Exhibit 10.2
RESTRUCTURING AGREEMENT
This RESTRUCTURING AGREEMENT (this "Agreement") is made as of this 24th
day of August, 1999 by and among FREDERICK BREWING CO., a Maryland corporation
("FBC"), ▇▇▇▇▇▇ INTERNATIONAL BREWING GROUP, LLC, an Ohio limited liability
company ("SIBG"), AUSTOST ANSTALT ▇▇▇▇▇▇, a Lichtenstein corporation
("Austost"), BALMORE FUNDS S.A., a British Virgin Islands corporation
("Balmore"), ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇▇ Sr."), ▇▇▇ ▇▇▇▇▇▇▇▇, JR. ("▇▇▇▇▇▇▇▇
Jr."), ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇ ("▇▇▇▇"), WORLD CAPITAL FUNDING, LLC, a
Pennsylvania limited liability company ("World Capital"), THE AUGUSTINE FUND
L.P., an Illinois limited partnership ("Augustine"), ▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇"),
CONGREGATION ▇▇▇▇ MOREDECHAI, a religious organization with an address at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("CBM"), and BERTEK, INC., a New York
corporation, ("Bertek").
RECITALS
--------
A. Each of Austost, Balmore, ▇▇▇▇▇▇▇▇ Sr., ▇▇▇▇▇▇▇▇ Jr., ▇▇▇▇▇, ▇▇▇▇
and World Capital (each, a "Note Holder" and collectively, the "Note Holders")
is a holder of FBC's 10% Convertible Notes, dated June 7, 1999 (the "Convertible
Notes") issued by FBC pursuant to that certain Subscription Agreement dated as
of June 2, 1999 (the "Note Subscription Agreement").
B. Each of Austost, Balmore, Augustine, Dowda, CBM and Bertek (each, a
"Preferred Share Holder" and collectively, the "Preferred Share Holders") is the
beneficial and record owner of shares of FBC's Series F Convertible Preferred
Stock (the "Series F Stock") and/or Series G Convertible Preferred Stock (the
"Series G Stock" and together with the Series F Stock, the "Preferred Shares")
issued pursuant to the Subscription Agreements, dated as of September 3, 1998
(the "Series F Subscription Agreements") and the U.S. Subscription Agreements,
dated as of November 20, 1998 (the "Series G Subscription Agreements," and
together with the Series F Subscription Agreement, the "Preferred Shares
Subscription Agreements"), respectively.
C. In order to induce SIBG to make an investment of $2.0 million in
FBC, the Note Holders and the Preferred Share Holders (collectively, the
"Securities Holders") have agreed, effective as of the closing of such
investment (the "Investment Closing"), to consummate the transactions
contemplated by this Agreement (collectively, the "Restructuring Transactions").
D. Capitalized terms not otherwise defined herein shall have the
meaning given to them in Section 11.10 of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and undertakings contained in this
Agreement, and subject to and on the terms and conditions set forth in this
Agreement, the parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
PAYMENT OF
THE CONVERTIBLE NOTES
---------------------
1.1 Payment of the Convertible Notes. In full payment of the
Convertible Notes, SIBG shall cause FBC to pay (a) an aggregate of $500,000 to
the respective Note Holders in the amount set forth opposite their name on
Exhibit A attached hereto (the "Note Payments"), (ii) an aggregate of $50,000 to
World Capital in respect of advances made by World Capital to FBC in connection
with the issuance of the Convertible Notes (the "Advance Payment"), and (iii) an
aggregate of $20,000, payable as follows: $10,000 to World Capital, $5,000 to
Austost and $5,000 to Balmore, in respect of fees incurred by them in connection
with the issuance of the Convertible Notes (the "Fees Payment"). SIBG shall pay
the foregoing amounts by wire transfer of immediately available funds to the
recipient's account or accounts specified by such recipients in writing prior to
the Closing.
1.2 Termination of Note Subscription Agreement and Related
Agreements. Effective as of the Closing, (i) the Note Subscription Agreement and
the Security Agreement, dated as of June 7, 1999, between FBC and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, as collateral agent (the "Collateral Agent") for the benefit of the
persons and entities listed on Exhibit A attached thereto (the "Security
Agreement"), shall terminate and be of no further force and effect, (ii) neither
FBC nor SIBG nor any of their respective Affiliates shall have any obligations
or liabilities to the Note Holders under the Note Subscription Agreement or the
Security Agreement or under any other agreements (written or oral) regarding the
Convertible Notes, and (iii) the Note Holders hereby release any and all claims
under such agreements pursuant to Section 9.2 of this Agreement. The Note
Holders shall execute, deliver and file, or cause the execution, delivery and
filing of, any and all agreements, instruments or filings required or determined
by FBC to be appropriate to terminate any Liens in favor of the Note Holders.
The Note Holders hereby authorize the Collateral Agent to execute any and all
agreements, instruments and filings necessary or appropriate to effect the
foregoing.
1.3 Warrant Amendments. At the Closing, each of the Note
Holders who beneficially own common stock purchase warrants issued in connection
with the issuance of the Convertible Notes (the "Note Warrants") shall execute
an amendment to their respective Note Warrants in the form of Exhibit B attached
hereto (each, an "Amended Note Warrant").
ARTICLE II
CONVERSION OF PREFERRED SHARES
------------------------------
2.1 Conversion of Preferred Shares. At the Closing, each of
the Preferred Share Holders shall execute and deliver to FBC in accordance with
the terms of such Preferred Shares a conversion notice specifying that,
effective upon the Investment Closing, all of such Preferred Share Holder's
Preferred Shares shall be converted into the number of shares of Common Stock of
FBC (the "Conversion Shares") set forth opposite their name on Exhibit C. FBC
hereby acknowledges that pursuant to subsection (d)(3)(i) and (ii) of Rule 144
(as defined in Section 9.6(a)), holders of the Preferred Shares can tack the
holding period of the Preferred Shares to the Conversion Shares.
2
2.2 Termination of Preferred Share Subscription Agreements and
Related Agreements. Effective as of the Closing, the Preferred Share
Subscription Agreements shall terminate and be of no further force and effect
and neither FBC nor SIBG nor any of their respective Affiliates shall have any
obligations or liabilities to the holders of the Preferred Shares under the
Preferred Share Subscription Agreements or the Certificate of Designation and
Articles Supplementary relating to the Preferred Shares or under any other
agreement (written or oral) regarding the Preferred Shares.
ARTICLE III
CLOSING
-------
3.1 Closing. The closing of the Restructuring Transactions
(the "Closing") will be held at the offices of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ on August 24, 1999 (the "Closing
Date") simultaneously with the execution and delivery of this Agreement.
3.2 Closing Deliveries and Payment.
(a) At the Closing, each of the Note Holders shall deliver or
cause to be delivered to FBC and SIBG the following documents:
(i) The original Convertible Note for cancellation;
(ii) An Amended Note Warrant, to the extent
applicable, duly executed by each holder thereof;
(iii) A certified copy of the organizational
documents of World Capital; and
(iv) A certificate of the Secretary of each of
Austost, Balmore and World Capital certifying as to (A) the
good standing of Austost, Balmore and World Capital,
respectively, under the laws of their respective jurisdictions
of incorporation, (B) the board resolutions authorizing the
execution and performance of this Agreement, the execution and
performance of the documents contemplated hereby (the
"Transaction Documents") to which it is a party and the
performance of the Restructuring Transactions, (C) except with
respect to Austost and Balmore, their respective by-laws or
regulations and (D) the incumbency and genuineness of the
signature of each of their respective officers executing this
Agreement and the documents contemplated hereby.
(b) At the Closing, each of the Preferred Share Holders shall
deliver or cause to be delivered to FBC and SIBG the following documents:
(i) A Conversion Notice, duly executed by such
Preferred Share Holder;
3
(ii) A certified copy of the organizational documents
of Augustine, CBM and Bertek;
(iii) A good standing certificate for Augustine, CBM
and Bertek issued by their respective jurisdictions of
organization; and
(iv) A certificate of the Secretary of each of
Augustine, CBM and Bertek certifying as to (A) the good
standing of Augustine, CBM and Bertek, respectively, under the
laws of their respective jurisdiction of organization, (B) the
board resolutions authorizing the execution and performance of
this Agreement, the execution and performance of the
Transaction Documents to which it is a party and the
performance of the Restructuring Transactions, (C) their
respective by-laws or regulations and (D) the incumbency and
genuineness of the signature of each of their respective
officers executing this Agreement and the documents
contemplated hereby.
(c) At the Closing, SIBG and/or FBC, as the case may be, shall
deliver or cause to be delivered to the Note Holders and/or the Preferred Share
Holders, as the case may be, the following documents:
(i) The Note Payments;
(ii) The Advance Payment;
(iii) The Fee Payment;
(iv) The Amended Note Warrants with respect to each
holder thereof;
(v) The shares of Common Stock of FBC issuable upon
conversion of the Preferred Shares pursuant to Section 2.1 of
this Agreement;
(vi) An Officer's Certificate certifying as to the
receipt by FBC of SIBG's $2.0 million investment for 51% of
FBC's outstanding common stock after giving effect to the
transactions contemplated hereby;
(vii) A certificate of the Secretary of SIBG
certifying as to (A) the good standing of SIBG under the laws
of its jurisdiction of organization, (B) the board resolutions
authorizing the execution and performance of this Agreement,
the execution and performance of the Transaction Documents to
which it is a party and the performance of the Restructuring
Transactions, (C) its by-laws or regulations and (D) the
incumbency and genuineness of the signature of each of its
officers executing this Agreement and the documents
contemplated hereby;
(viii) A certificate of the Secretary of FBC
certifying as to (A) the good standing of FBC under the laws
of its jurisdiction of organization, (B) the board resolutions
authorizing the execution and performance of this Agreement,
the execution and performance of the Transaction Documents to
which it is a party and the performance of the Restructuring
Transactions, (C) its by-laws or regulations and
4
(D) the incumbency and genuineness of the signature of each of
its officers executing this Agreement and the documents
contemplated hereby; and
(ix) A certified copy of the organizational documents
of SIBG and FBC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE NOTE HOLDERS
-------------------
Each Note Holder represents and warrants to SIBG and FBC as of the date
of this Agreement as follows:
4.1 Authority. Such Note Holder has all requisite power and
authority to enter into and perform its or his obligations under this Agreement
and any Transaction Documents to which it or he is a party and to consummate the
Restructuring Transactions, and this Agreement and each of the Transaction
Documents to which it or he is a party have been duly executed and delivered by
such Note Holder pursuant to all necessary authorization and are the legal,
valid and binding obligations of such Note Holder, enforceable against such Note
Holder in accordance with their terms.
4.2 Title. Such Note Holder (a) is the record and beneficial
owner of the Convertible Note set forth opposite his or its name on Exhibit A
attached hereto, which constitutes all of the Convertible Notes it or he
directly or indirectly owns or controls, (b) has full power, right and
authority, and any approval required by law, to make and enter into this
Agreement and the Transaction Documents to which it or he is a party, and (c)
has valid title to his or its Convertible Note, free and clear of any Liens.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PREFERRED SHARE HOLDERS
------------------------------
Each Preferred Share Holder represents and warrants to SIBG and FBC for
itself as of the date of this Agreement as follows:
5.1 Authority. Such Preferred Share Holder has all requisite
power and authority to enter into and perform its or his obligations under this
Agreement and the Transaction Documents to which it or he is a party and to
consummate the Restructuring Transactions, and this Agreement and each of the
Transaction Documents to which it or he is a party have been duly executed and
delivered by such Preferred Share Holder pursuant to all necessary authorization
and are the legal, valid and binding obligations of such Preferred Share Holder,
enforceable against such Preferred Share Holder in accordance with their terms.
5.2 Title. Such Preferred Share Holder (a) is the record and
beneficial owner of the Preferred Shares set forth opposite his or its name on
Exhibit C attached hereto, which constitute
5
all of the Preferred Shares it or he directly or indirectly owns or controls,
(b) has full power, right and authority, and any approval required by law, to
make and enter into this Agreement and the Transaction Documents to which it or
he is a party and to convert in full his or its Preferred Share, and (c) has
valid title to his or its Preferred Shares, free and clear of any Liens.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE SECURITIES HOLDERS
-------------------------
Each of the Securities Holders represents and warrants to SIBG and FBC
for itself as of the date of this Agreement as follows:
6.1 FBC Securities. Schedule 6.1 sets forth all of the debt
and/or equity securities of FBC directly or indirectly owned or controlled by
such Securities Holder except for the Amended Note Warrants and the Conversion
Shares. Except as set forth on Schedule 6.1 and except for the Amended Note
Warrants, such Securities Holder does not own or control any Options relating to
the Common Stock of FBC.
6.2 Consents and Approvals. No approval or authorization of,
or declaration, filing or registration with, any Governmental Authority is
required to be made or obtained by such Securities Holder in connection with the
execution, delivery and performance of this Agreement or any Transaction
Document to which it or he is a party and the consummation of the Restructuring
Transactions.
6.3 No Conflict or Violation. Neither the execution, delivery
or performance of this Agreement, any Transaction Document to which it or he is
a party nor the consummation of the Restructuring Transactions will result in
(a) a violation by such Securities Holder of any Laws or Orders applicable to
such Securities Holders, which violation would have a material adverse effect on
the ability of such Securities Holders to consummate the Restructuring
Transactions or (b) a violation or conflict with any provision of any contract
or agreement to which such Securities Holder is a party.
6.4 Litigation. There are no Actions instituted or pending
against such Securities Holder that seek to prevent or prohibit the consummation
of the Restructuring Transactions. Such Securities Holder is not subject to any
Order.
6.5 No Reliance. Such Securities Holder has (a) had access to
information regarding FBC, its business and financial condition, (b) had an
opportunity to ask questions of, and obtain additional information from, FBC
regarding its business, financial condition and prospects, and (c) had the
opportunity to seek legal counsel regarding the Restructuring Transactions and
this Agreement. Such Securities Holder is not taking any action pursuant to this
Agreement in reliance upon any representation made, or information provided by,
FBC or SIBG or any of their respective Representatives or Affiliates except for
the representations and warranties set forth in this Agreement.
6
6.6 Broker's Fees. No person has acted directly or indirectly
as a broker, finder or financial advisor for such Securities Holder in
connection with the Restructuring Transactions or this Agreement, and no person
is entitled to any fee or commission or like payment from such Securities Holder
in connection with the Restructuring Transactions or this Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SIBG
--------------------------------------
SIBG represents and warrants to the Securities Holders as follows:
7.1 Authorization. SIBG has the legal capacity, power and
authority to enter into this Agreement and perform its obligations under this
Agreement and any Transaction Document to which it is a party, and has taken all
actions necessary to consummate the Restructuring Transactions and to perform
SIBG's obligations under this Agreement and any Transaction Document to which it
is a party. This Agreement and the Transaction Documents to which it is a party
have been duly executed and delivered by SIBG and are the legal, valid and
binding obligations of SIBG, enforceable against SIBG in accordance with their
terms.
7.2 Consents and Approvals. No approval or authorization of,
or declaration, filing or registration with, any Governmental Authority is
required to be made or obtained by SIBG in connection with the execution,
delivery and performance of this Agreement or any Transaction Document to which
it is a party and the consummation of the Restructuring Transactions.
7.3 No Conflict or Violation. Neither the execution, delivery
or performance of this Agreement, any Transaction Document to which it is a
party nor the consummation of the Restructuring Transactions will result in (a)
a violation by SIBG of any Laws or Orders applicable to SIBG, which violation
would have a material adverse effect on the ability of SIBG to consummate the
Restructuring Transactions, or (b) a violation or conflict with any provision of
any contract or agreement to which SIBG is a party.
7.4 Litigation. There are no Actions instituted or pending
or, to the knowledge of SIBG, threatened against SIBG that seek to prevent or
prohibit the consummation of the Restructuring Transactions. SIBG is not subject
to any Order.
7.5 Broker's Fees. No person has acted directly or indirectly
as a broker, finder or financial advisor for SIBG in connection with the
Restructuring Transactions or this Agreement, and no person is entitled to any
fee or commission or like payment from SIBG in connection with the Restructuring
Transactions or this Agreement.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF FBC
-------------------------------------
FBC represents and warrants to the Securities Holders as follows:
7
8.1 Authorization. FBC has the legal capacity, power and
authority to enter into this Agreement and perform its obligations under this
Agreement and any Transaction Document to which it is a party and has taken all
actions necessary to consummate the Restructuring Transactions and to perform
FBC's obligations under this Agreement and any Transaction Document to which it
is a party. This Agreement and the Transaction Documents to which it is a party
have been duly executed and delivered by FBC and are the legal, valid and
binding obligations of FBC, enforceable against FBC in accordance with their
terms.
8.2 Consents and Approvals. No approval or authorization of,
or declaration, filing or registration with, any Governmental Authority is
required to be made or obtained by FBC in connection with the execution,
delivery and performance of this Agreement or any Transaction Document to which
it is a party and the consummation of the Restructuring Transactions.
8.3 No Conflict or Violation. Neither the execution, delivery
or performance of this Agreement, any Transaction Document to which it is a
party nor the consummation of the Restructuring Transactions will result in (a)
a violation by FBC of any Laws or Orders applicable to FBC, which violation
would have a material adverse effect on the ability of FBC to consummate the
Restructuring Transactions, or (b) a violation or conflict with any provision of
any contract or agreement to which FBC is a party.
8.4 Litigation. There are no Actions instituted or pending or,
to the knowledge of FBC, threatened against FBC that seek to prevent or prohibit
the consummation of the Restructuring Transactions. FBC is not subject to any
Order.
8.5 Broker's Fees. No person has acted directly or indirectly
as a broker, finder or financial advisor for FBC in connection with the
Restructuring Transactions or this Agreement, and no person is entitled to any
fee or commission or like payment from FBC in connection with the Restructuring
Transactions or this Agreement.
ARTICLE IX
COVENANTS AND AGREEMENTS
------------------------
9.1 Further Assurances. Following the Closing, SIBG and FBC,
on the one hand, and the Securities Holders, on the other hand, shall perform
such further deeds, acts, things and assurances as are necessary, reasonable,
advisable or appropriate to consummate the Restructuring Transactions and
otherwise to carry out or facilitate the performance of the terms of this
Agreement. If, at any time after the Closing, any further action is necessary or
desirable to carry out this Agreement or the Restructuring Transactions, SIBG
and FBC, on the one hand, and the Securities Holders, on the other hand, shall
take all such necessary action.
9.2 Release of Claims. Each Securities Holder, on behalf of
himself or itself and his or its dependents, successors, assigns, heirs,
executors, administrators and Representatives (the "Releasors"), hereby
releases, remises, acquits and discharges forever, irrevocably and
unconditionally, SIBG and FBC and their respective Representatives, Affiliates,
successors and assigns (the "Releasees"), from, against and with respect to any
and all Claims which any of the Releasors has, ever had or may hereafter have
against the Releasees arising on or prior to the date
8
of this Agreement or on account of or arising out of any matter, cause or event
occurring on or prior to the date of this Agreement; provided, however, that
nothing in this Section 9.2 will operate to release any obligation of SIBG or
FBC arising under this Agreement. Each Securities Holder, on behalf of himself
or itself and the other Releasors, hereby irrevocably covenants to refrain from,
directly or indirectly, asserting any Claim, or commencing, instituting or
causing to be commenced or instituted, any Action of any kind against any
Releasee under this Section 9.2 based on any matter purported to be released
under this Section 9.2. The provisions of this Section 9.2 are intended for the
benefit of, and will be enforceable by each Releasee.
9.3 Volume Limitations. During the period commencing on the
date the volume limitations of Rule 144(e) are no longer applicable to the
Conversion Shares through and including the second anniversary of the date
hereof (the "Contractual Restriction Period"), the number of Conversion Shares
which each Preferred Share Holder or any Affiliate of a Preferred Share Holder
who receives or acquires Conversion Shares (the "Conversion Share Holder") shall
be entitled to sell during any three-month period shall not exceed the greater
of (i) one percent of the shares of FBC Common Stock outstanding as shown by the
most recent report or statement published by FBC or (ii) the average weekly
reported volume of trading in such securities on all national securities
exchanges and/or reported through the automated quotation system of a
registered securities association during the four calendar weeks preceding the
date of such sale; provided, however, that if, prior to the commencement of the
Contractual Restriction Period, a Conversion Share Holder does not sell the
maximum number of Conversion Shares permitted during such period by Rule 144(e),
then, notwithstanding the restrictions contained in this Section 9.3, such
Conversion Share Holder may sell pursuant to Rule 144(k) (to the extent legally
available) the number of Conversion Shares equal to the Rule 144(e) Shortfall
Amount in addition to the amounts saleable pursuant to (i) and (ii) above. For
purposes of this Agreement, the "Rule 144(e) Shortfall Amount" means the excess
of the Rule 144(e) Amount over the number of Conversion Shares sold by such
Conversion Share Holder pursuant to Rule 144 after the date hereof and prior to
the commencement of the Contractual Restriction Period; and "Rule 144(e) Amount"
means the maximum number of shares of FBC Common Stock such Conversion Share
Holder was entitled to sell between the date hereof and the commencement of the
Contractual Restriction Period pursuant to Rule 144 in compliance with the
volume limitations of Rule 144(e). For purposes of determining the amount of
shares of FBC Common Stock which may be sold on a particular date, the parties
hereto shall rely on Rule 144(e)(3) and the interpretations of Rule 144 by the
Securities and Exchange Commission. Each Preferred Share Holder acknowledges
that the foregoing volume limitations are a material inducement for FBC and SIBG
to enter into this Agreement and consummate the transactions contemplated by
this Agreement.
9.4 Prohibition Against Short Sales. For a period of three
years commencing on the date of this Agreement, no Preferred Share Holder shall,
directly or indirectly, engage in any short sales in FBC Common Stock. For
purposes of this Agreement, "short sale" means any sale of a security that the
seller does not own or any sale that is consummated by delivery of a security
borrowed by, or for the account of, the seller. Each Preferred Share Holder
acknowledges that the foregoing prohibition is a material inducement for FBC and
SIBG to enter into this Agreement and consummate the transactions contemplated
by this Agreement.
9.5 Irrevocable Proxy. From the date hereof through and
including the second anniversary of the date hereof, each Preferred Share Holder
hereby grants SIBG an irrevocable proxy and irrevocably appoints SIBG or its
designees, with full power of substitution, his or its attorney
9
and proxy to vote all of the shares of FBC Common Stock then owned or controlled
by such Preferred Share Holder, at any meeting of the shareholders of FBC,
however called, in favor of any proposal to (i) approve a merger or other
business combination between or involving SIBG and FBC which (A) shall be on
commercially reasonable terms, and (B) shall result in FBC remaining a reporting
company under the Exchange Act (as defined in 9.6(a)) and (ii) increase the
number of authorized shares of FBC. The proxy granted hereby shall be deemed to
be a proxy coupled with an interest for purposes of Section 2-507 of the
Maryland General Corporation Law.
9.6 Registration Rights. FBC hereby provides the Preferred
Share Holders with registration rights as set forth in this Section 9.6.
(a) Definitions. The following terms, as used in this Section
9.6, have the following meanings (all terms defined herein in the
singular to have the correlative meanings when used in the plural and
vice versa):
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor statute,
and the rules and regulations promulgated thereunder.
"Holders" means the Preferred Share Holders who
receive FBC Common Stock pursuant to Section 2.1 of this
Agreement and any assignee of the Holders permitted by Section
9.6(h), so long as any such Person is a holder of record of
Registrable Shares.
"Initial Shares" means the Conversion Shares.
"Participating Holders" means, with respect to any
registration of Registrable Shares by FBC pursuant to this
Agreement the Holders that are entitled to participate in, and
are participating in or seeking to participate in, such
registration.
"Person" means a natural person, a corporation, a
partnership, a limited liability company, a trust, a joint
venture, any regulatory authority or any other entity or
organization.
"Piggyback Registration" means any registration of
Registrable Shares under the Securities Act effected in
accordance with Section 9.6(b).
"Registrable Shares" means (i) the Initial Shares,
and (ii) any other securities issued or issuable with respect
to the Initial Shares by way of stock dividend, stock split or
dividend or distribution in the form of securities or in
connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Shares, such securities shall
cease to be Registrable Shares when (i) a registration
statement with respect to the sale of such securities shall
have become effective under the Securities Act and such
securities shall have been disposed of pursuant to such
registration statement, (ii) such securities shall have been
distributed in accordance with Rule 144, (iii) such securities
shall have ceased to be outstanding, or (iv) such securities
are transferred to any Person that is not an assignee
permitted by Section 9.6(h).
10
"Registration Expenses" means all expenses incident
to FBC's performance of or compliance with this Agreement,
including, without limitation, (a) all registration and filing
fees, (b) all registration, filing, qualification and other
fees and expenses of complying with securities or blue sky
laws of all jurisdictions in which the securities are to be
registered and any legal fees and expenses incurred in
connection with the blue sky qualifications of the Registrable
Shares and the determination of their eligibility for
investment under the laws of all such jurisdictions, (c) all
word processing, duplicating, printing, messenger and delivery
expenses and (d) the fees and disbursements of counsel for FBC
and of its independent public accountants.
"Rule 144" means Rule 144 promulgated by the SEC
under the Securities Act and any successor provision thereto.
"SEC" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority
thereto.
"Securities Act" means the Securities Act of 1933,
as amended from time to time, or any successor statute, and
the rules and regulations promulgated thereunder.
"Selling Expenses" means all costs and expenses
incident to each Holder's sale of Registrable Shares as
provided for in Section 9.6(b) of this Agreement, including,
without limitation, commissions to brokers and/or dealers and
fees and expenses of any Person retained by the Holder in
connection with such sale or sales, but excluding Registration
Expenses.
"Shares" means shares of FBC Common Stock.
(b) Registration Under the Securities Act.
(i) If FBC at any time proposes to register any of
its equity securities under the Securities Act for its own
account (other than by a registration on Form S-4 or Form S-8
or any successor or similar form then in effect) in a form and
in a manner that would permit registration of the Registrable
Shares, it will give prompt (but in no event less than thirty
days prior to the proposed date of filing the registration
statement relating to such registration) notice to all Holders
of FBC's intention to do so and of such Holders' rights under
this Section 9.6(b). Upon the request of any such Holder made
within twenty days after the receipt by such Holder of any
such notice (which request shall specify the Registrable
Shares intended to be disposed of by such Holder) (the
"Piggyback Registration Notice"), FBC will use commercially
reasonable efforts to effect the registration under the
Securities Act of all Registrable Shares which FBC has been so
requested to register by the Holders thereof, to the extent
required to permit the disposition (in accordance with the
manner of distribution contemplated by FBC with respect to
such registration by FBC of the Registrable Shares so to be
registered; provided, however, that if, at any time after
giving notice of its intention to register any equity
securities and prior to the effective date of the registration
statement filed in connection with such registration, FBC
shall determine for any reason not to register or to delay
registration of such equity securities, FBC may, at its
election, give notice of such
11
determination to each such Holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of
its obligation to register any Registrable Shares in
connection with such registration and (ii) in the case of a
determination to delay registering, shall be permitted to
delay registering any Registrable Shares for the same period
as the delay in registering such other equity securities.
(ii) If FBC at any time proposes to register any of
its equity securities for its own account under the Securities
Act as contemplated by this Section 9.6(b) and such securities
are to be distributed by or through one or more underwriters,
FBC will, if requested by any Participating Holder and subject
to this Section 9.6(b), include the Registrable Shares
requested by such Holder or Holders among the securities to be
distributed by such underwriters. The Holders of Registrable
Shares to be distributed by such underwriters shall be parties
to the underwriting agreement between FBC and such
underwriters; provided, however, that such agreement is
reasonably satisfactory in substance and form to FBC.76
(iii) If (A) a registration pursuant to this Section
9.6(b) involves an underwritten offering of the securities
being registered to be distributed (on a firm commitment
basis) by or through one or more underwriters of recognized
standing under underwriting terms appropriate for such a
transaction and (B) the managing underwriter of such
underwritten offering shall inform FBC and the Holders
requesting such registration by letter of its belief that the
amount of securities requested to be included in such
registration exceeds the amount which can be sold in (or
during the time of) such offering within a price range
acceptable to FBC, FBC will include in such registration such
amount of securities which FBC is so advised can be sold in
(or during the time of) such offering as follows: first, all
securities proposed by FBC to be sold for its own account;
second, such Registrable Shares requested to be included in
such registration by any Holders thereof pro rata on the basis
of the amount of such securities so proposed to be sold and so
requested to be included by such Holders; and third, all other
securities of FBC requested to be included in such
registration pro rata on the basis of the amount of such
securities so proposed to be sold and so requested to be
included.
(c) Registration Terms and Procedures. (i) Each Participating
Holder shall pay its own Selling Expenses (as the case may be) incurred
in connection with a registration to be effected (whether or not
effected or deemed effected) pursuant to this Agreement. FBC shall pay
all Registration Expenses in connection with a registration to be
effected (whether or not effected or deemed effected) pursuant to this
Agreement.
(ii) In connection with FBC's obligations to register
Registrable Shares pursuant to this Agreement, FBC will use
commercially reasonable efforts to effect such registration so
as to permit the sale of any Registrable Shares included in
such registration in accordance with the intended method or
methods of distribution thereof, and pursuant thereto FBC will
as expeditiously as possible prepare and (as soon thereafter
as practicable) file with the SEC the requisite registration
statement containing all information required thereby to
effect such registration and thereafter use commercially
reasonable efforts to cause such registration statement to
become and remain effective in accordance with the terms of
this Agreement.
12
(iii) Each Holder of Registrable Shares as to which
any registration is being effected shall furnish to FBC such
information regarding such Holder, the Registrable Shares held
by such Holder and the intended plan of distribution of such
securities as FBC may from time to time reasonably request in
writing in connection with such registration. If any
registration statement refers to any Holder by name or
otherwise as the holder of any securities of FBC, then such
Holder shall have the right to require that such reference to
be in a form reasonably satisfactory to such Holder or in the
event that such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal
or state blue sky statute and the rules and regulations
thereunder then in force, the deletion of the reference to
such Holder.
(d) [intentionally omitted]
(e) Preparation: Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, FBC will give the Holders of
Registrable Shares to be registered under such registration statement,
in the case of registration of Registrable Shares pursuant to Section
9.6(b), their underwriters or agents, if any, and their respective
counsel and accountants reasonable access to its books and records and
such opportunities to discuss the business of FBC with its officers and
the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such Holders' and
such underwriters' or agents' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
(f) Indemnification. FBC and each of the Preferred Share
Holders acknowledge and agree that as a condition precedent to the
exercise of the registration rights herein contained, FBC and those
Holders electing to avail themselves of the rights specified in this
Section 9.6 shall each agree to and shall exchange such indemnities as
are customary and reasonable in connection with public offerings of
securities in circumstances similar to the circumstances of any
offering effected pursuant to the rights herein contained, which
indemnities shall be acceptable to FBC and its counsel in their sole
discretion. The Holders shall provide such information and undertake
such other actions as reasonably requested by FBC in connection with
such registration.
(g) [intentionally omitted]
(h) Assignment. The rights of the Holders hereunder shall only
be assignable in connection with the transfer of Registrable Shares by
a Holder that is required by operation of law, or in connection with a
transfer by a Holder by gift or to heirs, executors, legal
representatives and immediately family members or any other Person who
agree or agrees in writing to be bound by all the terms of this
Agreement.
(i) Termination of Certain Rights. The rights and obligations
hereunder of each Holder shall terminate with respect to such party at
such time when neither it nor any of its permitted assigns holds
Registrable Shares or two years from the date of this Agreement,
whichever occurs earlier; provided, however, that the provisions of
Section 9.6(f) and the
13
rights of any party hereto with respect to the breach of any provision
hereof shall survive termination of this Agreement.
ARTICLE X
INDEMNIFICATION
---------------
10.1 Survival Periods. The representations and warranties of
the parties contained in this Agreement will survive the Closing Date but expire
on the first anniversary of the Closing Date, except that there will be no
expiration date for any claim relating to breach of the representations and
warranties set forth in Sections 4.1, 4.2, 5.1, 5.2, 6.1, 6.6, 7.1, 7.5, 8.1 and
8.5. The covenants and agreements of the parties hereto will survive the Closing
in accordance with their terms. From and after the Closing, each of the
Securities Holders hereby agrees to indemnify, defend and hold harmless SIBG and
FBC, and SIBG and FBC hereby agree to indemnify, defend and hold harmless each
of the Securities Holders, against certain liabilities, in accordance with the
terms of this Article X.
10.2 Indemnification. Subject to the other provisions of this
Article X, from and after the Closing, a party providing indemnification
pursuant to this Article X (an "Indemnifying Party") shall indemnify, defend and
hold harmless the other party (the "Indemnified Party") from and against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims and damages (collectively, "Damages") to the extent they are the
result of any inaccuracy of any representation or warranty or failure to perform
or breach of any covenant or agreement made by the Indemnifying Party under this
Agreement. In addition, each of the Securities Holders, jointly and severally,
agree to indemnify, defend and hold harmless SIBG and FBC for any and all
Damages incurred or suffered by SIBG and/or FBC arising or resulting from any
activities of the Securities Holders or their Affiliates involving any
fraudulent or unlawful conduct with respect to any of FBC's debt in equity
securities, whether relating to a claim by FBC, SIBG, the SEC, any other
Governmental Authority or any other Person; provided, however, that unless a
claim relating to such fraudulent or unlawful conduct or alleged fraudulent or
unlawful conduct results in a determination by the appropriate Governmental
Authority that the Securities Holders or any of them engaged in such fraudulent
or unlawful conduct, the Securities Holders shall have no obligation to pay the
attorneys' fees and other costs and expenses of FBC and/or SIBG with respect to
such claim.
10.3 Claims. (a) If an Indemnified Party intends to seek
indemnification pursuant to this Article X, such Indemnified Party shall
promptly notify the Indemnifying Party in writing of such claim describing such
claim in reasonable detail; provided, that the failure to provide such notice
will not affect the obligations of the Indemnifying Party unless such Party is
actually prejudiced thereby. If such claim involves a claim by a third party
against the Indemnified Party, the Indemnifying Party will have 30 days after
receipt of such notice to decide whether it will undertake, conduct and control,
through counsel of its own choosing and at its own expense, the settlement or
defense of such claim, and if it so decides, the Indemnified Party shall
cooperate with the Indemnifying Party in connection with the settlement or
defense; provided, that the Indemnified Party may participate in such settlement
or defense through counsel chosen by it; and provided further, that the fees and
expenses of such counsel must be paid by the Indemnified Party. The Indemnifying
Party shall not, without the written consent of the Indemnified Party, settle or
compromise any action in any manner that would materially and adversely affect
the Indemnified
14
Party. If the Indemnifying Party does not notify the Indemnified Party within 30
days after the receipt of the Indemnified Party's notice of a claim of indemnity
under this Agreement that it elects to undertake the defense of such claim, the
Indemnified Party will have the right to contest, settle or compromise the claim
but does not thereby waive any right to indemnity for such claim pursuant to
this Agreement. As long as the Indemnifying Party is contesting any such claim
in good faith, the Indemnified Party shall not pay or settle any such claim.
Notwithstanding the foregoing, the Indemnified Party will have the right to pay
or settle any such claim; provided, that as long as the Indemnifying Party is
contesting such claim in good faith, any such settlement must include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnifying Party of a duly executed written release of the Indemnifying Party
from all liability and obligation in respect of such action; and provided
further, that in such event Indemnified Party shall waive any right to indemnity
for such claim by the Indemnifying Party; and provided further, that the
Indemnified Party shall provide the Indemnifying Party reasonable advance notice
of any proposed settlement or payment and may not pay or settle any claim if the
Indemnifying Party reasonably objects.
(b) The Indemnified Party shall cooperate fully in all aspects
of any investigation, defense, pretrial activities, trial, compromise,
settlement or discharge of any claim in respect of which indemnity is
sought pursuant to Article X, including, without limitation, by
providing the other party with reasonable access to any employees
(including as witnesses) and other information.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 Successors and Assigns. This Agreement is binding upon
and inures to the benefit of the parties and their respective successors and
assigns, but, except with respect to Section 9.6, is not assignable by any party
without the prior written consent of the other parties.
11.2 Notices. Unless otherwise provided in this Agreement, any
notice, request, instruction or other document to be given under this Agreement
by SIBG, FBC or any of the Securities Holders must be in writing and will be
deemed duly given (a) when received if personally delivered or sent by confirmed
facsimile, with a copy mailed by certified mail, postage prepaid, return receipt
requested, (b) within one business day after being sent by recognized overnight
delivery service or (c) within five business days after being mailed by
certified mail, postage prepaid, return receipt requested, and in each case
addressed as follows:
If to the Securities Holder:
To the address and facsimile number set forth opposite of the
Securities Holder's name on Exhibit A or Exhibit C hereto.
15
If to SIBG:
C. ▇▇▇▇▇ ▇▇▇▇▇▇
c/o Crooked River Brewing Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other place and with such other copies as any of the foregoing may
designate by written notice to the other party.
11.3 Choice of Law. This Agreement is governed by and will be
construed and enforced in accordance with the laws of the State of Ohio without
regard to principles of conflicts of laws.
11.4 Entire Agreement, Amendments and Waivers. This Agreement,
together with all Exhibits, constitutes the entire agreement of the parties
pertaining to this subject matter and supersedes all prior agreements,
understandings, negotiations or discussions, whether oral or written, of the
parties. No supplement, modification or waiver of this Agreement will be binding
unless executed in writing by the party or the parties to be bound thereby. No
waiver of any of the provisions of this Agreement will be deemed or will
constitute a waiver of any other provision of this Agreement (whether or not
similar), nor will such waiver constitute a continuing waiver unless otherwise
expressly provided.
11.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
11.6 Invalidity. If any one or more of the provisions
contained in this Agreement or in any other instrument referred to in this
Agreement, is, for any reason, held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect any
other provision of this Agreement.
11.7 Headings. The headings of the Articles and Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
16
11.8 Expenses. SIBG and FBC, on the one hand, and the
Securities Holders, on the other hand, are liable for their own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
11.9 No Third Party Beneficiaries. Except under Section 9.2,
nothing expressed or implied in this Agreement is intended, or will be
construed, to confer upon or give any person or entity other than the parties
hereto any rights or remedies under or by reason of this Agreement.
11.10 Defined Terms. For purposes of this Agreement the
following terms have the meanings (such meanings to be equally applicable to
both singular and plural forms of the defined terms) set forth below:
"Actions" means any action, suit, or legal, administrative or
arbitral proceeding before any Governmental Authority.
"Affiliate" means with respect to any person, any other
Person, directly or indirectly controlling, controlled by or under common
control with the first Person. For purposes of this definition, "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Claims" means any and all claims, Actions, suits,
liabilities, costs, demands, accounts, causes of action, rights of levy,
execution or recission, remedies, judgments, obligations, damages, expenses,
interest, penalties and charges of every kind and nature whatsoever, whether in
law or in equity, whether known or unknown, foreseen or unforeseen, matured or
unmatured, absolute or contingent, determined or determinable.
"Governmental Authority" means any government or political
subdivision, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any federal,
state, local or foreign court or arbitrator.
"Laws" means any law, statute, code, ordinance, regulation or
legally enforceable rule of any Governmental Authority.
"Liens" means any mortgage, lien, Option, pledge, adverse
claim, interest, charge or other encumbrance.
"Option" means any option, warrant, call, convertible or
exchangeable security, subscription, preemptive right or voting trust or
agreement, any agreement restricting sale or transfer or other agreement or
right of similar nature.
"Orders" means any order, judgment, ruling, injunction,
assessment, award, decree or writ of any Governmental Authority.
"Person" means any natural person and any corporation, firm,
partnership, trust, estate, limited liability company or any other entity.
17
"Representatives" means, with respect to a party, his or its
present and former employees, shareholders, partners, Affiliates, agents,
attorneys or representatives.
11.11 Consent To Jurisdiction And Service Of Process. Any and
all Actions arising out of or relating to this Agreement and any other Actions
by or among the Securities Holders (or my of them) or FBC and SIBG, on the one
hand, and the Securities Holders (or any of them), on the other hand, must be
brought in a court within the State of Ohio. Each Securities Holder irrevocably
consents to the jurisdiction of the state and federal courts located in the
State of Ohio and waives any objection which the Securities Holder may now or
hereafter have to the choice of forum whether personal jurisdiction, venue,
forum non conveniens or on any other ground. Each Securities Holder hereby
irrevocably designates, appoints and empowers the Secretary of State of the
State of Ohio to receive for and on behalf of such Securities Holder service of
process in the State of Ohio and each Securities Holder irrevocably consents to
the service of process outside of the territorial jurisdiction of said courts by
mailing copies thereof by registered or certified United States mail, postage
prepaid, to such Securities Holder's address as set forth pursuant to Section
11.2 hereof, with the same effect as if the Securities Holder were a resident of
the State of Ohio and had been lawfully served in such state. Nothing in this
Agreement prohibits service of process in any other manner permitted by law.
Each Securities Holder further agrees that final judgment against him in any
such Action will be conclusive and may be enforced in any other jurisdiction
within or outside the State of Ohio by suit on the judgment, a certified or
exemplified copy of which will be conclusive evidence of the fact and the amount
of such judgment.
11.12 Undertakings. The Securities Holders shall use their
reasonable efforts to provide to SIBG and FBC within thirty days of the date
hereof copies of the organizational documents and by-laws (or comparable
documents) of Austost and Balmore certified by their respective Corporate
Secretary or Officer.
18
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
SIBG:
▇▇▇▇▇▇ INTERNATIONAL BREWING
GROUP, LLC
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and C.E.O.
FBC:
▇▇▇▇▇▇▇▇▇ BREWING CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman and C.E.O.
SECURITIES HOLDERS:
AUSTOST ANSTALT ▇▇▇▇▇▇
By: /s/ [ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title: Representative
BALMORE FUNDS S.A.
By: /s/ {ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title:
WORLD CAPITAL FUNDING, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Partner
THE AUGUSTINE FUND L.P.
By: /s/ [ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title: COO, Augustine Capital
Management, Inc.,
General Partner
19
CONGREGATION ▇▇▇▇ MOREDECHAI
By: /s/
-------------------------------
Name:
Title:
BERTEK, INC.
By: /s/ [ILLEGIBLE]
-------------------------------
Name:
Title: Vice President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Sr.
-----------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jr.
-----------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇
20
EXHIBIT A
-------------------------------------------------------------------------------------------------------
Aggregate
Principal
Note Holder Amount of Note Address
-------------------------------------------------------------------------------------------------------
Austost Anstalt ▇▇▇▇▇▇ $125,000 7440 Fuerstentum
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇▇▇▇▇▇
with copy to:
Facsimile:
-------------------------------------------------------------------------------------------------------
Balmore Funds S.A. $125,000 ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
with copy to:
Facsimile:
-------------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, Sr. $ 30,000 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with copy to:
Facsimile:
-------------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, Jr. $ 20,000 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇ $ 50,000 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ $100,000 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
World Capital Funding, LLC $ 50,000 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------------------------------
21
EXHIBIT B
Form of Amended Note Warrant
22
EXECUTION COPY
--------------
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ▇▇▇▇▇▇▇▇▇ BREWING CO. THAT SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase 125,000 Shares of Common
Stock of ▇▇▇▇▇▇▇▇▇ Brewing Co. (subject
to adjustment as provided herein)
AMENDED AND RESTATED COMMON STOCK PURCHASE WARRANT
No. 1-A August 24, 1999
▇▇▇▇▇▇▇▇▇ BREWING CO., a corporation organized under the laws of the
State of Maryland (the "Company"), hereby certifies that, for value received,
AUSTOST ANSTALT ▇▇▇▇▇▇, or assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company after August 24, 1999 at any
time or from time to time before 5:00 p.m., New York time, on June 7, 2002 (the
"Expiration Date"), up to 125,000 fully paid and nonassessable shares of Common
Stock (as hereinafter defined), $.0004 par value per share, of the Company, at a
per share purchase price of $0.50 per share (the "Warrant"), (such purchase
price per share as adjusted from time to time as herein provided is referred to
herein as the "Purchase Price"). The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein.
1. Definitions. As used herein the following terms, unless the context
otherwise requires, have the following respective meanings:
(a) The term Company shall include ▇▇▇▇▇▇▇▇▇ Brewing Co. and any
corporation which shall succeed or assume the obligations of ▇▇▇▇▇▇▇▇▇ Brewing
Co. hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock,
$.0004 par value per share, as authorized on the date of the Agreement, (b) any
other capital stock of any class or classes (however designated) of the Company,
authorized on or after such date, the holders of which shall have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which
shall ordinarily, in the absence of contingencies, be entitled to vote for the
election of a majority of directors of the Company (even if the right so to vote
has been suspended by the happening of such a contingency) and (c) any other
securities into which or for which any of the securities described in (a) or (b)
may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
1
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the Holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 6 or otherwise.
(d) The term "Registrable Securities" means (i) Common Stock issued
pursuant to the Warrant, (ii) any Common Stock issued or issuable with respect
to the Common Stock referred to in clause (i) above by way of a stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization and (iii) any other shares
of Common Stock held by the Holder. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when they have been
distributed to the public pursuant to an offering registered under the
Securities Act of 1933 (the "Securities Act") or sold to the public through a
broker, dealer or market maker in compliance with Rule 144 under the Securities
Act (or any similar rule then in force) or repurchased by the Company. For
purposes of this Warrant, the Holder shall be deemed to be a Holder of
Registrable Securities, and the Registrable Securities shall be deemed to be in
existence, whenever such Holder has the right to acquire directly or indirectly
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Holder shall be entitled to exercise the
rights of a Holder of Registrable Securities hereunder (it being understood,
however, that any Registrable Securities which are not shares of Common Stock
shall be converted into or exercised for shares of Common Stock immediately
prior to the closing of any registration pursuant to which such Common Stock is
to be sold).
2. Amendment and Restatement. By execution of this Warrant, the Common
Stock Purchase Warrant executed between the Company and the parties, dated June
7, 1999, (the "June 7th Warrant") is hereby amended and restated in its entirety
and is of no further force and effect. The parties acknowledge and agree that
they have no further rights, interests, claims or obligations whatsoever arising
out of, or relating to, the June 7th Warrant.
3. Exercise of Warrant.
3.1. Number of Shares Issuable upon Exercise. From and after
the date hereof through and including the Expiration Date, the Holder hereof
shall be entitled to receive, upon exercise of this Warrant in whole in
accordance with the terms of subsection 3.2 or upon exercise of this Warrant in
part in accordance with subsection 3.3, shares of Common Stock of the Company,
subject to adjustment pursuant to Section 6.
3.2. Full Exercise. This Warrant may be exercised in full by
the Holder hereof by surrender of this Warrant, with the form of subscription
attached as Exhibit A hereto (the "Subscription Form") duly executed by such
Holder, to the Company at its principal office or at the office of its Warrant
agent (as provided in Section 13), accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price (as hereinafter defined)
then in effect.
2
3.3. Partial Exercise. This Warrant may be exercised in part
(but not for a fractional share) by surrender of this Warrant in the manner and
at the place provided in subsection 3.2 except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying (a)
the number of shares of Common Stock designated by the Holder in the
Subscription Form by (b) the Purchase Price then in effect. On any such partial
exercise, the Company, at its expense, will forthwith issue and deliver to or
upon the order of the Holder hereof a new Warrant of like tenor, in the name of
the Holder hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes), may request, the number of shares of Common Stock
for which such Warrant may still be exercised.
3.4. Fair Market Value. Fair Market Value of a share of Common
Stock as of a particular date (the "Determination Date") shall mean the Fair
Market Value of a share of the Company's Common Stock. Fair Market Value of a
share of Common Stock as of a Determination Date shall mean:
(a) If the Company's Common Stock is traded on an
exchange or is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System or the NASDAQ SmallCap
Market, then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date.
(b) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National Market System or the NASDAQ SmallCap Market
but is traded in the over-the-counter market, then the mean of the closing bid
and asked prices reported for the last business day immediately preceding the
Determination Date.
(c) Except as provided in clause (d) below, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree or in the absence of agreement by arbitration in accordance with
the rules then standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and
training to pass on the matter to be decided.
(d) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then all amounts to
be payable per share to holders of the Common Stock pursuant to the charter in
the event of such liquidation, dissolution or winding up, plus all other amounts
to be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date.
3.5. Company Acknowledgment. The Company will, at the time of
the exercise of the Warrant, upon the request of the Holder hereof acknowledge
in writing its continuing obligation to afford to such Holder any rights to
which such Holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the Holder shall fail to make
any such request, such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.
3.6. Trustee for Warrant Holder. In the event that a bank or
trust company shall have been appointed as trustee for the Holder of the Warrant
pursuant to subsection 5.2, such bank
3
or trust company shall have all the powers and duties of a warrant agent
appointed pursuant to Section 12 and shall accept, in its own name for the
account of the Company or such successor person as may be entitled thereto, all
amounts otherwise payable to the Company or such successor, as the case may be,
on exercise of this Warrant pursuant to this Section 3.
4. Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the Holder hereof, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and nonassessable shares of Common Stock (or
Other Securities) to which such Holder shall be entitled on such exercise, plus,
in lieu of any fractional share to which such Holder would otherwise be
entitled, cash equal to such fraction multiplied by the then Fair Market Value
of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such Holder is entitled
upon such exercise, pursuant to Section 3 or otherwise.
5. Adjustment for Reorganization, Consolidation,- Merger, etc.
5.1. Reorganization, Consolidation, Merger, etc. In case at
any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 3 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 6.
5.2. Dissolution. In the event of any dissolution of the
Company following the transfer of all or substantially all of its properties or
assets, the Company, prior to such dissolution, shall at its expense deliver or
cause to be delivered the stock and other securities and property (including
cash, where applicable) receivable by the Holder of the Warrant after the
effective date of such dissolution pursuant to this Section 5 to a bank or trust
company having its principal office in New York, NY, as trustee for the Holder
of the Warrant.
5.3. Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 5.3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any such
4
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided in Section 6. In the event this Warrant does continue
in full force and effect after the consummation of the transaction described in
this Section 5.3, then only in such event will the Company's securities and
property (including cash, where applicable) receivable by the Holder of the
Warrant be delivered to the Trustee as contemplated by Section 5.2.
6. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock or (c) combine its outstanding shares of the Common Stock
into a smaller number of shares of the Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 6. The number
of shares of Common Stock that the Holder of this Warrant shall thereafter, on
the exercise hereof as provided in Section 3, be entitled to receive shall be
increased to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 6) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 6)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.
7. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 12 hereof).
8. Reservation of Stock, etc. Issuable on Exercise of Warrant;
Financial Statements. The Company will at all times reserve and keep available,
solely for issuance and delivery on the exercise of the Warrant, all shares of
Common Stock (or Other Securities) from time to time issuable on the exercise of
the Warrant. This Warrant entitles the Holder hereof to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Company's Common Stock.
5
9. Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by the registered Holder hereof (a "Transferor") with respect to
any or all of the shares of Common Stock due to the Holder under this Warrant.
On the surrender for exchange of this Warrant, with the Transferor's endorsement
in the form of Exhibit B attached hereto (the "Transferor Endorsement Form") and
together with evidence reasonably satisfactory to the Company demonstrating
compliance with applicable securities laws, the Company at its expense but with
payment by the Transferor of any applicable transfer taxes will issue and
deliver to or on the order of the Transferor thereof a new warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face thereof for the number of shares of Common Stock called for on the face
of the Warrant so surrendered by the Transferor.
10. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrent and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
11. Registration Rights. FBC hereby provides the Holder with
registration rights as set forth in this Section 11.
(a) Definitions. The following terms, as used in this Section
11, have the following meanings (all terms defined herein in the
singular to have the correlative meanings when used in the plural and
vice versa):
"Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor statute, and the rules
and regulations promulgated thereunder.
"Initial Shares" means the FBC Common Stock issued to the
Holder upon exercise of the Warrants pursuant to this Agreement.
"Person" means a natural person, a corporation, a
partnership, a limited liability company, a trust, a joint venture,
any regulatory authority or any other entity or organization.
"Piggyback Registration" means any registration of
Registrable Shares under the Securities Act effected in accordance with
Section 11(b).
"Registrable Shares" means (i) the Initial Shares, and
(ii) any other securities issued or issuable with respect to the
Initial Shares by way of stock dividend, stock split or dividend or
distribution in the form of securities or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Shares,
such securities shall cease to be Registrable Shares when (i) a
registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such
securities shall have been disposed of pursuant
6
to such registration statement, (ii) such securities shall have been
distributed in accordance with Rule 144, (iii) such securities shall
have ceased to be outstanding, or (iv) such securities are transferred
to any Person that is not an assignee permitted by Section 11.
"Registration Expenses" means all expenses incident to
the Company's performance of or compliance with this Agreement,
including, without limitation, (a) all registration and filing fees,
(b) all registration, filing, qualification and other fees and expenses
of complying with securities or blue sky laws of all jurisdictions in
which the securities are to be registered and any legal fees and
expenses incurred in connection with the blue sky qualifications of the
Registrable Shares and the determination of their eligibility for
investment under the laws of all such jurisdictions, (c) all word
processing, duplicating, printing, messenger and delivery expenses and
(d) the fees and disbursements of counsel for FBC and of its
independent public accountants.
"Rule 144" means Rule 144 promulgated by the SEC under
the Securities Act and any successor provision thereto.
"SEC" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority thereto.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor statute, and the rules and
regulations promulgated thereunder.
"Selling Expenses" means all costs and expenses incident
to the Holder's sale of Registrable Shares as provided for in Section
11 of this Agreement, including, without limitation, commissions to
brokers and/or dealers and fees and expenses of any Person retained by
the Holder in connection with such sale or sales, but excluding
Registration Expenses.
"Shares" means shares of FBC Common Stock.
(b) Registration Under the Securities Act.
(i) If the Company at any time proposes to register
any of its equity securities under the Securities Act for its
own account (other than by a registration on Form S-4 or Form
S-8 or any successor or similar form then in effect) in a form
and in a manner that would permit registration of the
Registrable Shares, it will give prompt (but in no event less
than thirty days prior to the proposed date of filing the
registration statement relating to such registration) notice
to the Holder of the Company's intention to do so and of such
Holder's rights under this Section 11(b). Upon the request of
the Holder made within twenty days after the receipt by the
Holder of any such notice (which request shall specify the
Registrable Shares intended to be disposed of by the Holder)
(the "Piggyback Registration Notice"), the Company will use
commercially reasonable efforts to effect the registration
under the Securities Act of all Registrable Shares which the
Company has been so requested to register by the Holder, to
the extent required to permit the disposition (in accordance
with the manner of distribution contemplated by the Company
with respect to such registration by the Company) of the
Registrable Shares so to be
7
registered; provided, however, that if, at any time after
giving notice of its intention to register any equity
securities and prior to the effective date of the registration
statement filed in connection with such registration, the
Company shall determine for any reason not to register or to
delay registration of such equity securities, the Company may,
at its election, give notice of such determination to each
such Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to
register any Registrable Shares in connection with such
registration and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any
Registrable Shares for the same period as the delay in
registering such other equity securities.
(ii) If the Company at any time proposes to register
any of its equity securities for its own account under the
Securities Act as contemplated by this Section 11(b) and
such securities are to be distributed by or through one or
more underwriters, the Company will, if requested by the
Holder and subject to Section 11(b), include the Registrable
Shares requested by the Holder among the securities to be
distributed by such underwriters. The Holder shall become a
party to the underwriting agreement between the Company and
such underwriters; provided, however, that such agreement is
reasonably satisfactory in substance and form to the Company.
(iii) If (A) a registration pursuant to this Section
11(b) involves an underwritten offering of the securities
being registered to be distributed (on a firm commitment
basis) by or through one or more underwriters of recognized
standing under underwriting terms appropriate for such a
transaction and (B) the managing underwriter of such
underwritten offering shall inform the Company and the Holder
requesting such registration by letter of its belief that the
amount of securities requested to be included in such
registration exceeds the amount which can be sold in (or
during the time of) such offering within a price range
acceptable to the Company, the Company will include in such
registration such amount of securities which the Company is so
advised can be sold in (or during the time of) such offering
as follows: first, all securities proposed by the Company to
be sold for its own account; second, such Registrable Shares
requested to be included in such registration by the Holder
thereof pro rata on the basis of the amount of such securities
so proposed to be sold and so requested to be included by the
holders of Warrants issued in connection with the Company's
10% Convertible Notes dated June 7, 1999; and third, all other
securities of the Company requested to be included in such
registration pro rata on the basis of the amount of such
securities so proposed to be sold and so requested to be
included.
(c) Registration Terms and Procedures. (i) The Holder shall
pay its own share of the Selling Expenses (as the case may be) incurred
in connection with a registration to be effected (whether or not
effected or deemed effected) pursuant to this Agreement. The Company
shall pay all Registration Expenses in connection with a registration
to be effected (whether or not effected or deemed effected) pursuant to
this Agreement.
(ii) In connection with the Company's obligations to
register Registrable Shares pursuant to this Agreement, the
Company will use commercially reasonable
8
efforts to effect such registration so as to permit the sale
of any Registrable Shares included in such registration in
accordance with the intended method or methods of distribution
thereof, and pursuant thereto the Company will as
expeditiously as possible prepare and (as soon thereafter as
practicable) file with the SEC the requisite registration
statement containing all information required thereby to
effect such registration and thereafter use commercially
reasonable efforts to cause such registration statement to
become and remain effective in accordance with the terms of
this Agreement.
(iii) The Holder shall furnish to the Company such
information regarding the Holder, the Registrable Shares held
by the Holder and the intended plan of distribution of such
securities as the Company may from time to time reasonably
request in writing in connection with such registration. If
any registration statement refers to the Holder by name or
otherwise as the holder of any securities of the Company, then
the Holder shall have the right to require that such reference
to be in a form reasonably satisfactory to the Holder or in
the event that such reference to the Holder by name or
otherwise is not required by the Securities Act or any similar
federal or state blue sky statute and the rules and
regulations thereunder then in force, the deletion of the
reference to the Holder.
(d) [intentionally omitted]
(e) Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give the
Holder, in the case of registration of Registrable Shares pursuant to
Section 11(b), its underwriters or agents, if any, and its respective
counsel and accountants reasonable access to its books and records and
such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the
Holder's and such underwriters' or agents' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities
Act.
(f) Indemnification. The Company and the Holder acknowledge
and agree that as a condition precedent to the exercise of the
registration rights herein contained, the Company and the Holder
electing to avail itself of the rights specified in this Section 11
shall each agree to and shall exchange such indemnities as are
customary and reasonable in connection with public offerings of
securities in circumstances similar to the circumstances of any
offering effected pursuant to the rights herein contained, which
indemnities shall be acceptable to the Company and its counsel in their
sole discretion. The Holder shall provide such information and
undertake such other actions as requested by the Company in connection
with such registration.
(g) Holdback Agreement. The Holder agrees not to effect any
public sale or distribution of equity of the Company, or any
securities convertible into or exchangeable or exercisable for such
securities during the ten days prior to and the 180-day period
beginning on the effective date of any underwritten registration
pursuant to Section 11(b) (except as part of such underwritten
registration), unless the underwriters managing the registered public
offering otherwise agree.
9
(h) Assignment. The rights of the Holder hereunder shall only
be assignable in connection with the transfer of Registrable Shares by
the Holder that is required by operation of law, or in connection with
a transfer by the Holder by gift or to heirs, executors, legal
representatives and immediately family members or any other Person who
agree or agrees in writing to be bound by all the terms of this
Agreement.
(i) Termination of Certain Rights. The rights and obligations
hereunder of the Holder shall terminate with respect to such party at
such time when neither it nor any of its permitted assigns holds
Registrable Shares or two years from the date of this Agreement,
whichever occurs earlier; provided, however, that the provisions of
Section 11(f) and the rights of any party hereto with respect to the
breach of any provision hereof shall survive termination of this
Agreement.
12. Warrant Agent. The Company may, by written notice to the Holder of
the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 3, exchanging
this Warrant pursuant to Section 9, and replacing this Warrant pursuant to
Section 10, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
13. Transfer on the Company's Books. Until this Warrant is transferred
on the books of the Company, the Company may treat the registered Holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
14. Notices, etc. All notices and other communications from the Company
to the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
15. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York. Any dispute relating to this Warrant shall be
adjudicated in New York State. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
16. Maximum Exercise. The Holder shall not be entitled to exercise, on
an exercise date, this Warrant in connection with that number of shares of
Common Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the exercise
of this Warrant with respect to which the determination of this proviso is being
made on an exercise date, which would result in beneficial ownership by the
Holder and its affiliates of more than 9.99% of the outstanding shares of Common
Stock of the Company on such exercise date. For the purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation l3d-3 thereunder. Subject to the foregoing, the Holder
shall not be limited to
10
aggregate exercises which would result in the issuance of more than 9.99%. The
restriction described in this paragraph may be revoked upon 75 days prior notice
from the Holder to the Company.
11
IN WITNESS WHEREOF, the Company has executed this Warrant under seal as
of the date first written above.
▇▇▇▇▇▇▇▇▇ BREWING CO.
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and CEO
Witness:
[ILLEGIBLE]
---------------------------
12
Exhibit A
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: ▇▇▇▇▇▇▇▇▇ Brewing Co.
The undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise this Warrant for, and to purchase thereunder, ___________________
shares of Common Stock of ▇▇▇▇▇▇▇▇▇ Brewing Co. and herewith makes payment of
$___________________ therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to _______________ whose address
is _______________________________________________________ __________________.
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.
Dated: _____________________________
--------------------------------------------
(Signature must conform to name of Holder as
specified on the face of the Warrant)
--------------------------------------------
(Address)
13
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of ▇▇▇▇▇▇▇▇▇ Brewing Co. to which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
▇▇▇▇▇▇▇▇▇ Brewing Co. with full power of substitution in the premises.
--------------------------------------------------------------------------------
Tranferees Percentage Number
---------- Transferred Transferred
----------- -----------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:________________, 19___ -------------------------------------------
(Signature must conform to name of Holder as
specified on the face of the warrant)
Signed in the presence of:
-------------------------------- -------------------------------------------
(Name) (address)
ACCEPTED AND AGREED: --------------------------------------------
[TRANSFEREE] (address)
--------------------------------
(Name)
14
EXHIBIT C
------------------------------------------------------------------------------------------------------------------------
Face Face
Amount of No. of Common Amount of No. of Common
Preferred Share Holder Series F Shares to be Series G Shares to be
---------------------- Preferred Received Upon Preferred Received Upon
Stock Conversion Stock Conversion
----- ---------- ----- ----------
------------------------------------------------------------------------------------------------------------------------
Austost Anstalt ▇▇▇▇▇▇ $388,000 776,000 0 0
------------------------------------------------------------------------------------------------------------------------
Balmore Funds S.A. $388,000 776,000 0 0
------------------------------------------------------------------------------------------------------------------------
The Augustine Fund L.P. 0 0 $71,000 142,000
------------------------------------------------------------------------------------------------------------------------
Congregation ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 0 0 $38,500 77,000
------------------------------------------------------------------------------------------------------------------------
Bertek, Inc. 0 0 $61,000 122,000
------------------------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇ 0 0 $60,000 120,000
------------------------------------------------------------------------------------------------------------------------
Totals $776,000 1,552,000 $230,500 461,000
------------------------------------------------------------------------------------------------------------------------
15
Schedule 6.1
Other FBC Securities
16
Schedule 6.1
Common Preferred Convertible
Name Stock Stock Warrants Options Notes
---- ----- ----- -------- ------- -----
Austost Anstalt ▇▇▇▇▇▇ 607 0 0 0 $125,000
Balmore Funds S.A. 5,279 0 0 0 $125,000
World Capital Funding, LLC 29,600 0 30,000* 0 $ 50,000
The Augustine Fund L.P. 84,271 0 0 0 0
Congregation ▇▇▇▇ Moredechai 67,923 0 0 0 0
Bertek, Inc. 0 0 0 0 0
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. 0 0 0 0 $ 20,000
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. 0 0 0 0 $ 30,000
▇▇▇▇ ▇▇▇▇▇ 0 0 0 0 $ 50,000
▇▇▇▇ ▇▇▇▇ 0 0 0 0 $100,000
Shares Exercise Price Exp. Date
------------------------------------------------------------------
10,000 43.750 3/31/02
10,000 48.760 3/31/02
5,000 5.00 11/20/01
5,000 10.00 11/20/01
17