SUBORDINATED REVOLVING LINE OF CREDIT AGREEMENT
SUBORDINATED
REVOLVING
This
Subordinated Revolving Line of Credit Agreement (this “Agreement”)
is
made as of _________, 2006 by and between Beverage Acquisition Corporation,
a
Delaware corporation (“Borrower”),
and
the individuals and entities set forth on Schedule A (“Lenders”),
with
reference to the following facts.
(a) Borrower
has been organized for the purpose of effecting a merger, capital stock
exchange, asset acquisition or other similar business combination with an
operating business (a “Business
Combination”).
(b) Borrower
proposes to: (a) make a public offering (the “Public
Offering”)
of its
securities pursuant to a registration statement (File No. 333-________) (the
“Registration
Statement”)
filed
with and to be declared effective by the Securities and Exchange Commission
(the
“SEC”);
(b) deposit the net proceeds from the Public Offering into a trust account
(the “Trust
Account”)
for
the benefit of the purchasers of securities in the Public Offering, to be held
and disbursed in accordance with the terms of the Investment Management Trust
Agreement to be entered into between Borrower and Continental Stock Transfer
and
Trust Company, as trustee (the “Trust
Agreement”);
and
(c) utilize the funds in the Trust Account in connection with a Business
Combination. “Net proceeds” refers to the proceeds of the Public Offering, net
of offering costs, underwriting discounts and $750,000 of such proceeds to
be
used for general corporate purposes (such $750,000, the “Non-Trust
Funds”).
(c)
Borrower may need additional funds (i) to pay costs and expenses prior
to consummation of a Business Combination or (ii) to pay costs, expenses
and claims in connection with Borrower’s dissolution and the liquidation of
Borrower and the Trust Account to its public stockholders.
(d) On
the terms and subject to the conditions set forth in this Agreement, Lenders
are
willing to make available to Borrower a revolving line of credit to pay certain
costs and expenses that may arise prior to a Business Combination or to pay
costs, expenses and claims in connection with Borrower’s dissolution and the
liquidation of the Trust Account to its public stockholders (the “Loan”).
1. The
Loan
1.1 If
the Non-Trust Funds are insufficient for the Borrower’s working capital purposes
(including the payment of costs, expenses and claims in connection with
Borrower’s dissolution and the liquidation of Borrower and the distribution of
the Trust Account to its public stockholders), then Lenders agree to make
advances to Borrower, and Borrower agrees to repay such advances, from time
to
time in accordance with the terms and conditions of this Agreement and the
form of revolving promissory note attached hereto as Exhibit A (the
“Note”);
provided, however, that notwithstanding anything to the contrary in this
Agreement, at no time shall the aggregate of all advances and readvances
outstanding under the Loan at any time exceed $250,000. Each Lender shall be
obligated to advance or readvance his pro-rata share to the Borrower, up to
such
amount per Lender as indicated on Schedule A. This Agreement and the Note are
each sometimes referred to in this Agreement individually as a “Loan
Document,”
and
are sometimes collectively referred to as the “Loan
Documents.”
1.2 Lenders’
obligation to make advances shall expire upon the first to occur of the
following:
1.2.1 Upon
a material breach or default of any representation, warranty or agreement of
Borrower that is not cured or corrected within 20 days of notice of such breach
from any Lender;
1.2.2 Upon
consummation of a Business Combination;
1.2.3 If
no Business Combination is consummated, after the completion of the liquidation
of the Trust Account and Borrower’s completed and fully implemented dissolution
and distribution;
1.2.4
Thirty days after Borrower provides written notice to Lenders of its termination
of this Agreement and the Loan, and the payment of all amounts due hereunder
to
Lenders.
2. Conditions
of Advances.
Upon
reasonable advance request from Borrower, Lenders shall make advances to or
as
directed by Borrower, provided that each and all of the following conditions
is
satisfied:
2.1 Borrower
shall have executed and delivered the Note to Lenders, as
applicable;
2.2 The
aggregate amount of outstanding advances following such advance shall not exceed
$250,000;
2.3 The
representations and warranties of Borrower in the Loan Documents shall be true
and correct in all material respects;
2.4
Borrower shall have complied in all material respects with each of its
agreements in the Loan Documents;
2.5 The
advances shall be used only for such purposes as are set forth in
Section 4.1 of this Agreement; and
2.6
Borrower shall have completed the Public Offering.
3. Borrower
Representations
3.1 Borrower
represents and warrants as follows:
3.1.1 Borrower
has full power and authority to execute and deliver this Agreement and the
other
Loan Documents to be executed and delivered by it pursuant hereto and to
perform its obligations hereunder and thereunder. This Agreement and such
Loan Documents constitute the valid, legal and binding obligations of the
Borrower and are enforceable against Borrower in accordance with their
terms.
3.1.2 Neither
the execution and the delivery of the Loan Documents by Borrower, nor the
consummation of the transactions contemplated by the Loan Documents,
nor the borrowing by Borrower, will (a) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
Borrower is subject or any provision of the Amended and Restated Certificate
of
Incorporation or Bylaws of Borrower, or (b) conflict with, result in a
breach of, constitute a default
under,
result in the acceleration of, create in any entity or natural person (each,
a
“Person”)
the
right to accelerate, terminate, modify, or cancel, any agreement, contract,
lease, license, instrument, or other arrangement to which Borrower is a party
or
by which it is bound or to which any of its assets are subject (or result in
the
imposition of any security interest upon any of its assets), in each case other
than where such violation, conflict, breach, default, acceleration or creation
of right would not reasonably be expected to have a material adverse effect
on
the ability of Borrower to repay amounts due under the Note in accordance with
the terms of the Loan Documents. (a “Material
Adverse Effect”).
3.1.3 Borrower
does not need to give any notice to, make any filing with, or obtain any
authorization, permit, certificate, registration, consent, approval or order
of
any government or governmental agency in order for the parties to consummate
the
transactions contemplated by this Agreement, except where the failure would
not
reasonably be expected to have a Material Adverse Effect.
3.1.4 The
conditions to the obligation of Lenders to make the advance, as set forth in
Section 2, shall be satisfied.
3.2 Each
and every representation and warranty made by Borrower in this Agreement shall
be deemed renewed and remade upon the making of each and every advance or
re-advance under the Note that Lenders may make.
4. Borrower
Covenants.
For as
long as Lenders shall have a commitment to make advances or there shall be
any
outstanding balance on the Loan, without the prior consent of Lenders, Borrower
shall:
4.1 use
the proceeds of any advance made hereunder only for (i) ordinary and
reasonable operating costs and expenses during the period Borrower seeks to
identify, investigate, negotiate and consummate a Business Combination,
including Borrower’s reporting obligations with the SEC, the audit and review of
Borrower’s financial statements, identifying and investigating potential targets
for a Business Combination, deposits, down payments or funding of “no-shop”
provisions in connection with a particular Business Combination, negotiating
and
closing the Business Combination, legal and other professional fees and
expenses, fees, salaries and compensation for directors, officers, employees,
consultants and advisors, and insurance premiums or (ii) to pay claims of
vendors, prospective target businesses or other entities related to
4.1(i) and any costs or expenses incurred in connection with Borrower’s
dissolution and the liquidation of Borrower and the distribution of the Trust
Account to its public stockholders;
4.2 not
declare or pay any dividend or distribution with respect to, or repurchase
or
redeem any shares of, the capital stock of Borrower, provided that this shall
not prohibit payments from the Trust Account to stockholders of Borrower in
accordance with the Trust Agreement;
4.3 not
engage in any business other than identifying, investigating, negotiating and
closing a Business Combination;
4.4 not
make any material capital expenditure or purchase any material property or
asset
(other than office supplies and equipment); and
4.5 upon
request of Lenders, provide to Lenders copies of all filings with the Securities
and Exchange Commission.
5. No
Recourse to Trust Account
Lenders,
on behalf of themselves and their successors and assigns, hereby acknowledge
and
agree that under no circumstance shall Lenders have any right, title or interest
in or to any of the funds in the Trust Account, notwithstanding the fact that
such funds were received for the purchase and sale of securities of Borrower,
or
any funds distributed from the Trust Account other than in a Business
Combination Distribution (as defined below), and that their sole recourse for
repayment of any and all amounts due under the Note shall be against the assets
or properties of Borrower never deposited into the Trust Account or distributed
to Borrower from the Trust Account in a Business Combination Distribution.
Lenders hereby irrevocably waive any claim that they might have to funds in
the
Trust Account, and any funds distributed from the Trust Account other than
in a
Business Combination Distribution, at law or in equity, agree not to make any
such claim, and agree to indemnify and hold Borrower harmless from any such
claim made by or on behalf of Lenders. For purposes of this Section 5, a
“Business
Combination Distribution”
means
a
distribution from the Trust Account in connection with the consummation of
a
Business Combination pursuant to the Trust Agreement.
6. Events
of Default.
The
occurrence of any of the following shall constitute an event of default (an
“Event
of Default”)
hereunder and under each and every other Loan Document:
6.1 The
Borrower shall fail to pay any principal or any other amount as and when due
and
payable under any Loan Document;
6.2 Any
representation or warranty which is made or deemed made in any Loan Document
by
the Borrower shall prove to have been incorrect or misleading in any material
respect on or as of the date made or deemed made or remade;
6.3 The
Borrower shall fail to perform or observe any term, provision, covenant, or
agreement contained in any Loan Document to be performed or observed by the
Borrower (other than any payment obligation) and such failure shall continue
more than 20 days after notice thereof from Lenders;
6.4 The
Borrower shall (a) generally not, or be unable to, or admit in writing its
inability to, pay its debts as such debts become due, only after the Company
has
borrowed the entire $250,000 pursuant hereto; or (b) make an assignment for
the benefit of creditors, or petition or apply to any tribunal for the
appointment of a custodian, receiver, or trustee for it or a substantial
part of its assets; or (c) commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution,
or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (d) have any such petition or application filed or any such
proceeding commenced against it in which an order for relief is entered or
adjudication or appointment is made and which remains undismissed for a period
of 30 days or more; or (e) by any act or omission to act indicate consent
to, approval of, or acquiescence in any such petition, application, or
proceeding, or order for relief, or the appointment of a custodian, receiver,
or
trustee for all or any such substantial part of its properties; or
(f) suffer any such custodianship, receivership, or trusteeship for all or
any substantial part of its properties; or (g) suffer any such
custodianship, receivership, or trusteeship to continue undischarged for a
period of 30 days or more; provided,
however
, that
the adoption of a plan of dissolution and distribution and its implementation
by
the Borrower’s Board of Directors that is approved by its stockholders due to
the failure of Borrower to complete a Business Combination shall not in any
instance be deemed an Event of Default hereunder; or
6.5 At
any time after execution and delivery of this Agreement, and whether or not
due
to any fault of Lender, any Loan Document shall cease to be in full force and
effect and enforceable in accordance with its terms, or shall be declared null
and void.
7. Consequences
of Default.
If an
Event of Default shall occur, Lenders:
7.1 shall
have no further obligation to make advances under the Loan Documents;
and
7.2 may declare
the Note and all amounts payable under this Agreement and any other Loan
Document to be forthwith due and payable, whereupon the Note and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by Borrower.
8. Miscellaneous
Provisions
8.1 Notices.
All
notices, requests, demands and other communications (collectively, “Notices”)
given
pursuant to this Agreement shall be in writing, and shall be delivered by
personal service, courier, facsimile transmission or by United States first
class, registered or certified mail, addressed to the following
addresses:
|
If
to
|
|
Beverage
Acquisition Corporation
|
|
|
|
0000
Xxxxxxxxxx Xxxxxx
|
|
|
|
Xxxxx
Xxxxxxxx, Xxxx 00000
|
|
|
|
Facsimile:
___________
|
|
|
|
|
|
If
to Lenders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Any
Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails (or
on
the seventh day if sent to or from an address outside the United States). Any
party may from time to time change its address for further Notices
hereunder by giving notice to the other party in the manner prescribed in this
Section.
8.2 No
Waivers; Remedies Cumulative.
No
failure or delay by a party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies provided herein
shall be cumulative and not exclusive of any rights or remedies provided by
law.
8.3 Amendments
and Waivers.
Any
provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by Borrower and
Lenders.
8.4 Successors
and Assigns.
Borrower may not assign its right or duties hereunder without the prior
written consent of Lenders, which consent Lenders may deny, withhold or
delay in its sole and absolute discretion.
8.5 Governing
Law.
This
Agreement has been made and entered into in the State of New York and shall
be
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law thereof.
8.6 Prior
Understandings.
This
Agreement supersedes all prior understandings and agreements (whether written,
oral or otherwise) pertaining to the subject matter hereof, and constitutes the
entire agreement between the parties hereto relating to the subject matter
hereof and the transactions provided for herein.
8.7 Counterparts.
This
Agreement may be executed in any number of counterparts each of which shall
be deemed an original and all of which shall constitute one and the same
agreement with the same effect as if all parties had signed the same signature
page. The parties shall accept facsimile signatures as the equivalent of
original ones.
8.8 Severability.
If any
provision of this Agreement or the application of such provision to any Person
or circumstance will be held invalid, the remainder of this Agreement or the
application of such provision to Persons or circumstances other than those
to
which it is held invalid will not be affected thereby.
8.9 Additional
Documents and Acts.
Borrower shall execute and deliver such additional documents and instruments
and
shall perform such additional acts as may be necessary or appropriate
to effectuate, carry out and perform all of the terms, provisions, and
conditions of this Agreement and the transactions contemplated by this
Agreement.
8.10 Survival.
All
indemnities, rights, remedies, representations and warranties contained herein
shall survive the expiration or termination of this Agreement, and no
termination or expiration hereof shall relieve either party from liability
for
any breach of this Agreement.
8.11
Action
by Lenders.
Any
actions required by or taken by the Lenders pursuant to the provisions of this
Agreement or the Note shall be effective if taken pursuant to a written document
executed by Lenders holding 50.1% or more of the outstanding principal balance
of any unpaid Notes hereunder.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement to
one
another as of the date first above written.
|
LENDERS:
|
|
|
|||
|
|
|
Xxxxxx
X. Xxxxx
|
|
||
|
|
|
|
|
||
|
|
|
|
|||
|
|
|
Xxxxxxx
X. Xxxxxx
|
|
||
|
|
|
|
|
||
|
|
|
|
|||
|
|
|
Xxxxxx
X. Xxxxxx, Xx.
|
|
||
|
|
|
|
|
||
|
|
|
|
|||
|
|
|
Xxxxxxx
X. Xxxxxxxxx
|
|
||
|
|
|
|
|
||
|
|
|
|
|||
|
|
|
J.
Xxxx Xxxxxxx
|
|
||
|
|
|
|
|||
|
|
|
|
|||
|
BORROWER:
|
|
BEVERAGE
ACQUISITION CORPORATION
|
|||
|
|
|
|
|||
|
|
|
By:
|
|
||
|
|
|
|
Name:
Title:
|
||
|
|
|
|
|
|
|
EXHIBIT A
REVOLVING
LINE OF CREDIT NOTE
|
Not
to Exceed $250,000 in Principal
|
|
,
2006
|
For
value
received, the undersigned
BEVERAGE ACQUISITION CORPORATION,
a
Delaware corporation (“Borrower”),
promises to pay, in lawful money of the United States, to the order of
,
together with his successors and assigns (“Holder”),
at
such address as Holder may direct, the principal sum of Two Hundred and
Fifty Thousand Dollars ($250,000), or so much thereof as shall have been
advanced and shall remain unpaid hereunder.
This
Note
is delivered pursuant to, and is subject to all of the terms and conditions
of,
that certain Amended and Restated Subordinated Revolving Line of Credit
Agreement dated as of ________, 2006 (the “Loan
Agreement”)
between Borrower and ______________. Unless otherwise defined in this
Note, capitalized terms used in this Note shall have the meanings ascribed
to
them in the Loan Agreement, and in the event of any conflict between the terms
of this Note and the terms of the Loan Agreement, the terms of the Loan
Agreement shall govern.
1.
Maturity.
This
Note shall mature and become due and payable upon the earlier of an Event of
Default (after the expiration of any cure period), upon consummation of a
Business Combination or as described in Section 1 of the Loan
Agreement.
2.
Prepayment.
This
Note may be repaid in whole or in part at any time without penalty or
premium.
3.
Event of Default.
Should
an Event of Default occur, Lenders shall have the rights set forth in
Section 7 of the Loan Agreement.
4.
Borrower’s Acknowledgement.
Borrower acknowledges that Holder is extending the credit contemplated hereby
solely as an accommodation to Borrower, and is willing to do so in reliance
upon
Borrower’s monetary and non-monetary covenants contained herein and in the Loan
Agreement.
5.
Holder’s Acknowledgement.
The
Holder acknowledges and agrees that, as specified in Section 5 of the Loan
Agreement, the Holder has limited recourse against Borrower for repayment of
any
and all amounts due and owing under this Note.
6.
Miscellaneous.
If this
Note (or any payment due hereunder) is not paid when due, Borrower promises
to
pay all costs and expenses of collection and reasonable attorneys’ fees incurred
by the Holder hereof on account of such collection whether or not suit is filed
hereon. Borrower consents to renewals, replacements and extensions of time
for
payment hereof, before, at, or after maturity, consents to the acceptance,
release or substitution of security for this Note, and waives demand and
protest. The indebtedness evidenced hereby shall be payable in lawful money
of
the United States. In any action brought under or arising out of this Note,
Borrower, including successor(s) or assign(s), hereby consents to the
application of Delaware law, to the jurisdiction of any competent court within
the State of Delaware, and to service of process by any means authorized by
Delaware law. No single or partial exercise of any power hereunder, or under
any
other Loan Document in connection herewith, shall preclude other or further
exercises thereof or the exercise of any other such power.
IN
WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date
first above written.
|
|
BEVERAGE
ACQUISITION CORPORATION
|
|||
|
|
|
|||
|
|
|
By :
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Schedule
A
|
Name
of Lender
|
Maximum
Amount of Loans
|
|
Xxxxxx
X. Xxxxx
|
|
|
Xxxxxxx
X. Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx, Xx.
|
|
|
Xxxxxxx
X. Xxxxxxxxx
|
|
|
TOTAL
|
$250,000
|
