of the foregoing matters. 
 (ii) The Company and its Subsidiaries are
in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. 
 (w) Title. Except as
set forth on Schedule 3(w), the Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the
Company and its Subsidiaries, in each case, subject to the Mortgage, Equipment Line (each, as defined in the Note), free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries. 
 (x) Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (“Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted except where the failure to so own or possess would not reasonably be expected to result in a Material Adverse Effect. None of the Company’s Intellectual
Property Rights have expired or terminated or been abandoned, or are expected to expire, terminate, or be abandoned, within three years from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or
its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company, being threatened, against the Company or its Subsidiaries regarding its Intellectual
Property Rights. The Company is unaware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their Intellectual Property Rights. 
 (y) Environmental Laws. The Company and its
Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, 

  

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without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations issued, entered, promulgated or approved thereunder. 
 (z) Subsidiary Rights. The Company or one of its
Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary. 
 (aa) Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the
Investment Company Act of 1940, as amended. 
 (bb) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 (cc) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company and an
unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect. 
 (dd) Ranking of Notes. No Indebtedness of the Company is senior to or ranks pari passu with the Notes in right of payment, whether with
respect of payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise. 
 (ee) Registration
Eligibility. The Company is eligible to register the Conversion Shares and the Warrant Shares for resale by the Buyers using Form SB-2 promulgated under the 1933 Act. 
 (ff) Transfer Taxes. On the applicable Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the sale and transfer of the
Securities to be sold to each Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with. 
  

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 (gg) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf
has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid
for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company. 
 (hh) Disclosure. The Company confirms that neither it nor to its knowledge any Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes, or could reasonably be expected to constitute, material nonpublic information other than as set forth in this Agreement or the schedules attached hereto. The Company understands and confirms
that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on behalf of the Company is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. 
 (ii) U.S. Real Property
Holding Corporation. The Company is not, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon any
Buyer’s request. 
 (jj) Acknowledgement Regarding Buyers’ Trading Activity. Anything in this Agreement or elsewhere herein
to the contrary notwithstanding, but subject to compliance by the Buyers with applicable law and the provisions of Section 4(s) hereto, it is understood and acknowledged by the Company (i) that none of the Buyers have been asked to agree,
nor has any Buyer agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term;
(ii) that past or future open market or other transactions by any Buyer, including, without limitation, short sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities; (iii) that any Buyer, and counter parties in “derivative” transactions to which any such Buyer is a party, directly or indirectly, presently may have
a “short” position in the Common Stock, and (iv) that each Buyer shall not be deemed to have any 

  

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affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and
acknowledges that (a) one or more Buyers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Conversion Shares
deliverable with respect to Securities are being determined and (b) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are
being conducted. 
 (kk) Loans Subordinated. The loan to the Company from Duane Martin, the former CEO of the Company for $300,000
(the “Martin Loan”) is subordinated in right of payment, whether in respect of payment of interest or upon liquidation or dissolution or otherwise, to the Notes. 
 (ll) Loans Repaid. The loans to the Company from Bruce Neviaser, a shareholder of the Company for $250,000 and $200,000 (collectively, the
“Neviaser Loans”). have been repaid in full. 
 (mm) Independent Nature of Buyers’ Obligations and Rights. The
Company acknowledges that the obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any
other Buyer under any Transaction Document. The Company acknowledges that nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a
partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents and the Company acknowledges that the Buyers are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. The Company acknowledges that each Buyer shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party
in any proceeding for such purpose. The Company acknowledges that the decision of each Buyer to purchase Securities pursuant to this Agreement has been made by such Buyer independently of any other Buyer and independently of any information,
materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or of its Subsidiaries which may have made or given by
any other Buyer or by any agent or employee of any other Purchaser, and no Buyer or any of its agents or employees shall have any liability to any Buyer (or any other person) relating to or arising from any such information, materials, statements or
opinions. The Company acknowledges that it has elected to provide all Buyers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Buyers and the Buyers have
retained their own counsel with respect to the transactions contemplated hereby. The Company acknowledges that such procedure with respect to the Transaction Documents in no way creates a presumption that the Buyers are in any way acting in concert
or as a group with respect to the Transaction Documents or the transactions contemplated hereby or thereby. 
  

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 4. COVENANTS. 
 (a) Best Efforts. Each party shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement. 
 (b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or before the applicable Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities
for sale to the Buyers at the applicable Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence
of any such action so taken to the Buyers on or prior to the applicable Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws
of the states of the United States following the applicable Closing Date. 
 (c) Reporting Status. From and after the 1934 Act
Compliance Date (as defined in the Registration Rights Agreement) and until the date on which the Investors (as defined in the Registration Rights Agreement) shall have sold all the Conversion Shares and Warrant Shares, and none of the Notes or
Warrants is outstanding (the “Reporting Period”), the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination. 
 (d) Use of
Proceeds. The Company will use the proceeds from the sale of the Securities solely as set forth on Schedule 4(d). 
 (e)
Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are
available to the public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K or 10-KSB, any interim reports or any consolidated balance sheets, income statements,
stockholders’ equity statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on
the same day as the release thereof, facsimile or e-mailed copies of all press releases issued by the Company or any of its Subsidiaries, and (iii) copies of any notices and other information made available or given to the stockholders of the
Company generally, contemporaneously with the making available or giving thereof to the stockholders. 
 (f) Listing. Following the
1934 Act Compliance Date, the Company shall promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which
the Common Stock is then listed (subject to official notice of issuance) and shall maintain such listing of all Registrable Securities from time to time issuable under the 

  

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terms of the Transaction Documents. Following the 1934 Act Compliance Date, the Company shall maintain the Common Stocks’ authorization for quotation on
the Principal Market. Following the 1934 Act Compliance Date, neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal
Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f). 
 (g)
Fees. The Company shall reimburse Magnetar Capital Master Fund, Ltd. (a Buyer) or its designee(s) (in addition to any other expense amounts paid to any Buyer prior to the date of this Agreement) for all reasonable legal costs and expenses
actually incurred in connection with the transactions contemplated by the Transaction Documents (including all reasonable legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the
Transaction Documents), which amount shall be withheld by such Buyer from its Purchase Price at the Closing (the “Pre-Closing Costs”). The Company shall also reimburse Magnetar Capital Master Fund, Ltd. for all reasonable legal costs and
expenses incurred after the Closing arising out of the transactions contemplated hereby, which together with the Pre-Closing costs shall not exceed $150,000. The Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. 
 (h) Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged pursuant to an available exemption from registration under the 1933 Act by an Investor (as defined in the
Registration Rights Agreement) in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document,
including, without limitation, Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(g) hereof in order to effect a sale, transfer or assignment of Securities to such
pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor. 
 (i) Disclosure of Transactions and Other Material Information. On or before June 22, 2006, the Company shall issue a press release and file a
Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents (including, without limitation, this Agreement (and
all schedules to this Agreement), the form of the Notes, the form of Warrant, the form of Registration Rights Agreement and the form of Security Documents) as exhibits to such filing (including all attachments, the “8-K Filing”).
From and after the filing of the 8-K Filing, no Buyer shall be in possession of material nonpublic, information received by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents that is not
disclosed in the 8-K filing. The Company shall not, and shall cause each of 

  

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its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Buyer with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after the filing of the 8-K Filing without the express written consent of such Buyer. If a Buyer has, or believes it has, received any such material, nonpublic information
regarding the Company or any of its Subsidiaries, it shall provide the Company with written notice thereof. The Company shall, within five (5) Trading Days of receipt of such notice, make public disclosure of such material, nonpublic
information. In the event of a breach of the foregoing covenant by the Company, or any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents, for any such
disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and
(ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without
the prior written consent of any applicable Buyer, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Buyer in any filing, announcement, release or otherwise. 
 (j) Additional Registration Statements. Other than as required by the Registration Rights Agreement, dated as of February 15, 2006, by and
among the Company and the buyers listed on the Schedule of Buyers attached to the Securities Purchase Agreement, dated as of February 15, 2006 (the “February SPA”), until 30 days after the date that the Registration Statement
(as defined in the Registration Rights Agreement) is first declared effective by the SEC (the “Effective Date”), the Company shall not file a registration statement under the 1933 Act relating to securities that are not the
Securities. 
 (k) Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly
or indirectly, redeem, or declare or pay any cash dividend or distribution on, the Common Stock without the prior express written consent of the holders of Notes representing not less than 75% of the aggregate principal amount of the then
outstanding Notes. 
 (l) Additional Issuances. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any
manner, issue or sell any equity securities or debt securities without the prior written consent of Buyers holding at least 75% of the principal amount of the Notes. 
 (m) Corporate Existence. So long as any Buyer beneficially owns any Securities, the Company shall not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with
the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants. 
  

 - 20 - 

 (n) Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted
in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate, in a Material Adverse Effect. 
 (o) Reservation of Shares. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance,
no less than 110% of the sum of the number of shares of Common Stock issuable (1) upon conversion of the Notes issued at the applicable Closing and at any prior Closing and (2) upon exercise of the Warrants issued at such Closing and
issued at any prior Closing (without taking into account any limitations on the Conversion of the Notes or exercise of the Warrants set forth in the Notes and Warrants, respectively). 
 (p) Collateral Agent. 
 (i) Each
Buyer hereby (a) appoints Midsummer Capital, LLC, as the collateral agent hereunder and under the other Security Documents (in such capacity, the “Collateral Agent”), and (b) authorizes the Collateral Agent (and its
officers, directors, employees and agents) to take such action on such Buyer’s behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have, by reason hereof or any of the other Security Documents, a fiduciary
relationship in respect of any Buyer. Neither the Collateral Agent nor any of its officers, directors, employees and agents shall have any liability to any Buyer for any action taken or omitted to be taken in connection hereof or any other Security
Document except to the extent caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents
(collectively, the “Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs
and expenses) incurred by such Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of the Security
Documents, other than as a result of such Collateral Agent’s fraud, gross negligence or willful misconduct. 
 (ii) The Collateral
Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it. The Collateral Agent may not distribute any Collateral to itself or
any other Buyer without delivering the pro rata portion of the Collateral to each of the Buyers in accordance with the principal amount of Notes then outstanding; provided, that the Collateral Agent shall be entitled to reasonable fess and
expenses in connection with its role as Collateral Agent. 
  

 - 21 - 

 (iii) The Collateral Agent may resign from the performance of all its functions and duties hereunder and
under the Notes and the Security Documents at any time by giving at least ten (10) Business Days’ prior written notice to the Company and each holder of the Notes. Such resignation shall take effect upon the acceptance by a successor
Collateral Agent of appointment as provided below. If a successor Collateral Agent has not accepted such appointment by the end of such ten (10) Business Day period, the Collateral Agent may apply to a court of competent jurisdiction for the
appointment of a successor Collateral Agent or for other appropriate relief. The costs and expenses (including reasonable attorneys fees and expenses) incurred by the Collateral Agent in connection with such proceeding shall be paid by, and be
deemed an obligation of the Company. In addition, holders of at least 75% of the outstanding principal under the Notes may remove the Collateral Agent upon written notice to the Collateral Agent and the Company. Upon any such notice of resignation
or removal, the holders of at least 75% of the outstanding principal under the Notes shall appoint a successor Collateral Agent. Upon the acceptance of the appointment as Collateral Agent, such successor Collateral Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its duties and obligations under this Agreement, the Notes and the other Security Documents. After
any Collateral Agent’s resignation hereunder , the provisions of this Section 4(p) shall inure to its benefit. If a successor Collateral Agent shall not have been so appointed within said fifteen (15) Business Day period, the retiring
Collateral Agent shall then appoint a successor Collateral Agent who shall serve until such time, if any, as the holders of at least 75% of the outstanding principal under the Notes appoint a successor Collateral Agent as provided above. 

(q) Incurrence of Liens. So long as any Notes are outstanding, the Company shall not, directly or indirectly, allow or suffer to exist any
Lien, other than Permitted Liens (as defined in the Notes), upon any property or assets (including accounts and contract rights) owned by the Company. 
 (r) UCC Searches. The Company shall have delivered or caused to be delivered to each Buyer within five (5) days following the Closing Date certified copies of UCC search results, listing all effective
financing statements which name as debtor the Company or any of its Subsidiaries filed in the prior five years to perfect an interest in any assets thereof, together with copies of such financing statements, none of which, except as otherwise agreed
in writing by the Buyers, shall cover any of the Collateral (as defined in the Security Documents) and the results of searches for any tax lien and judgment lien filed against such Person or its property, which results, except as otherwise agreed to
in writing by the Buyers shall not show any such Liens (as defined in the Security Documents). 
 (s) Trading in Common Stock. Until
the 8-K Filing, no Buyer may, offer, sell, contract to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission promulgated
thereunder with respect to any shares of Common Stock; provided, that, notwithstanding the foregoing, nothing shall prohibit a Buyer from (i) entering into an open market transaction (that is not a short sale transaction) to sell Common
Stock purchased in an open market transaction, (ii) pledging Securities in connection 

  

 - 22 - 

 
with a bona fide margin account or other loan or financing arraignment secured by the Securities. The forgoing restriction is expressly intended to preclude
Buyers and their affiliates from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of any Conversion Shares or Warrant Shares even if such securities
would be disposed of by someone other than the undersigned or (iii) selling Securities pursuant to Rule 144. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect to any Conversion Shares or Warrant Shares or with respect to any security that includes, relates to, or derives any significant part of its value from Conversion Shares or
Warrant Shares. 
 (t) Within 10 days of the Closing Date, unless waived by the Collateral Agent, the Company shall deliver or cause to be
delivered to the Collateral Agent the following with respect to the real property owned by the Company or its Subsidiaries in Savannah, Georgia (the “Savannah Real Property”): 
 (i) a Federal Institution Reform Recovery Enforcement Act (FIRREA) appraisal reviewed and approved by an Member Appraisal Institute (MAI) appraiser, with
no interest, direct or indirect, in any real property owned by the Company or its Subsidiaries or in the transactions contemplated hereby, and whose compensation is not affected by the approval or disapproval of the transactions contemplated hereby
(including the issuance of the Notes), acceptable in all respects to Collateral Agent; 
 (ii) a Phase I environmental report acceptable to
Collateral Agent addressing all environmental risks, including asbestos, radon, and lead-based paint, a Phase II report acceptable to Collateral Agent, if required, and the implementation of an Operations and Maintenance Plan for asbestos and
lead-based paint, if required. 
 (iii) a structural engineering report acceptable to the Collateral Agent, and if the Savannah Real
Property is located in a seismic zone three (3) or greater, a seismic report including a probable maximum loss analysis based on a mean recurrence interval of 475 years and a probability of exceedance of 10% in 50 years (hereinafter referred to
as the “PML Report”). 
 (iv) standard mortgage documentation granting a mortgage (the “Savannah Mortgage”) on
the Savannah Real Property satisfactory to Collateral Agent and its counsel; 
 (v) a copy of all leases, tenant estoppels and subordination
agreements from all tenants and from any ground lessor relating to the Savannah Real Property reasonably satisfactory to Collateral Agent and its counsel; provided, however, if any of the following is not reasonably satisfactory to the Collateral
Agent, the Company shall use best efforts to promptly amend any of the foregoing upon the reasonable request of the Collateral Agent; 
 (vi) valid permanent certificates of occupancy and zoning confirmation letters or zoning reports with respect to all of the improvements constructed upon the Savannah Real Property owned by the Company; 
  

 - 23 - 

 (vii) opinions of the Company’s counsel, in form and substance satisfactory to the Collateral
Agent, from counsel reasonably satisfactory to the Collateral Agent, with respect to the due authorization, execution, delivery and enforceability of the Savannah Mortgage, and such other matters with respect thereto as are covered with respect to
the Savannah Mortgage; 
 (viii) a policy of mortgagee title insurance acceptable to the Collateral Agent and a certified survey acceptable
to the Collateral Agent; and 
 (ix) other mortgage documentation customary for transactions of the type contemplated hereby reasonably
requested by the Collateral Agent. 
 (u) The Company shall have delivered or caused to be delivered to each Buyer within ten (10) days
following the Closing Date a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit G attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.

 (v) Each of the holders of the Company’s Series A Preferred Stock purchased from the Company pursuant to the February SPA shall have
surrendered to the Company for cancellation, within ten (10) days following the Closing Date, all Warrants received pursuant to the February SPA. 
 5. REGISTER; TRANSFER AGENT INSTRUCTIONS. 
 (a) Register. The Company shall maintain at its principal
executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and address of the Person in whose
name the Notes and the Warrants have been issued (including the name and address of each transferee), the principal amount of Notes held by such Person, the number of Conversion Shares issuable upon conversion of the Notes and Warrant Shares
issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives. 
 (b) Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, to
issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares and the Warrant Shares
issued at the applicable Closing or upon conversion of the Notes or exercise of the Warrants in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or exercise of the Warrants in the form of
Exhibit G attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop
transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this 

  

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Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the
Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect
such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer
agent shall issue such Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive legend. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer.
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this
Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required. 
 6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. 
 (a) Closing Date. The obligation of the Company hereunder to issue and sell the Notes and the related Warrants to each Buyer at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof: 
 (i) Such Buyer shall have executed each of the Transaction Documents to which it is a party
and delivered the same to the Company. 
 (ii) Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less,
in the case of Magnetar Capital Master Fund, Ltd. the amounts withheld pursuant to Section 4(g)) for the Notes and the related Warrants being purchased by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the
wire instructions provided by the Company. 
 (iii) The representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date. 
 7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. 
 (a) Closing Date. The obligation of each Buyer hereunder to purchase the Notes and the related Warrants at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof: 
  

 - 25 - 

 (i) The Company shall have duly executed and delivered to such Buyer (A) each of the Transaction
Documents and (B) the Notes (in such principal amounts as such Buyer shall request) and the related Warrants (in such principal amounts as such Buyer shall request) which are being purchased by such Buyer at the Closing pursuant to this
Agreement. 
 (ii) Such Buyer shall have received the opinion of Holland & Knight, LLP, the Company’s outside counsel, dated
as of the Closing Date, in substantially the form of Exhibit H attached hereto. 
 (iii) The Company shall have delivered to such
Buyer (i) a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction or
(ii) a written confirmation from the Company’s service agent evidencing the formation and good standing of the Company and each of its Subsidiaries in such entity’s jurisdiction or formation as of a date within 10 days of the Closing
Date. 
 (iv) The Company shall have delivered to such Buyer (i) a certificate evidencing the Company’s qualification as a foreign
corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and is required to so qualify or (ii) a written certification from the Company’s service
agent evidencing the Company’s qualification as a foreign corporation in good standing in each jurisdiction in which the Company conducts business and is required to so qualify as of a date within 10 days of the Closing Date. 
 (v) The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions consistent with Section 3(b) as adopted by the Company’s Board of Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at
the Closing, in the form attached hereto as Exhibit I. 
 (vi) The representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all respects with
the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form attached hereto as Exhibit J. 
 (vii) Each of the Buyers set forth on the Schedule of Buyers hereto shall have purchased the Notes and Warrants set forth opposite such Buyer’s
name on the Schedule of Buyers. 
 (viii) The Company shall have obtained all governmental, regulatory or third party consents and
approvals, if any, necessary for the sale of the Securities. 
  

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 (ix) In accordance with the terms of the Security Documents, the Company shall have: 
 (1) filed such financing statements and other documents in such offices as the Collateral Agent may request to perfect the security
interests granted by the Security Agreement (it being understood that in no event shall financing statements be filed against fixtures in the local jurisdictions of their location); and 
 (2) delivered to the Collateral Agent all certificates evidencing any of the Pledged Shares (as defined in the Pledge Agreement),
accompanied by undated stock or other powers duly executed in blank. 
 (x) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request. 
 8. TERMINATION.
In the event that the Closing shall not have occurred with respect to a Buyer on or before five (5) Business Days from the date hereof due to the Company’s or such Buyer’s failure to satisfy the conditions set forth in Sections 6 and
7 above (and the nonbreaching party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate this Agreement with respect to such breaching party at the close of business on such date without
liability of any party to any other party; provided, however, if this Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse the non-breaching Buyers for the expenses described in Section 4(g)
above. 
 9. MISCELLANEOUS. 
 (a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.  
  

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 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature. 
 (c)
Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 
 (d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder
of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 
 (e)
Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the holders of at least 75% of the aggregate number of Registrable Securities issued and issuable hereunder and under the Notes, and any amendment to this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the applicable Securities then outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of
the Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be. The Company has not, directly or indirectly, made any
agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set
forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company or otherwise. 
 (f) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business
Day after deposit with an 

  

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overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications
shall be: 
 If to the Company: 
 Universal Food & Beverage Company 
 3830 Commerce Drive, 
 St. Charles, Illinois 60174 
 Telephone:
(630) 584-8670 
 Facsimile: (630) 584-8674 
 Attention: Chief Executive Officer 
 With a copy (for informational purposes only) to: 
 Holland & Knight, LLP 
 One
MidAmerica Plaza, Suite 1000 
 Oakbrook Terrace, IL 60133 
 Telephone: (630) 954-2100 
 Facsimile: (630) 954-2112 
 Attention: Carl A. Neumann, Esq. 
 If to the
Transfer Agent: 
 Interwest Transfer Co., Inc. 
 1981 East 4800 South, Suite 100 
 Salt Lake City, UT 84117 
 Telephone: (801) 272-9294 
 Facsimile:
(801) 277-3147 
 Attention: Melina Orth 
 If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, 
 with a copy (for informational purposes only) to: 
 Schulte Roth & Zabel LLP 
 919 Third Avenue 
 New York, New York 10022 
 Telephone: (212) 756-2000 
 Facsimile: (212) 593-5955 
 Attention:
Eleazer N. Klein, Esq. 
 or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number 

  

 - 29 - 

 
and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. 
 (g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes or the Warrants. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written consent of the holders of at least 75% of the aggregate number of Registrable Securities issued and issuable hereunder, including by way of a Fundamental Transaction
(unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants). A Buyer may assign some or all of its rights hereunder without the consent of the Company, in which
event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights. 
 (h) No Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
 (i) Survival. Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder. 
 (j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby. 
 (k) Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents
and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the Securities
and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated
hereby or thereby or (c) any cause of action, suit or claim brought or 

  

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made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer or holder of the Securities as an investor in
the Company pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the
same as those set forth in Section 6 of the Registration Rights Agreement. 
 (l) No Strict Construction. The language used in
this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
 (m) Remedies. Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company
recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Buyers. The Company therefore agrees that the
Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security. 
 (n) Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 
 (o) Payment Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign,
state or federal law, common law or equitable cause of action), then to the extent of any such restoration the 

  

 - 31 - 

 
obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made
or such enforcement or setoff had not occurred. 
 (p) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document.
Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are not acting in concert
or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary
for any other Buyer to be joined as an additional party in any proceeding for such purpose. 
 [Signature Page Follows] 
  

 - 32 - 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 COMPANY:
  
 UNIVERSAL FOOD & BEVERAGE COMPANY

		
	By:	 	 /s/ August J. Liguori

	Name:	 	August J. Liguori
	Title:	 	Chief Executive Officer
	  
  
 [BUYERS’ SIGNATURES]

 EXHIBITS 
  

			
	Exhibit A	  	Form of Notes
	Exhibit B	  	Form of Warrant
	Exhibit C	  	Registration Rights Agreement
	Exhibit D	  	Form of Pledge Agreement
	Exhibit E	  	Form of Security Agreement
	Exhibit F	  	Form of Guarantee
	Exhibit G	  	Form of Irrevocable Transfer Agent Instructions
	Exhibit H	  	Form of Outside Company Counsel Opinion
	Exhibit I	  	Form of Secretary’s Certificate
	Exhibit J	  	Form of Officer’s Certificate

 SCHEDULES 
  

			
	Schedule 3(a)	  	Subsidiaries
	Schedule 3(b)	  	Authorization; Enforcement; Validity
	Schedule 3(c)	  	Issuance of Securities
	Schedule 3(e)	  	Consents
	Schedule 3(k)	  	SEC Documents; Financial Statements
	Schedule 3(l)	  	Absence of Certain Changes
	Schedule 3(n)	  	Conduct of Business; Regulatory Permits
	Schedule 3(p)	  	Sarbanes-Oxley Act
	Schedule 3(q)	  	Transactions with Affiliates
	Schedule 3(r)	  	Equity Capitalization
	Schedule 3(s)	  	Indebtedness and Other Contracts
	Schedule 3(t)	  	Litigation
	Schedule 3(w)	  	Title
	Schedule 3(dd)	  	Ranking of Notes
	Schedule 4(d)	  	Use of Proceeds

 Schedules to 
 Securities Purchase Agreement 
 dated as of June 22, 2006 
 by and between 
 Universal
Food & Beverage Company 
 and the Buyers Identified in that Agreement 

 Schedule 3(a) 
 1. Universal Food & Beverage Company, a Delaware Corporation (“Delaware Subsidiary”). 
 2. Universal Food & Beverage Company of Virginia, a Virginia Corporation (“Virginia Subsidiary”). 
 3.
Universal Food & Beverage Company of Georgia, a Georgia Corporation (“Georgia Subsidiary”). 

 Schedule 3(e) 
 1. Rights of preferred shareholders. The holders of the Company’s Preferred Series A stock have certain rights and preferences as set forth in the Company’s Articles of Incorporation and related Certificate
of Designation. The Company is required to obtain the consent of the Preferred Stockholders in connection with the transactions contemplated by this Agreement. 
 2. The Company has been notified by the NASD that the Company’s Common Stock will not be eligible for quotation on, and will be removed from, the OTC Bulletin Board as of June 25, 2006 for failure to meet
its current reporting obligations under Rule 6530 unless the Company files its Form 10-QSB for the quarter ended March 31, 2006 before that date. 

 Schedule 3(k) 
 1. The Company has not filed its Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006. See the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2006. 
 2. The Company has not filed a required amendment to its Form 8-K relating to financial statements in connection with the Georgia Subsidiary’s
acquisition of a business located in Savannah Georgia from California Natural Products. 
 3. The Company will, but has not yet filed an
Amendment to its Form 10-KSB for 2005. 
 4. The Company failed to report on a timely basis the election of Mr. August Ligouri to the
Company’s Board of Directors. A Form 8-K regarding such election has been filed as of the date of this Agreement. 

 Schedule 3(l) 
 1. Prior to the transactions contemplated by this Agreement, the Company’s management believes that the Company would meet the Agreement’s definition of “Insolvent” as provided in clauses
(iii) and (iv). 
 2. As reported in the Company’s Form 8-K filed with the SEC on June 7, 2006 (the “June 7, 2006
8-K”), in connection with his preparation of the interim financial information for the first quarter of 2006, the Company’s Chief Financial Officer discovered certain financial transactions involving Mr. Duane Martin, the former Chief
Executive Officer of the Company, that did not appear to be properly reflected in the Company’s financial records. As a result, the Company’s Board of Directors is undertaking a complete investigation into all of the activities of
Mr. Martin during his tenure with the Company and intends to hire an independent certified fraud/forensic auditor to assist it in that investigation. At the June 1, 2006 Board meeting, Mr. Martin stated that he intended to cooperate
in the Company’s investigation and looks forward to its prompt conclusion. Once it makes its findings, the Board intends to take all appropriate additional actions consistent with the best interest of shareholders. 
 3. As reported in the Company’s Form 8-K filed with the SEC on June 13, 2006 (the “June 13, 2006 8-K”), the Company intends to
restate its 2005 financial statements. 
  

 Schedule 3(n) 
  

	1.	The matters disclosed in June 7, 2006 8-K are fully incorporated herein by reference. 

  

	2.	See paragraph 2 of Schedule 3(e), which is incorporated herein by reference. 

 Schedule 3(p) 
 The investigation described in paragraph 2 of Schedule 3(l) may identify violations of the Sarbanes-Oxley Act. 

 Schedule 3(q) 
 1. There is an outstanding contractual obligation to provide options to purchase 460,000 shares of the Company’s common stock to John F. Levy, the Company’s former interim financial officer ,at an exercise
price of $0.70 per share (the closing price of the Common Stock on the day prior to the November 28, 2005 agreement) pursuant to a stock option agreement to be approved by the Board of Directors. 
 2. There is a lease for a pick-up truck between the Company and Marc Fry. The rent is $225 per month. The truck is used at the water plant in
Independence, Virginia. 
 3. The Company owes the following executive officers the following amounts as defined compensation as of the date
of this Agreement (officers agreed to defer 50% of their compensation until the Company’s operations reaches an annual revenue rate of $4 million): 
  

					
	 Name
	  	Deferred Compensation Owed	 
	 Duane N. Martin
	  	$	167,788.55	*
	 Marc R. Fry
	  	$	119,471.18	 
	 Ralph M. Passino
	  	$	94,791.71	*
	 Joseph Balistreri
	  	$	67,115.40	 
	 Charles Sizer
	  	$	97,451.96	 

	*	The Company is investigating whether these deferred compensation amounts have in fact been paid or partially paid as of the date of this Agreement. 

4. See paragraph 2 of Schedule 3(l) which is incorporated herein by reference. 
  

 Schedule 3(r) 
 (i) The Series A preferred stockholders have rights to participate in future stock offerings under the February SPA. 
 (ii) As of the date of this Agreement, there were issued and outstanding 37,439,536 shares of our common stock and 20,204 shares of our Series A preferred stock. As of the date of this Agreement, there are outstanding
rights, warrants and options to acquire up to 70,567,247 shares of our common stock, including the common stock issuable on conversion of our Series A preferred stock and the outstanding common stock purchase warrants and options for our common
stock described below. In addition, our contractual obligations with the holders of certain of these rights requires that we reserve between 110% and 125% of the shares currently issuable on conversion or exercise. 
  

								
	 Description
	  	 No. of Shares
 Subject to Rights
	  	 Exercise or
 Conversion Price
	  	 Shares Reserved
 For Issuance

	 Common stock purchase warrants issued in connection with March 2005 acquisition of IWG assets
	  	3,000,000	  	$	1.00	  	3,000,000
	 Common stock issuable on litigation settlement
	  	1,000,000	  	 	N/A	  	1,000,000
	 Common stock awards under the consultants’ compensation plan
	  	0	  	 	N/A	  	837,500
	 Common stock purchase warrants issued to December 2005 senior convertible exchangeable note holders
	  	2,464,647	  	$	0.01	  	2,711,111
	 Common stock issuable in conversion of Series A preferred stock
	  	40,408,000	  	$	0.50	  	50,510,000
	 Common stock issuable as dividend on convertible preferred stock
	  	N/A	  	 	N/A	  	6,061,200
	 Common stock purchase warrants issued to preferred stock holders
	  	20,204,000	  	$	0.70	  	25,255,000
	 Common stock purchase warrants issued to Illington Capital, Inc.
	  	3,030,600	  	$	0.50	  	3,030,600
	 Common stock issuable on exercise of awards under 2006 Omnibus Stock Plan
	  	460,000	  	$	0.70	  	14,000,000
	 Total
	  	70,567,247	  			  	101,843,611

 (iii) Secured Mortgage Note dated March 31, 2005 payable by the Virginia Subsidiary to
Grayson National Bank in the original principal amount of $2,500,000 due March 31, 2035 (“Virginia Mortgage Note”). 
 (iv) Deed of Trust dated March 31, 2005 between Grayson National Bank and the Virginia Subsidiary securing the Virginia Mortgage Note. 
 (v) 1. Registration Rights Agreement dated as of December 30, 2005. 
 2. Registration Rights Agreement
dated as of February 16, 2006. 
  

	(vi)    	1.    The Series A preferred stock. 

  

	(vii)    1.    The	Series A preferred stock. 

            2.    Outstanding warrants to purchase Common Stock. 

 Schedule 3(s) 
 1. The Virginia Mortgage Note. The current amount outstanding on this note is $2,461,858.29. 
 2. Guaranty
of the Company dated March 31, 2005 in favor of Grayson National Bank with respect to Virginia Subsidiary obligations under the Virginia Mortgage Note. 
 3. Guaranty of the Delaware Subsidiary dated March 31, 2005 in favor of Grayson National Bank with respect to Virginia Subsidiary obligations under the Virginia Mortgage Note. 
 4. The Company may incur the indebtedness in accordance with the terms of this Agreement, the Notes and the other documents delivered in connection
therewith. 
  

 Schedule 3(t) 
 1. See paragraph 2 of Schedule 3(e) which is incorporated by reference. 
 2. The Company is the defendant in
the lawsuit Julie A. Bytnar v. Universal Food & Beverage Company No. 06 CH 07518 filed in the Circuit Court of Cook County, Illinois on April 17, 2006. The complaint in this lawsuit sought to compel the Company to issue
100,000 restricted common shares in the Company to the plaintiff according to the terms of a certain Settlement Agreement dated December 12, 2004. All of the subject shares have been issued to and received by the plaintiff as of the date of
this Agreement. The lawsuit remains un-dismissed as of the date of this Agreement pending resolution of the payment by the Company of plaintiff’s attorneys fees in the amount of $3,970.00, which plaintiff claims are owed by the Company under
the terms of the Settlement Agreement. 
 3. Mr. Kenneth Swaisland has threatened legal action against the Company based on a claim that
the Company owes him approximately $200,000 in connection with a purported transaction between himself, the Company and a certain Mr. Trump, a resident of Florida. The purported transaction was allegedly entered into while Mr. Duane Martin
was Chief Executive Officer of the Company. Mr. Swaisland alleges that he dealt with Mr. Martin on this matter and that Mr. Martin was acting on behalf of the Company and not on behalf of himself individually. Under this purported
transaction, Mr. Swaisland agreed to transfer 200,000 free trading shares of Universal stock which he owned to Mr. Trump’s account in order to assist Universal establish a business relationship with Mr. Trump’s company, and
such stock was returnable to Mr. Swaisland upon demand. Mr. Swaisland alleges he has an agreement with Universal whereby Universal has guaranteed a payment to Mr. Swaisland to compensate Mr. Swaisland for the failure of
Mr. Trump to return the stock. As of the date of this Agreement, no copy of any such agreement has been provided to the Company by Mr. Swaisland or by any other party. The Company is continuing its investigation of this matter. 

 Schedule 3(w) 
 There are liens on the assets of the Company and its Subsidiaries established by the following agreements: 
 1. Grayson National Bank Deed of Trust dated March 31, 2005. 

 Schedule 3(gg) 
 1. The investigation described in paragraph 2 of Schedule 3(l) may identify transactions involving the Company’s former CEO which are identified in
clauses (i), (ii) and (iii) of Section 3(gg) of this Agreement. 

 Schedule 4(d) 
 Use of Proceeds 
  

			
	$2,000,000	  	Universal working capital for operations
		
	$500,000	  	Universal allocated for Virginia operations
		
	$200,000	  	Universal to fund costs to initiate program with Dark Dog
		
	$300,000	  	Universal for investigation, catch up in accounts payable and completing financial statements and SEC filings
		
	$150,000	  	Legal fees to Schulte, Roth & Zabel, LLP and Holland & Knight LLP
		
	$3,150,000	  	Total

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