Convertible Promissory Note Agreement between B&D Food Corp. and EGFE dated December 20, 2005

Summary

B&D Food Corp., a Delaware corporation, agrees to pay EGFE $250,000 plus 8% annual interest, with the loan maturing on December 20, 2007. EGFE may convert the loan and accrued interest into B&D Food Corp. common stock after six months, based on a set formula. The agreement outlines payment terms, conversion rights, transfer restrictions, and is governed by New York law. The note becomes immediately due if B&D Food Corp. becomes insolvent or bankrupt. No shareholders, officers, or directors are personally liable under this agreement.

EX-10.1 2 v031984_ex10-1.txt Exhibit 10.1 THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933. CONVERTIBLE PROMISSORY NOTE $250,000 December 20, 2005 New York, New York For value received, B&D Food Corp., a Delaware corporation ("Company"), promises to pay EGFE ("Holder"), the principal sum of Two Hundred Fifty Thousand Dollars ($250,000). Interest shall accrue from the date of this Note on the unpaid principal amount at a rate equal to eight percent (8%) per annum, compounded annually. This Note is subject to the following terms and conditions. 1. Maturity. Unless converted as provided in Section 2, this Note will automatically mature and be due and payable on December 20, 2007 (the "Maturity Date"). Subject to Section 2 below, interest shall accrue on this Note, but shall not be due and payable until the Maturity Date. Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the insolvency of the Company, the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company. 2. Conversion. (a) Optional Conversion. At any time after the six- (6) month anniversary of the date hereof, the holder shall have the right to convert the principal and interest due on this Note into fully paid and non-assessable shares of the Company's common stock, par value $.001 per share (the "Common Stock"). The number of shares of Common Stock to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note plus (if applicable) accrued interest by (ii) ninety percent (90%) of the average closing price per share for the Common Stock as recorded on the OTC Bulletin Board for the ten trading days prior to conversion. (b) Mechanics and Effect of Conversion. No fractional shares of the Company's Common Stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal and interest balance of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed, at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Holder, at such principal office, a certificate or certificates for the number of shares of Common Stock to which such Holder is entitled upon such conversion, together with all other property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable as described herein. Upon conversion of this Note, the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the principal amount and accrued interest being converted including without limitation the obligation to pay such portion of the principal amount and accrued interest. (c) Payment of Interest. Upon conversion of the principal amount of this Note into the Company's capital stock, any interest accrued on this Note that is not by reason of Section 2(a) hereof simultaneously converted into shares of Common Stock shall be immediately paid to the Holder. 3. Payment. All payments shall be made in United States Dollars at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. Prepayment of this Note may be made at any time without penalty including by conversion in accordance with Section 2. 4. Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the prior written consent of the Company, except for transfers to affiliates. Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and principal are payable only to the registered holder of this Note. 5. Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law. 6. Notices. Any notice required or permitted by this Note shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party's address as set forth below or as subsequently modified by written notice. 7. Amendments and Waivers. Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 7 shall be binding upon the Company, the Holder and each transferee of the Note. 8. Shareholders, Officers and Directors Not Liable. In no event shall any shareholder, officer or director of the Company be liable for any amounts due or payable pursuant to this Note. COMPANY: B&D FOOD CORP., a Delaware corporation By: /s/ Daniel Ollech --------------------------------- Name: Daniel Ollech Title: Chief Executive Officer AGREED AND ACCEPTED: EGFE By: /s/ Michael Ben Ari ----------------------------- Name: Michael Ben Ari Title: Director Address: 7 Jabotinski Street Ramat Gan - Israel 52520