FORM OF EXCHANGE AGREEMENT
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THIS EXCHANGE AGREEMENT (this "Agreement") is dated as of March 31,2000
and is by and between Universal Beverages Holding Corporation, a Florida
corporation ("UBHC") and Universal Beverages, Inc., a Florida corporation
("UBI") which is a wholly owned subsidiary of UBHC (collectively, UBHC and USI
shall he referred to as "Universal") and Capital International SBIC, L.P. ("Note
Holder").
WHEREAS, the Note Holder advanced $1,306,000 to Universal and such debt
is evidenced by a promissory note in the amount of 51,306,000 (the "Note") and
is secured by the Note Holder's security interest in certain fixtures and
personal property, as further described in a certain security agreement (the
"Security Agreement") between the Note Holder and Universal:
WHEREAS, the Note, the Security Agreement and any other documents
related directly or indirectly to the Note, such as pledge agreements, guaranty
agreements or agreements of any other type shall be collectively referred to as
the "Loan Documents;"
WHEREAS, in exchange for receiving 130,600 shares of UBHC's Series C
Convertible Preferred Stock, the Note Holder has agreed (i) to forgive any
indebtedness that Universal owes under the Note,, (ii) to release its security
interest in Universal's tangible and intangible property under the Security
Agreement and (iii) to release Universal and its Affiliates from any and all
obligations under cash of the Loan Documents;
WHEREAS, the terms of the Series C Shares are further described in
Exhibit "A" of this Agreement, which is attached hereto and incorporated herein
by this reference:
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
1. Exchange Agreement.
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1.1 In exchange for receiving 130,600 shares of UBHC's Series C Shares,
the Note Holder has agreed (i) to forgive any indebtedness that Universal owes
under the Note, (ii) to release its security interest in Universal's tangible
and intangible assets and (iii) to release Universal and its Affiliates from any
and all obligations under each of the Loan Documents.
1.2 Effective as of the date of this Agreement, the Note Holder hereby
agrees and acknowledges that all sums due and owing under the Note are hereby
extinguished and canceled. The Note Holder also agrees that each and every one
of the Loan Documents is deemed to be null, void and of no further force and
effect. The Note Holder agrees that it
will a UCC-3 Termination State With the Florida Department of State and any
other filings offices to terminate any and all security interests that it may
have in Universal's assets.
1.3 In order to evidence the cancellation of indebtedness under the
Note, the Note Holder agrees that it will write "PAID 1N FULL" on the original
promissory note, initial such phrase and return the original promissory note to
Universal. The Note Holder also agrees that it will handwrite "CANCELED" on each
of the original Loan Documents, initial such phrase and return each of the
original Loan Documents to Universal.
1. Terms of the Series C Preferred Stock.
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2.1 The Board of Directors has agreed to issue 130,600 shares of its
Series C Preferred Stock to the Note Holder, which is the subject of this
Agreement. The Terms of the Series C Stock are described in Exhibit "A".
2.2 If UBHC files a registration statement with the Securities and
Exchange Commission during the next five (5) years, the underlying shares of
Universal's common stock into which the Series C Stock can be converted will
have "piggyback" rights to be included in the registration statement. If UBHC
in good faith, or an underwriter determines that the inclusion of these shares
would hurt the public offering, UBHC will not have to include these shares in
the registration statement; however, UBHC will use its best efforts to include
these shares in the next registration statement that it files during said time
period.
3. Release and Covenant Not to ▇▇▇. The Note Holder hereby releases
UBHC, UBI and each and every one of their respective directors, officers,
employees, representatives, legal counsel, agents, subsidiaries, or affiliates
(collectively, the "Affiliates") from all claims, causes of action, damages,
judgements, agreements and demands whatsoever, whether liquidated or
unliquidated, contingent or fixed, determined or undetermined, known or unknown,
at law or in equity, which it has had, now has, or may hereinafter have against
UBHC, UBI or its Affiliates for any matter whatsoever arising out of or relating
to this Agreement arising from the beginning of the world to the end of the
world. The Note Holder further agrees never to institute or cause to be
instituted any suit or any form or action or proceeding of any kind or nature
against UBHC, UBI or its Affiliates by reason of or in connection with any of
the actions or matters released hereinabove and that this Release shall be
construed broadly to protect UBHC, UBI and their Affiliates.
4. Representation, Warranties, and Agreements of the Note Holder. In
connection with UBHC's agreement to issue Series C Shares pursuant to the terms
of this Agreement, the Note Holder hereby makes the following representations,
warranties and agreements and confirms the following understandings:
4.1 Investment Purpose. The Note Holder is acquiring the Series C
Shares for its own account and for investment purposes only, within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), with no
intention of assigning any participation or interest therein and no view to the
distribution thereof.
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4.2 Unregistered Offering. The Note Holder understands that the sale of
the Series B Shares is not being registered, on the basis that the issuance of
the Series C Shares is exempt from registration under the Securities Act and
rules and regulations promulgated thereunder, as a transaction by an issuer not
involving any public offering (the "Offering"), and that reliance on such
exemption is predicated, in part, on the Note Holder's representations and
warranties contained in this Agreement.
4.3 Limitations on Disposition. The Note Holder understand that there
are substantial restrictions on the transferability of the Series C Shares; the
Series C Shares will contain a restrictive legend; the investors in UBHC have no
rights to require that the Series C Shares he registered under the Securities
Act and there is not expected to be a market for the resale of the Series
Shares. Acc.ordingly, the undersigned may have to hold the Series C Shares for a
substantial period of time and it may not be possible for the undersigned to
liquidate its investment in UBHC.
4.4 Absence of Official Evaluation. The Note Holder has had the
opportunity to conduct a due diligence review of Universal and ask
representatives of Universal questions about Universal's business and financial
condition and the terms of this exchange offer and related restructuring with
other creditors and has obtained such information as it has requested to the
extent it has deemed it necessary to permit it to fully evaluate the merits and
risks of its investments in UBHC. The Note Holder also represents that it has
had access to all material books and records of UBHC and all materiel contracts
and documents relating to Universal and this Exchange Offer.
5. Indemnification
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5.1 The Note Holder agrees to indemnify and hold harmless UBHC, UBl and
its Affiliates against and in respect of any and all loss, liability, claim,
damage, deficiency, and all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses whatsoever (including, but not limited to, any and
all expenses whatsoever, including attorneys' fees, reasonably incurred in
investigating, preparing, or defending against any litigation commenced or
threatened or any claim whatsoever through all appeals) arising out of or based
upon any false representation or warranty or breach or failure by the Note
Holder to comply with any covenant or agreement made by him herein or in any
other document furnished by its in connection with his subscription.
5.2 This Agreement has been entered into and shall be construed and
enforced in accordance with the laws of the State of Florida, without reference
to the choice of law principles thereof.
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6. General Provisions.
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6.1 This Agreement and the agreements, instruments, schedules, exhibits
and other writings referred to in this Agreement, constitute the entire
understanding of the parties with respect to the subject matter of this
Agreement. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. This Agreement may be
amended only by means of a written instrument duly executed by all of the
parties hereto.
6.2 This Agreement shall not be assignable by any party, and shall not
be altered or otherwise amended except pursuant to a writing executed by all of
the parties hereto. This Agreement will be binding upon, inure to the benefit of
and by enforceable by the patties hereto, their respective officers, directors,
parents, subsidiaries, successors in interest and assigns, whether by merger,
consolidation. or otherwise and upon and to the benefit of their respective
present and future affiliated and subsidiary companies.
6.3 No waiver of any breach or default hereunder shall be considered
valid d unless such waiver is made in writing and signed by the party giving
such waiver. The granting of a waiver by a party in a particular instance shall
not constitute a waiver of future conduct unless expressly specified in the
written instrument granting such waiver. No waiver shall be granted or inferred
based upon the conduct of the parties.
6.4 Each party represents and warrants to the other party hereto that
it has the proper authorization and legal authority to enter into this
Agreement. All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular and plural as the context may require.
6.5 All notices, claims, certificates, requests, demands or other
communications under this Agreement shall be in writing and will be deemed to
have been duly given when delivered or mailed, registered or certified mail,
postage prepaid, return receipt requested, or by overnight delivery by a
nationally recognized overnight mail service, as follows:
If to the:
Note Holder ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
Capital International SBIC, LP.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
If to Universal: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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or to such address as the partys to whom such notice is to he given has
furnished to the other party writing in the manner set forth it this Section.
6.6 If any term, condition or provision of this Agreement shall he
declared invalid or enforceable, the remainder of this Agreement shall not be
affected thereby and shall remain in full force and effect and shall be valid
and enforceable to the fullest extent permitted by law.
6.7 The Preliminary Recitals set forth in the Preamble are hereby
incorporated and made part of this Agreement. Section headings are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement. The Exhibits and Schedules
identified in this Agreement and incorporated herein by reference arc made a
part hereof.
6.8 The parties agree to execute aid deliver all such further
documents, agreements, and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.
6.9 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, taken together,
shall constitute one and the same document. Any facsimile copy of a manually
executed original shall be deemed a manually executed original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to he
duly executed as of the day and year first written above.
UNIVERSAL BEVERAGES HOLDING
CORPORATION
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
UNIVERSAL BEVERAGES, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Note Holder:
CAPITAL INTERNATIONAL SBIC, L.P.
/s/ [ILLEGIBLE]
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By:
Its:
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