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EXHIBIT 10.22
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NOTE PURCHASE AGREEMENT
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This NOTE PURCHASE AGREEMENT (the "Agreement") is made between CIAO
CUCINA CORPORATION, an Ohio corporation (the "Company"), and BLUE CHIP CAPITAL
FUND LIMITED PARTNERSHIP, a Delaware limited partnership ("Purchaser") effective
as of January 16, 1998. The parties hereby agree as follows:
1. GENERAL. This Agreement sets forth the terms upon which the
Purchaser will purchase a promissory note in the form attached hereto as Exhibit
A (the "Note") from the Company providing for loans (the "Loans") of up to
$500,000 principal amount to the Company. The obligations of the Company under
the Note and the Loans have been secured by a security agreement of even date
herewith (the "Security Agreement") executed by the Company in favor of the
Purchaser. As partial consideration for the Loans and to induce Purchaser to
enter into this Agreement, Company is delivering to Purchaser a common stock
purchase warrant of even date herewith (the "Warrant") executed by the Company
in favor of Purchaser. As soon as practicable after the date hereof, the Company
and Purchaser shall enter into a registration rights agreement (the
"Registration Rights Agreement") with respect to any shares issuable upon
exercise of the Warrant (the "Warrant Shares") providing for one "demand" and
unlimited "piggyback" rights and otherwise on such terms or conditions as
Purchaser may specify. The Note, the Security Agreement, the Warrant, and the
Registration Rights Agreement are collectively referred to herein as the "Loan
Documents". Simultaneously with the execution of this Agreement, counsel to the
Company is delivering its opinion to Purchaser with respect to certain of the
matters set forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.5 hereof, and the Company
is delivering to Purchaser certified resolutions of the Company's Board of
Directors with respect to the transactions contemplated hereby.
2. LOANS. Upon the terms set forth in this Agreement and the Loan
Documents, Purchaser may make loans to the Company in an aggregate principal
amount of up to $500,000. On the date hereof, Purchaser is making a loan in the
principal amount of $200,000. Any further loans by Purchaser hereunder shall be
discretionary and Purchaser has no commitment or obligation to make such loans.
All further loans, if any, shall be made in response to a written request
therefor from the Company, which request must be received on or before December
30, 1998.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Purchaser that, except as set forth in Exhibit 3
hereto.
3.1 INCORPORATION OF THE COMPANY. The Company is a
corporation duly organized and validly existing under the laws of
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EXHIBIT 10.22
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the State of Ohio with full corporate power and authority to execute, deliver
and perform this Agreement and the Loan Documents to which the Company is a
party, to conduct its business and to own its properties. This Agreement and the
Loan Documents to which the Company is a party have been duly authorized by all
necessary corporate action of the Company and constitute legal, valid and
binding obligations of the Company enforceable against it in accordance with
their terms.
3.2 NO CONFLICT. Neither the execution and delivery of this
Agreement and the Note nor the completion of the transactions contemplated
hereby or thereby will contravene or violate (a) any provision of the Articles
of Incorporation or the Code of Regulations of the Company or any of its
affiliates, (b) any agreement or commitment to which the Company, or any of its
affiliates is a party or (c) any law or order of any court or governmental
agency applicable to the Company, or any of its affiliates.
3.3 CAPITALIZATION. The authorized stock of the Company
consists of 10,000,000 shares of Common Stock, of which ________ shares are duly
issued and outstanding, and 100,000 shares of preferred stock, none of which are
outstanding. None of the outstanding shares of Common Stock of the Company has
been issued in violation of any federal or state securities laws. There are no
outstanding commitments of any kind (including options, warrants and rights)
relating to the issuance or transfer of any capital stock of the Company. The
shares of Common Stock to be issued upon exercise of the Warrant will be validly
authorized, duly issued and outstanding, fully paid and non-assessable and
issued free and clear of all encumbrances and have been reserved for issuance.
None of the outstanding capital stock of the Company was issued in violation of
applicable law, preemptive right or agreement.
3.4 ORGANIZATION OF THE COMPANY. The Company has no
subsidiaries and does not own, or have any agreement or commitment to acquire,
any stock of any person or any direct or indirect equity or ownership interest
in any other business. The Company is duly qualified as a foreign corporation
and in good standing in each jurisdiction where the nature of its activities or
ownership of property requires it to be so qualified.
3.5 APPROVALS. No approval or authorization of, or filing
with, any governmental agency, and no consent or approval of any person, is
required to be obtained or made by the Company in connection with the execution,
delivery or performance of this Agreement or any Loan Document or any
transactions contemplated hereby or thereby.
3.6 FINANCIAL STATEMENTS. The Company has delivered
to Purchaser true and correct copies of the financial statements
of the Company as at December 31, 1996 and for the year then
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EXHIBIT 10.22
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ended and as at October 31, 1997 (the balance sheet of the Company as of October
31, 1997 is hereinafter referred to as the "Balance Sheet") and for the period
then ended. Such financial statements fairly present the assets, liabilities,
financial condition and results of operations of the Company at such date and
for such period, all in accordance with generally accepted United States
accounting principles consistently applied throughout the periods involved.
3.7 NO UNDISCLOSED LIABILITIES. The Company does not have any
liabilities or obligations of any nature that were not fully reflected or
reserved against in the Balance Sheet, of a nature required to be so reflected
or reserved in accordance with the United States generally accepted accounting
principles consistently applied, except for immaterial liabilities and
obligations incurred in the ordinary course of business and consistent with past
practice since the respective dates thereof. All reserves reflected in the
Balance Sheet are adequate.
3.8 COMPLIANCE WITH LAW. The operations of the Company have
been conducted in accordance with all applicable laws and regulations. The
Company has not received any notification of any asserted present or past
failure to comply with any such law or regulation. The Company has all licenses,
permits and approvals from governmental agencies required for the conduct of its
businesses and is not in violation of any of them. Each is in full force and
effect, and no suspension or cancellation has been threatened. All required
filings by the Company with the Securities and Exchange Commission or any state
securities agency have been made. All of such filings comply in all material
respects with the rules and regulations relating thereto, and none of such
filings contains any misstatement of material fact or omits any material fact
required to be stated therein or necessary to make the statements therein not
materially misleading.
3.9 BROKERAGE FEES, ETC. No person has any claim for brokerage
fees, commissions or similar payments with respect to the transactions
contemplated hereby based upon any agreement or understanding made by the
Company or any of its shareholders.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to, and agrees with, the Company as
follows:
(a) This Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms.
(b) The Note, the Warrant and the Warrant Shares will be acquired for
investment for its own account, not as a nominee or agent, and not with a view
to the distribution thereof.
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EXHIBIT 10.22
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(c) Purchaser acknowledges that the Note, the Warrant and the Warrant
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act"), and, therefore, cannot be resold unless subsequently registered
under such Act or unless an exemption from such registration is available.
(d) Purchaser or its representatives have been provided the opportunity
to ask questions of and receive answers from one or more officers of the Company
concerning the terms and conditions of this transaction and to obtain
information concerning the Company.
5. MISCELLANEOUS.
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(a) The representations, warranties and covenants of the Company and
Purchaser contained herein or made pursuant to this Agreement shall survive the
execution and delivery hereof and delivery of the Note.
(b) The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors, heirs and assigns of
the parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
(c) This Agreement shall be governed by and construed under the
internal laws of the State of Ohio as applied to agreements entered into and to
be performed entirely within the State of Ohio.
(d) This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
(e) The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
(f) This Agreement, together with the Loan Documents, constitutes the
entire agreement of the parties with respect to its subject matter.
(g) Any term of this Agreement may be amended and the observance of any
term of this Agreement 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 Purchaser.
(h) The Company shall reimburse Purchaser for all legal fees and
expenses incurred by it in connection with the
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EXHIBIT 10.22
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preparation and registration of this Agreement and the Loan
Documents. Purchaser may offset such fees and expenses against
any of the Loans.
BLUE CHIP CAPITAL FUND
LIMITED PARTNERSHIP
By: Blue Chip Venture
Company, its General
Partner
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
CIAO CUCINA CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President-Finance
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