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EXHIBIT 4.3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ("THE ACT") OR QUALIFIED OR REGISTERED UNDER ANY STATE SECURITIES OR
BLUE SKY LAWS. NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH STATE LAWS UNLESS SUCH
OFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION
OR QUALIFICATION UNDER THE ACT AND SUCH STATE LAWS, IN THE OPINION OF COUNSEL
FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL
FOR THIS CORPORATION.
BEVERAGE WORKS, INC.
CLASS B WARRANT AGREEMENT
RECITALS. This Warrant Agreement dated April 20, 1996 certifies that
the registered owners ("Holders") of the Class B Warrants (herein referred to as
the "Class B Warrants") to purchase shares of the Common Stock, no par value
("Common Stock"), of Beverage Works, Inc., a California corporation (herein
referred to as the "Company") entitles the Holders to purchase from the Company,
for a three (3) year period commencing on the date hereof, one fully-paid and
nonassessable share of Common Stock of the Company at an exercise price (the
"Exercise Price") of $4.75, upon presentation and surrender of the Class B
Warrant certificate at the principal corporate office of the Company, with the
Form of Election to Purchase duly executed, and upon payment of the Exercise
Price per share of such Common Stock.
1. REGISTRATION. The Class B Warrants shall be numbered and shall be
registered in the Class B Warrant Register. The Company shall be entitled to
treat the Holder of any Class B Warrant as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Class B Warrant on the part of any other person, and shall not
be liable for any registration of transfer of Class B Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration of transfer, or
with such knowledge of such facts that its participation therein amounts to bad
faith.
2. TRANSFER. The Class B Warrants shall be transferable only on the
books of the Company maintained at the Company's principal office upon delivery
thereof duly endorsed by a Holder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment, or
authority to transfer. In all cases of transfer by an attorney, the original
letter of attorney, duly approved, or an official copy thereof, duly certified,
shall be deposited and remain with the Company. In case of transfer by
executors, administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced. Upon any
registration of transfer, the Company shall countersign and deliver new Class B
Warrants to the person entitled thereto.
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3. FORM OF CLASS B WARRANTS. The text of the Class B Warrants and of
the form of election to purchase Shares shall be substantially as set forth in
Exhibit "A" attached hereto. The price of Shares and the number of Shares
issuable upon exercise of Class B Warrants are subject to adjustment upon the
occurrence of certain events, all as hereinafter provided. The Class B Warrants
shall be executed on behalf of the Company by its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or an Assistant Secretary. The signature of any of these officers on
the Class B Warrants may be manual or facsimile. Class B Warrants bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such
individuals or any one of them shall have ceased to hold such offices prior to
the delivery of such Class B Warrants or did not hold such office on the date of
this Agreement. Class B Warrants shall be dated as of the date of
counter-signature thereof by the Company either upon initial issuance or upon
division, exchange, substitution, or transfer.
4. EXCHANGE. Class B Warrant certificates may be exchanged for another
certificate or certificates entitling the Holder thereof to purchase a like
aggregate number of Shares as the certificate or certificates surrendered then
entitle such Holder to purchase. Any Holder of a Class B Warrant desiring to
exchange Class B Warrant certificates shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the
certificate or certificates evidencing the Class B Warrant or Class B Warrants
to be so exchanged. Thereupon, the Company shall countersign and deliver to the
person entitled thereto a new Class B Warrant certificate or certificates, as
the case may be, as so requested.
5. TERM OF CLASS B WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, at any time during the period commencing at
10:00 A.M., New York time, on April 20, 1996 until 3:00 P.M. New York time, on
April 19, 1999 (the "Termination Date"), to purchase from the Company the number
of fully paid and nonassessable Shares to which the Holder may at the time be
entitled to purchase pursuant to such Class B Warrants, upon surrender, to the
Company at the principal office of the Company of the certificate or
certificates evidencing the Class B Warrants to be exercised, together with the
form of election to purchase duly completed and signed, and upon payment to the
Company of the Exercise Price, for the number of Shares in respect of which such
Class B Warrants are then exercised.
6. PAYMENT UPON EXERCISE. Payment of the aggregate Exercise Price shall
be made in cash or by certified or cashier's check. Upon such surrender of Class
B Warrants and payment of the Exercise Price as aforesaid, the Company shall
issue and cause to be delivered with all reasonable dispatch to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate or certificates for the number of full Shares so
purchased upon the exercise of such Class B Warrants, together with cash, as
provided in Section 14 hereof, in respect of any fractional Shares otherwise
issuable upon such surrender. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such Shares as of the date of the
surrender of such Class B Warrants and payment of the Exercise Price, as
aforesaid; provided, however, that if, at the date of surrender of such Class B
Warrants and payment of
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such Exercise Price, the transfer books for the Shares or other class of stock
purchasable upon the exercise of such Class B Warrants shall be closed, the
certificates for the Shares in respect of which such Class B Warrants are then
exercised shall be issuable as of the date on which such books shall next be
opened (whether before or after the Termination Date) and until such date the
Company shall be under no duty to deliver any certificate for such Shares;
provided further, however, that the transfer books of record, unless otherwise
required by law, shall not be closed at any one time for a period longer than
twenty days. The rights of purchase represented by the Class B Warrants shall be
exercisable, at the election of the Holders thereof either in full or from time
to time in part and, in the event that a certificate evidencing Class B Warrants
is exercised in respect of less than all of the Shares specified therein at any
time prior to the date of expiration of the Class B Warrants, a new certificate
evidencing the remaining Class B Warrant or Class B Warrants will be issued.
7. TAXES. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Shares issuable upon the exercise of
Class B Warrants; provided, however, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer involved in
the issue or delivery of any Class B Warrants or certificates for Shares.
8. MUTILATED OR MISSING WARRANTS. In case any of the certificates
evidencing the Class B Warrants shall be mutilated, lost, stolen or destroyed,
the Company may, in its discretion, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Class B Warrant
certificate, or in lieu of and substitution for the Class B Warrant certificate
lost, stolen or destroyed, a new Warrant certificate of like tenor and
representing an equivalent right or interest; but only upon receipt of evidence
satisfactory to the Company of such loss, theft or destruction of such Warrant
and indemnity, if requested, also satisfactory to them. Applicants for such
substitute Class B Warrant certificate shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
9. RESERVATION OF SHARES. There have been reserved, and the Company
shall at all times keep reserved, out of its authorized Common Stock a number of
shares of Common Stock sufficient to provide for the exercise of the rights of
purchase represented by the outstanding Class B Warrants. The Transfer Agent for
the Common Stock (the "Transfer Agent") and every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of any of
the rights of purchase aforesaid will be irrevocably authorized and directed at
all times to reserve such number of authorized shares as shall be requisite for
such purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent for the Common Stock and with every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by the Class B Warrants. The Company will supply
such Transfer Agent with duly executed stock certificates for such purpose and
will provide or otherwise make available any cash which may be payable as
provided herein. All Class B Warrants surrendered in the exercise of the rights
thereby evidenced shall be cancelled by the Company.
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10. ANTI-DILUTION. In case the Company shall (i) pay a dividend in
shares of Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock or (iv)
issue by reclassification of its shares of Common Stock other securities of the
Company, the number of Shares purchasable upon exercise of each Class B Warrant
immediately prior thereto shall be adjusted so that the Holder of each Class B
Warrant shall be entitled to receive the kind and number of Shares or other
securities of the Company which he would have owned or have been entitled to
receive after the happening of any of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event. Whenever the number of Shares purchasable
upon the exercise of each Class B Warrant is adjusted, as herein provided, the
Company shall promptly mail by first class mail, postage prepaid, to each Holder
of a Class B Warrant or Class B Warrants notice of such adjustment setting forth
the number of Shares purchasable upon the exercise of each Class B Warrant and
the Exercise Price of such Shares after such adjustment, a brief statement of
the facts requiring such adjustment and the computation by which such adjustment
was made. Such certificate shall be conclusive evidence of the correctness of
such adjustment. The Company shall be entitled to rely on such certificate and
shall be under no duty or responsibility with respect to any such certificate,
except to exhibit the same, from time to time, to any holder of a Class B
Warrant or Class B Warrants desiring an inspection thereof during reasonable
business hours.
11. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 10, no
adjustment in respect of any dividends shall be made during the term of the
Class B Warrants or upon the exercise of the Class B Warrants.
12. PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute an agreement that each
Holder of a Class B Warrant shall have the right thereafter upon payment of the
Exercise Price in effect immediately prior to such action to purchase upon
exercise of each Warrant the kind and amount of Shares and other securities and
property which he would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had such Class B
Warrant been exercised immediately prior to such action. Such agreement shall
provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 10. The Company shall
mail by first class mail, postage prepaid, to the Holder of each Class B
Warrant, notice of the execution of any such agreement. The provisions of this
Section 12 shall similarly apply to successive consolidations, mergers, sales,
or conveyances.
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13. STATEMENT ON WARRANTS. Irrespective of any adjustments in the
number or kind of Shares purchasable upon the exercise of the Class B Warrants,
Class B Warrants theretofore or thereafter issued may continue to express the
same number and kind of Shares as are stated in the Class B Warrants initially
issuable pursuant to this Agreement.
14. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Shares on the exercise of Class B Warrants. If more than one Class B
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Shares which shall be issuable upon the exercise
thereof shall be computed on the basis of the aggregate number of Shares
represented by the Class B Warrants so presented. If any fraction of a Share
would, except for the provisions of this Section 14, be issuable on the exercise
of any Class B Warrant (or specified portion thereof), the Company shall pay an
amount in cash equal to the current market price per Share multiplied by such
fraction.
15. NO RIGHTS AS STOCKHOLDER. Nothing contained in this Agreement or in
any of the Class B Warrants shall be construed as conferring upon the Holders or
their transferees the right to vote or to receive dividends or to consent or to
receive notice as stockholders in respect of any meeting of stockholders for the
election of directors of the Company or any other matter, or any rights
whatsoever as stockholders of the Company.
16. NOTICES. Any notice pursuant to this Agreement by the Company or by
the Holder of any Warrant, shall be in writing and shall be deemed to have been
duly given if delivered or mailed, certified mail, return receipt requested:
(a) If to the Company addressed as follows:
Beverage Works, Inc.
9800 S. Sepulveda Blvd., Suite 720
Los Angeles, CA 90045
Attn: Lyle Maul, CFO
with a copy to :
Hecht & Steckman, P.C.
60 East 42nd Street, Suite 5101
New York, NY 10165-5101
Attn: James G. Smith, Esq.
(b) If to the Holder addressed to the address as reflected on
the Company's books.
Any notice mailed pursuant to this Agreement by the Company or to the Holders of
Class B Warrants shall be in writing and shall be deemed to have been duly given
if mailed, postage prepaid, to such Holders at their respective addresses on the
books of the Company.
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17. AMENDMENTS. The Company may from time to time supplement or amend
this Agreement, without the approval of any Holders of Class B Warrants, in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions in regard to matters or questions arising
hereunder which the Company may deem necessary or desirable and which shall not
be inconsistent with the provisions of the Class B Warrants and which shall not
adversely affect the interest of the Holders of Class B Warrants.
18. MERGER OR CONSOLIDATION OF COMPANY. The Company will not merge or
consolidate with or into any other corporation unless the corporation resulting
from such merger or consolidation (if not the Company) shall expressly assume,
by supplemental agreement, the due and punctual performance and observance of
each and every covenant and condition of this Agreement to be performed and
observed by the Company.
19. RESTRICTED SECURITIES. The Class B Warrants and the shares of
Common Stock issuable upon exercise of the Class B Warrants have not been
registered under the Securities Act of 1933, as amended, and that the Class B
Warrants and the shares of Common Stock issuable upon exercise of the Class B
Warrants may be sold, transferred, assigned or disposed of, except in accordance
with such Act and the Rules and Regulations of the Securities and Exchange
Commission promulgated thereunder. Holders consent that the Class B Warrant
certificates and certificates evidencing shares of Common Stock issuable upon
exercise of the Class B Warrants may contain the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 ("THE ACT") OR QUALIFIED OR REGISTERED UNDER ANY
STATE SECURITIES OR BLUE SKY LAWS. NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND SUCH STATE LAWS UNLESS SUCH OFFER, SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR
QUALIFICATION UNDER THE ACT AND SUCH STATE LAWS, IN THE OPINION OF
COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS CORPORATION.
In the event that the Company has an initial public offering of its Common
Stock, of which there is no assurance, the Class B Warrants and the shares of
Common Stock issuable upon exercise of the Class B Warrants will be registered;
provided, however, that the Class B Warrants and the shares of Common Stock
issuable upon exercise of the Class B Warrants or any portion thereof, may not
be sold for a period of thirteen (13) months after the closing date of the
initial public offering without the prior written consent of the lead
underwriter.
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20. APPLICABLE LAW. This Agreement and each Class B Warrant referred to
hereunder shall be deemed to be a contract made under the laws of the State of
California and for all purposes shall be construed in accordance with the laws
of said state.
21. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
22. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders of Class B Warrants any legal or equitable right, remedy or claim under
this Agreement and this Agreement shall be for the sole and exclusive benefit of
the Company and the Holders of Class B Warrants.
23. CAPTIONS. The captions of sections and paragraphs of this Agreement
have been inserted for convenience only and shall have no substantive effect.
24. WARRANT AGENT. The Company shall act as the initial warrant agent
in connection with the issuance, transfer and exchange of the certificates and
the exercise of the Class B Warrants. The Company may, without prior consent of
any of the Holders, appoint a successor warrant agent. Notice of the appointment
of a successor warrant agent shall be promptly given by the Company to all
registered Holders.
BEVERAGE WORKS, INC. Attest:
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By: Frederik G.M. Rodenhuis, By: Lyle R. Maul,
President Secretary
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EXHIBIT C
CALL OPTION
CALL OPTION dated as of November 8, 1995 granted by BEVERAGE WORKS,
INC., a California corporation ("BrewCo") to the Selling Shareholders (as
defined in the Agreement and Plan of Reorganization) of HERITAGE BREWING
COMPANY, INC. ("Heritage").
WHEREAS, simultaneously herewith, Selling Shareholders are exchanging
each share of their stock in Heritage to BrewCo for 0.3866 shares of BrewCo
Common Stock; and
WHEREAS, one of the reasons for exchanging the Heritage stock for
BrewCo stock is that BrewCo intends to have a public offering consummated no
later than December 31, 1996, which will raise gross proceeds of no less than
$5,000,000; and
WHEREAS, BrewCo wishes to give the Selling Shareholders the right to
call on BrewCo to deliver the Heritage shares it owns in its subsidiary in the
event the foregoing public offering is not consummated.
NOW, THEREFORE, BrewCo grants this call option to the Selling
Shareholders on the following terms and conditions:
1. CONDITION PRECEDENT TO THE EXERCISE OF THE CALL OPTION.
BrewCo does not consummate a public offering which generates gross
proceeds of at least $5,000,000 on or before December 31, 1996.
2. EXERCISE PRICE FOR THE CALL OPTION.
The Selling Shareholders must cause Heritage to deliver a promissory
note signed by Heritage with the following provisions:
A. An amount equal to (i) the sum of all payments made by BrewCo to
the holder of the Small Business Administration ("SBA") loan, a copy of which is
attached hereto as Exhibit 1, since the consummation of the acquisition of all
Heritage's voting stock by BrewCo and (ii) the increase in the book value,
before depreciation, of Heritage's capital assets and improvements after the
date that BrewCo acquires all of the voting stock of Heritage.
B. Payments shall be in thirty-six (36) equal monthly
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installments and shall be without interest.
C. The payment of the note shall be secured by a lien on the capital
assets and improvements.
3. DELIVERY OF BREWCO SHARES.
The Selling Shareholders shall deliver all shares of BrewCo (previously
issued under the terms of the Plan of Reorganization to Selling Shareholders) to
BrewCo prior to delivery of any Heritage shares to Selling Shareholders. Such
BrewCo shares must be delivered properly endorsed and unencumbered.
4. TERMINATION OF CALL OPTION.
The Call Option shall terminate on the earlier of the closing of a
public offering in the amount of $5,000,000 or June 30, 1997.
Dated: November 8, 1995
BEVERAGE WORKS, INC.
By:
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Frederik G.M. Rodenhuis
President
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