THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL TO THE ISSUER OF
THESE SECURITIES), SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER
APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
Date: March 31, 2000
UNIVERSAL BEVERAGES HOLDINGS CORPORATION
WARRANT FOR THE PURCHASE OF 200,000 SHARES OF
COMMON STOCK OF UNIVERSAL BEVERAGES HOLDINGS CORPORATION
Warrant Price: $1.00 per share, subject to adjustment as provided below.
THIS IS TO CERTIFY that, for value received, Capital International,
SBIC, LP, a Florida limited partnership and its successors and assigns
(collectively, the "Holder"), is entitled to purchase, subject to the terms and
conditions hereinafter set forth, up to 200,000 shares of the common stock
("Common Stock"), of Universal Beverages Holdings Corporation, a Florida
corporation (the "Company"), and to receive certificates for the Common Stock so
purchased.
1. Exercise Period. This Warrant shall be exercisable during the period
beginning on the earlier of (i) the effective date of a registration statement
covering the shares of Common Stock or (ii) one year from the date of this
Warrant (the "Issuance Date") and ending at 5:00 p.m., Miami, Florida time, on
March 31, 2002 (the "Exercise Period"). This Warrant will terminate
automatically and immediately upon the expiration of the Exercise Period.
2. Exercise of Warrant. This Warrant may be exercised, in whole or in
part, at any time and from time to time during the Exercise Period. Such
exercise shall be accomplished by tender to the Company of the purchase price
set forth above as the warrant price (the "Warrant Price"), in cash by wire
transfer or by certified check or bank cashier's check, payable to the order of
the Company, together with presentation and surrender to the Company of this
Warrant with an executed subscription in substantially the form attached hereto
as Exhibit A (the "Subscription"). Upon receipt of the foregoing, the Company
will deliver to the Holder, as promptly as possible, a certificate or
certificates representing the shares of Common Stock so purchased, registered in
the name of the Holder or its transferee (as permitted under Section 3 below).
With respect to any exercise of this Warrant, the Holder will for all purposes
be deemed to have become the holder of record of the number of shares of Common
Stock purchased hereunder on the date this Warrant, a properly executed
Subscription and payment of the Warrant Price is received by the Company (the
"Exercise Date"), irrespective of the date of delivery of the certificate
evidencing such shares, except that, if the date of such receipt is a date on
which the stock transfer books of the Company are closed, such person will be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open. Fractional
shares of Common Stock will not be issued upon the exercise of this Warrant. In
lieu of any fractional shares that would have been issued but for the
immediately preceding sentence, the Holder will be entitled to receive cash
equal to the current market price of such fraction of a share of Common Stock on
the trading day immediately preceding the Exercise Date. In the event this
Warrant is exercised in part, the Company shall issue a new Warrant to the
Holder covering the aggregate number of shares of Common Stock as to which this
Warrant remains exercisable for.
3. Transferability and Exchange.
(a) This Warrant, and the Common Stock issuable upon the
exercise hereof, may not be sold, transferred, pledged or hypothecated unless
the Company shall have been provided with an opinion of the Company's counsel
that such transfer is not in violation of the Securities Act, and any applicable
state securities laws. Subject to the satisfaction of the aforesaid condition,
this Warrant and the underlying shares of Common Stock shall be transferable
from time to time by the Holder upon written notice to the Company. If this
Warrant is transferred, in whole or in part, the Company shall, upon surrender
of this Warrant to the Company, deliver to each transferee a Warrant evidencing
the rights of such transferee to purchase the number of shares of Common Stock
that such transferee is entitled to purchase pursuant to such transfer. The
Company may place a legend similar to the legend at the top of this Warrant on
any replacement Warrant and on each certificate representing shares issuable
upon exercise of this Warrant or any replacement Warrants. Only a registered
Holder may enforce the provisions of this Warrant against the Company. A
transferee of the original registered Holder becomes a registered Holder only
upon delivery to the Company of the original Warrant and an original Assignment,
substantially in the form set forth in Exhibit B attached hereto.
(b) This Warrant is exchangeable upon its surrender by the
Holder to the Company for new Warrants of like tenor and date representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as may be designated by the Holder at the time of such surrender.
4. Adjustments to Warrant Price and Number of Shares Subject to
Warrant. The Warrant Price and the number of shares of Common Stock purchasable
upon the exercise of this Warrant are subject to adjustment from time to time
upon the occurrence of any of the events specified in this Section 4. For the
purpose of this Section 4, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any other stock of
the Company, however designated, that has the right to participate in any
distribution of the assets or earnings of the Company without limit as to per
share amount (excluding, and subject to any prior rights of, any class or series
of preferred stock).
2
(a) In case the Company shall (i) pay a dividend or make a
distribution in shares of Common Stock or other securities, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock other securities
of the Company, then the Warrant Price in effect at the time of the record date
for such dividend or on the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock) of
the Company, at the same aggregate Warrant Price, that, if such Warrant had been
exercised immediately prior to such date, the Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of cash, evidences of indebtedness or
assets, or subscription rights or warrants, the Warrant Price to be in effect
after such record date shall be determined by multiplying the Warrant Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price per share of Common Stock on such record
date, less the amount of cash so to be distributed (or the fair market value (as
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company) of the portion of the assets or evidences of
indebtedness so to be distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock, and the denominator of which shall be
such current market price per share of Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Warrant Price shall again be adjusted to
be the Warrant Price which would then be in effect if such record date had not
been fixed.
(c) For purposes of this Warrant "current market price" shall
mean the price of the Company's Common Stock determined as of the last business
day for which the prices or quotes below are available: (i) the closing price of
the Company's Common Stock appearing on a national securities exchange if the
principal market for such Common Stock is such an exchange or if not listed or
if such exchange is not the principal market, appearing on the Nasdaq Stock
Market ("Nasdaq"); (ii) if the principal market for the Company's Common Stock
is not an exchange or Nasdaq, then the average bid and asked price for its
Common Stock as listed on the National Association of Securities Dealers, Inc.'s
OTC Bulletin Board ("OTC-BB"); or (iii) if the principal market for Company's
Common Stock is not an exchange, Nasdaq or the OTC-BB, then the average bid and
asked price for the Company's Common Stock as reported in the National Quotation
Bureau's "pink sheets"; or (iv) if the Common Stock is not so listed as provided
in Section 4(c)(i), (ii) or (iii) above, and bid and asked prices are not so
reported, the "current market price" shall be an amount determined in such
reasonable manner as may be prescribed by the Board of Directors of the Company.
3
(d) Notwithstanding any provision herein to the contrary, no
adjustment in the Warrant Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Warrant Price; provided,
however, that any adjustments which by reason of this subsection (d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 4 shall be made to
the nearest cent or the nearest one-hundredth of a share, as the case may be.
(e) In the event that at any time, as a result of an
adjustment made pursuant to subsection (a) above, the Holder of any Warrant
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this Section 4, and the other provisions of this Warrant shall
apply on like terms to any such other shares.
(f) If the Company merges or consolidates into or with another
corporation or entity, or if another corporation or entity merges into or with
the Company (excluding such a merger in which the Company is the surviving or
continuing corporation and which does not result in any reclassification,
conversion, exchange, or cancellation of the outstanding shares of Common
Stock), or if all or substantially all of the assets or business of the Company
are sold or transferred to another corporation, entity, or person, then, as a
condition to such consolidation, merger, or sale (a "Transaction"), lawful and
adequate provision shall be made whereby the Holder shall have the right from
and after the Transaction to receive, upon exercise of this Warrant and upon the
terms and conditions specified herein and in lieu of the shares of the Common
Stock that would have been issuable if this Warrant had been exercised
immediately before the Transaction, such shares of stock, securities, or assets
as the Holder would have owned immediately after the Transaction if the Holder
had exercised this Warrant immediately before the effective date of the
Transaction.
(g) In case any event shall occur as to which the other
provisions of this Section 4 are not strictly applicable but the failure to make
any adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof, then, in
each such case, the Company shall effect such adjustment, on a basis consistent
with the essential intent and principles established in this Section 4, as may
be necessary to preserve, without dilution, the purchase rights represented by
this Warrant.
5. Registration Rights. The Holder shall be entitled to the benefits
Registration Rights Agreement, a form of which is set forth in Exhibit C
attached hereto.
6. Reservation of Shares. The Company agrees at all times to reserve
and hold available out of its authorized but unissued shares of Common Stock the
number of shares of Common Stock issuable upon the full exercise of this
Warrant. The Company further covenants and agrees that all shares of Common
Stock that may be delivered upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder.
4
7. Notices to Holder. Upon any adjustment of the Warrant Price (or
number of shares of Common Stock purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such adjustment. Such notice shall include the
Warrant Price (and/or the number of shares of Common Stock purchasable upon the
exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company's method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions of this Section 7.
In the event of (a) any fixing by the Company of a record date with
respect to the holders of any class of securities of the Company for the purpose
of determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event. Any such notice shall be given at least 10 days prior to the earliest
date therein specified.
8. No Rights as a Stockholder. This Warrant does not entitle the Holder
to any voting rights or other rights as a stockholder of the Company, nor to any
other rights whatsoever except the rights herein set forth.
9. Additional Covenants of the Company. For so long as the Common Stock
is listed for trading on any national securities exchange or the Nasdaq Stock
Market, the Company shall, upon issuance of any shares for which this Warrant is
exercisable, at its expense, promptly obtain and maintain the listing of such
shares.
The Company shall comply with the reporting requirements of Sections 13
and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") for so
long as and to the extent that such requirements apply to the Company.
The Company shall not, by amendment of its Articles or Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (a) will
at all times reserve and keep available, solely for issuance and delivery upon
exercise of this Warrant, shares of Common Stock issuable from time to time upon
exercise of this Warrant, (b) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (c) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable stock.
5
10. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, the Holder and their respective successors
and permitted assigns.
11. Notices. The Company agrees to maintain a ledger of the ownership
of this Warrant (the "Ledger"). Any notice hereunder shall be given by Federal
Express, other overnight delivery service or registered or certified mail, if to
the Company at its principal executive office and, if to the Holder to its
address shown in the Ledger of the Company; provided, however, that either the
Company or the Holder may at any time on three days written notice to the other
designate or substitute another address where notice is to be given. Notice
shall be deemed given and received after such notice has been delivered to the
Federal Express or other overnight delivery service, or certified or registered
letter, properly addressed with postage prepaid, is deposited in the U.S. mail.
12. Severability. Every provision of this Warrant 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 remainder of this
Warrant.
13. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to the
principles of choice of laws thereof.
14. Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
15. Entire Agreement. This Warrant (including the Exhibits attached
hereto) constitutes the entire understanding between the Company and the Holder
with respect to the subject matter hereof, and supersedes all prior
negotiations, discussions, agreements and understandings relating to such
subject matter.
6
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer as of the date first set forth above.
Universal Beverages Holdings Corporation
By: /s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx,
Chief Executive Officer
Exhibit A
---------
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for _______ shares of the
Common Stock (the "Stock") of Universal Beverages Holdings Corporation (the
"Company") pursuant to and in accordance with the terms and conditions of the
attached Warrant (the "Warrant"), and hereby makes payment of $_______ therefor
by tendering cash, wire transferring or delivering a certified check or bank
cashier's check, payable to the order of the Company. The undersigned requests
that a certificate for the Stock be issued in the name of the undersigned and be
delivered to the undersigned at the address stated below. If the Stock is not
all of the shares purchasable pursuant to the Warrant, the undersigned requests
that a new Warrant of like tenor for the balance of the remaining shares
purchasable thereunder be delivered to the undersigned at the address stated
below.
In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
I understand that because the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless the Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition. I agree that each certificate representing the
Stock delivered to me shall bear substantially the same as set forth on the
front page of the Warrant.
I agree that each certificate representing the Stock delivered to me
shall bear substantially the same legend as set forth on the front page of the
Warrant.
I further agree that the Company may place stop orders on the
certificates evidencing the Stock with the transfer agent, if any, to the same
effect as the above legend. The legend and stop transfer notice referred to
above shall be removed only upon my furnishing to the Company of an opinion of
counsel (reasonably satisfactory to the Company) to the effect that such legend
may be removed.
Date: Signed:
--------------------- ---------------------------------------
Address:
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A-1
Exhibit B
---------
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Attached Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.
Dated: Signed:
------------------------------ ---------------------------
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
------------------------------------- ----------------------------------
-------------------------------------
-------------------------------------
B-1
Exhibit C
---------
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") entered into as of this
31st day of March, 2000 by and between Universal Beverages Holdings Corporation
(the "Company"), a Florida corporation, and Capital International, SBIC, LP,
(the "Holder") a Florida limited partnership.
1. Definitions
Affiliate: With reference to any designated Person, any Person that has
a relationship with such designated Person whereby either of such Persons
directly or indirectly controls or is controlled by or is under common control
with the other. For this purpose "control" means the power, direct or indirect,
of one Person to direct or cause direction of the management and policies of
another, whether by contract, through voting securities or otherwise.
Commission: The Securities and Exchange Commission or any other
governmental body at the time administering the Securities Act.
Common Stock: The Company's authorized common stock, as constituted on
the date of this Warrant, any stock into which such Common Stock may thereafter
be changed and any stock of the Company of any other class, which is not
preferred as to dividends or assets over any other class of stock of the Company
and which is not subject to redemption, issued to the holders of shares of such
Common Stock upon any re-classification thereof.
Company Securities: Any equity securities proposed to be sold by the
Company in the registration statement referred to.
Person: A corporation, an association, a partnership, a limited
liability company, a joint venture, a trust, an organization, a business, an
entity, an individual, a government or political subdivision thereof or a
governmental body.
Registrable Securities: Common Stock and any securities of the Company
issued with respect to the Common Stock by way of stock dividend or stock split
or in connection with a combination, recapitalization, share exchange,
consolidation or other reorganization of the Company. As to any Registrable
Securities, once issued such securities shall cease to be Registrable Securities
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 in accordance with such registration statement, (ii) they
shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, or (iv) they shall have
ceased to be outstanding.
C-1
Selling Expenses: All underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered by the Holder and
all fees and disbursements of counsel for the Holder.
Capitalized terms used in this Agreement but not otherwise defined
herein shall have the meanings ascribed to such terms in the Warrant issued to
the Holder by the Company as of the same date.
2. Registration Rights.
(a) If the Company at any time proposes to register any of its equity
securities under the Securities Act on any form other than Form S-4 or Form S-8
(or any similar or successor form then in effect), whether or not for sale for
its own account, and if the registration form proposed to be used may be used
for the registration of Registrable Securities, the Company will in each such
case give prompt written notice (and in any event at least 10 business days'
prior written notice prior to the filing of such registration statement) to the
Holders of the Company's intention to do so, such notice to specify the
securities to be registered, the proposed numbers and amounts thereof and the
date not less than 20 days thereafter by which the Company must receive the
Holders' written indication of whether the Holders wish to include their
Registrable Securities in such registration statement and advising the Holders
of their rights under this Section 2. Upon the written request of any Holder
made on or before the date specified in such notice (which request shall specify
the number of Registrable Securities intended to be disposed of by such Holder),
the Company will, subject to the limitations of Section 3.2(a) and to the extent
permitted under Section 7, use its best efforts to cause all such Registrable
Securities, which the Holders have so requested the registration thereof, to be
registered under the Securities Act (with the securities that the Company at the
time proposes to register), to the extent requisite to permit the sale or other
disposition (in accordance with the intended methods thereof as aforesaid) by
the Holders of the Registrable Securities to be so registered.
(b) Notwithstanding anything to the contrary in this Section 2, the
Company shall have the right to discontinue any registration under this Section
2 at any time prior to the effective date of such registration if the
registration of other securities giving rise to such registration under this
Section 2 is discontinued.
3. Registration Procedures
3.1 Obligations of the Company.
---------------------------
If and whenever the Company is required by the provisions hereof to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided herein, the Company will, as expeditiously as
possible:
(a) prepare and file with the Commission (in the case of a registration
pursuant to Section 2, such filing to be made as soon thereafter as possible but
in any event within 60 days after the request by the Holder to register
Registrable Securities) a registration statement with respect to such
Registrable Securities and use all commercially reasonable efforts to cause such
registration statement to become and remain effective (provided that, before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to one counsel selected by the Holder copies
of all such documents proposed to be filed);
C-2
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective as
provided in Section 3.2(a) and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities covered by
such registration statement during such period in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement;
(c) furnish to counsel for the Holder and each underwriter of the
securities being sold by the Holder such number of copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as such counsel may reasonably request, in substantially the form in
which they are proposed to be filed with the Commission, in order to facilitate
the public sale or other disposition of the Registrable Securities owned by the
Holder;
(d) use all commercially reasonable efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of New York and do any and all other acts and things
which may be necessary or advisable to enable the Holders and any underwriter to
consummate the disposition in such jurisdictions of such Registrable Securities
owned by the Holder;
(e) use all commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be reasonably
necessary to enable the Holder to consummate the disposition of its Registrable
Securities;
(f) notify the Holder at any time when a prospectus relating to its
Registrable Securities is required to be delivered under the Securities Act, of
the Company's becoming aware that the prospectus included in the related
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly prepare and furnish to the Holder and
each underwriter a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing;
(g) otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission;
(h) to the extent applicable if the principal trading market for the
Company's common stock is one of the following exchanges or markets, use all
commercially reasonable efforts (i) to cause all such Registrable Securities
covered by such registration statement to be listed on a national securities
exchange (if such Registrable Securities are not already so listed) and on each
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additional national securities exchange on which similar securities issued by
the Company are then listed, if the listing of such Registrable Securities is
then permitted under the rules of such exchange, or (ii) to secure designation
of all such Registrable Securities covered by such registration statement as a
Nasdaq "national market system security" or "small cap system security" within
the meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure Nasdaq
authorization for such Registrable Securities;
(i) enter into such agreements (including an underwriting agreement in
customary form) and take such other actions as the Holder shall reasonably
request in order to expedite or facilitate the disposition of its Registrable
Securities;
(j) make available for inspection by the Holder and by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by the Holder
or any such underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors, employees and the independent public accountants
who have audited its financial statements to supply all information reasonably
requested by the participating Holder, underwriter, attorney, accountant or
agent in connection with such registration statement;
(k) in the case of an underwritten offering, enable the Registrable
Securities to be in such denominations and registered in such names as the
underwriters may request at least two business days prior to the sale of the
Registrable Securities; and
(l) notify the Holder of any stop order threatened or issued by the
Commission and take all actions reasonably necessary to prevent the entry of
such stop order or to remove it if entered.
Section 3.2 Other Procedures.
----------------
(a) The Company shall be required to maintain the effectiveness of a
registration statement until the earlier of (i) the sale of all Common Stock
owned by the Holder or (ii) a total of six months. In the event that the
registration statement is required to be amended or supplemented and the Company
gives the Holder notice of such requirement, the Holder shall cease all sales.
The Company shall have no liability to the Holder for delays in the Holder being
able to sell the Registerable Securities (i) as long as the Company uses its
best efforts to file post-effective amendments or supplements or (ii) where the
required financial statements are unavailable or the Company would be required
to disclose information that it has no duty to disclose under the Securities
Act, the Exchange Act, or the rules and regulations of the Commission.
(b)______The Holder shall be deemed to have agreed by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3.1(f) above, the
Holder will forthwith discontinue its disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until the Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by said Section 3.1(f) and, if so directed by the
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Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in the Holder's possession of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. In the event the Company shall give any such notice, the period
mentioned in Section 3.2(a) above shall be extended by the number of days during
the period from and including the date of the giving of such notice to and
including the date when the Holders shall have received the copies of the
supplemented or amended prospectus contemplated by Section 3.1 (f) above.
(c) The Holder shall furnish to the Company in writing such information
and documents regarding it and the distribution of its securities as may
reasonably be required to be disclosed in the registration statement in question
by the rules and regulations under the Securities Act or under any other
applicable securities or blue sky laws of the jurisdictions referred to in
Section 3.1(d) above. The Holder shall also promptly execute any representation
letter concerning compliance with Regulation M under the Exchange Act (or any
successor rule or regulation).
(d) If any such registration or comparable statement refers to the
Holder by name or otherwise as the holder of any securities of the Company, but
such reference to the Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, then the Holder
shall have the right to require the deletion of the reference to the Holder.
4. Registration Expenses
In connection with any registration of Registrable Securities pursuant
to Section 2, the Company will, whether or not any such registration shall
become effective, from time to time, pay all expenses (other than Selling
Expenses) incident to its performance of or compliance herewith (the "Company
Registration Expenses"), including, without limitation, all registration, and
filing fees, fees and expenses of compliance with securities or blue sky laws,
word processing, duplicating expenses, messenger and delivery expenses, fees and
disbursements of counsel for the Company and all independent public accountants
and other Persons retained by the Company.
5. Indemnification
(a) The Company will indemnify, to the extent permitted by law, the Holder and
each Person, if any, who controls the Holder within the meaning of Section 15 of
the Securities Act (collectively, "Holder Indemnified Parties"), from and
against all losses, claims, damages, liabilities and expenses, joint or several,
to which any such Holder Indemnified Party may become subject under the
Securities Act, the Exchange Act and all rules and regulations under each such
Act, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement as contemplated hereby or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading, or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
of or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable to any such Holder
Indemnified Party insofar as the Company is entitled to indemnification under
Section 7(c) for such losses, claims, damages, liabilities, expenses, actions or
proceedings.
(b) If the offering pursuant to any registration statement provided for
hereunder is made through underwriters, no action or failure to act on the part
of such underwriters (whether or not any such underwriter is an Affiliate of any
Holder Indemnified Party) shall affect the Company's obligations to indemnify
the Holder Indemnified Parties pursuant to Section 5(a). If the offering
pursuant to any registration statement provided for hereunder is made through
underwriters, the Company agrees to enter into an underwriting agreement in
customary form with such underwriters and to indemnify such underwriters, their
officers and directors, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act to the same
extent as hereinbefore provided with respect to the indemnification of the
Holder Indemnified Parties; provided, however, that the Company shall not be
required to indemnify any such underwriter, or any officer or director of such
underwriter or any Person who controls such underwriter within the meaning of
Section 15 of the Securities Act, to the extent that the loss, claim, damage,
liability, expense, action or proceeding for which indemnification is claimed
results from such underwriter's failure to send or give a copy of the amended or
supplemented final prospectus, at or prior to the written confirmation of the
sale of Registrable Securities, or to a Person asserting the existence of an
untrue statement or alleged untrue statement or omission or alleged omission if
such statement or omission was corrected in such amended or supplemented final
prospectus prior to such written confirmation and the underwriter was given
notice of the availability of such amended or supplemented final prospectus.
(c) In connection with any registration statement in which the Holder
is participating, the Holder will furnish to the Company in writing such
information as shall be reasonably requested by the Company for use in any such
registration statement or prospectus and will indemnify, to the extent permitted
by law, the Company, its officers and directors and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages, liabilities, expenses, actions or
proceedings resulting from (i) any untrue statement or alleged untrue statement
of a material fact or any omission or alleged omission of a material fact
required to be stated in the registration statement or prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is made in reliance on or in conformity with any
information so furnished in writing by the Holder expressly for use therein; or
(ii) any failure by the Holder to register or qualify the Registerable
Securities under the securities laws of any state or other jurisdiction.
(d) A party that seeks indemnification under this Section 5 must
promptly give the other party notice of any legal action. However, a delay in
notice does not relieve an indemnifying party of any liability to an indemnified
party, except to the extent the indemnifying party shows that the delay
prejudiced the defense of the action.
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(e) The indemnifying party may participate in the defense at any time
or it may assume the defense by giving notice to the other party. After assuming
the defense, the indemnifying party:
(i) must select an attorney that is reasonably
satisfactory to the other party;
(ii) is not liable to the other party for any later
attorney's fees or for any other later expenses that
the other party incurs;
(iii) must not compromise or settle the action without the
other party's consent (but the other party must not
unreasonably withhold its consent); and
(iv) is not liable for any compromise or settlement made
without its consent.
(f) If the indemnifying party fails to assume the defense within 10
days after receiving notice of the action, the indemnifying party is bound by
any determination made in the action or by any compromise or settlement made by
the other party.
(g) If for any reason the foregoing indemnity is unavailable, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, or (ii) if the allocation provided by Section 5(g) (i) above
is not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, the Holder shall not be required to contribute any amount in excess
of the amount the Holder would have been required to pay to an indemnified party
if the indemnity under Section 5(a) was available. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The obligation of any underwriters
to contribute pursuant to this Section 5 shall be several in proportion to their
respective underwriting commitments and not joint.
(h) An indemnifying party shall make payments of all amounts required
to be made pursuant to the foregoing provisions of this Section 5 to or for the
account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due and payable.
6. Certain Limitations on Registration Rights
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In the case of a registration under Section 2, if the Company
determines to enter into an underwriting agreement in connection therewith, all
Registrable Securities to be included in such registration shall be subject to
such underwriting agreement and no Person may participate in such registration
unless such Person agrees to sell such Person's securities on the basis provided
in such underwriting agreement and completes and/or executes all questionnaires,
indemnities, and other reasonable documents which must be executed under the
terms of such underwriting agreement.
7. Allocation of Securities Included in Registration Statement
In the case of a registration pursuant to Section 2 for the Company's
account, if the Company's managing underwriter shall advise the Company and the
Holder and other holders of Registrable Securities in writing that the inclusion
in any registration pursuant hereto of some or all of (a) the Registrable
Securities sought to be registered by the Holder and other holders, and (b) the
Company Securities sought to be registered creates a substantial risk that the
proceeds or price per unit that will be derived from such registration will be
reduced or that the number of securities to be registered is too large a number
to be reasonably sold, (i) first, the number of Company Securities sought to be
registered shall be included in such registration, and (ii) next, the number of
Registrable Securities and other securities of holders including the Holder
exercising "piggyback rights" shall be included in such registration to the
extent permitted by the Company's managing underwriter with the number of
Registrable Securities and such other securities being registered being on a
pro-rata basis based on the number of securities the participating holders
including the Holder desire to have registered; provided, however, that, if any
participating Holder would be required pursuant to the provisions of this
Section 7 to reduce the number of Registrable Securities that it may include in
such registration, the Holder may withdraw all or any portion of its Registrable
Securities from such registration.
8. Limitations on Sale or Distribution of Securities
If a registration hereunder shall be in connection with an underwritten
public offering, the Holder shall be deemed to have agreed by acquisition of its
Registrable Securities not to effect any public sale or distribution, including
any sale pursuant to Rule 144 under the Securities Act, of any Registrable
Securities and to use its best efforts not to effect any such public sale or
distribution of any other equity security of the Company (including any short
sale) or of any security convertible into or exchangeable or exercisable for any
equity security of the Company (other than as part of such underwritten public
offering) within 10 days before or 90 days after the effective date of such
registration statement. In such event, the Holder agrees, if requested, to sign
a customary market stand-off letter with the Company's managing underwriter, and
to comply with applicable rules and regulations of the Commission.
9. Rule 144
The Company covenants that it will file the reports required to be
filed under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, in the event that the
Company is not required to file such reports, it will make publicly available
information as set forth in Rule 144(c)(2) promulgated under the Securities
Act), and it will take such further action as the Holder may reasonably request,
or to the extent required from time to time to enable the Holder to sell its
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Registrable Securities without registration under the Securities Act within the
limitation of the exemption provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission (collectively, "Rule 144"). Upon
request of any Holder, the Company will deliver to the Holder a written
statement as to whether it has complied with such requirements.
10. Transfer of Registration Rights
If and to the extent that the Holder sells or otherwise disposes of
Registrable Securities in any transaction that does not require registration
under the Securities Act (other than a transaction exempt under Rule 144), the
rights of the Holder hereunder with respect to such Registrable Securities will
be assignable to the transferee of such Registrable Securities; provided,
however, that such transferee agrees in writing to be bound by all the terms and
conditions of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
UNIVERSAL BEVERAGES HOLDINGS
CORPORATION
-----------------------------------
----------------------------------- By:
---------------------------------
Xxxxxxxx X. Xxxxx,
Chief Executive Officer
HOLDER
-----------------------------------
----------------------------------- By:
---------------------------------
---------------------------------
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