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Exhibit 4.9
NOTE AGREEMENT
Beverage Works, Inc., a California corporation (the "Company") and
Frederick Friedman ("Purchaser") (collectively the "Parties"), agree
("Agreement") as follows:
SECTION 1. DESCRIPTION OF NOTE AND COMMITMENT.
Section 1.1. Description of Note. The Company will authorize the issue
and sale of a $500,000 aggregate principal amount 18% promissory note (the
"Note") to be dated the date of issue, to bear interest from such date at the
rate of 18% per annum, simple interest, payable on the fifteenth day of each
month (commencing May 15, 1996) and at maturity until paid to mature on the
earlier of (i) closing of a public offering by the Company with aggregate gross
proceeds of no less than $6,000,000 (the "IPO"), the occurrence of which there
is no guarantee, or (ii) December 31, 1996, whichever shall occur earlier
("Maturity Date"), and to be substantially in the form attached hereto as
Exhibit A.
Section 1.2. Warrants.
(a) The Company shall issue to Purchaser Thirty-Five Thousand
(35,000) Warrants to purchase shares of the Company's Common Stock, no par
value ("Common Stock"). Each Warrant entitles the holder thereof to purchase
from the Company, for a three (3) year period commencing on the date of
issuance of the Warrants, one fully-paid and nonassessable share of Common
Stock at an exercise price (the "Exercise Price") of $4.75. If the IPO has not
closed by the Maturity Date, the Purchaser shall receive an additional
Thirty-Five Thousand (35,000) Warrants on the same terms and conditions.
(b) These Warrants and the shares of Common Stock issuable
upon the exercise of these Warrants will be registered in the Company's IPO.
(c) Purchaser as holder of a Warrant Certificate shall not be
entitled to vote or receive dividends or be deemed the holder of Common Stock
or any other securities of the Company, nor shall anything contained herein be
construed to confer upon Purchaser any of the rights of a shareholder of the
Company. The number of Warrants issued shall be adjusted pro rata in the event
of a Common Stock dividend, Common Stock split, or Common Stock reverse split
by the Company prior to the earlier of exercise or expiration.
Section 1.3. Security Interest. The Note shall be secured by all
equipment, inventory and accounts receivable of the Company. In addition, the
proceeds from the sale of the Note shall be deposited into an escrow account
held at PaineWebber, or such other comparable institution ("Escrow Account").
The Company may immediately withdraw up to $250,000 from the Escrow Account.
The Company may withdraw the remaining proceeds from the sale of the note only
after filing a registration statement with the U.S. Securities and Exchange
Commission for the IPO. The Company shall execute and file with the California
Secretary of State a Form UCC-1 containing such appropriate information to
effectuate this Section 1.3.
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SECTION 2. PREPAYMENT OF NOTE.
Section 2.1. The Company may prepay this Note at any time prior to
Maturity without penalty.
SECTION 3. REPRESENTATIONS.
Section 3.1. Purchaser represents, and in entering into this Agreement
the Company understands, that he is acquiring the Note, Warrants and shares
issuable upon exercise of the Warrants for the purpose of investment and not
with a view to the distribution thereof, and that he has no present intention
of selling, negotiating or otherwise disposing of the Note, Warrants and shares
issuable upon exercise of the Warrants. Purchaser further represents that he is
an accredited investor as that term is defined in Rule 501(a) of Regulation D
of the Securities Act. Purchaser has had an opportunity to question
representatives of the Company and to obtain appropriate information concerning
the Company as he has deemed appropriate under the circumstances.
SECTION 4. EVENTS OF DEFAULT.
Section 4.1. Events of Default. Default shall occur (i) in the
payment of interest on the Note when the same shall have become due and such
default shall continue for more than five business days; or (ii) in the payment
of principal on the Note when the same shall have become due and such default
shall continue for more than thirty days ("Event of Default").
SECTION 5. AMENDMENTS, WAIVERS AND CONSENTS.
Section 5.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may be amended or compliance therewith may be
waived, only upon the Parties' written consent of the Parties. Any such
amendment or waiver shall be binding upon each future holder of the Note and
upon the Company, whether or not the Note shall have been marked to indicate
such amendment or waiver. No such amendment or waiver shall extend to or affect
any obligation not expressly amended or waived or impair any right consequent
thereon.
SECTION 6. MISCELLANEOUS.
Section 6.1. Notices. Any notice, payment, demand or communication
required or permitted to be given by any provision of this Agreement shall be
deemed given if sent by United States Mail, first class, postage prepaid, or by
telephone or facsimile, if such telephone conversation or facsimile is followed
by a hard copy of the telephone conversation or facsimilied communication sent
by United States Mail, first class, postage prepaid, and addressed as follows:
Note Agreement 2 of 3
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The Company: The Purchaser:
Mr. Frederik Rodenhuis Frederick Friedman
Brewing Company of America
9800 S. Sepulveda Boulevard, Suite 720 ___________________
Los Angeles, CA 90045
___________________
Section 6.2. Binding Effect. Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
heirs, legatees, legal representatives, successors, transferees, and assigns.
Section 6.3. Severability. Every provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid
for any reason whatsoever, such illegality or invalidity shall not affect the
validity or legality of the remainder of this Agreement.
Section 6.4. Further Action. Each Party, upon the request of any other
Party, agrees to perform all further acts and execute, acknowledge, and deliver
any documents which may be reasonably necessary to carry out the provisions of
this Agreement.
Section 6.5. Arbitration and Governing Law. All disputes relating to
or arising under this Agreement or the transactions contemplated hereby shall
be resolved by binding arbitration before the American Arbitration Association
at its offices at 140 West 51st Street, New York, New York. California law
shall apply in all respects.
Section 6.6. Attorneys' Fees. The prevailing party in any arbitration
shall be entitled to recover costs and expenses, including reasonable
attorneys' fees as determined by the arbitrator.
Section 6.7. Counterpart Execution. This Agreement may be executed in
any number of counterparts with the same effect as if all of the Parties had
signed the same document. All counterparts shall be construed together and
shall constitute one agreement.
IN WITNESS WHEREOF, the Parties have entered into this Agreement by
their signatures below:
THE COMPANY: BEVERAGE WORKS, INC.
Dated:______________ _________________________________
Frederik Rodenhuis,
Chief Executive Officer
THE PURCHASER:
Dated:______________ _________________________________
Frederick Friedman
Note Agreement 3 of 3
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EXHIBIT A
$500,000
PROMISSORY NOTE December 31, 1996
1. Beverage Works, Inc., a California corporation (the
"Company"), for value received, hereby promises to pay to Frederick Friedman:
(a) the principal amount of $500,000 on (i) the date of a
close of a public offering by the Company with aggregate gross proceeds of at
least $6,000,000, or (ii) December 31, 1996, whichever shall occur earlier (the
"Maturity Date"); and
(b) interest on the principal amount from time to time
remaining unpaid hereon at the rate of 18% per annum, simple interest, from the
date hereof until the Maturity Date, payable on the fifteenth day of each month
(commencing on May 15, 1996).
2. Both the principal hereof and interest hereon are payable in
United States currency. If any amount of principal or interest on or in respect
of this Note becomes due and payable on any date which is not a Business Day,
such amount shall be payable on the immediately preceding Business Day.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York are required by law to close or are customarily closed.
3. The Company may prepay this Note at any time prior to Maturity
without penalty.
4. The laws of the State of California shall apply.
BEVERAGE WORKS, INC.
Dated:___________________ _________________________________
Frederik Rodenhuis,
Chief Executive Officer