Exhibit 10.1

 

EXHIBIT B to CONFIDENTIAL OFFERING MEMORANDUM

 

SUBSCRIPTION DOCUMENTS

 

EASTSIDE DISTILLING, INC.

 

Offering of up to $1,040,000 of

Units consisting of Common Stock and Warrants

(800,000 Units)

 

CONTENTS

 

Instructions for Subscription

 

Section A:General Instructions - Wiring and Check Instructions

 

Section B:Subscription Agreement

 

Section C:Confidential Purchaser Questionnaire

 

 

 

 

SECTION A

 

INSTRUCTIONS FOR SUBSCRIPTION FOR UNITS

 

Each subscriber for Units offered must do the following:

 

1.Complete, sign and deliver the Subscription Agreement (Section B) included in
this Subscription Booklet.

 

2.Complete, sign and deliver the Confidential Purchaser Questionnaire (Section
C) included in this Subscription Booklet.

 

3.Deliver payment in the amount of $1.30 per Unit subscribed for in accordance
with the wire transfer and check instructions as indicated in the Subscription
Agreement (Section B).

 

4.All subscriptions from partnerships, corporations, trusts, or limited
liability companies must be accompanied by resolutions of the appropriate
corporate authority (board of directors, trustee or managing partners or
members) and trust documents evidencing the authorization and power to make the
subscription.

 

Delivery of the completed subscription documents described above and check (if
applicable) should be delivered directly to the Company at the following
address:

 

Eastside Distilling, Inc.

1805 SE Martin Luther King Jr. Blvd.

Portland, Oregon 97214

Email: SShum@eastsidedistilling.com

Attention: Chief Financial Officer

 

The Company may accept or reject subscriptions, in whole or in part, in its sole
discretion. The offering is available only to “accredited investors” as defined
under Regulation D under the Securities Act of 1933, as amended. All investors
must have such knowledge and experience in financial and business matters that
they are each capable of evaluating the merits and risks of the prospective
investment, or the Company must reasonably believe immediately prior to making
any sale that such purchaser comes within this description. The Confidential
Purchaser Questionnaire (Section C of this Subscription Booklet) will be used by
the Company in assessing whether the subscribers are suitable investors. In the
event a subscription offer is not accepted by the Company, the subscription
funds shall be returned to the subscriber, without interest or deduction
thereon.

 

 A-1 

 

 

SECTION B

 

SUBSCRIPTION AGREEMENT

 

EASTSIDE DISTILLING, INC.

 

Please review, sign on page B-15 or page B-17, and return to:

 

Eastside Distilling, Inc.

1805 SE Martin Luther King Jr. Blvd.

Portland, Oregon 97214

Email: steven@eastsidedistilling.com

Attention: Chief Executive Officer

 

 

 

 

EASTSIDE DISTILLING, INC.

 

SUBSCRIPTION AGREEMENT

 

The undersigned (hereinafter “Subscriber”) hereby confirms his/her/its
subscription for the purchase of units (“Units”) of Eastside Distilling, Inc., a
Nevada corporation (the “Company”), on the terms described below, with each Unit
consisting of:

 

(a)       One share (collectively, the “Shares”) of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”).

 

(b)       a warrant (collectively, the “Warrants”) to purchase, at any time
prior to the third anniversary of the date of issuance of the Warrant, one (1)
share of Common Stock at the exercise price of $2.50 per whole share of Common
Stock (the “Warrant Exercise Price”). The shares of Common Stock underlying each
Warrant are referred to herein as the “Warrant Shares.”

 

The Units, the Shares, the Warrants and the Warrant Shares are sometimes
referred to collectively herein as the “Securities.”

 

In connection with this subscription, Subscriber and the Company agree as
follows:

 

1.       Purchase and Sale of the Units.

 

(a)       The Company hereby agrees to issue and to sell to Subscriber, and
Subscriber hereby agrees to purchase from the Company, a number of Units at a
price equal to $1.30 per Unit (the “Unit Price”) and for the aggregate
subscription amount set forth on the signature page hereto. The form of Warrant
is attached as Exhibit A to the Offering Memorandum (defined below). Upon
acceptance of this Subscription Agreement by the Company, the Company shall
issue and deliver to Subscriber a share certificate and a warrant certificate
evidencing the applicable number of Shares and Warrants subscribed for against
payment in U.S. Dollars of the Purchase Price (as defined below).

 

(b)       Subscriber has hereby delivered and paid concurrently herewith the
aggregate purchase price (the “Purchase Price”) set forth on the signature page
hereof required to purchase the Units subscribed for hereunder which amount has
been paid in U.S. Dollars by cash, wire transfer, check, or cancellation of
indebtedness, subject to collection, to the order of “Eastside Distilling, Inc.”

 

(c)       Subscriber understands and acknowledges that this subscription is part
of a proposed placement by the Company of up to $1,040,000 of Units (800,000
Units), which offering is being made on a “best efforts” basis (the “Offering”).
During the Offering Period, funds will be held in an account established by the
Company and released at the discretion of the Company from time to time. If a
subscription is not accepted, whether in whole or in part, the subscription
funds held therein will be returned to the investor without interest or
deduction.

 

 B-1 

 

 

2.       Covenants, Representations and Warranties of Subscriber. Subscriber
covenants with, and represents and warrants to, the Company as follows:

 

(a)       The Confidential Purchaser Questionnaire has been completed, signed
and delivered to the Company by the Subscriber and is, as of the date hereof,
true, complete, and correct in all respects.

 

(b)       The undersigned has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of an
investment in the Securities and protecting the undersigned’s own interests in
this transaction, and does not desire to utilize the services of any other
person in connection with evaluating such merits and risks.

 

(c)       The Subscriber acknowledges that the offering of the Securities is
subject to the Federal securities laws of the United States and state securities
laws of those states in which the Units are offered.

 

(d)       The Subscriber represents and warrants that it is an “accredited
investor” as such term is defined in the Securities Act of 1933, as amended (the
“Act”) and that the Subscriber comes within the category so initialed and has
truthfully set forth the factual basis or reason the Subscriber comes within
that category. All information in response to this paragraph will be kept
strictly confidential, unless required to be disclosed by the Staff of the
Securities and Exchange Commission (the “SEC”) or otherwise by law. The
Subscriber agrees to furnish any additional information which the Company deems
necessary in order to verify the answers set forth below.

 

(e)       Subscriber acknowledges and understands that the Securities are being
purchased for investment purposes and not with a view to distribution or resale,
nor with the intention of selling, transferring or otherwise disposing of all or
any part thereof for any particular price, or at any particular time, or upon
the happening of any particular event or circumstances, except selling,
transferring, or disposing of the Securities made in full compliance with all
applicable provisions of the Act, the rules and regulations promulgated by the
SEC thereunder, and applicable state securities laws; and that an investment in
the Securities is not a liquid investment.

 

(f)        Subscriber acknowledges the Securities must be held indefinitely
unless subsequently registered under the Act or unless an exemption from such
registration is available. Subscriber is aware of the provisions of Rule 144
promulgated under the Act, which permit limited resale of common stock purchased
in a private placement subject to the satisfaction of certain conditions,
including, among other things, the existence of a public market for the common
stock, the availability of certain current public information about the Company,
the resale occurring not less than six-months after a party has purchased and
paid for the security to be sold.

 

 B-2 

 

 

(g)       Subscriber acknowledges that Subscriber has had the opportunity to ask
questions of, and receive answers from the Company or any person acting on its
behalf concerning the Company and its business and to obtain any additional
information, to the extent possessed by the Company (or to the extent it could
have been acquired by the Company without unreasonable effort or expense)
necessary to verify the accuracy of the information received by Subscriber. In
connection therewith, Subscriber acknowledges that Subscriber has had the
opportunity to discuss the Company’s business, management and financial affairs
with the Company’s management or any person acting on its behalf. Subscriber has
received and reviewed the Company’s Offering Memorandum, dated November 21,
2016, including the exhibits thereto (the “Offering Memorandum”) pertaining to
the Unit Offering, and all the information, both written and oral, that it
desires. Without limiting the generality of the foregoing, Subscriber has been
furnished with or has had the opportunity to acquire, and to review: (i) copies
of all of the Company’s publicly available documents, and (ii) all information,
both written and oral, it desires with respect to the Company’s business,
management, financial affairs and prospects. In determining whether to make this
investment, Subscriber has relied solely on Subscriber’s own knowledge and
understanding of the Company and its business based upon Subscriber’s own due
diligence investigations and the information furnished pursuant to this
paragraph. Subscriber understands that no person has been authorized to give any
information or to make any representations that were not furnished pursuant to
this paragraph, and Subscriber has not relied on any other representations or
information.

 

(h)       Subscriber has all requisite legal and other power and authority to
execute and deliver this Subscription Agreement and to carry out and perform
Subscriber’s obligations under the terms of this Subscription Agreement. This
Subscription Agreement constitutes a valid and legally binding obligation of
Subscriber, enforceable in accordance with its terms, and subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
general principals of equity, whether such enforcement is considered in a
proceeding in equity or law.

 

(i)        Subscriber has carefully considered and has discussed with the
Subscriber’s professional legal, tax, accounting and financial advisors, to the
extent Subscriber has deemed necessary, the suitability of this investment and
the transactions contemplated by this Subscription Agreement for the
Subscriber’s particular federal, state, local and foreign tax and financial
situation and has determined that this investment and the transactions
contemplated by this Subscription Agreement are a suitable investment for the
Subscriber. Subscriber relies solely on such advisors and not on any statements
or representations of the Company or any of its agents. Subscriber understands
that Subscriber (and not the Company) shall be responsible for Subscriber’s own
tax liabilities which may arise as a result of this investment or the
transactions contemplated by this Subscription Agreement.

 

(j)        Neither this Subscription Agreement nor the Confidential Purchaser
Questionnaire contain any untrue statement of a material fact or omit any
material fact concerning Subscriber.

 

(k)       There are no actions, suits, proceedings or investigations pending
against Subscriber or Subscriber’s properties before any court or governmental
agency (nor, to Subscriber’s knowledge, is there any threat thereof) which would
impair in any way Subscriber’s ability to enter into and fully perform
Subscriber’s commitments and obligations under this Subscription Agreement or
the transactions contemplated hereby.

 

 B-3 

 

 

(l)        The execution, delivery and performance of and compliance with this
Subscription Agreement and the issuance of the Securities will not result in any
material violation of, or conflict with, or constitute a material default under,
any of Subscriber’s articles of incorporation or bylaws or other governing
documents, if applicable, or any of Subscriber’s material agreements nor result
in the creation of any mortgage, pledge, lien, encumbrance or charge against any
of the assets or properties of Subscriber or the Securities.

 

(m)       Subscriber acknowledges the Securities are speculative and involve a
high degree of risk and that Subscriber can bear the economic risk of the
purchase of the Securities, including a total loss of his/her/its investment.

 

(n)       Subscriber acknowledges he/she/it has carefully reviewed and
considered the Offering Memorandum, including the risk factors discussed in the
“Risk Factors” section of the Offering Memorandum prior to making an investment
decision.

 

(o)       Subscriber recognizes that no federal, state or foreign agency has
recommended or endorsed the purchase of the Securities.

 

(p)       Subscriber is aware the Securities are and will be, when issued,
“restricted securities” as that term is defined in Rule 144 of the general rules
and regulations under the Act.

 

(q)       Subscriber understands any and all certificates representing the
Securities and any and all securities issued in replacement thereof or in
exchange therefore shall bear the following legend or one substantially similar
thereto, which Subscriber has read and understands:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”

 

(r)        Because of the restrictions imposed on resale, Subscriber understands
the Company shall have the right to note stop-transfer instructions in its stock
transfer records, and Subscriber has been informed of the Company’s intention to
do so. Any sales, transfers, or any other dispositions of the Securities by
Subscriber, if any, will be in compliance with the Act.

 

(s)       Subscriber acknowledges that Subscriber has such knowledge and
experience in financial and business matters that he/she/it is capable of
evaluating the merits and risks of an investment in the Securities and of making
an informed investment decision.

 

 B-4 

 

 

(t)        Subscriber represents: (i) Subscriber is able to bear the economic
risks of an investment in the Securities and to afford the complete loss of the
investment, and (ii) (A) Subscriber could be reasonably assumed to have the
capacity to protect his/her/its own interests in connection with this
subscription; or (B) Subscriber has a pre-existing personal or business
relationship with either the Company or any affiliate thereof of such duration
and nature as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
the Company or such affiliate and is otherwise personally qualified to evaluate
and assess the risks, nature and other aspects of this subscription.

 

(u)       Subscriber further represents the address set forth in the
Confidential Purchaser Questionnaire is his/her principal residence (or, if
Subscriber is a company, partnership or other entity, the address of its
principal place of business); that Subscriber is purchasing the Securities for
Subscriber’s own account and not, in whole or in part, for the account of any
other person; Subscriber is purchasing the Securities for investment and not
with a view to resale or distribution; and Subscriber has not formed any entity
for the purpose of purchasing the Securities.

 

(v)       Subscriber understands the Company shall have the unconditional right
to accept or reject each subscription, in whole or in part, for any reason or
without a specific reason, in the sole and absolute discretion of the Company
(even after receipt and clearance of Subscriber’s funds). No subscription will
be binding upon the Company until accepted by an authorized officer of the
Company. In the event the subscription is rejected, Subscriber’s subscription
funds will be returned without interest thereon or deduction therefrom.

 

(v)       Subscriber has not been furnished with any oral representation or oral
information in connection with the offering of the Securities that is not
contained in the Offering Memorandum and this Subscription Agreement.

 

(w)      Subscriber represents that Subscriber is not subscribing for Securities
as a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over the Internet, television or radio or presented at any seminar or meeting.

 

(w)       Subscriber has carefully read this Subscription Agreement, Warrant,
and the Offering Memorandum, and Subscriber has accurately completed the
Confidential Purchaser Questionnaire that accompanies this Subscription
Agreement.

 

(x)       No representations or warranties have been made to Subscriber by the
Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for the Securities, Subscriber is not relying upon any
representations other than those contained in the Offering Memorandum or in this
Subscription Agreement.

 

(y)       Subscriber represents and warrants, to the best of its knowledge, that
other than set forth in the Offering Memorandum, no finder, broker, agent,
financial advisor or other intermediary, nor any purchaser representative or any
broker-dealer acting as a broker, is entitled to any compensation in connection
with the transactions contemplated by this Subscription Agreement.

 

 B-5 

 

 

(z)       Subscriber represents and warrants that Subscriber: (i) has not
distributed or reproduced the Offering Memorandum, in whole or in part, at any
time, without the prior written consent of the Company; and (ii) for one (1)
year from the date hereof, or until such time as the information noted in this
Clause (ii) becomes publicly available, will keep confidential the existence of
the Offering Memorandum and the information contained therein, and the
Subscriber further represents and warrants that it will not make available such
information in connection with any further investigation of the Company and will
not use the information about the Company for any other purpose.

 

(aa)     If Subscriber is a trust, this investment, together with all other
securities of the Company held by the trust, does not exceed 10% of the trust
assets.

 

3.       Covenants, Representations and Warranties of the Company. The Company
covenants with, and represents and warrants to, Subscriber as follows:

 

(a)       The Company is duly organized and validly exists as a corporation in
good standing under the laws of the State of Nevada.

 

(b)       The Company has all such corporate power and authority to enter into,
deliver and perform its obligations under this Subscription Agreement and the
Warrant.

 

(c)       All necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this
Subscription Agreement and the Warrant by the Company, and the issuance and sale
of the Securities to be sold by the Company pursuant to this Subscription
Agreement and the Warrant. This Subscription Agreement and the Warrant have been
duly and validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
by general equitable principles.

 

(d)       As of the date hereof, there is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending
or to the Company's knowledge threatened, with respect to the Company, or its
respective operations, businesses, properties, or assets, except as properly
described in the Offering Memorandum or Company filings made with the SEC or
such as individually or in the aggregate do not now have and will not, to the
best knowledge of the Company, in the future have a material adverse effect upon
the operations, business, properties or assets of the Company. The Company is
not, nor as of each Closing Date shall be, in violation of, or in default with
respect to, any law, rule, regulation, order, judgment or decree, except as
properly described in the Offering Memorandum or Company filings made with the
SEC or such as individually or in the aggregate do not have and will not in the
future have a material adverse effect upon the operations, business, properties,
or assets of the Company; nor is the Company required to take any action in
order to avoid any such violation or default.

 

 B-6 

 

 

(e)       The Units (and component parts) to be issued and sold to the
undersigned as provided in this Subscription Agreement have been duly authorized
and when issued and delivered against payment therefor, will be validly issued,
fully paid and non-assessable. The Warrants are exercisable for Common Stock and
the shares of Common Stock issuable upon exercise of the Warrants have been duly
authorized and when issued and delivered upon exercise and due payment therefor
will be validly issued, fully paid and non-assessable. The Company has reserved
sufficient shares of Common Stock to be issued upon exercise of the Warrants.

.

(f)       The Offering Memorandum and/or information provided by the Company to
the undersigned hereof does not and shall 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 circumstances made
therein not misleading.

 

4.       Indemnification. Subscriber agrees to indemnify and hold harmless the
Company and its officers, directors, employees, shareholders, agents
representatives and affiliates, and any person acting on behalf of the Company,
from and against any and all damage, loss, liability, cost and expense
(including reasonable attorneys’ fees) which any of them may incur by reason of
the failure by Subscriber to fulfill any of the terms and conditions of this
Subscription Agreement, or by reason of any breach of the representations and
warranties made by Subscriber herein, or in any other document provided by
Subscriber to the Company. All representations, warranties and covenants of each
of Subscriber and the Company contained herein shall survive the acceptance of
this subscription.

 

5.       Patriot Act Compliance. (Terms used in this section are defined in
paragraph (d) below.)

 

To induce the Company to accept the undersigned’s investment, the undersigned
hereby makes the following representations, warranties and covenants to the
Company:

 

(a)       The undersigned represents and warrants that no holder of any
beneficial interest in the undersigned’s equity securities of the Company (each
a “Beneficial Interest Holder”) and, no Related Person (in the case the
undersigned is an entity) is or will be:

 

(1)A person or entity whose name appears on the list of specially designated
nationals and blocked persons maintained by the Office of Foreign Asset Control
from time to time;

 

(2)A Foreign Shell Bank; or

 

(3)A person or entity resident in or whose subscription funds are transferred
from or through an account in a Non-Cooperative Jurisdiction.

 

(b)       The undersigned represents that the bank or other financial
institution (the “Wiring Institution”) from which the undersigned’s funds will
be wired is located in a FATF Country.

 

 B-7 

 

 

(c)       The undersigned represents that:

 

(1)Neither it, any Beneficial Interest Holder nor any Related Person (in the
case of the undersigned is an entity) is a Senior Foreign Political Figure, any
member of a Senior Foreign Political Figure’s Immediate Family or any Close
Associate of a Senior Foreign Political Figure;

 

(2)Neither it, any Beneficial Interest Holder nor any Related Person (in the
case the undersigned is an entity) is resident in, or organized or chartered
under the laws of, a jurisdiction designated by the Secretary of the Treasury
under Section 311 or 312 of the USA PATRIOT Act as warranting special measures
due to money laundering concerns; and

 

(3)Its investment funds do not originate from, nor will they be routed through,
an account maintained at a Foreign Shell Bank, an “offshore bank,” or a bank
organized or chartered under the laws of a Non-Cooperative Jurisdiction.

 

(d)       Definitions:

 

Close Associate: With respect to a Senior Foreign Political Figure, a person who
is widely and publicly known internationally to maintain an unusually close
relationship with the Senior Foreign Political Figure, and includes a person who
is in a position to conduct substantial domestic and international financial
transactions on behalf of the Senior Foreign Political Figure.

 

FATF: The Financial Action Task Force on Money Laundering.

 

FATF Country: A country that is a member of FATF. As of September 1, 2003, the
countries which are members of FATF are: Argentina; Australia; Austria; Belgium;
Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong; Iceland;
Ireland; Italy; Japan; Luxembourg; Mexico; Kingdom of the Netherlands; New
Zealand; Norway; Portugal; Singapore; South Africa; Spain; Sweden; Switzerland;
Turkey; United Kingdom and United States. For a current list of FATF members see
http://www1.oecd.org/fatf/Members_en.htm.

 

Foreign Bank: An organization which (i) is organized under the laws of a country
outside the United States; (ii) engages in the business of banking; (iii) is
recognized as a bank by the bank supervisory or monetary authority of the
country of its organization or principal banking operations; (iv) receives
deposits to a substantial extent in the regular course of its business; and (v)
has the power to accept demand deposits, but does not include the U.S. branches
or agencies of a foreign bank.

 

Foreign Shell Bank: A Foreign Bank without a Physical Presence in any country,
but does not include a Regulated Affiliate.

 

Government Entity: Any government or any state, department or other political
subdivision thereof, or any governmental body, agency, authority or
instrumentality in any jurisdiction exercising executive, legislative,
regulatory or administrative functions of or pertaining to government.

 

Immediate Family: With respect to a Senior Foreign Political Figure, typically
includes the political figure’s parents, siblings, spouse, children and in-laws.

 

 B-8 

 

 

Non-Cooperative Jurisdiction: Any foreign country or territory that has been
designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as
FATF, of which the United States is a member and with which designation the
United States representative to the group or organization continues to concur.
See http://www1.oecd.org/fatf/NCCT_en.htm for FATF’s list of non-cooperative
countries and territories.

 

Physical Presence: A place of business maintained by a Foreign Bank and is
located at a fixed address, other than solely a post office box or an electronic
address, in a country in which the Foreign Bank is authorized to conduct banking
activities, at which location the Foreign Bank: (a) employs one or more
individuals on a full-time basis; (b) maintains operating records related to its
banking activities; and (c) is subject to inspection by the banking authority
that licensed the Foreign Bank to conduct banking activities.

 

Publicly Traded Company: An entity whose securities are listed on a recognized
securities exchange or quoted on an automated quotation system in the U.S. or
country other than a Non-Cooperative Jurisdiction or a wholly-owned subsidiary
of such an entity.

 

Qualified Plan: A tax qualified pension or retirement plan in which at least 100
employees participate that is maintained by an employer organized in the U.S. or
is a U.S. Government Entity.

 

Regulated Affiliate: A Foreign Shell Bank that: (a) is an affiliate of a
depository institution, credit union or Foreign Bank that maintains a Physical
Presence in the U.S. or a foreign country, as applicable; and (b) is subject to
supervision by a banking authority in the country regulating such affiliated
depository institution, credit union or Foreign Bank.

 

Related Person: With respect to any entity, any interest holder, director,
senior officer, trustee, beneficiary or grantor of such entity; provided that in
the case of an entity that is a Publicly Traded Company or a Qualified Plan, the
term “Related Person” shall exclude any interest holder holding less than 5% of
any class of securities of such Publicly Traded Company and beneficiaries of
such Qualified Plan.

 

Senior Foreign Political Figure: A senior official in the executive,
legislative, administrative, military or judicial branches of a non-U.S.
government (whether elected or not), a senior official of a major non-U.S.
political party, or a senior executive of a non-U.S. government-owned
corporation. In addition, a Senior Foreign Political Figure includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a Senior Foreign Political Figure.

 

USA PATRIOT Act: The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001
(Pub. L. No. 107-56).

 

 B-9 

 

 

6.       Independent Nature of Subscriber’s Obligations and Rights. The
obligations of the Subscriber under this Agreement and any other documents
delivered in connection herewith and therewith (collectively, the “Transaction
Documents”) are several and not joint with the obligations of any other
purchaser of Units, and the Subscriber is not responsible in any way for the
performance of the obligations of any other purchaser of Units under any
Transaction Document. The decision of the Subscriber to purchase Units pursuant
to the Transaction Documents has been made by the Subscriber independently of
any other purchaser of Units. Nothing contained herein or in any Transaction
Document, and no action taken by any purchaser of Units pursuant thereto, shall
be deemed to constitute such purchasers as a partnership, an association, a
joint venture, or any other kind of entity, or create a presumption that the
purchasers of Units are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by the Transaction
Documents. The Subscriber acknowledges that no other purchaser of Units has
acted as agent for the Subscriber in connection with making its investment
hereunder and that no other purchaser of Units will be acting as agent of the
Subscriber in connection with monitoring its investment in the Units or
enforcing its rights under the Transaction Documents. The Subscriber shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other purchaser of
Units to be joined as an additional party in any proceeding for such purpose.

 

7.       Miscellaneous.

 

(a)       Subscriber agrees not to transfer or assign this Subscription
Agreement or any of Subscriber’s interest herein and further agrees that the
transfer or assignment of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws.

 

(b)       Subscriber agrees that Subscriber cannot cancel, terminate or revoke
this Subscription Agreement or any agreement of Subscriber made hereunder, and
this Subscription Agreement shall survive the death or legal disability of
Subscriber and shall be binding upon Subscriber’s heirs, executors,
administrators, successors and permitted assigns.

 

(c)       Subscriber has read and accurately completed this entire Subscription
Agreement and Offering Memorandum (including all Exhibits attached thereto).

 

(d)       This Subscription Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and may be amended only
by a written execution by all parties.

 

(e)       Subscriber acknowledges it has been advised to consult with
his/her/its own attorney regarding this subscription and Subscriber has done so
to the extent that Subscriber deems appropriate. Subscriber understands and
agrees that Subscriber has not been represented in this transaction by counsel
to the Company.

 

(f)        Any notice or other document required or permitted to be given or
delivered to the Subscriber shall be in writing and sent: (i) by registered or
certified mail with return receipt requested (postage prepaid) or (ii) by a
recognized overnight delivery service (with charges prepaid).

 

If to the Company, at:

 

Eastside Distilling, Inc.

1805 SE Martin Luther King Jr Blvd.

Portland, Oregon 97214

 

 B-10 

 

 

Email: SShum@eastsidedistilling.com

Attn.: Chief Financial Officer

 

If to the Subscriber, at its address set forth on the signature page to this
Subscription Agreement, or such other address as it shall have specified to the
Company in writing.

 

(g)       Failure of the Company to exercise any right or remedy under this
Subscription Agreement or any other agreement between the Company and the
Subscriber, or otherwise, or delay by the Company in exercising such right or
remedy, will not operate as a waiver thereof. No waiver by the Company will be
effective unless and until it is in writing and signed by the Company.

 

(h)       This Subscription Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the State of Nevada, as such laws
are applied by the Nevada courts except with respect to the conflicts of law
provisions thereof, and shall be binding upon the Subscriber, the Subscriber’s
heirs, estate, legal representatives, successors and assigns and shall inure to
the benefit of the Company, its successors and assigns.

 

(i)        Any legal suit, action or proceeding arising out of or relating to
this Subscription Agreement or the transactions contemplated hereby shall be
instituted exclusively in state or federal courts located in City of Portland,
State of Oregon (the “Oregon Courts”). The parties hereto hereby: (i) waive any
objection which they may now have or hereafter have to the venue of any such
suit, action or proceeding, and (ii) irrevocably consent to the jurisdiction of
the applicable Oregon Court in any such suit, action or proceeding. The parties
further agree to accept and acknowledge service of any and all process which may
be served in any such suit, action or proceeding in the Oregon Courts and agree
that service of process upon a party mailed by certified mail to such party’s
address shall be deemed in every respect effective service of process upon such
party in any such suit, action or proceeding.

 

(j)       If any provision of this Subscription Agreement is held to be invalid
or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed modified to conform to such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provisions hereof.

 

(k)       The parties understand and agree money damages would not be a
sufficient remedy for any breach of the Subscription Agreement by the Company or
the Subscriber and that the party against which such breach is committed shall
be entitled to equitable relief, including injunction and specific performance,
as a remedy for any such breach. Such remedies shall not be deemed to be the
exclusive remedies for a breach by either party of the Subscription Agreement
but shall be in addition to all other remedies available at law or equity to the
party against which such breach is committed.

 

(l)       All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, singular or plural, as identity of the person
or persons may require.

 

 B-11 

 

 

(m)       This Subscription Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

[Signature Pages Follow]

 

 B-12 

 

 

Signature Page for Individuals:

 

IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement to be
executed as of the date indicated below.

 

$______________________ ($1.30 per Unit)    

Purchase Price

 

  Number of Units      

Print or Type Name

 

 

Print or Type Name (Joint-owner)

 

     

Signature

 

 

Signature (Joint-owner)

 

     

Date

 

 

Date (Joint-owner)

 

     

IRS Taxpayer Identification Number

 

 

IRS Taxpayer Identification Number (Joint-owner)

 

      Address   Address (Joint-owner)       Telephone Number   Telephone Number
      Fax Number   Fax Number       E-mail Address   E-mail Address

 

Type of Ownership

 

¨Individual

¨Tenants in common

¨Joint tenants with right of survivorship

¨Community property (check only if resident of community property state)

¨Other (please specify:____________________)

 

Wiring Instructions:

Bank Name: Chase

ABA: #021000021

SWIFT: CHASUS33

Tel Number: (503) 238-3250

Address: 3902 SE Hawthorne Blvd. Portland, OR 97214

Acct #: 658397315

Acct. Name: Eastside Distilling, Inc.

 

 B-13 

 

 

Partnerships, Corporations or Other Entities:

 

IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement to be
executed as of the date indicated below.

 

$ ______________________ ($1.30 per Unit)     Total Purchase Price   Number of
Units

 

  Print or Type Name of Entity   Address

 

    Telephone Number           Fax Number           Email Address  

 

      Taxpayer I.D. No. (if applicable)   Date

 

By:       Signature: Name:   Print or Type Name and Indicate   Title:   Title or
Position with Entity

 

      Signature (other authorized signatory)   Print or Type Name and Indicate  
  Title or Position with Entity

 

Type of Ownership

 

¨Corporation

¨Limited Liability Company

¨Partnership

¨Trust

¨Other (please specify:____________________)

 

 B-14 

 

 

All subscriptions from partnerships, corporations, trusts or limited liability
companies must be accompanied by resolutions of the appropriate corporate
authority (board of directors, trustee or managing partner or members, as
applicable) and trust documents evidencing the authorization and power to make
the subscription.

 

Wiring Instructions:

 

Bank Name: Chase

ABA: #021000021

SWIFT: CHASUS33

Tel Number: (503) 238-3250

Address: 3902 SE Hawthorne Blvd. Portland, OR 97214

Acct #: 658397315

Acct. Name: Eastside Distilling, Inc.

 

 B-15 

 

 

SUBSCRIPTION ACCEPTANCE BY EASTSIDE DISTILLING INC.

 

IN WITNESS WHEREOF, the Company has caused this Subscription Agreement to be
executed, and the foregoing subscription accepted, as of the date indicated
below.

 

  Eastside Distilling, Inc.         By:       Name:     Title:  

 

Date: _______________________, 2016

 

 B-16 

 

 

SECTION C

 

CONFIDENTIAL PURCHASER QUESTIONNAIRE

 

Please review, sign on page C-9, and return to:

 

Eastside Distilling, Inc.

1805 SE Martin Luther King Jr. Blvd.

Portland, Oregon 97214

Phone 971-888-4264

Fax No.: 866-554-0271

Email: SShum@eastsidedistilling.com

Attention: Chief Financial Officer

 

 

 

 

CONFIDENTIAL PURCHASER QUESTIONNAIRE

 

THIS QUESTIONNAIRE WILL BE USED IN CONNECTION WITH THE UNDERSIGNED’S EXPRESSED
INTEREST IN A PROPOSED INVESTMENT IN EASTSIDE DISTILLING, INC. (THE “COMPANY”).

 

THE COMPANY SHALL HAVE THE RIGHT TO FULLY RELY ON THE REPRESENTATIONS AND
WARRANTIES CONTAINED HEREIN UNTIL SUCH TIME AS THE UNDERSIGNED HAS FURNISHED AN
AMENDED CONFIDENTIAL PURCHASER QUESTIONNAIRE.

 

THIS QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED TO THE COMPANY

 

THE INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT
CONFIDENCE. NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT SUCH
DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL
PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND ITS CONTROLLING PERSONS.

 

(1)The undersigned represents and warrants that has such knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of an investment in the Units and protecting the
undersigned’s own interests in this transaction, and does not desire to utilize
the services of any other person in connection with evaluating such merits and
risks.

 

(2)By initialing one of the categories below, the Subscriber represents and
warrants that the Subscriber is an “accredited investor” as such term is defined
in the Securities Act of 1933, as amended and that Subscriber comes within the
category so initialed and has truthfully set forth the factual basis or reason
the Subscriber comes within that category. All information in response to this
paragraph will be kept strictly confidential. The Subscriber agrees to furnish
any additional information which the Company deems necessary in order to verify
the answers set forth below.

 

Category I       ______   The Subscriber is a director or executive officer of
the Company.       Category II       _____   The Subscriber is an individual
(not a partnership, corporation, etc.) whose individual net worth, or joint net
worth with the Subscriber’s spouse, presently exceeds $1,000,000, excluding the
value of the primary residence of the Subscriber.           Explanation.  In
calculation of net worth, the Subscriber may include equity in personal property
and real estate (other than the primary residence of the Subscriber), including
the Subscriber’s cash, short term investments, stocks, securities.  Equity in
personal property and real estate should be based on the fair market value of
such property less debt secured by such property.

 

 C-1 

 

 

 

Category III       _____   The Subscriber is an individual (not a partnership,
corporation, etc.) who had an individual income in excess of $200,000 in each of
the two most recent years, or joint income with the Subscriber’s spouse in
excess of $300,000 in each of the two most recent years, and has a reasonable
expectation of reaching the same income level in the current year.      
Category IV       _____   The undersigned is (i) a bank, as defined in Section
3(a)(2) of the Securities Act of 1933, as amended (the “Act”); (ii) a savings
and loan association or other institution as defined in Section 3(a)(5)(A) of
the Act, whether acting in its individual or fiduciary capacity; (iii) an
insurance company as defined in Section 2(13) of the Act; (iv) an investment
company registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; (v) a Small
Business Investment Company (SBIC) licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; or (vi) a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;                         Category V       _____   The
undersigned is an (i) employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
advisor, (ii) an employee benefit plan with total assets in excess of
$5,000,000, or (iii) a self-directed employee benefit plan (including a
self-directed individual retirement account or IRA, Keough or SEP plan) with
investment decisions made solely by persons that are accredited investors
(describe entity).                         Category VI       _____   The
undersigned is a private business development company as defined in section
202(a) (22) of the Investment Advisors Act of 1940 (describe entity)            
       

 

 C-2 

 

 

Category VII       _____   The undersigned is either a corporation, limited
liability company, partnership, Massachusetts business trust, or non-profit
organization within the meaning of Section 501(c)(3) of the Internal Revenue
Code, in each case not formed for the specific purpose of acquiring the
Securities and with total assets in excess of $5,000,000. (describe entity)    
                    Category VIII       _____   The undersigned is a trust with
total assets in excess of $5,000,000, not formed for the specific purpose of
acquiring the Securities, where the purchase is directed by a “sophisticated
investor” as defined in Regulation 506(b)(2)(ii) under the Act. (Must also
answer Question 5 below).       Category IX       _____   The undersigned is an
entity (other than a trust) in which all of the equity owners are “accredited
investors” within one or more of the above categories.  If relying upon this
category alone, each equity owner must complete a separate copy of this
Purchaser Questionnaire.  (describe entity below)                            
The undersigned agrees that the undersigned will notify SMH Capital at any time
in the event that the representations and warranties in this Purchaser
Questionnaire shall cease to be true, accurate and complete.

 

(2)Suitability (please answer each question)

 

(a)For an individual, please describe your current employment, including the
company by which you are employed and its principal business:

 

                 

 

(b)For an individual, please describe any college or graduate degrees held by
you:

 

                 

 

(c)For all subscribers, please list types of prior investments:

 

                 

 

 C-3 

 

 

(d)For all subscribers, please state whether you have participated in other
private placements before:

 

YES      __________           NO       __________  

 

(e)If your answer to question (d) above was “YES”, please indicate frequency of
such prior participation in private placements of:

 

    Public
Companies   Private
Companies   Frequently         Occasionally         Never      

 

(f)For individuals, do you expect your current level of income to significantly
decrease in the foreseeable future?

 

YES       __________           NO       __________  

 

(g)For trust, corporate, partnership and other institutional subscribers, do you
expect your total assets to significantly decrease in the foreseeable future?

 

YES       __________           NO       __________  

 

(h)For all subscribers, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need sudden cash
requirements in excess of cash readily available to you?

 

YES       __________           NO       __________  

 

(i)For all subscribers, are you familiar with the risk aspects and the
non-liquidity of investments such as the Securities for which you seek to
purchase?

 

YES       __________           NO       __________  

 

(j)For all subscribers, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of losing your
entire investment?

 

YES       __________           NO       __________

 

 C-4 

 

 

(3)       Manner in which title is to be held: (circle one)

 

(a)       Individual Ownership

(b)       Community Property

(c)        Joint Tenant with Right of Survivorship (both parties must sign)

(d)       Partnership

(e)       Tenants in Common

(f)        Limited Liability Company

(g)       Corporation

(h)       Trust

(i)        Other

 

(4)       FINRA Affiliation.

 

Are you affiliated or associated with a FINRA member firm (please check one):

 

YES       __________           NO       __________  

 

If Yes, please describe:

 

_________________________________________________________

_________________________________________________________

_________________________________________________________

 

*If subscriber is a Registered Representative with a FINRA member firm, have the
following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges receipt of the notice required by
the FINRA Conduct Rules.

 

_________________________________

Name of FINRA Member Firm

 

By: ______________________________

              Authorized Officer

 

Date: ____________________________

 

(5)       For Trust Subscribers

 

A. Certain trusts generally may not qualify as accredited investors except under
special circumstances. Therefore, if you intend to hold securities in whole or
in part through a trust, please answer each of the following questions.

 

 C-5 

 

 

 

Is the trustee of the trust a national or state bank that is acting in its
fiduciary capacity in making the investment on behalf of the trust?

 

  Yes ¨   No ¨

 

B. If the trust is a revocable trust, please complete Question 1 below. If the
trust is an irrevocable trust, please complete Question 2 below.

 

1.        REVOCABLE TRUSTS

 

Can the trust be amended or revoked at any time by its grantors:

 

  Yes ¨   No ¨

 

If yes, please answer the following questions relating to each grantor (please
add sheets if necessary):

 

Grantor Name: _________________________

 

Net worth of grantor (including spouse, if applicable), including home, home
furnishings and automobiles exceeds $1,000,000?

 

  Yes ¨   No ¨

 

OR

Income (exclusive of any income attributable to spouse) was in excess of
$200,000 for the prior two taxable years and is reasonably expected to be in
excess of $200,000 for the current taxable year?

 

  Yes ¨   No ¨

 

OR

 

Income (including income attributable to spouse) was in excess of $300,000 for
the prior two taxable years and is reasonably expected to be in excess of
$300,000 for the current taxable year?

 

  Yes ¨   No ¨

 

 C-6 

 

 

2.        IRREVOCABLE TRUSTS

 

If the trust is an irrevocable trust, please answer the following questions:

 

Please provide the name of each trustee:

 

Trustee Name: ________________________________________

 

Trustee Name: ________________________________________

 

Does the trust have assets greater than $5 million?

 

  Yes ¨   No ¨

 

Indicate how often you invest in:

 

Marketable Securities

 

  Often ¨ Occasionally ¨ Seldom ¨ Never ¨

 

Restricted Securities

 

  Often ¨ Occasionally ¨ Seldom ¨ Never ¨

 

Venture Capital Companies

 

  Often ¨ Occasionally ¨ Seldom ¨ Never ¨

 

This completes the questions applicable to Trust Investors. Please sign below.

 

 C-7 

 

 

The undersigned has been informed of the significance of the foregoing
representations and answers contained in this Confidential Purchaser
Questionnaire and such representations and answers have been provided with the
understanding that the Company, will rely on them.

 

      Individual             Date:               Name of Individual        
(Please type or print)                             Signature of Individual      
                                Name of Joint Owner         (Please type or
print)                             Signature (Joint Owner)                  
Partnership, Corporation or         Other Entity             Date:              
Print or Type Entity Name  

 

  By:       Name:       Title:    

 

                    Signature (other authorized signatory, if any)  

 

 C-8