Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of December __, 2016 between Eastside Distilling, Inc., a Nevada corporation
(the “Company”) and the purchasers (the “Purchasers”) who have subscribed for
units (the “Units”), each Unit consisting of one share of the Company’s common
stock (the “Shares” and one common stock purchase warrant (the “Warrants,”)
pursuant to the Confidential Private Placement Memorandum of the Company dated
November 21, 2016 and accompanying Subscription Agreement (“Offering
Materials”).

 

The parties hereby agree as follows:

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each of the Holders
agree as follows:

 

1.       Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Subscription Agreement shall have the meanings given
such terms in the Subscription Agreement. As used in this Agreement, the
following terms shall have the following meanings:

 

“415 Cutback Shares” has the meaning set forth in Section 2(a).

 

“Advice” has the meaning set forth in Section 6(c).

 

“Affiliate” means, with respect to any person, any other person which directly
or indirectly controls, is controlled by, or is under common control with, such
person.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Closing” has the meaning set forth in the Subscription Agreement.

 

“Closing Date” has the meaning set forth in the Subscription Agreement.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.0001 per
share, and any securities into which such common stock may hereinafter be
reclassified.

 

“Company” has the meaning set forth in the Preamble.

 

“Effective Date” means each date that the Registration Statement filed pursuant
to Section 2(a) and any post-effective amendment thereto is declared effective
by the Commission.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

 

“Indemnified Party” has the meaning set forth in Section 5(c).

 

“Indemnifying Party” has the meaning set forth in Section 5(c).

 

 

 

 

“Initial Registration Statement” means the initial Registration Statement filed
pursuant to this Agreement.

 

“Losses” has the meaning set forth in Section 5(a).

 

“Offering” means the offering of up to 769,230 Units by the Company pursuant to
the Offering Materials.

 

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

 

“Registrable Securities” means (i) all shares of Common Stock issued to the
Holder and all other purchasers of Units pursuant to the terms of the
Subscription Agreement; (ii) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing; and (iii) the shares of Common Stock underlying the
Warrants issued to the Holder and all other purchasers pursuant to the terms of
the Subscription Agreement, provided, that the Holder has completed and
delivered to the Company a Selling Shareholder Questionnaire. Notwithstanding
the foregoing, the Securities will cease to be Registrable Securities of a
particular Holder upon the earliest of (v) when they have been effectively
registered under the Securities Act and disposed of in accordance with a
Registration Statement covering them, (w) when they have been sold to the public
pursuant to Rule 144 (or by similar provision under the Securities Act) (in
which case, only such securities sold by the Holder shall cease to be a
Registrable Security), or (x) when they are otherwise transferred and such
securities may be resold without subsequent registration under the Securities
Act.

 

“Registration Statement” means any one or more registration statements of the
Company filed under the Securities Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement (including,
without limitation, the Initial Registration Statement, the New Registration
Statement and any Remainder Registration Statements), including (in each case)
the amendments and supplements to such Registration Statements, including pre-
and post-effective amendments thereto, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
Registration Statements.

 

“Remainder Registration Statement” has the meaning set forth in Section 2(a).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

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“Selling Shareholder Questionnaire” has the meaning set forth in Section 2(c).

 

“SEC Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Staff and (ii) the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Staff” means the staff of the Commission.

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its principal market, or (ii) if the Common Stock is not listed on a
Trading Market), a day on which the Common Stock is traded in the
over-the-counter market, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported in the “pink sheets” by OTCPink (or any
similar organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the NYSE, the NYSE MKT, the NASDAQ Global
Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC
Markets on which the Common Stock is listed or quoted for trading on the date in
question.

 

2.               Required Registration

 

(a)       As soon as reasonable practicable following the final closing of the
Offering, the Company shall use its commercially reasonable efforts to prepare
and file with the Commission a Registration Statement covering the resale of all
of the Registrable Securities for an offering to be made on a continuous basis
pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of
the Registrable Securities, by such other means of distribution of Registrable
Securities as the Holders may reasonably specify (the “Initial Registration
Statement”). The Initial Registration Statement shall be on Form S-1 (or such
other form available to register for resale the Registrable Securities as a
secondary offering). Notwithstanding the registration obligations set forth in
this Section 2, in the event the Commission informs the Company that all of the
Registrable Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly (i) inform each of the Holders thereof
and use its commercially reasonable efforts to file amendments to the Initial
Registration Statement as required by the Commission and/or (ii) withdraw the
Initial Registration Statement and file a new registration statement (a “New
Registration Statement”), in either case covering the maximum number of
Registrable Securities permitted to be registered by the Commission, on Form S-1
or such other form available to register for resale the Registrable Securities
as a secondary offering. Notwithstanding any other provision of this Agreement,
if any SEC Guidance sets forth a limitation of the number of Registrable
Securities permitted to be registered on a particular Registration Statement as
a secondary offering (and notwithstanding that the Company used commercially
reasonable efforts to advocate with the Commission for the registration of all
or a greater number of Registrable Securities), or in the event the Staff seeks
to characterize any offering pursuant to a Registration Statement filed pursuant
to this Agreement as constituting an offering of securities by or on behalf of
the Company such that Rule 415 is not available to the Company to register the
resale of such Registrable Securities and as a result the Staff or the SEC does
not permit such Registration Statement to become effective and used for resales
in a manner that permits the continuous resale at the market by the Holders
participating therein (or as otherwise may be acceptable to each Holder) without
being named therein as an “underwriter,” unless otherwise directed in writing by
a Holder as to its Registrable Securities, the number of Registrable Securities
to be registered on such Registration Statement will be reduced by on a pro rata
basis based on the total number of unregistered Shares held by such Holders
(such reduced Registrable Securities, the “415 Cutback Shares”). In the event
the Company amends the Initial Registration Statement or files a New
Registration Statement, as the case may be, under clauses (i) or (ii) above, the
Company will use its commercially reasonable efforts to file with the
Commission, as promptly as allowed by Commission or SEC Guidance provided to the
Company or to registrants of securities in general, one or more registration
statements on Form S-1 or such other form available to register for resale those
Registrable Securities that were not registered for resale on the Initial
Registration Statement, as amended, or the New Registration Statement, including
the 415 Cutback Shares (the “Remainder Registration Statements”). No Holder
shall be named as an “underwriter” in any Registration Statement without such
Holder’s prior written consent.

 

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(b)       The Company shall use its commercially reasonable efforts to cause
each Registration Statement or any post-effective amendment thereto to be
declared effective by the Commission as soon as practicable (including, with
respect to the Initial Registration Statement or the New Registration Statement,
as applicable, filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five Business Days after the date that the Company is notified (orally or
in writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed,” or not be subject to further review and the
effectiveness of such Registration Statement may be accelerated), shall use its
commercially reasonable efforts to keep each Registration Statement continuously
effective under the Securities Act until the earlier of (i) such time as all of
the Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders or (ii) the date that is three years following the
Closing Date (the “Effectiveness Period”). The Company shall promptly notify the
Holders via facsimile or electronic mail of the effectiveness of a Registration
Statement or any post-effective amendment thereto on or before the first Trading
Day after the date that the Company telephonically confirms effectiveness with
the Commission.

 

(c)       Each Holder agrees to furnish to the Company a completed Selling
Shareholder Questionnaire in the form attached to this Agreement as Annex B or
in a form mutually agreeable between the Parties. At least 10 Trading Days prior
to the first anticipated filing date of a Registration Statement for any
registration under this Agreement, the Company will notify each Holder of the
information the Company requires from that Holder other than the information
contained in the Selling Shareholder Questionnaire, if any, which shall be
completed and delivered to the Company promptly upon request and, in any event,
within three Trading Days prior to the applicable anticipated filing date. Each
Holder further agrees that it shall not be entitled to be named as a Selling
Shareholder in the Registration Statement or use the Prospectus for offers and
resales of Registrable Securities at any time, unless such Holder has returned
to the Company a completed and signed Selling Shareholder Questionnaire and a
response to any requests for further information as described in the previous
sentence. If a Holder of Registrable Securities returns a Selling Shareholder
Questionnaire or a request for further information, in either case, after its
respective deadline, the Company shall use its commercially reasonable efforts
at the expense of the Holder who failed to return the Selling Shareholder
Questionnaire or to respond for further information to take such actions as are
required to name such Holder as a selling security holder in the Registration
Statement or any pre-effective or post-effective amendment thereto and to
include (to the extent not theretofore included) in the Registration Statement
the Registrable Securities identified in such late Selling Shareholder
Questionnaire or request for further information. Each Holder acknowledges and
agrees that the information in the Selling Shareholder Questionnaire or request
for further information as described in this Section 2(c) will be used by the
Company in the preparation of the Registration Statement and hereby consents to
the inclusion of such information in the Registration Statement.

 

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(d)       Notwithstanding anything to the contrary herein, at any time after any
Registration Statement has been declared effective by the Commission, the
Company may delay the disclosure of material non-public information concerning
the Company if the disclosure of such information at the time is not, in the
good faith judgment of the Company, in the best interests of the Company (a
“Grace Period”); provided, however, the Company shall promptly (i) notify the
Holders in writing (including via facsimile or other electronic transmission) of
the existence of material non-public information giving rise to a Grace Period
(provided that the Company shall not disclose the content of such material
non-public information to the Holders) or the need to file a supplement or
post-effective amendment, as applicable, and the date on which such Grace Period
will begin, and (ii) notify the Holders in writing (including via facsimile or
other electronic transmission) of the date on which the Grace Period ends;
provided, further, that no single Grace Period shall exceed 30 consecutive days,
and during any 365 day period, the aggregate of all Grace Periods shall not
exceed an aggregate of 60 days (each Grace Period complying with this provision
being an “Allowable Grace Period”). For purposes of determining the length of a
Grace Period, the Grace Period shall be deemed to begin on and include the date
the Holders receive the notice referred to in clause (i) above and shall end on
and include the later of the date the Holders receive the notice referred to in
clause (ii) above and the date referred to in such notice; provided, however,
that no Grace Period shall be longer than an Allowable Grace Period.

 

3.       Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:

 

(a)       Not less than five Trading Days prior to the filing of each
Registration Statement and not less than one Trading Day prior to the filing of
any related Prospectus or any amendment or supplement thereto (not including any
document that would be incorporated or deemed to be incorporated therein by
reference, and not including a supplement or amendment filed solely for the
purpose of adding the contents of a Form 10-K, Form 10-Q or Form 8-K filed at
such as time as the Registration Statement is on a form that does not permit
“forward” incorporation by reference) by the Company, the Company shall
(i) furnish to each Holder copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be incorporated by
reference, and other than a supplement or amendment filed solely for the purpose
of adding the contents of a Form 10-K, Form 10-Q or Form 8-K filed at such as
time as the Registration Statement is on a form that does not permit “forward”
incorporation by reference by the Company) will be subject to the review of such
Holder (it being acknowledged and agreed that if a Holder does not object to or
comment on the aforementioned documents within such five Trading Day or one
Trading Day period, as the case may be, then the Holder shall be deemed to have
consented to and approved the use of such documents) and (ii) cause its officers
and directors, counsel and independent certified public accountants to respond
to such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to each Holder, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file a Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities shall reasonably object in
good faith, provided that the Company is notified of such objection in writing
no later than five Trading Days after the Holders have been so furnished copies
of a Registration Statement or one Trading Day after the Holders have been so
furnished copies of any related Prospectus or amendments or supplements thereto.

 

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(b)(i)   Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities (except during an Allowable Grace Period);
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement (subject to the terms of this Agreement), and, as so
supplemented or amended, to be filed pursuant to Rule 424 (except during an
Allowable Grace Period); (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to a Registration Statement
or any amendment thereto and provide as promptly as reasonably possible to the
Holders true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement (provided that the Company may
excise any information contained therein which would constitute material
non-public information concerning the Company); and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of disposition by the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented; provided, however, that each Holder shall be
responsible for the delivery of the Prospectus to the Persons to whom such
Holder sells any of the Shares (including in accordance with Rule 172 under the
Securities Act), and each Holder agrees to dispose of Registrable Securities in
compliance with the plan of distribution described in the Registration Statement
and otherwise in compliance with applicable federal and state securities laws.

 

(c)       Notify the Holders of Registrable Securities to be sold (which notice
shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of
(i)(A) below, not less than one Trading Day prior to such filing) and (if
requested by any such Person) confirm such notice in writing (including via
facsimile or other electronic transmission) no later than one Trading Day
following the day (i) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; and (ii) of the
occurrence of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein or any
statement made in a Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of a Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (vi) of the
occurrence or existence of any pending corporate development with respect to the
Company that the Company believes may be material and that, in the determination
of the Company, makes it not in the best interest of the Company to allow
continued availability of a Registration Statement or Prospectus, provided that
any and all of such information shall be kept confidential by each Holder until
such information otherwise becomes public, unless disclosure by a Holder is
required by law; provided, further, that notwithstanding each Holder’s agreement
to keep such information confidential, each such Holder makes no acknowledgement
that any such information is material, non-public information.

 

(d)       Use its commercially reasonable efforts to avoid the issuance of, or,
if issued, obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

 

(e)       The Company may require each selling Holder to furnish to the Company
a certified statement as to (i) the number of shares of Common Stock
beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial
Industry Regulatory Authority, Inc. (“FINRA”) affiliations, (iii) any natural
persons who have the power to vote or dispose of the common stock and (iv) any
other information as may be requested by the Commission, FINRA or any state
securities commission.

 

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(f)       Subject to the terms of this Agreement, the Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(c).

 

(g)       Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, would subject the Company to
any material tax in any such jurisdiction where it is not then so subject or
file a general consent to service of process in any such jurisdiction.

 

(h)       If requested by a Holder, cooperate with such Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by the Subscription
Agreement and applicable state and Federal laws, of all restrictive legends, and
to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holder may request.

 

(i)       If the Company notifies the Holders to suspend the use of any
Prospectus until a requisite changes to such Prospectus has been made, then the
Holders shall suspend use of such Prospectus. The Company will use its
commercially reasonable efforts to ensure that the use of the Prospectus may be
resumed as promptly as is practicable. The Company shall be entitled to exercise
its right under this Section 3(i) to suspend the availability of a Registration
Statement and Prospectus, for a period not to exceed 60 calendar days (which
need not be consecutive days) in any 12 month period.

 

(j)        Comply in all material respects with all applicable rules and
regulations of the Commission.

 

4.       Registration Expenses.     All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses of the Company’s counsel and
auditors) (A) with respect to filings made with the Commission, (B) with respect
to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, (C) in compliance with applicable state securities
or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in
connection with Blue Sky qualifications or exemptions of the Registrable
Securities) and (D) if not previously paid by the Company in connection with an
issuer filing, with respect to any filing that may be required to be made by any
broker through which a Holder intends to make sales of Registrable Securities
with the FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving
no more than a customary brokerage commission in connection with such sale,
(ii) printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any underwriting, broker or similar commissions of any Holder or
any legal fees or other costs of the Holders.

 

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5.       Indemnification.

 

(a)       Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents and employees (and any other
persons with a functionally equivalent role of a person holding such titles,
notwithstanding a lack of such title or any other title) of each of them, each
person who controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
members, shareholders, partners, agents and employees (and any other persons
with a functionally equivalent role of a person holding such titles,
notwithstanding a lack of such title or any other title) of each such
controlling person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged
untrue statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder, in connection with the performance of its obligations
under this Agreement, except to the extent, but only to the extent, that
(i) such untrue statements or omissions are in reliance upon, and in conformity
with, information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement, such Prospectus or in
any amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
of an event of the type specified in Section 3(c)(ii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated in Section 6(c). The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.

 

(b)       Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities
Act or (y) any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company specifically
for inclusion in such Registration Statement or such Prospectus or (ii) to the
extent that such information relates to such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or in any amendment or supplement thereto or (iii) in the case
of an occurrence of an event of the type specified in Section 3(c)(ii)-(vi), the
use by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(c).
In no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.

 

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(c)       Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within 20 Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
previously disbursed and that are applicable to such actions for which such
Indemnified Party is judicially determined to be not entitled to indemnification
hereunder.

 

 9 

 

 

(d)       Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

6.       Miscellaneous.

 

(a)       Remedies. Subject to the limitations set forth in this Agreement, in
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.

 

(b)       Compliance. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as applicable to it
in connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

(c)       Discontinued Disposition. By its acquisition of Registrable
Securities, each Holder agrees that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c)(ii), such
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until it is advised in writing (the “Advice”) by
the Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its commercially
reasonable efforts to ensure that the use of the Prospectus may be resumed as
promptly as is practicable.

 

 10 

 

 

(d)       Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of a majority of the then outstanding Registrable Securities. If a
Registration Statement does not register all of the Registrable Securities
pursuant to a waiver or amendment done in compliance with the previous sentence,
then the number of Registrable Securities to be registered for each Holder shall
be reduced pro rata among all Holders and each Holder shall have the right to
designate which of its Registrable Securities shall be omitted from such
Registration Statement. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of some Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of all of
the Registrable Securities to which such waiver or consent relates; provided,
however, that in the event the Company shall deliver written notice to a Holder
with respect to a requested waiver or amendment, such Holder shall be deemed to
have consented and agreed to such amendment or waiver if such Holder does not
provide written notice to the Company indicating such Holder’s non-consent
within 10 calendar days of delivery by the Company of such written notice;
provided, further, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the first 
sentence of this Section 6(d).

 

(e)       Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Subscription Agreement.

 

(f)        Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. The Company may not assign its rights
(except by merger or in connection with another entity acquiring all or
substantially all of the Company’s assets) or obligations hereunder without the
prior written consent of all the Holders of the then outstanding Registrable
Securities. Each Holder may assign its respective rights with respect to any or
all of its Registrable Securities hereunder in the manner and to the persons as
permitted under the Subscription Agreement; provided in each case that (i) the
Holder agrees in writing with the transferee or assignee to assign such rights
and related obligations under this Agreement, and for the transferee or assignee
to assume such obligations, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being transferred
or assigned, (iii) at or before the time the Company received the written notice
contemplated by clause (ii) of this sentence, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein and (iv) the transferee is an “accredited investor,” as that term is
defined in Rule 501 of Regulation D and completes any required documentation
requested by the Company to confirm the foregoing.

 

(g)       No Inconsistent Agreements. Except as set forth in the Subscription
Agreement or in the Company’s filings with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, neither the Company nor any of its
subsidiaries has previously entered into any agreement granting any registration
rights with respect to any of its securities to any person that have not been
satisfied in full.

 

 11 

 

 

(h)       Execution and Counterparts. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or other electronic transmission of a “.pdf”
format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or “.pdf” signature page were an
original thereof.

 

(i)        Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Subscription Agreement.

 

(j)        Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any other remedies provided by law.

 

(k)        Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

(l)        Headings. The headings in this Agreement are for convenience only, do
not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

 

(m)       Independent Nature of Holders’ Obligations and Rights. The obligations
of each Holder hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Investor acknowledges that no other
Investor has acted as agent for such Investor in connection with making its
investment hereunder and that no Investor will be acting as agent of such
Investor in connection with monitoring its investment in the Shares or enforcing
its rights under the Subscription Agreement or any other agreement entered into
in connection with the Subscription Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.

 

********************

 

[Signature pages follow]

 

 12 

 

 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

  EASTSIDE DISTILLING, INC.         By:       Steve Shum     Chief Financial
Officer

 

[Signature Page of Investors Follows]

 

 13 

 

 

INVESTOR SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

Name of Investor:

 

 

 

Signature of Authorized Signatory of Investor:

 

 

 

Name of Authorized Signatory:

 

 

 

Title of Authorized Signatory:

 

 

 

Address for Notice of Investor:

 

 

 

 

 

 14 

 

 

ANNEX A

 

EASTSIDE DISTILLING, INC.

 

Purchaser Information Request

 

The undersigned beneficial owner of common stock (the “Registrable Securities”)
of Eastside Distilling, Inc., a Delaware corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a registration statement (the
“Registration Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement
(the “Registration Rights Agreement”) to which this document is annexed. A copy
of the Registration Rights Agreement is available from the Company upon request
at the address set forth below. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

 

Certain legal consequences arise from being named as a selling Shareholder in
the Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling Shareholder in the Registration Statement and the related
prospectus.

 

The undersigned beneficial owner (the “Selling Shareholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it in
the Registration Statement.

 

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

 

1.Name.

 

(a)Full Legal Name of Selling Shareholder:

 

 

 

(b)Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are held:

 

 

 

(c)Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):

 

 

 

2.Address for Notices to Selling Shareholder.

 

 

 

 

 

 

 

 

 

 

Contact Person:  

 

Email:  

 

Telephone:  

 

Fax:

 

3.Broker-Dealer Status:

 

(a)       Are you a broker-dealer?

 

Yes            ¨            No            ¨

 

(b)       If “yes” to Section 3(a), did you receive your Registrable Securities
as compensation for investment banking services to the Company?

 

Yes            ¨            No            ¨

 

(c)       Are you an affiliate of a broker-dealer?

 

Yes            ¨            No            ¨

 

(d)       If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

 

Yes            ¨            No            ¨

 

Note: If no, the Commission’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

 

4.Beneficial Ownership of Securities of the Company Owned by the Selling
Shareholder.

 

Except as set forth below in this Item 4, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the securities
issuable pursuant to the Subscription Agreement.

 

(a)            Type and Amount of other securities of the Company beneficially
owned by the Selling Shareholder:

 

 

 

 

 

 

 

 2 

 

 

5.Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

 

State any exceptions here:

 

 

 

 

 

 

 

The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof at any time while the Registration Statement remains effective.

 

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

 

Dated:_____________________________

 

  Beneficial Owner:             By:     Name:     Title:  

 

 3