Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT is made and entered into June 8, 2004 between
Todhunter International, Inc., a Delaware corporation (the “Company”), and
Angostura Limited, a corporation organized under the laws of Trinidad & Tobago
(“Angostura”).

 

The parties hereto agree as follows.

 

1.             Angostura shall purchase, and the Company shall issue to
Angostura, 714,285 unregistered shares of common stock of the Company (the
“Shares”) for an aggregate purchase price of $10,000,000, or $14.000014 per
share (the “Per Share Purchase Price”), promptly upon approval by the American
Stock Exchange of the Company’s listing application with respect to the Shares. 
Angostura agrees to transfer $10,000,000 to the Company on June 9, 2004 as
payment of the purchase price for the Shares.

 

2.             Concurrently herewith, the Company and Angostura shall execute
the Registration Rights Agreement attached hereto as Exhibit A (the
“Registration Rights Agreement”).

 

3.             Angostura will pay all of its expenses in connection with its
subscription for the Shares.  Angostura will pay one-half of the Company’s
expenses related to this Agreement within five (5) days of its receipt of
written evidence of such expenses from the Company, including, but not limited,
to the fees and expenses of: the Company’s counsel, the Special Committee of the
Company’s Board of Directors (the “Special Committee”) established for purposes
of evaluating and determining the price of Angostura’s purchase of the Shares,
the Special Committee’s counsel, and Houlihan Lokey Howard & Zukin, the
investment banker engaged by the Company’s Special Committee.

 

4.             Angostura represents, warrants and agrees as follows:

 

(a)           (i) Angostura has full authority under its governing instruments
and applicable law to purchase the Shares; (ii) the purchase of the Shares has
been duly authorized; (iii) the individual signing this Subscription Agreement
and the Registration Rights Agreement has actual authority to execute this
Subscription Agreement and the Registration Rights Agreement on behalf of
Angostura; (iv) Angostura has not been formed for the specific purpose of
purchasing the Shares; and (v) Angostura has been in existence for at least
ninety (90) days prior to the date hereof.

 

(b)           Angostura acknowledges that it has received or had access to all
information it deemed necessary or appropriate to evaluate the merits and risks
of an investment in the Shares.  Angostura acknowledges that the Company has
made available to it the opportunity to obtain additional information to verify
the accuracy of the information provided to it and to evaluate the merits and
risks of

 

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an investment in the Shares.  Angostura further acknowledges that it has had the
opportunity to ask questions of and receive answers from the Company, or a
person or persons acting on behalf of the Company, concerning the terms and
conditions of the offering, the Company and the information provided to it.

 

(c)           Angostura has such knowledge and experience in financial and
business matters to enable it to evaluate the risks and merits of an investment
in the Shares, and the tax consequences associated therewith, and to make an
informed decision with respect thereto.

 

(d)           Angostura understands that the Shares have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), the
securities laws of any state or any other applicable securities laws, rules or
regulations in reliance upon exemptions therefrom.  Such reliance is in part
predicated upon the truth and accuracy of the representations of Angostura
contained herein.  Angostura understands that the Shares must be held for at
least a two-year period unless, among other things, they are subsequently
registered under the Securities Act and applicable state securities laws unless
an exemption from such registration is available.  Angostura further understands
that, other than pursuant to the Registration Rights Agreement, the Company is
under no obligation to register the Shares on its behalf or to assist it in
registering or in complying with any exemption from registration.

 

(e)           The Shares are being purchased solely for Angostura’s own account
for investment and not for the account of any other person and not with a view
to distribution, assignment or resale, and no other person has a direct or
indirect beneficial interest in the Shares through Angostura.  Angostura is not
participating, directly or indirectly, in a distribution or transfer of the
Shares, or in the underwriting of any such distribution or transfer, and it will
not act in any way that would cause it to be considered an underwriter within
the meaning of the Securities Act.

 

(f)            All information which Angostura may have provided to the Company
concerning itself, its financial position and its knowledge of financial and
business matters, is correct and complete as of the date set forth at the end of
this Subscription Agreement, and if there should be any change in such
information prior to its subscription being accepted, Angostura will immediately
provide the Company with such revised information.

 

(g)           Angostura understands that it has received no assurances regarding
the tax treatment of its investment in the Shares and that existing tax laws and
regulations may be modified in the future and could deny it all or a portion of
the tax benefits, if any, which may be available under existing laws and
regulations.  No tax opinion or advice is being rendered by the Company in
connection with the offering of the Shares.  Angostura is relying (and will
continue to rely) solely on the advice of its own advisors with respect to an
investment in the Company and has consulted with its advisors as Angostura

 

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deemed necessary prior to making a determination whether to invest in the
Shares.

 

(h)           Angostura has not been solicited to subscribe for the Shares by
means of general advertising or general solicitation.

 

(i)            Angostura (and any customer for whose account it is acting as
fiduciary agent) qualifies as an “Accredited Investor,” as that term is defined
in Rule 501(a) of Regulation D of the Securities Act.

 

(j)            Angostura understands the meaning and legal consequences of the
foregoing representations, warranties and agreements, which are true as of the
date hereof and will be true as of the date of the purchase of the Shares by
Angostura.  Each such representation, warranty and agreement shall survive such
purchase.  Angostura understands that the information furnished by it will be
relied upon by the Company in connection with the offering of the Shares.

 

(k)           Angostura agrees not to offer, sell, contract to sell, grant any
option to purchase, make any short sale or otherwise dispose of the Shares for
the nine (9) months following the consummation of its purchase of the Shares;
provided, however, that Angostura may pledge the Shares during such nine-month
period provided that the pledgee(s) agrees in writing to be bound by the
restrictions of this Section 4(k) during such nine-month period.

 

5.             Indemnification.  Angostura understands the consequences of the
agreements, representations and warranties set forth in this Subscription
Agreement, and shall indemnify and hold harmless, on demand, the Company and its
respective officers, directors, affiliates, agents, and employees from and
against all claims, allegations, damages, losses, costs and expenses (including
reasonable attorneys’ fees) which they may incur, directly or indirectly, by
reason of Angostura’s failure to fulfill any of the terms or conditions of this
Subscription Agreement, of the misrepresentations or inaccuracy of any of
Angostura’s representations and warranties herein, or in any document provided
by Angostura to the Company.

 

6.             Counterparts.  This Subscription Agreement may be executed in
counterparts, all of which shall be deemed to be duplicate originals.

 

7.             Jurisdiction and Venue.  The parties acknowledge that a
substantial portion of the negotiations, anticipated performance and execution
of this Agreement occurred or shall occur in Palm Beach County, Florida.  Any
civil action or legal proceeding arising out of or relating to this Agreement
shall be brought in the courts of record of the State of Florida in Palm Beach
County or the United States District Court, Southern District of Florida.  Each
party consents to the jurisdiction of such Florida court in any such civil
action or legal proceeding and waives any objection to the laying of venue of
any such civil action or legal proceeding in such Florida court.  Service of any
court paper may be effected on such party by mail, as provided in this
Agreement, or in

 

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such other manner as may be provided under applicable laws, rules of procedure
or local rules.

 

8.             Enforcement Costs.  If any civil action, arbitration or other
legal proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default or misrepresentation in connection with any
provision of this Agreement, the successful or prevailing party or parties shall
be entitled to recover reasonable attorneys’ fees, court costs, sales and use
taxes and all expenses even if not taxable as court costs (including, without
limitation, all such fees, taxes, costs and expenses incident to arbitration,
appellate, bankruptcy and post judgment proceedings), incurred in that
proceeding, in addition to any other relief to which such party or parties may
be entitled.  Attorneys’ fees shall include, without limitation, paralegal fees,
investigative fees, administrative costs, sales and use taxes and all other
charges billed by the attorney to the prevailing party (including any fees and
costs associated with collecting such amounts).

 

9.             Equitable Remedies.  Each of the parties acknowledges that the
parties will be irreparably damaged (and damages at law would be an inadequate
remedy) if this Agreement is not specifically enforced.  Therefore, in the event
of a breach or threatened breach by any party of any provision of this
Agreement, then the other parties shall be entitled, in addition to all other
rights or remedies, (a) to an injunction restraining such breach, without being
required to show any actual damage or to post an injunction or other bond, or
(b) to a decree for specific performance of the provisions of this Agreement, or
both.

 

10.           General.

 

(a)           Angostura will not transfer or assign this Subscription Agreement,
or any of its interest herein.

 

(b)           This Subscription Agreement is irrevocable (except for withdrawal
rights under applicable state securities laws) and shall be binding upon the
parties hereto and their respective successors and permitted assigns.

 

(c)           This Subscription Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.

 

(d)           This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of Delaware,
without reference to principles of conflicts of laws.

 

11.           Rights Offering.  The Company agrees that, as soon as possible
following the closing (the “Closing”) of the stock purchase contemplated by this
Subscription Agreement, it will use its best efforts to complete an offering
(the “Rights Offering”), pursuant to a registration statement (the “Registration
Statement”) filed with the Securities and Exchange Commission, pursuant to which
each stockholder of the Company other than Angostura and its affiliates (each a
“Public Stockholder” and

 

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collectively, the “Public Stockholders”) shall have the right to purchase such
holder’s pro rata amount of a number of shares of common stock of the Company
that will permit the Public Stockholders in the aggregate to maintain the
percentage stock ownership the Public Stockholders owned prior to the Closing,
at a price per share equal to the lesser of: (a) $14.00 per share, and (b) the
closing quotation of the Company’s common stock on the American Stock Exchange
on the date that is two (2) days prior to the effective date of the Registration
Statement.  The terms of the Rights Offering shall provide that to the extent
any Public Stockholder does not elect to purchase such holder’s pro rata share,
the remaining Public Stockholders shall have the further opportunity to
purchase, on a pro rata basis, such shares.  The Company agrees to use its best
efforts to file the Registration Statement within sixty (60) days following the
Closing.  Angostura agrees that it will take all actions necessary to facilitate
the Rights Offering.  The Company shall be responsible for its expenses in
connection with the Rights Offering.

 

IN WITNESS WHEREOF the parties hereto have executed this agreement as of June 8,
2004.

 

 

 

TODHUNTER INTERNATIONAL, INC.

 

 

 

 

 

By:

/s/ Jay S. Maltby

 

 

Name:

Jay S. Maltby

 

Title:  Chief Executive Officer and President

 

 

 

 

 

ANGOSTURA LIMITED

 

 

 

 

 

By:

/s/ Michael E. Carballo

 

 

Name:

Michael E. Carballo

 

Title:  Group Company Secretary and
Treasurer

 

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EXHIBIT A

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “AGREEMENT”) is made and entered into as
of June    , 2004, between Todhunter International, Inc. a Delaware corporation
(the “COMPANY”), and Angostura Limited, a Trinidad corporation (the “HOLDER”).

 

This Agreement is made concurrently with the purchase by the Holder of 714,285
unregistered shares of the Company’s Common Stock (the “SECURITIES”) for an
aggregate purchase price of $10 million (the “STOCK PURCHASE”).  In order to
induce the Holder to enter into the Stock Purchase, the Company has agreed to
provide to the Holder the registration rights set forth in this Agreement.

 

In consideration of the foregoing, the parties hereto agree as follows:

 

1.             DEFINITIONS.

 

As used in this Agreement, the following capitalized defined terms shall have
the meanings set forth below (certain terms being defined elsewhere in this
Agreement):

 

“1933 ACT” shall mean the Securities Act of 1933, as amended from time to time.

 

“BOARD” shall mean the Board of Directors of the Company, or any committee of
the Board of Directors authorized to act with respect to this Agreement.

 

“BUSINESS DAY” shall mean any day other than Saturday, Sunday or legal holiday
on which banks in the State of Florida are not open for business.

 

“COMPANY” shall have the meaning set forth in the preamble and shall also
include the Company’s successors.

 

“COMMON STOCK” shall mean the Common Stock of the Company, par value $.01 per
share.

 

“PERSON” shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

 

“PROSPECTUS” shall mean the prospectus included in a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented, including all material incorporated by reference therein.

 

“REGISTRABLE SECURITIES” shall mean the Securities; provided, however, that any
given Security shall cease to be a Registrable Security (i) when such Security
has been distributed to the public pursuant to an offering registered under the
1933 Act

 

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or pursuant to a transaction exempt from registration under Rule 144 under the
1933 Act (or any similar rule then in force) or (ii) when such Security shall
have ceased to be outstanding.

 

“REGISTRATION EXPENSES” shall mean any and all reasonable expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or the Holder in connection with blue sky qualification of any of
the Registrable Securities), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreement and other documents
relating to the performance of and compliance with this Agreement, (iv) the fees
and disbursements of counsel for the Company and for any underwriters, and (v)
the fees and disbursements of the independent public accountants of the Company,
including the expenses of any special audits or “cold comfort” letters required
by or incident to such performance and compliance.

 

“REGISTRATION STATEMENT” shall mean any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.

 

“SEC” shall mean the Securities and Exchange Commission.

 

2.             REGISTRATION ON REQUEST.

 

(a)           Subject to the limitations set forth herein, if the Company shall
receive written notice requesting registration of Registrable Securities (a
“REGISTRATION REQUEST”) from the Holder:

 

(i)            the Company shall promptly, but in no event more than ten (10)
business days following the receipt of such request, deliver to the Holder
written notice of its intention to file a Registration Statement pursuant to
such Registration Request and specify the principal amount, or number of shares,
as the case may be, of Registrable Securities proposed to be included pursuant
to the Registration Request by the Holder;

 

(ii)           the Company shall, within the time period specified in paragraph
2(b), below, prepare, file and use its best efforts to cause to become effective
a Registration Statement under the 1933 Act relating to the Registrable
Securities specified in the Registration Request for inclusion; and

 

(iii)          the Company shall use its best efforts to keep such Registration
Statement current and effective until the earlier of (i) three (3) months after

 

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the date such Registration Statement is declared effective and (ii) the date
that the Registrable Securities covered by such Registration Statement have been
disposed of pursuant thereto.

 

(b)           The Company shall be obligated to file such Registration Statement
as promptly as practicable, but in any event within ninety (90) days after
receipt of any Registration Request; provided, however, that, with respect to
any Registration Statement filed, or to be filed, pursuant to this paragraph 2,
if the Company shall furnish to the Holder a certificate of an executive officer
of the Company stating that, in such officer’s good faith judgment, it would
(because of the existence of, or in anticipation of, any acquisition or
financing activity, or the unavailability for reasons beyond the Company’s
control of any required financial statements, or any other event or condition of
significance to the Company) be significantly disadvantageous (a
“DISADVANTAGEOUS CONDITION”) to the Company or the Holder for such Registration
Statement to be maintained effective, or to be filed and become effective, the
Company shall be entitled to cause such Registration Statement to be withdrawn
and the effectiveness of such Registration Statement to be terminated, or, in
the event such Registration Statement has not yet been filed, shall be entitled
not to file any such Registration Statement, until such Disadvantageous
Condition no longer exists (notice of which the Company shall promptly deliver
to the Holder) and, upon receipt of any such notice of a Disadvantageous
Condition, the Holder will forthwith discontinue use of the Prospectus contained
in such Registration Statement and, if so directed by the Company, the Holder
will deliver to the Company all copies, other than permanent file copies then in
the Holder’s possession, of the Prospectus then covering such Registrable
Securities at the time of receipt of such notice, and, in the event no
Registration Statement has yet been filed, all drafts of the Prospectus covering
such Registrable Securities.  Upon termination of such Disadvantageous
Condition, the Company will, if requested by the Holder, use its best efforts to
file such Registration Statement as promptly as practicable, but in any event
within sixty (60) days of such termination.  If the Company declines to file or
withdraws a Registration Statement in accordance with this paragraph, then the
election to initiate the proposed offering shall not constitute the exercise of
a Registration Request by the Holder.  The Company shall not be required to file
a Registration Statement within twelve (12) months of the effective date of a
prior Registration Statement filed as a result of a Registration Request.

 

(c)           Notwithstanding anything contained herein to the contrary, (i) no
Registration Request shall be effective pursuant to this paragraph 2 unless such
request includes Registrable Securities having a fair market value (as
determined by the Board in good faith) of at least $5 million with respect to
any Registration Request; and (ii) the Holder shall be entitled to make 2 (two)
separate Registration Requests.

 

(d)           Notwithstanding anything contained herein to the contrary, the
Company will not be obligated to effect any Registration Request (i) within
twelve (12) months after the effective date of any Registration Request, (ii)
during any period in which the Company is in the process of negotiating or
preparing, and ending on a date ninety (90) days following the effective date
of, a registration statement pertaining to an

 

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underwritten public offering of securities for the account of the Company, or
(iii) during any period in which the Company is in possession of material
information concerning the Company or its business and affairs, the public
disclosure of which would have a material adverse effect on the Company, which
information shall be disclosed to the Holder.  In any given twelve (12) month
period, the Company may effect one (1) postponement for up to one hundred eighty
(180) days of the filing or the effectiveness of a registration statement for a
Registration Request if, in the opinion of the Company’s Board, such
Registration Request or offering of securities would reasonably be expected to
have a material adverse effect on any plan of the Company or any of its
subsidiaries to engage in any material acquisition of assets outside the
ordinary course of business, any material merger, consolidation, or tender
offer, or any other transaction; provided, however, that in such event, the
Holder will be entitled to withdraw such request and, if such request is
withdrawn, such Registration Request will not count as one of the Holder’s
permitted Registration Requests.

 

(e)           The Holder will pay all Registration Expenses in connection with
the registration of Registrable Securities effected by the Company pursuant to
this paragraph 2.

 

(f)            If a Registration Request is an underwritten offering and the
managing underwriters advise the Company and the Holder that, in such
underwriters’ opinion, the aggregate number of securities requested to be
included in such offering exceeds the number of securities which can be sold in
an orderly manner in such offering within a price range acceptable to the
Holder, the Company will include in such registration, prior to the inclusion of
any other securities, the maximum number of Registrable Securities requested to
be included by the Holder, which, in the opinion of such underwriters, can be
sold in an orderly manner within such price range.

 

3.             INCIDENTAL REGISTRATION.

 

(a)           If the Company at any time proposes to register any of its
securities under the 1933 Act (other than pursuant to paragraph 2 above),
whether or not for sale for its own account (but subject to the limitations
contained in this paragraph 3), on a form and in a manner which would permit
registration of Registrable Securities for sale to the public under the 1933
Act, it will give written notice promptly (and in no event less than twenty (20)
days prior to the proposed filing date) to the Holder of its intention to do so,
describing such securities and specifying the form and manner and the other
relevant facts involved in such proposed registration, and upon the written
request of the Holder delivered to the Company within ten (10) days after the
giving of any such notice (which request shall specify the principal amount, or
number of shares, as the case may be, of Registrable Securities intended to be
disposed of by the Holder and the intended method of disposition thereof), the
Company will use its best efforts to effect the registration under the 1933 Act
of all of the Registrable Securities which the Company has been so requested to
register by the Holder; provided that:

 

(i)            The Holder may request registration of Securities only if the
Company is registering its Common Stock in a public offering other than any
public

 

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offering of the Company’s Common Stock which is consummated within nine months
following the date hereof.

 

(ii)           if, at any time after giving such written notice of its intention
to register any of its securities and prior to the effective date of the
Registration Statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company may,
at its election, give written notice of such determination to the Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such registration, without prejudice, however, to
the rights, if any, of the Holder to request that such registration be effected
as a registration under paragraph 2, above; and

 

(iii)          if (A) the Company has filed a registration statement covering
the sale for its own account of its own securities to underwriters for the
purpose of making a public offering of the Common Stock and Registrable
Securities are to be included therein pursuant to the provisions of this
paragraph 3, (B) in the judgment of the managing underwriter or underwriters of
the proposed public offering of such Common Stock, such inclusion would
materially adversely affect such public offering, and (C) notification of such
determination is given to the Holder participating in such offering prior to the
effective date of such registration statement, then the Registrable Securities
as to which registration has been requested need not be included by the Company
in such registration; provided, however, that such managing underwriter or
underwriters may elect to permit the inclusion of a portion of the Registrable
Securities as to which registration has been requested.

 

(b)           Notwithstanding anything contained herein to the contrary, the
Company shall not be obligated to effect any registration of Registrable
Securities under this paragraph 3 incidental to the registration of any of its
securities in connection with mergers, acquisitions, exchange offers, dividend
reinvestment plans, retirement plans or stock option or other employee benefit
plans.

 

(c)           The Holder will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this paragraph
3.

 

4.             RELATED PROVISIONS.

 

(a)           Holder agrees not to offer, sell, contract to sell, grant any
option to purchase, make any short sale or otherwise dispose of the Securities
for the nine (9) months following the consummation of the Stock Purchase;
provided, however, that Holder may pledge the Securities during such nine-month
period provided that the pledgee(s) agrees in writing to be bound by the
restrictions of this Section 4(a) during such nine-month period.

 

(b)           In connection with any registration of Registrable Securities
pursuant to paragraph 2 or 3, the Company will:

 

(i)            furnish to the Holder such number of conformed copies of the
Registration Statement and of each amendment or supplement thereto (in each

 

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case including not more than two copies of all exhibits), such number of copies
of the Prospectus included in the Registration Statement (including each
preliminary Prospectus and any summary Prospectus), in conformity with the
requirements of the 1933 Act, any documents incorporated by reference in the
Registration Statement or Prospectus, and such other documents, as the Holder
may reasonably request;

 

(ii)           use its reasonable best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holder, to keep such registration or qualification in effect for so long as such
registration remains in effect, and take any other action which may be
reasonably necessary or advisable to enable the Holder to consummate the
disposition in such jurisdictions of the securities owned by the Holder;
provided that the Company shall not for any such purpose be required to (i)
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this Section 4(b)(ii) be
obligated to be so qualified or (ii) subject itself to taxation in any such
jurisdiction.

 

(iii)          furnish to the Holder the following letters: (A) a signed
counterpart of an opinion of counsel for the Company, dated the effective date
of such Registration Statement (except, if such registration involves an
underwritten public offering, such opinion shall be dated the date of the
closing under the underwriting agreement), covering such matters as the Holder,
or its counsel, may reasonably request; and (B) a letter signed by the
independent public accountants who have certified the Company’s financial
statements included in the Registration Statement, covering such matters as the
Holder, or its counsel, may reasonably request; such letters or opinions shall
be in the form as is customary for similar letters or opinions, so long as such
form is acceptable to the managing underwriters, if any, of such offering;

 

(iv)          promptly notify the Holder of Registrable Securities covered by
such Registration Statement at any time when a Prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which the Prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of the Holder prepare and furnish to the Holder a reasonable number
of copies of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing; and

 

(v)           otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to Holder, as soon as reasonably
practicable, but in no event more than eighteen (18) months after the effective
date of such Registration Statement, an earnings statement covering a period of
at least twelve

 

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(12) months after the effective date of such Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the 1933
Act.

 

The Company may require the Holder to furnish the Company such information
regarding the Holder and the distribution of such securities by the Holder as
the Company may from time to time reasonably request in writing or as shall be
required by law or by the SEC in connection therewith.

 

(c)           If requested by the underwriters for any offering pursuant to a
Registration Request under paragraph 2, above, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to contain such representations and warranties by the Company and such other
terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions including, without limitation,
agreements to indemnify and to contribute to the effect and to the extent
provided in paragraphs 6 and 7, respectively.

 

(d)           If the Company at any time proposes to register any of its Common
Stock under the 1933 Act (other than pursuant to a request made under paragraph
2, above), whether or not for sale for its own account, and such securities are
to be distributed by or through one or more underwriters, the Company will make
reasonable efforts, if requested by the Holder to arrange for such underwriters
to include such Registrable Securities among those securities to be distributed
by or through such underwriters; provided that the Holder may request
registration of Registrable Securities only if the Company is registering its
Common Stock in a public offering other than any public offering of the
Company’s Common Stock which is consummated during the nine month period
following the date hereof; provided, further, however, that for purposes of this
sentence, reasonable efforts shall not require the Company or any other seller
of the securities proposed to be distributed by or through such underwriters to
reduce the amount or net sale price of such securities proposed to be so
distributed.  The Holder shall be party to any such underwriting agreement and
the representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to
and for the benefit of the Holder.

 

(e)           In the case of any registration pursuant to paragraph 2 or 3 which
shall be in connection with an underwritten public offering, the Company and the
Holder agree, if so required in writing delivered to the Holder by the managing
underwriter or underwriters, not to effect any public sale or distribution of
Registrable Securities (other than as part of such underwritten public
offering):

 

(i)            within thirty (30) days prior to the effective date of such
Registration Statement, or

 

(ii)           thereafter until the later of one hundred eighty (180) days after
the effective date of such Registration Statement and the date on which all
securities under such Registration Statement are sold.

 

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(f)            The Company will not be obligated to include any Registrable
Securities in a registration pursuant to paragraph 2 or 3 if the Company
delivers to the Holder an opinion of the Company’s counsel in a form reasonably
acceptable to the Holder to the effect that the requested registration is not at
that time required to permit the proposed disposition or any resale of such
Registrable Securities without restrictions on transfer under the 1933 Act,
which opinion may be furnished to and relied upon by any broker through which
the Holder intends to sell the Registrable Securities.

 

5.             PREPARATION; REASONABLE INVESTIGATION.

 

In connection with the preparation and filing of each Registration Statement
registering Registrable Securities under the 1933 Act, the Company will give the
Holder and its underwriters, if any, and their respective counsel and
accountants, the reasonable opportunity to participate in the preparation of
such Registration Statement, each Prospectus included therein or filed with the
SEC, and each amendment thereof or supplement thereto, and will give each of
them such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of the Holder and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning of the 1933
Act.

 

6.             INDEMNIFICATION.

 

(a)           In the event of any registration of securities of the Company
under the 1933 Act, the Company will, and hereby does, indemnify and hold
harmless in the case of any Registration Statement filed pursuant to paragraph 2
or 3, above, the Holder, its directors and officers, each underwriter of such
securities, each officer and director of each such underwriter, each Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the 1933 Act (collectively, the “INDEMNIFIED PARTIES”),
against any losses, claims, damages, liabilities and expenses, joint or several,
to which an Indemnified Party may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceeding in respect thereof) arise out of or are based upon any of
the following statements, omissions or violations (collectively, “VIOLATIONS”): 
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such securities were
registered under the 1933 Act, any preliminary Prospectus, final Prospectus or
summary Prospectus included therein, or any amendment or supplement thereto, or
any statement incorporated by reference therein, (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the 1933 Act, the Securities Exchange Act
of 1934, as amended, or any state securities law in connection with the offering
covered by such Registration Statement.  The Company will reimburse such
Indemnified Party for any legal or any other expenses reasonably incurred by

 

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them, as incurred, in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that the
Company shall not be liable in any such case to the extent that any Violation
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement, any such
preliminary Prospectus, final Prospectus, summary Prospectus, amendment or
supplement in reliance upon and in conformity with information furnished to the
Company by an Indemnified Party.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party and shall survive the transfer of such securities by the Holder.

 

(b)           The Company may require that, as a condition to including any
Registrable Securities in any Registration Statement, the Company shall have
received an undertaking reasonably satisfactory to it from the Holder or
underwriter of such securities, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph 6(a) above) the Company,
each director of the Company, each officer of the Company who shall sign such
Registration Statement and each other Person, if any, who controls the Company
within the meaning of the 1933 Act, with respect to any Violation in such
Registration Statement, any preliminary Prospectus, final Prospectus or summary
Prospectus included therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity with
information furnished to the Company for use in the preparation of such
Registration Statement, preliminary Prospectus, final Prospectus, summary
Prospectus, amendment or supplement.  Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling Person and shall survive the
transfer of such securities by the Holder or underwriter.

 

(c)           Promptly after receipt by an Indemnified Party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding paragraphs of this paragraph 6, such Indemnified Party will, if a
claim in respect thereof is to be made against a party required to provide
indemnification (an “Indemnifying Party”), give written notice to the latter of
the commencement of such action; provided, however, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this paragraph 6 or relieve the
Indemnifying Party from any liability which it may have to any Indemnified Party
otherwise than under this paragraph 6 except to the extent that the Indemnifying
Party is actually prejudiced by such failure to give notice.  In case any such
action is brought against any Indemnified Party, and it notifies the
Indemnifying Party of the commencement thereof, then, unless in such Indemnified
Party’s reasonable judgment a conflict of interest between such Indemnified and
Indemnifying Parties may exist in respect of such action, the Indemnifying Party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other Indemnifying Party similarly notified, to the extent that it may
wish, with counsel satisfactory to such Indemnified Party (who shall not, except
with the consent of the Indemnified Party, be counsel to the Indemnifying
Party), and after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume the defense thereof, the Indemnifying Party shall
not be liable to such Indemnified Party for any legal or other expenses

 

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subsequently incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation, unless in such Indemnified Party’s
reasonable judgment a conflict of interest between such Indemnified and
Indemnifying Parties arises in respect of such actions after assumption of the
defense thereof.  No Indemnifying Party will (except with the written consent of
each Indemnified Party) consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.

 

(d)           Indemnification similar to that specified in the preceding
paragraphs of this paragraph 6 (with appropriate modifications) shall be given
by the Company and the Holder with respect to any required registration or other
qualification of such Registrable Securities under any federal or state law or
regulation or governmental authority other than the 1933 Act.

 

(e)           The indemnification required by this paragraph 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or liability
is incurred.

 

(f)            The obligations of the Company and the Holder under this
paragraph 6 shall survive completion of any offering of Registrable Securities
in a Registration Statement and the termination of this Agreement.

 

7.             CONTRIBUTION.

 

If the indemnification provided for in paragraph 6 above is unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable to such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Company and the Holder on the one hand and the underwriters on
the other, in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Holder on the one hand and the underwriters on
the other hand from the offering of the Registrable Securities, or, if such
allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of the Company and the Holder on the one hand and of the underwriters on
the other hand in connection with the Violations which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company on the one hand and the Holder on
the other hand, in such proportion as is appropriate to reflect the relative
fault of the Company and of the Holder in connection with such Violations, as
well as any other relevant equitable considerations.  The relative benefits
received by the Company and the Holder on the one hand and the underwriters on
the other hand shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the Holder bear to the
total underwriting discounts and commissions received by the underwriters, in
each case as

 

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set forth in the table on the cover page of the Prospectus.  The relative fault
of the Company and the Holder on the one hand and of the underwriters on the
other hand shall be determined by reference to, among other things, whether the
Violation or alleged Violation relates to information supplied by the
Indemnifying Party or Parties or by the Indemnified Party or Parties, and
reference to, among other things, whether the Violation or alleged Violation
relates to information supplied by such party, and the party’s relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

 

The Company and the Holder agree (and the underwriters, if any, are deemed to
agree) that it would not be just and equitable if contribution pursuant to this
paragraph 7 were determined by pro rata allocation (even if the underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph.  The amount paid or payable to an
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 7 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim.  Notwithstanding the provisions of this paragraph 7, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such underwriter has otherwise been required to pay by reason
of such Violation, and the Holder shall not be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Securities of the Holder were offered to the public exceeds the amount of any
damages which the Holder has otherwise been required to pay by reason of such
Violation.  No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

 

8.             MISCELLANEOUS.

 

(a)           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 Company has obtained the written consent of the
Holder.

 

(b)           NOTICES.  All notices and other communications required or
permitted under this Agreement shall be in writing and shall be (as elected by
the person giving such notice) hand delivered by messenger or courier service,
transmitted by fax, or mailed by registered or certified mail (postage prepaid),
return receipt requested, to the receiving party at the address appearing on the
records of the party sending the notice (which address may be changed by a
notice complying with the foregoing).  Each communication shall be deemed to
have been delivered (a) on the date delivered, if by messenger or courier
service; (b) on the date of the confirmation of receipt, if by fax; and (c)
either upon the date of receipt or refusal of delivery, if mailed.

 

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(c)           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, other than a transferee of Securities.

 

(d)           COUNTERPARTS.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

(e)           HEADINGS.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

 

(f)            GOVERNING LAW.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
principles of conflicts of laws.

 

(g)           ENTIRE AGREEMENT.  This Agreement and all exhibits and schedules
attached to this Agreement, if any, represent the entire understanding and
agreement between the parties with respect to the subject matter of this
Agreement, and supersedes all other negotiations, understandings and
representations (if any), whether oral or written, made by and between such
parties.

 

(h)           SEVERABILITY.  In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

 

(i)            TERMINATION.  This Agreement, other than the provisions of
paragraphs 6, 7 and 8, shall terminate, except with respect to a registration
previously requested or in process, at the earlier of ten (10) years after the
date of this Agreement or such other date as is mutually agreed upon by the
Company and the Holder.

 

(j)            JURISDICTION AND VENUE.  The parties acknowledge that a
substantial portion of the negotiations, anticipated performance and execution
of this Agreement occurred or shall occur in Palm Beach County, Florida.  Any
civil action or legal proceeding arising out of or relating to this Agreement
shall be brought in the courts of record of the State of Florida in Palm Beach
County or the United States District Court, Southern District of Florida.  Each
party consents to the jurisdiction of such Florida court in any such civil
action or legal proceeding and waives any objection to the laying of venue of
any such civil action or legal proceeding in such Florida court.  Service of any
court paper may be effected on such party by mail, as provided in this
Agreement, or in such other manner as may be provided under applicable laws,
rules of procedure or local rules.

 

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

 

 

TODHUNTER INTERNATIONAL, INC.

 

 

 

 

 

By:

 

 

 

Name:  Jay S. Maltby

 

Title:  Chief Executive Officer and President

 

 

 

 

 

ANGOSTURA LIMITED

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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