U.s. Subscription Agreement

EXHIBIT 10(lx)


U.S. SUBSCRIPTION AGREEMENT


THIS U.S. SUBSCRIPTION AGREEMENT IS EXECUTED IN RELIANCE UPON THE EXEMPTION PROVIDED BY SECTION 4(2) ("SECTION 4(2)") FOR TRANSACTIONS NOT INVOLVING ANY PUBLIC OFFERING UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the "SECURITIES ACT").


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THIS U.S. SUBSCRIPTION AGREEMENT (this "Agreement") has been executed by the undersigned in connection with the private placement of up to a maximum of 500 shares of Series G Convertible Preferred Stock, par value $.01 (hereinafter referred to as the "Preferred Stock"), of Frederick Brewing Co., a corporation organized under the laws of the State of Maryland, Nasdaq SmallCap Market symbol "BLUE") (hereinafter referred to as the "Company"). The Preferred Stock being sold pursuant to this Agreement has not been registered under the Securities Act. In addition to such other terms as are set forth in this Agreement, the terms on which the Preferred Stock may be converted into shares of Common Stock, $.00004 par value, of the Company (the "Common Stock") and the other terms of the Preferred Stock are set forth in the Articles Supplementary of the Preferred Stock attached hereto as Annex I (the "Articles Supplementary"). The offer of the Preferred Stock and, if this Subscription Agreement is accepted by the Company, the sale of Preferred Stock is being made in reliance upon Section 4(2). (All dollar amounts in this Agreement are expressed in U.S. Dollars.)


The undersigned Purchaser


NAME:________________________________________________________________


ADDRESS______________________________________________________________ - -----------------------------------------------------------------------------


if applicable, a [Corporate] [Partnership] [Trusts] organized under the laws of ______________, a non USA Jurisdiction] hereinafter referred to as "Purchaser")


hereby represents and warrants to, and agrees with the Company as follows:


1. Agreement to Subscribe


a. Subscription. The undersigned Purchaser hereby
subscribes to purchase_____________ shares of
Preferred Stock, having a purchase price of $1,000
per share of Preferred Stock, at an aggregate
purchase price of $_____________.


b. Form of Payment. Purchaser shall pay the purchase
price for the Preferred Stock by delivering good
funds in United States Dollars in accordance with
Paragraph 1(c) below, to the Company.


c. Method of Payment. Payment of the purchase price for
the Preferred Stock shall be made by wire transfer of
funds directly to the Company, upon which the Company
shall deliver the certificates for the shares of
Preferred Stock to the Purchaser (the "Closing
Date"). Such delivery to the Purchaser shall be by
hand delivery or by overnight courier to such address
as the Purchaser may direct.


2. Purchaser Representations: Access to Information; Independent Investigation


a. Purchaser Representations and Warranties. Purchaser
represents and warrants to the Company as follows:


(i) Purchaser is either an "accredited
investor" or a "sophisticated
purchaser" as such terms are defined
in Rule 501 promulgated under the
Securities Act.


(ii) Purchaser is sufficiently
experienced in financial and
business matters to be capable of
evaluating the merits and risks of
its investments, and to make an
informed decision relating thereto,
and to protect its own interests in
connection with the transaction.


(iii) Purchaser is purchasing the
Preferred Stock for its own account
or for the account of beneficiaries
for whom the Purchaser has full
investment discretion, each of which
beneficiaries is bound to all of the
terms and provisions hereof
including all representations and
warranties herein. Purchaser is
purchasing the Preferred Stock for
investment purposes only and not
with an intent towards further sale
or distribution thereof, and has not
pre-arranged any sale with any other
purchaser.


(iv) The Preferred Stock has not been
registered under the Securities Act
and may not be transferred, sold,
assigned, hypothecated or otherwise
disposed of, unless such transaction
is the subject of a registration
statement filed with and declared
effective by the Securities and
Exchange Commission (the "SEC") or
unless an exemption from the
registration requirements under the
Securities Act such as Rule 144 is
available. Purchaser represents and
warrants and hereby agrees that all
offers and sales of the Preferred
Stock and the Common Stock issuable
upon conversation thereof
(collectively, the "Securities")
shall be made only pursuant to such
registration or to such exemption
from registration.


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No later than 60 days after the
Closing Date, the Company shall file
a registration statement on Form S-3
under the Securities Act and under
all applicable Blue Sky laws
covering the Common Stock and to
cause such registration statement to
be declared effective, by
acceleration, within 120 days
thereafter, by the SEC, all at the
Company's sole cost and expense.
Such best efforts shall include
promptly responding to all comments
received by the staff of the SEC,
providing Purchaser or its counsel
with contemporaneous copies of all
written communications form the
staff of the SEC and promptly
preparing and filing amendments to
such registration statement which
are responsive to the comments
received from the staff of the SEC.
Such registration statement shall
name Purchaser as a selling
shareholder and shall provide for
the sale of the Common Stock by
Purchaser or in the-over-the-counter
market through or to securities
brokers or dealers that may receive
compensation in the form of
discounts, concessions, or
commissions. This obligation to
register the Common Stock is in
addition to the Company's
registration obligation described in
Section 10 hereunder. None of the
foregoing shall in any way limit
Purchaser's rights to sell the
Common Stock in reliance on an
exemption from the registration
requirements under the Securities
Act in connection with a particular
transaction.


In the event the Company either (a)
fails to file a registration
statement covering the Common Stock
issuable upon conversion of the
Preferred Stock, within 60 days of
the first Closing Date or (b) fails
to have such registration statement
declared effective by the Securities
and Exchange Commission within 120
days of the first Closing Date, the
Conversion Price shall be increased,
in each case as liquidated damages
and not as a penalty, to give the
Holder upon conversion additional
shares of common stock equal to 5%
of the shares that would otherwise
be issuable for each violation of
the foregoing covenants.


Regardless of whether the Company
registers the resale of the Common
Stock issuable upon conversion of
the Preferred Stock, the Company
will, upon the presentation of an
opinion of the Purchaser's counsel,
allow the Purchaser to offer and
sell the shares of Common Stock in
reliance on the provisions of Rule
144, at the option of Purchaser.


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(v) Purchaser acknowledges that the
purchase of the Securities involves
a high degree of risk, is aware of
the risks and further acknowledges
that it can bear the economic risk
of the Securities, including the
total loss of its investment.


(vi) Purchaser understands that the
Securities are being offered and
sold to it reliance on an exemption
from the registration requirements
of the Securities Act, and that the
Company is relying upon the truth
and accuracy of the representations,
warranties, agreements,
acknowledgments and understandings
of Purchaser set forth herein in
order to determine the applicability
of such safe harbor and the
suitability of Purchaser to acquire
the Securities.


(vii) Purchaser is purchasing the
Securities for its own account or
for the account of beneficiaries for
whom Purchaser has full investment
discretion and not with a view to,
or for sale in connection with, any
"distribution" (as such term is used
in Section 2(11) of the Securities
Act) thereof.


(viii) In evaluating its investment,
Purchaser has consulted its own
investment and/or legal and/or tax
advisor ...