AGREEMENT AND PLAN OF MERGER BY AND AMONG NEW AGE BEVERAGES CORPORATION BWR ACQUISITION CORP. AND BRANDS WITHIN REACH, LLC AND OLIVIER SONNOIS Dated as of May 30, 2019 AGREEMENT AND PLAN OF MERGER
Exhibit
2.1
AGREEMENT AND PLAN OF MERGER
BY AND
AMONG
NEW AGE BEVERAGES CORPORATION
BWR ACQUISITION CORP.
AND
BRANDS WITHIN REACH, LLC
AND
OLIVIER SONNOIS
Dated
as of May 30, 2019
AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger (this “Agreement”) is entered
into as of May 30, 2019 (the “Effective Date”), by and
among Brands Within Reach, LLC. (“BWR”), a New York limited
liability corporation and Olivier Sonnois as sole owner, Member and
Manager of BWR (“Seller”), New Age
Beverages Corporation, a Washington corporation
(“NBEV”
or “Buyer”), and BWR
Acquisition Corp., a newly organized New York corporation that is
wholly owned by Buyer (“Sub”) (Buyer together
with Sub, BWR and Seller constitute the “Parties” and each
individually a “Party”).
WHEREAS, Seller
wishes to effectuate a sale of BWR to NBEV, and Buyer wishes to
purchase BWR from Seller on the terms and conditions contained
herein;
WHEREAS, in
connection with such sale, NBEV will assume substantially all
obligations and liabilities of BWR subject to the terms and
conditions contained herein;
WHEREAS, the
respective Boards of Directors of Buyer and Sub, and the Manager of
BWR have approved and declared advisable this Agreement, which
contemplates the merger of Sub with and into BWR, as set forth
below (the “Merger”), in accordance
with the New York Business Corporation Law (the
“NYBCL”) and the New York
Limited Liability Company Law (the “NYLLCL”), and upon the
terms and subject to the conditions set forth in this
Agreement;
WHEREAS, for United
States’ federal income tax purposes, the Merger is intended
to qualify as a reorganization under the provisions of section
368(a) of the United States Internal Revenue Code of 1986, as
amended, and the regulations promulgated and the rulings issued
thereunder (the “Code”).
NOW,
THEREFORE, in consideration of the covenants, premises,
representations and warranties set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I.
THE MERGER
SECTION
1.1 The
Merger.
(a) Upon the terms and
subject to the conditions of this Agreement, at the Closing, a
certificate of merger (the “Certificate of Merger”)
shall be duly prepared, executed and acknowledged by Sub and BWR in
accordance with the NYBCL and the NYLLCL and shall be duly filed
with the office of the Secretary of State of the State of New York
in accordance with the provisions of the NYBCL and the NYLLCL,
which filing shall be made as soon as practicable following the
fulfillment or waiver of the conditions set forth in Article VIII
hereof. The Merger shall become effective upon the filing of the
Certificate of Merger (or at such later time reflected in such
Certificate of Merger as shall be agreed to by Buyer and BWR). The
date and time when the Merger shall become effective is hereinafter
referred to as the “Effective
Time”.
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(b) On the terms and
subject to the conditions set forth in this Agreement and in
accordance with the NYBCL and the NYLLCL, at the Effective Time,
Sub shall be merged with and into BWR, and the separate corporate
existence of Sub shall cease, and BWR shall continue as the
surviving entity under the laws of the State of New York (the
“Surviving
Entity”.
(c) From and after the
Effective Time, the Merger shall have the effects set forth in
Section 1004 of the NYLLCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, franchises and powers of the
Company and Sub shall vest in the Surviving Entity, and all debts,
liabilities and duties of BWR and Sub shall become debts,
liabilities and duties of the Surviving Entity.
SECTION 1.2 Articles of
Organization of the Surviving Entity. The Articles of Organization of
BWR, as in effect immediately prior to the Effective Time, shall be
the Articles of Organization of the Surviving Entity.
SECTION 1.3 Operating Agreement
of the Surviving Entity. The Limited Liability Company
Operating Agreement of BWR, as in effect immediately prior to the
Effective Time, shall be the Limited Liability Company Operating
Agreement of the Surviving Entity.
SECTION 1.4 Officers and
Managers of the Surviving Entity. At the Effective Time, the
directors of Sub immediately prior to the Effective Time shall be
the managers of the Surviving Entity, each of such managers to hold
office, subject to the applicable provisions of the Articles of
Organization and the Limited Liability Company Operating Agreement
of the Surviving Entity, until their respective successors shall be
duly elected or appointed and qualified. At the Effective Time, the
officers of BWR, if any, immediately prior to the Effective Time
shall, subject to the applicable provisions of the Articles of
Organization and the Limited Liability Company Operating Agreement
of the Surviving Entity, be the officers of the Surviving Entity
until their respective successors shall be duly elected or
appointed and qualified.
SECTION
1.5 Conversion
of Membership Interests.
(a) At the Effective
Time:
(i) Seller’smembership
interests in BWR (the “Interests”) issued and
outstanding immediately prior to the Effective Time and all rights
in respect thereof shall, by virtue of the Merger and without any
action on the part of the holder thereof, forthwith cease to exist
and be converted into and represent the right to receive (A) Seven
Hundred Thousand (700,000) restricted shares (subject to adjustment
as provided below) of Buyer’s common stock, $0.001 par value
per share (the “NBEV
Shares”) and (B) Three Million Dollars
($3,000,000.00); provided, however, that the cash
consideration set forth above shall be reduced by up to Two Million
Five Hundred Thousand Dollars ($2,500,000.00) to eliminate all
existing BWR debt such that the Surviving Entity is cash-free and
debt-free immediately after the Effective Time. The consideration
payable in respect of the Interests as set forth in this Section
1.5(a)(i) is hereinafter defined as the “Merger
Consideration”.
(ii) Each share of
common stock, par value $.001 per share, of Sub, issued and
outstanding immediately prior to the Effective Time, shall, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into membership interests of BWR
representing 100% of the outstanding membership interests and the
Surviving Entity shall become a wholly owned subsidiary of
Buyer.
(b) If at any time
during the period between the Effective Date and the Effective
Time, any change in the outstanding shares of common stock of Buyer
shall occur by reason of any reclassification, recapitalization,
stock split or combination, exchange or readjustment of shares, or
any similar transaction, or any stock dividend thereon is declared
with a record date during such period, the number of NBEV Shares
shall be correspondingly adjusted to provide the holder of
Interests the same economic effect as contemplated by this
Agreement immediately prior to such event.
SECTION
1.6 Post-merger Ownership of BWR
Assets.
(a) Purchase. For the avoidance of
doubt, without limiting the generality of the foregoing, in
connection with the Merger, Buyer shall become the indirect owner
of all of the assets of BWR used in, related to, or necessary for,
the operation of the Business as conducted immediately prior to the
Closing (the “Acquired Assets”). The
Ac quired Assets shall include all of the following Assets of
BWR existing on the Closing Date:
(i) all Contracts,
including all licenses and other agreements, entered into
(including, but not limited to, any sales of existing products and
planned products or contracts) by BWR prior to the date of this
Agreement, including, but not limited to, those Contracts that
Buyer notifies BWR in writing not less than five (5) Business Days
after the Effective Date that such Contracts shall be Acquired
Assets (collectively, the “Assumed
Contracts”);
(ii) all BWR inventory
(including raw materials, supplies, containers, labels, packing and
shipping materials, work in process and finished goods across all
product types) (collectively, the “Inventory”);
(iii) all BWR systems,
tools, equipment, content management systems, databases and other
Tangible Personal Property;
(iv) all of BWR’s
intellectual property (“IP”);
(v) all of BWR’s
web domains, trademarks, brand names, and other archived digital
assets;
(vi) copies of all BWR
books and records including, but not limited to, books of account,
financial and accounting records (including all records related to
accounts receivable, general ledgers, purchasing, billing and
payment), Tax Returns and Tax records, correspondence with
Governmental Authorities, sales, marketing, promotional and
advertising materials and records, strategic plans, files relating
to BWR’s IP and all other documentation, forms, records
(including support records and audit records), procedures, policy
documents, manuals, customer materials, system specifications,
scripts, logs, databases and other materials of any kind, whether
in print or electronic form, but excluding the books and records
related exclusively to the Excluded Assets and the Excluded
Liabilities;
(vii) all BWR customer
lists, user lists, goodwill and other intangible
Assets;
(viii) all of
BWR’s and any other’s membership interests, stock or
other securities in any joint ventures or other subsidiaries,
security deposits, refunds, deposits and prepaid expenses of BWR
and all vendor rebate accounts and prospective rebates, whether
soft dollar or hard dollar (other than those constituting Excluded
Assets);
(ix) all of BWR’s
accounts receivable and the rights to any payments for terminated
licenses (agreements) not paid as of the Closing Date (other than
those constituting Excluded Assets);
(x) all of BWR’s
rights arising from or relating to the matters described in Section
4.7 of the Disclosure Schedule; and
(xi) all of BWR’s
prepaid expenses.
SECTION 1.7 Excluded
Assets. Notwithstanding any other provision of this
Agreement to the contrary, the following Assets of Seller existing
on the Closing Date (collectively, the “Excluded Assets”) are not
part of the sale and purchase contemplated hereunder, are excluded
from the Acquired Assets and shall remain the property of Seller
after the Closing:
(i) None.
SECTION 1.8 Liabilities Assumed
by Buyer. Upon
the terms and subject to the conditions of this Agreement, at the
Closing, the Buyer will, effective as of the Closing, assume and
agree to duly and timely pay, perform and discharge all of the
liabilities of BWR (collectively, the “Assumed Liabilities”),
including, but not limited to:
(i) the accounts payable
of BWR;
(ii) accrued liabilities
of BWR; including the loan with AMI Holdings, LLC, a California
limited liability company (which shall be $276,000 or less as of
the Closing Date) but no other obligations to AMI Holdings, LLC
exceeding such loan;
(iii) obligations of BWR
with respect to any Acquired Assets, including any Contracts and
Assumed Contracts;
(iv) fees and expenses
of Seller and BWR incurred in connection with the transactions
contemplated by this Agreement;
(v) all liabilities of
BWR and Seller under that certain line of credit between BWR and TD
Bank, N.A. (the “Line of Credit”), including, without
limitation, all liabilities of Seller as guarantor under the Line
of Credit; and
(vi) all categories of
liabilities set forth on BWR’s Balance Sheet other than
Excluded Liabilities.
SECTION 1.9 Excluded
Liabilities.
Notwithstanding any provision of the Transaction Documents to the
contrary, the Buyer will not accept, acquire, assume or become
liable to pay, perform or discharge, and the Assumed Liabilities
will not include, the following liabilities (the
“Excluded
Liabilities”):
(i) all Liabilities for
Taxes of Seller, other than as set forth in Section
1.8(vi);
(ii) all preexisting
Liabilities of Seller and BWR under Environmental
Laws;
(iii) all preexisting
Liabilities of Seller and BWR and its ERISA Affiliates arising
under, or with respect to, the Employee Plans;
(iv) all preexisting
Liabilities with respect to any current or former employee of BWR,
or any of its directors, members, managers, stockholders, partners,
agents or independent contractors, other than as set forth in
Section 1.8(ii) and (v) above;
(v) all preexisting
Liabilities arising out of, or relating to, any conduct or alleged
conduct of any employee or independent contractor of BWR and
Seller;
(vi) all Liabilities
arising out of, or relating to, any Proceeding pending as of the
Closing Date or any Proceeding commenced after the Closing Date to
the extent arising out of, or relating to, any act or omission of
BWR or Seller or any event, circumstance, condition, breach or
default occurring on or prior to the Closing Date (other than those
relating to any Acquired Assets);
(vii) all Liabilities
arising out of, or resulting from, BWR’s or Seller’s
compliance or noncompliance with any Legal Requirement or Order
occurring prior to the Closing Date;
(viii) all Liabilities
of BWR or Seller to BWR’s members, managers, stockholders or
any Affiliate of any of BWR’s members, managers or
stockholders, originating prior to Closing;
(ix) all Liabilities
relating to, or resulting from, BWR’s and Seller’s IP
to the extent arising prior to the Closing Date; and
(x) all Liabilities (the
“First Bank Loan”) owed by BWR and Seller to First Bank
in Nashville (“First
Bank”), which Liabilities will be satisfied and
released as part of the Closing of this Agreement, in accordance
with the provisions of Section 1.5(a)(i).
SECTION 1.10 Contracts.
Notwithstanding anything to the contrary in this Agreement, this
Agreement shall not constitute an agreement to assign or transfer
any Assumed Contract if such assignment or transfer, or an attempt
to make such an assignment or transfer, without the consent of a
third party would constitute a material breach or violation thereof
or affect adversely the rights of Buyer or Seller thereunder. To
the extent that prior to the Closing BWR or Seller has not obtained
any Consent required to assign or transfer any Assumed Contract in
connection with the sale of the Interests to Buyer, BWR and Seller
shall use commercially reasonable efforts to obtain such Consent as
promptly as practicable thereafter. Until such Consent is obtained,
Seller and BWR shall cooperate and shall cause their
representatives to cooperate with Buyer in any arrangement designed
to provide Buyer with the interests, rights and benefits of BWR
under such Assumed Contract at Buyer’s sole cost and expense.
Nothing in this paragraph shall be deemed to constitute an
agreement to exclude from the Acquired Assets any Assets set forth
above in Section 1.6; provided, however, that Buyer shall be
responsible for, and shall promptly pay, (i) all costs and expenses
of BWR and Seller to establish, implement, monitor, maintain,
execute on, or carry into effect any such arrangement (including
any costs and expenses incurred in connection with enforcing rights
under any such Contract), which BWR and Seller shall not incur
without Buyer’s prior written consent, and (ii) all payment
and other obligations under such Contract (all of which shall
constitute, and shall be deemed to be, Assumed Liabilities
hereunder) to the same extent as if such Contract had been assigned
or transferred at Closing. The obligation of BWR and Seller to
cooperate with Buyer set forth in this Section 1.10 shall not
require BWR or Seller to incur any expenses, liabilities or
obligations or to provide any financial accommodation or to remain
secondarily or contingently liable for any liabilities or
obligations under any applicable Contract.
ARTICLE II.
POST CLOSING ADJUSTMENT
SECTION 2.1 Working Capital
Adjustment.
(a) As soon as
practicable after the Closing, but in any event prior to thirty
(30) days after the Closing Date, Seller shall
prepare and deliver to the Buyer a balance sheet of BWR as of the
Closing Date (the “Closing Balance Sheet”)
that has been prepared in accordance with GAAP, applied in a manner
consistent with the preparation of the Balance Sheets except that
(i) no liabilities arising under the Line of Credit or the Demand
Note shall be reflected on the Closing Balance Sheet and (ii) the
Closing Balance Sheet shall be based upon accrual accounting
principles. The Closing Balance Sheet shall include a calculation
of the working capital at the Closing Date (the “Closing Working Capital”)
which shall be determined by subtracting the current liabilities as
reflected on the Closing Balance Sheet from the current assets set
forth therein.
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(b) If Buyer disagrees
in whole or in part with the Closing Working Capital, then within
ten (10) business days after its receipt of the Closing Balance
Statement, Buyer shall notify Seller of such disagreement in
writing (the “Notice
of Disagreement”), setting forth in reasonable detail
the particulars of any such disagreement. To be effective, any such
Notice of Disagreement shall include a copy of the Closing Balance
Sheet marked to indicate the specific line items of the Closing
Balance Sheet that are in dispute (the “Disputed Line Items”) and
shall be accompanied by Buyer’s calculation of each of the
Disputed Line Items and Buyer’s revised Closing Balance Sheet
setting forth its determination of the Closing Working Capital and
any component thereof. All items that are not Disputed Line Items
shall be final, binding and conclusive for all purposes hereunder
unless the resolution of a Disputed Line Item affects an undisputed
item, in which case such undisputed item shall remain open and be
considered a Disputed Line Item to the extent of such corresponding
effect. In the event that Buyer does not provide a Notice of
Disagreement within such ten (10) business day period, Buyer shall
be deemed to have accepted in full the Closing Working Capital as
prepared by Seller, and such Closing Working Capital shall become
final, binding and conclusive for all purposes hereunder as of 5:00
P.M., New York City time, on such tenth (10th) business day. In
the event any Notice of Disagreement is properly and timely
provided, Buyer and Seller shall use commercially reasonable
efforts for a period of thirty (30) days (or such longer period as
they may mutually agree) to resolve any Disputed Line Items. During
such thirty 30-day period, Buyer and Seller shall cooperate with
each other and shall have reasonable access to the personnel, books
and records, working papers, schedules and calculations of the
other used in the preparation of the Closing Balance Sheet and the
Notice of Disagreement and the determination of the Closing Working
Capital and Disputed Line Items. All Disputed Line Items agreed to
during such thirty (30)-day period shall be final, conclusive
and binding on the parties and not subject to further
appeal.
(c) If, at the end of
such additional thirty (30)-day period, Buyer and Seller are unable
to resolve all such Disputed Line Items, then any such remaining
Disputed Line Items shall be referred to the dispute resolution
group of an independent, internationally recognized accounting firm
mutually agreed to by Buyer and Seller (the “Accounting Firm”). Buyer
and Seller will enter into reasonable and customary arrangements
for the services to be rendered by the Accounting Firm under this
Section 2.1(c), and such services shall be provided in the
Accounting Firm’s capacity as an accounting expert and not an
arbitrator. The Accounting Firm shall be directed to determine as
promptly as practicable (and in any event within thirty (30) days
from the date that the remaining Disputed Line Items are submitted
to it) its final determination with respect to such Disputed Line
Items (in each case, calculated in accordance with this Agreement
and the definitions included herein and determined within the range
of dispute between the amounts set forth in the Closing Balance
Sheet and those set forth in the Notice of Disagreement). Buyer and
Seller shall each furnish to the Accounting Firm (i) a single
presentation (which presentations shall be limited to the items
specifically submitted to the Accounting Firm for evaluation)
within fifteen (15) days after the engagement thereof (which the
Accounting Firm shall forward to Buyer or Seller, as applicable,
after both presentations have been received or the time for
submission of presentations has expired) and (ii) one written
response within five (5) business days after receipt of each such
presentation (which the Accounting Firm shall forward to Buyer or
Seller, as applicable, after both responses have been received or
the time for submission of responses has expired). The
determination of the Accounting Firm shall be final, conclusive and
binding on the Parties. The fees and expenses of the Accounting
Firm shall be paid by Buyer.
(d) If the Closing
Working Capital that has been finally determined in accordance with
this Section 2.1 is less than zero, then the Parties will negotiate
in good faith an adjustment to the number of NBEV Shares
constituting the equity portion of the Merger Consideration and the
number of shares so issued will be adjusted accordingly upon
written agreement of Seller and Buyer. For all purposes of this
Agreement, the Parties acknowledge and agree that the value of each
share of common stock, par value $0.001 per share, of Buyer shall
be deemed to be the closing price on the Effective Date of the
shares as reported on the Nasdaq Capital Market.
SECTION
2.2 Consent
Matters.
(a) Promptly following
the Effective Date, BWR shall use commercially reasonable efforts
to obtain all Consents and Orders reasonably required in order to
effectuate the transactions contemplated by this
Agreement.
(b) If the Consents and
Orders set forth on Exhibit
C attached hereto are not obtained on or prior to thirty
(30) days after the Closing Date, the Parties will negotiate in
good faith an adjustment to the Merger Consideration.
ARTICLE III.
CLOSING; DELIVERIES
SECTION 3.1 Closing. The
closing of the transactions (the “Closing”) will take place
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which all of the conditions to Closing set forth in Article VIII
are either satisfied or waived (other than conditions which, by
their nature, are to be satisfied on the Closing Date), or at such
other time, date or place as the Parties may mutually agree upon in
writing. The date on which the Closing occurs is the
“Closing
Date”. The Parties presently anticipate that the
Closing Date shall be May 31, 2019.
SECTION
3.2 Closing
Deliveries.
(a) Seller’s Deliveries to
Buyer. At the Closing, Seller will duly execute, if
applicable, and deliver to Buyer:
(i) such bills of sale,
assignments, deeds, certificates of title, documents and other
instruments of transfer and conveyance as may be reasonably
requested by Buyer to effect the transactions contemplated by this
Agreement, each in form and substance satisfactory to Buyer and
Seller, dated the Closing Date and duly executed by Seller or by
BWR as necessary;
(ii) a certificate,
dated as of the Closing Date and executed by a manager or executive
officer of BWR, certifying as to the fulfillment of the conditions
set forth in Sections 8.1(b) and
(c);
(iii) a certificate,
dated as of the Closing Date and executed by a manager or secretary
of BWR, certifying as to (A) (1) the certificate of formation
of the BWR and (2) certificates of good standing of the BWR of the
jurisdiction of the BWR’s formation certified not later than
ten (10) days prior to the Closing Date by the Secretary of State
of such jurisdiction, (B) resolutions of the member(s) and managers
of the BWR authorizing and approving the execution, delivery and
performance by the Seller and BWR of this Agreement and any other
Transaction Documents to which the Seller or BWR is a party, and
(C) the incumbency and signatures of the managers and officers of
BWR executing this Agreement and any Transaction Documents to which
the BWR is a party;
(iv) a noncompetition
agreement between Buyer and Seller, in the form attached hereto as
Exhibit A, duly
executed by Seller;
(v) a verified sworn
statement from Seller stating that no person or entity other than
Seller has any legal or equitable membership or ownership interest
in BWR, and that no other person has been granted, pledged or
promised any phantom share, bonus, or legal or equitable ownership
interest in BWR, so that 100% of the right, title and interest in
BWR may be wholly conveyed by Seller to Buyer without being subject
to any claim of legal or equitable ownership in BWR by any other
person or entity;
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(vi) an employment
agreement, duly executed by Seller (the “Employment
Agreement”);
(vii) any other
documents as may be reasonably requested by Buyer to effect the
transactions contemplated by this Agreement.
(b) Buyer’s Deliveries. At
the Closing, Buyer will duly execute, if applicable, and deliver to
Seller:
(i) the restricted NBEV
Shares, issued electronically to an account or accounts in the name
of Seller and his designees, including First Bank;
(ii) the cash
consideration set forth in Section 1.5(a);
(iii) the Employment
Agreement, duly executed by Buyer;
(iv) a certificate,
dated as of the Closing Date and executed by an executive officer
of Buyer, certifying as to the fulfillment of the conditions set
forth in Sections 8.2(b) and
(c);
(v) a certificate, dated
as of the Closing Date and executed by the secretary of Buyer,
certifying as to (A) (1) the certificate of incorporation and
bylaws of the Buyer and (2) certificates of good standing of the
Buyer of the jurisdiction of the Buyer’s incorporation
certified not later than ten (10) days prior to the Closing Date by
the Secretary of State of such jurisdiction, (B) resolutions of the
board of directors of Buyer authorizing and approving the
execution, delivery and performance by the Buyer of this Agreement
and any other Transaction Documents to which the Buyer is a party,
and (C) the incumbency and signatures of the officers of the buyer
executing this Agreement and any Transaction Documents to which the
Buyer is a party;
(vi) such other
documents as may be reasonably requested by Seller to effect the
transactions contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except
as set forth in Disclosure Schedule, the Seller makes the following
representations and warranties to Buyer, in each case, based on and
subject to Seller’s Knowledge.
SECTION 4.1 Authority, Power
and Capacity. Seller has all requisite
power and authority to execute and deliver this Agreement and the
other Transaction Documents to which Seller is or will be a party,
to perform his obligations under this Agreement and such other
Transaction Documents and to consummate the transactions
contemplated hereby and thereby. This Agreement and the other
Transaction Documents to which Seller is or will be a party have
been duly authorized and when executed and delivered by Seller does
or will constitute the valid and binding agreement of Seller and is
enforceable against Seller in accordance with their respective
terms (except as the enforcement of such obligations may be limited
by applicable bankruptcy, insolvency, reorganization, liquidation,
receivership, moratorium and other laws relating to or affecting
the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law).
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SECTION 4.2 Conflicts;
Consents.
(a) The execution and
delivery by Seller of this Agreement and the other Transaction
Documents to which Seller is or will be a party does not, and the
consummation of the transactions contemplated hereby and thereby
will not, violate any provision of the Organizational Documents of
BWR; result in the creation of any Encumbrance (other than
Permitted Encumbrances) upon the Interests or the Acquired Assets,
conflict with or result in a breach of, require a Consent, create
an event of default (or event that, with the giving of notice or
lapse of time or both, would constitute an event of default) under,
or give any person or entity the right to terminate, accelerate or
modify any obligation or benefit under, any contract, lease, permit
or order to which BWR is a party or by which BWR or the Acquired
Assets are bound or affected.
(b) The execution and
delivery by Seller and BWR of this Agreement and the other
Transaction Documents to which BWR or Seller is or will be a party
does not, and the consummation of the transactions contemplated
hereby and thereby will not, result in a violation of, or require
the Consent, other action by, or registration, declaration or
filing with or notice to, any Governmental Authority under any
Legal Requirement or Order applicable to Seller, BWR or the
Acquired Assets. There is no pending or, to Seller’s
Knowledge, threatened Proceeding against BWR or Seller before any
court or Governmental Authority, to restrain or prevent the
consummation of the transactions contemplated by this Agreement or
that would reasonably be expected to affect the right of BWR after
the Closing to own and control the Interests or to use the Acquired
Assets in a manner consistent with BWR’s use of the Acquired
Assets as of the Effective Date.
SECTION 4.3 Organization and
Authority. Seller warrants that BWR is a duly organized
limited liability company authorized under the laws of the state of
New York, and that BWR has all requisite power and authority to
conduct the Business as it has done in the normal course of its
dealings. True and correct copies of BWR’s Organizational
Documents, including any amendments thereto, have been made
available to Buyer.
SECTION 4.4 Properties and
Assets of BWR. BWR owns or otherwise has the right to use
all of the Acquired Assets. Upon consummation of the transactions,
Buyer will acquire good and marketable title to the Interests, free
and clear of all Encumbrances other than Permitted Encumbrances.
The Acquired Assets constitute all of the assets, properties and
rights used or held for use by BWR in connection with the Business
as conducted as of the Effective Date.
SECTION 4.5 Balance
Sheet. Attached hereto as Exhibit B are true and correct copies of
the balance sheets of BWR as of April 30, 2019, March 31, 2019 and
December 31, 2018 (the “Balance Sheets”). The
Balance Sheets (i) are true, complete and correct in all material
respects and (ii) were prepared in accordance with GAAP applied on
a consistent basis in accordance with the past practice of BWR. All
liabilities of BWR as of April 30, 2019, March 31, 2019 and
December 31, 2018, required to be reflected or reserved for by GAAP
are fully reflected or reserved for in the Balance
Sheets.
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SECTION 4.6 Compliance with
laws; permits. BWR and Seller are not now, and have not
since December 31, 2016, (a) been in material violation of any
provision of any Legal Requirement or Order applicable to BWR or
the Acquired Assets, or (b) directly or indirectly made any payment
of funds to any person, or received or retained any funds from any
person in violation of any applicable Legal Requirement. BWR has
(i) all permits required to conduct the Business as conducted by
BWR as of the Effective Date; and (ii) satisfied all material
bonding requirements pertaining to its operations under applicable
Legal Requirements. All such permits shall remain in effect
following the closing without violation of or loss of benefits
under such permits, without consent of or notice to any other
person, including any Governmental Authority. BWR is not in
material violation of, nor is there a basis for the revocation or
withdrawal of, any permit. BWR has performed all material
obligations expressly set forth in writing in each permit that by
their terms are to be performed on or before the Closing
Date.
SECTION 4.7 Litigation.
There is no Proceeding pending or threatened against or affecting
BWR or Seller, the Acquired Assets or the Business, or relating to
or involving the transactions contemplated by this Agreement, and
Seller and BWR are not aware of any basis for any of the foregoing.
Seller and BWR are not in default with respect to any Order known
to or served upon Seller or BWR.
SECTION 4.8 Tax
Matters.
Seller and BWR have timely filed all Tax Returns required of them
under all Legal Requirements to which they are subject. Seller and
BWR have timely paid all Taxes required by Legal Requirements to be
paid by them, whether or not shown on any Tax Return. All such Tax
Returns are accurate and complete in all material respects. No
examination or audit of any Tax Return of BWR is in progress. All
deficiencies proposed as a result of any examination or audit of
any Tax Return filed by Seller or BWR have been paid or finally
settled and no issue has been raised in any such examination or
audit that, by application of similar principles, reasonably would
be expected to result in the assertion of a deficiency for any
other year not so examined or audited. There are no Encumbrances
related to Taxes outstanding against any of the Acquired Assets,
other than for Taxes not yet due and payable.
SECTION 4.9 Licenses, Permits,
Orders and Authorizations. No licenses, approvals, consents,
ratifications, waivers, notices, registrations, qualifications,
designations, filings, franchises, authorizations, security
clearances and other permits of, to, from or with, any Governmental
Authority are required under applicable Legal Requirements to
permit BWR to own, operate, use and maintain its Assets in the
manner in they are operated and maintained and to conduct the
Business, in each case as of the Effective Date.
SECTION 4.10 Absence of Certain
Changes or Events. BWR has conducted its business only in
the ordinary course of business and since December 31, 2016 there
has not been any material loss, damage or destruction to, or any
material interruption in the use of any of the Acquired
Assets.
SECTION 4.11 Affiliated
Transactions. No Affiliate of BWR is a party to any Assumed
Contract or has a direct or indirect financial interest in any
Assumed Contract.
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SECTION 4.12 Contracts.
With respect to each Assumed Contract: (i) such Assumed Contract is
legal, valid, binding, enforceable in accordance with its terms and
in full force and effect and, subject to obtaining any required
consent, will continue to be legal, valid, binding, enforceable by
Buyer and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (ii) such
Assumed Contract does not require the Consent of any Person in
connection with the transactions contemplated by this Agreement;
(iii) Seller, BWR and the other parties to such Assumed Contract
are not in material breach or default and no event has occurred
which with the passage of time or giving of notice would constitute
a material breach or default, or permit termination, modification,
or acceleration, under such Assumed Contract; and (iv) no party has
repudiated or waived any provision of such Assumed Contract in
writing.
SECTION 4.13 Employee Benefits
Plans; ERISA. Neither BWR nor any ERISA Affiliate maintains
or contributes to, or has any obligation to contribute to, or has
any Liability with respect to, any Employee Plan. BWR does not have
any Liability with respect to any Person under Title IV of ERISA.
Neither BWR nor any ERISA Affiliate maintains, contributes to, or
has any Liability for any Employee Plan or any medical, health,
life or other welfare benefits for present or future terminated
employees or retirees.
SECTION 4.14 Environmental
Matters. The operations of BWR are, and have been, in
material compliance with all Environmental Laws.
SECTION 4.15 Insurance.
BWR has paid or caused to be paid all of the premiums of all
insurance policies (including policies providing property,
casualty, liability, errors and omissions and worker’s
compensation coverage and bond and surety arrangements) to which
BWR is a party, a named insured or otherwise the beneficiary of
coverage insurance policy, and has at all times operated the
Business in a manner so as to conform to the applicable provisions
of such insurance policy. BWR has never made any claim under any
insurance policy.
SECTION 4.16 Employees.
BWR is and has been in material compliance with all Legal
Requirements related to employment and employment practices, terms
and conditions of employment and wages and hours, fair employment,
safety, worker compensation, unemployment and social security and
with all Contracts relating to the employment of the employees of
BWR. Each of the employees of BWR is properly classified with
respect to employment status for all purposes including, without
limitation, employment, labor and Tax purposes. No current or
former independent contractor of BWR could be deemed to be a
misclassified employee.
SECTION 4.17 Brokers’
Fees. No broker, finder, investment banker or other Person
is entitled to any brokerage fee, finders’ fee or other
commission or payment in connection with the transactions
contemplated by this Agreement based on arrangements made by
Seller, or by BWR or any of its Affiliates.
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SECTION
4.18 Intellectual
Property.
(a) BWR
exclusively owns all right, title and interest in and to the
BWR’s IP, free and clear of any Encumbrance. BWR is not bound
by, and no BWR’s IP is subject to, any contract, agreement or
understanding containing any covenant or other provision that in
any way limits or restricts the ability of BWR to use, exploit,
assert or enforce any BWR’s IP anywhere in the world. All
documents and instruments necessary to perfect the rights of BWR in
the BWR’s IP have been validly executed, delivered, and filed
in a timely manner with the appropriate Governmental
Authority.
(b) Any
license by which BWR has obtained rights in the BWR’s owned
or licensed IP represents the complete agreement and understanding
between the BWR and the other respective party or parties thereto
relating to the BWR’s Licensed or Other IP that is the
subject of such agreement, or BWR has provided Purchaser with
access to all agreements and understandings pertaining to the
same.
(c) No
member, manager, officer or employee of BWR is (i) bound by or
otherwise subject to any contract, agreement or understanding
restricting him or her from performing his or her duties for BWR or
(ii) in material breach of any contract, agreement or understanding
with any former employer or other Person concerning Intellectual
Property Rights or confidentiality due to his or her activities as
a member, manager, officer or employee of BWR.
(d) BWR
has taken all reasonable steps to maintain the confidentiality of
all of its trade secrets and otherwise maintain its rights in
BWR’s license agreements.
(e) Since
BWR’s inception, BWR has not assigned or otherwise
transferred ownership of, or agreed to assign or otherwise transfer
ownership of, any license rights or other Intellectual Property
Right to any other Person.
(h) No
Person has infringed, misappropriated or otherwise violated, and no
Person is currently infringing, misappropriating or otherwise
violating, any BWR’s licenses. BWR has never infringed
(directly, contributorily, by inducement or otherwise),
misappropriated or otherwise violated or made unlawful use of any
right of any other Person. BWR has never received any notice or
other communication (in writing or otherwise) relating to any
actual, alleged or suspected infringement, misappropriation or
violation of any intellectual property rights of another Person.
Except pursuant to the licenses under which BWR has acquired rights
in BWR’s Licensed IP, BWR is not bound by any contract,
agreement or understanding to indemnify, defend, hold harmless or
reimburse any other Person with respect to, or otherwise assumed or
agreed to discharge or otherwise take responsibility for, any
existing or potential Intellectual Property infringement,
misappropriation or similar claim. No claim or Proceeding involving
any Intellectual Property or Intellectual Property Right licensed
to the BWR is pending or has been threatened.
(i) No software governed
by a license commonly referred to as an open source, free software,
copyleft or community source code license, including the GNU
General Public License or GNU Lesser General Public License is used
in, incorporated into or integrated or bundled with any BWR’s
IP in a manner that obligates BWR to distribute or disclose the
source code developed by BWR on a royalty free basis.
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SECTION 4.19 Accredited
Investor. Except as disclosed
by Seller to Buyer before Closing, Seller and each of his designees
to whom the NBEV Restricted Shares will be issued at Closing (i) is
an “accredited investor” as defined in Regulation D
promulgated under the Securities Act and (ii) is acquiring the NBEV
Restricted Shares to be issued at Closing without a view to, or for
sale in connection with, a public distribution in violation of the
federal securities laws; provided however, that Seller and each
such other Person to whom NBEV Restricted Shares are issued
reserves the right to resell or otherwise dispose of all or any of
such NBEV Restricted Shares pursuant to a registration statement or
exemption under the Securities Act and any state law or
regulations. Seller acknowledges that the NBEV Restricted Shares to
be issued pursuant to this Agreement are subject to Rule 144
regulations and have not been registered under the Securities Act
or any state securities laws, and may not be sold, offered for
sale, pledged, hypothecated or otherwise transferred in the absence
of an effective registration statement under the Securities Act, or
until the holder thereof provides evidence satisfactory to
Buyer (which, in the discretion of Buyer, may include an opinion of
counsel acceptable to Buyer) that such
registration is not required and that the proposed transfer may be
made without violation of the Securities Act.
SECTION 4.20 No Other
Representations and Warranties. Except for the
representations and warranties contained in this Agreement and the
Transaction Documents (as modified by the Disclosure Schedule),
none of the Seller, BWR or any other Person has made or makes any
other express or implied representation or warranty, either written
or oral, on behalf of the Seller or BWR, including any
representation or warranty as to the accuracy or completeness of
any information regarding BWR furnished or made available to the
Buyer and its representatives (including as to the future revenue,
profitability, financial projections, budgets or success of the
Business); provided, however, that nothing in this Agreement
shall preclude or limit a claim by any Person for
Fraud.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer
makes the following representations and warranties to
Seller.
SECTION 5.1 Authority, Power
and Capacity. Buyer has all requisite power
and authority to execute and deliver this Agreement and the other
Transaction Documents to which Buyer is or will be a party, to
perform its obligations under this Agreement and such other
Transaction Documents and to consummate the transactions
contemplated hereby and thereby. This Agreement and the other
Transaction Documents to which Buyer is or will be a party have
been duly authorized and when executed and delivered by Buyer does
or will constitute the valid and binding agreement of Buyer and is
enforceable against Buyer in accordance with their respective terms
(except as the enforcement of such obligations may be limited by
applicable bankruptcy, insolvency, reorganization, liquidation,
receivership, moratorium and other laws relating to or affecting
the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law).
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SECTION 5.2 Conflicts;
Consents.
(a) The execution and
delivery by Buyer of this Agreement and the other Transaction
Documents to which Buyer is or will be a party does not, and the
consummation of the transactions contemplated hereby and thereby
will not, violate any provision of the Organizational Documents of
Buyer; result in the creation of any Encumbrance (other than
Permitted Encumbrances) upon any material asset of Buyer, conflict
with or result in a breach of, require a consent, create an event
of default (or event that, with the giving of notice or lapse of
time or both, would constitute an event of default) under, or give
any person or entity the right to terminate, accelerate or modify
any obligation or benefit under, any contract, lease, permit or
order to which Buyer is a party or by which Buyer or its assets are
bound or affected.
(b) The execution and
delivery by Buyer of this Agreement and the other Transaction
Documents to which Buyer is or will be a party does not, and the
consummation of the transactions contemplated hereby and thereby
will not, result in a violation of, or require the Consent, other
action by, or registration, declaration or filing with or notice
to, any Governmental Authority under any Legal Requirement or Order
applicable to Buyer or its business or assets. There is no pending
or, to Buyer’s knowledge, threatened Proceeding against Buyer
before any court or Governmental Authority, to restrain or prevent
the consummation of the transactions contemplated by this
Agreement.
SECTION 5.3 Organization and
Authority.
Buyer is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Washington. Buyer has
all requisite corporate power and authority to own or lease and
operate its properties and assets True and correct copies of
Buyer’s Organizational Documents, including any amendments
thereto, have been made available to Seller.
SECTION 5.4 Tax
Matters.
Buyer has timely filed all Tax Returns required of Buyer under all
Legal Requirements to which Buyer is subject. Buyer has timely paid
all Taxes required by Legal Requirements to be paid by Buyer,
whether or not shown on any Tax Return. All such Tax Returns are
accurate and complete in all material respects. No examination or
audit of any Tax Return of Buyer is in progress. All deficiencies
proposed as a result of any examination or audit of any Tax Return
filed by Buyer have been paid or finally settled and no issue has
been raised in any such examination or audit that, by application
of similar principles, reasonably would be expected to result in
the assertion of a deficiency for any other year not so examined or
audited. There are no Encumbrances related to Taxes outstanding
against any of Buyer’s assets, other than for Taxes not yet
due and payable.
SECTION 5.5 Disclosed
Liabilities.
Neither Buyer nor any of its subsidiaries has any Liability (and
there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability), except
for (i) Liabilities set forth on the face of Buyer’s balance
sheet as December 31, 2018 (rather than in any notes thereto)
included in Buyer’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on April 1, 2019
and (ii) Liabilities that have arisen after December 31, 2018 in
the ordinary course of business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort, infringement, or
violation of Legal Requirements).
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SECTION 5.6 SEC Filings.
(i) Buyer has filed or furnished, as applicable, on a timely basis
all SEC filings and reports required to be made under applicable
law since January 31, 2018. Each of the SEC Filings, at the time of
its filing or being furnished complied, or if not yet filed or
furnished, will comply, in all material respects with the
applicable requirements of the Exchange Act, the Securities Act and
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and any rules and regulations promulgated
thereunder applicable to the SEC Filings. As of their respective
dates (or, if amended prior to the date hereof, as of the date of
such amendment), the SEC Filings did not, and any SEC Filings filed
with or furnished to the SEC subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in
which they were made, not misleading.
SECTION 5.7 NBEV
Shares.
The issuance of the NBEV Restricted
Shares by Buyer at the Closing has been duly authorized and, when
issued and delivered by Buyer as provided in this Agreement, the
NBEV Restricted Shares will be validly issued, fully paid,
non-assessable and free of any Encumbrances aside from the
normal Rule 144 restrictions. Assuming
the accuracy of the representations and warranties of Seller set
forth in Section 4, the issuance of the NBEV Restricted Shares at
the Closing will be exempt from registration or qualification under
the Securities Act and applicable state securities
laws.
SECTION 5.8 Brokers’
Fees. No broker, finder, investment banker or other Person
is entitled to any brokerage fee, finders’ fee or other
commission or payment in connection with the transactions
contemplated by this Agreement based on arrangements made by Buyer
or any of its Affiliates.
SECTION 5.9 Disclosure.
No representation or warranty by Buyer in this Agreement, any other
Transaction Document or any Schedule or Exhibit to this Agreement
or any other Transaction Document, nor any statement or certificate
furnished or to be furnished to Seller pursuant to this Agreement,
or in connection with the transactions contemplated by this
Agreement, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements contained therein not
misleading.
SECTION 5.10 Disclosure of
Agreements. The
agreements and documents described in the SEC Filings conform in
all material respects to the descriptions thereof contained or
incorporated by reference therein, and there are no agreements or
other documents required by the Securities Act to be described in
the SEC Filings, that have not been so described or filed or
incorporated by reference. Each agreement or other instrument
(however characterized or described) to which Buyer is a party or
by which it is or may be bound or affected and (a) that is
referred to or incorporated by reference in the SEC Filings, or
(b) is material to Buyer’s business, has been duly
authorized and validly executed by Buyer, is in full force and
effect in all material respects and is enforceable against Buyer
and, to Buyer’s knowledge, the other parties thereto, in
accordance with its terms, except (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally, (ii) as
enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws, and
(iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought. None of such agreements or
instruments has been assigned by Buyer, and neither Buyer nor, to
Buyer’s knowledge, any other party is in default thereunder
and, to Buyer’s knowledge, no event has occurred that, with
the lapse of time or the giving of notice, or both, would
constitute a default thereunder. To the best of Buyer’s
knowledge, performance by Buyer of the material provisions of such
agreements or instruments will not result in a violation of any
existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign,
having jurisdiction over Buyer or any of its assets or businesses
(each, a “Governmental Entity”), including, without
limitation, those relating to environmental laws and
regulations.
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SECTION 5.11 Prior Securities
Transactions. No
securities of Buyer have been sold by Buyer or by or on behalf of,
or for the benefit of, any person or persons controlling,
controlled by or under common control with Buyer, except as
disclosed in the SEC Filings.
SECTION 5.12 Recent Securities
Transactions, etc.
Subsequent to the respective dates as of which information is given
in the SEC Filings, and except as may otherwise be indicated or
contemplated herein, Buyer has not: (i) issued any securities
or incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made
any other distribution on or in respect to its capital stock,
excluding any shares of capital stock of Buyer sold under the
Buyer’s ATM with ▇▇▇▇ Capital Partners as previously
disclosed to Seller.
SECTION 5.13 Financial
Statements, etc. The financial
statements, including the notes thereto and supporting schedules
included or incorporated by reference in the SEC Filings, fairly
present the financial position and the results of operations of
Buyer at the dates and for the periods to which they apply; and
such financial statements have been prepared in conformity with
GAAP, consistently applied throughout the periods involved
(provided that unaudited interim financial statements are subject
to year-end audit adjustments that are not expected to be material
in the aggregate and do not contain all footnotes required by
GAAP); and the supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein. The pro forma and pro forma as adjusted financial
information and the related notes, if any, included or incorporated
by reference in the SEC Filings have been properly compiled and
prepared in accordance with the applicable requirements of the
Securities Act and the Exchange Act and present fairly the
information shown therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and
circumstances referred to therein. Each of the SEC Filings
discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and
other relationships of Buyer with unconsolidated entities or other
persons that may have a material current or future effect on
Buyer’s financial condition, changes in financial condition,
results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses.
Except as disclosed in the SEC
Filings, (a) neither Buyer nor any of its direct and indirect
subsidiaries, including each entity disclosed or described in the
SEC Filings as being a subsidiary of Buyer (each, a
“Subsidiary” and, collectively, the
“Subsidiaries”), has incurred any material liabilities
or obligations, direct or contingent, or entered into any material
transactions other than in the ordinary course of business, (b)
Buyer has not declared or paid any dividends or made any
distribution of any kind with respect to its capital stock, (c)
there has not been any change in the capital stock of Buyer or any
of its Subsidiaries, or, other than in the course of business, any
grants under any stock compensation plan, and (d) there has not
been any material adverse change in Buyer’s long-term or
short-term debt.
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SECTION 5.14 Outstanding
Securities. All
issued and outstanding securities of Buyer issued prior to the
transactions contemplated by this Agreement have been duly
authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any
security of Buyer or similar contractual rights granted by
Buyer.
SECTION 5.15 Registration Rights
of Third Parties.
Except as set forth in the SEC Filings, no holders of any
securities of Buyer or any rights exercisable for or convertible or
exchangeable into securities of Buyer have the right to require
Buyer to register any such securities of Buyer under the Securities
Act or to include any such securities in a registration statement
to be filed by Buyer.
SECTION 5.16 No Defaults;
Violations. No
material default exists in the due performance and observance of
any term, covenant or condition of any material license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement,
or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to
which Buyer is a party or by which Buyer may be bound or to which
any of the properties or assets of Buyer is subject. Buyer is not
in violation of any term or provision of its charter or by-laws, or
in violation of any franchise, license, permit, applicable law,
rule, regulation, judgment or decree of any Governmental
Entity.
SECTION 5.17 Conduct of
Business. Except as
described in the SEC Filings, Buyer has all requisite corporate
power and authority, and has all necessary authorizations,
approvals, orders, licenses, certificates and permits of and from
all governmental regulatory officials and bodies that it needs as
of the date hereof to conduct its business purpose.
SECTION 5.18 Litigation;
Governmental Proceedings. There is no material action, suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to Buyer’s knowledge,
threatened against, or involving Buyer or, to Buyer’s
knowledge, any executive officer or director which has not been
disclosed in the SEC Filings, other than as referenced in the
Disclosure Schedule.
SECTION 5.19 Insurance.
Buyer carries or is entitled to the benefits of insurance, with
reputable insurers, in such amounts and covering such risks which
Buyer believes are adequate, and all such insurance is in full
force and effect. Buyer has no reason to believe that it will not
be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result
in a material adverse change in the
financial position or results of operations of
Buyer.
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SECTION 5.20 Foreign Corrupt
Practices Act. None
of Buyer and its Subsidiaries or, to Buyer’s knowledge, any
director, officer, agent, employee or affiliate of Buyer and its
Subsidiaries or any other person acting on behalf of Buyer and its
Subsidiaries, has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of Buyer
(or assist it in connection with any actual or proposed
transaction) that (i) might subject Buyer to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, might have had a
material adverse change in the
financial position or results of operations of Buyer or
(iii) if not continued in the future, might adversely affect
the assets, business, operations or prospects of Buyer. Buyer has
taken reasonable steps to ensure that its accounting controls and
procedures are sufficient to cause Buyer to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as
amended.
SECTION 5.21 Compliance with
OFAC. None of Buyer
and its Subsidiaries or, to Buyer’s knowledge, any director,
officer, agent, employee or affiliate of Buyer and its Subsidiaries
or any other person acting on behalf of Buyer and its Subsidiaries,
is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the
Treasury (“OFAC”), and Buyer will
not, directly or indirectly, use the proceeds of the Offering
hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
SECTION 5.22 Related Party
Transactions. There
are no business relationships or related party transactions
involving Buyer or any other person required to be described or
incorporated by reference in the SEC Filings that have not been
described or incorporated by reference as required.
SECTION
5.23 ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance.
(a) Disclosure Controls. Buyer has
developed and currently maintains disclosure controls and
procedures that comply with Rule 13a-15 or 15d-15 under the
Exchange Act, and such controls and procedures are effective to
ensure that all material information concerning Buyer will be made
known on a timely basis to the individuals responsible for the
preparation of Buyer’s Exchange Act filings and other public
disclosure documents.
(b) Compliance. Buyer is in
material compliance with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
applicable to it, and has implemented or will implement such
programs and taken reasonable steps to ensure Buyer’s future
compliance (not later than the relevant statutory and regulatory
deadlines therefor) with all of the material provisions of the
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SECTION 5.24 Accounting
Controls. Buyer and
its Subsidiaries maintain systems of “internal control over
financial reporting” (as defined under Rules 13a-15 and
15d-15 under the Exchange Act) that comply with the requirements of
the Exchange Act and have been designed by, or under the
supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with GAAP, including, but not limited to,
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the SEC Filings, Buyer is not aware of any material
weaknesses in its internal controls. Buyer’s auditors and the
Audit Committee of the Board of Directors of Buyer have been
advised of: (i) all significant deficiencies and material
weaknesses in the design or operation of internal controls over
financial reporting which are known to Buyer’s management and
that have adversely affected or are reasonably likely to adversely
affect Buyer’ ability to record, process, summarize and
report financial information; and (ii) any fraud known to
Buyer’s management, whether or not material, that involves
management or other employees who have a significant role in
Buyer’s internal controls over financial
reporting.
SECTION 5.25 No Labor
Disputes. No labor
dispute with the employees of
Buyer or any of its Subsidiaries exists or, to the knowledge of
Buyer, is imminent.
SECTION 5.26 Confidentiality and
Non-Competitions. To
Buyer’s knowledge, no director, officer, key employee or
consultant of Buyer is subject to any confidentiality,
non-disclosure, non-competition agreement or non-solicitation
agreement with any employer or prior employer that could materially
affect his ability to be and act in his respective capacity of
Buyer or be expected to result in a material adverse change
in the financial position or results
of operations of Buyer.
SECTION 5.27 Capitalization.
The description of Buyer’s securities and capitalization set
forth under the heading “Description of Securities” in
Buyer’s prospectus dated February 13, 2017 and filed with the
SEC on February 14, 2017 is accurate.
SECTION 5.28 Subsidiaries.
All direct and indirect Subsidiaries of Buyer are duly organized
and in good standing under the laws of the place of organization or
incorporation, and each Subsidiary is in good standing in each
jurisdiction in which its ownership or lease of property or the
conduct of business requires such qualification, except where the
failure to qualify would not have a material adverse effect on the
assets, business or operations of Buyer taken as a whole.
Buyer’s ownership and control of each Subsidiary is as
described in the SEC Filings.
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SECTION 5.29 Intellectual
Property Rights. Buyer and each
of its Subsidiaries owns or possesses or has valid rights to use
all Intellectual Property and Intellectual Property Rights
necessary for the conduct of the business of Buyer and its
Subsidiaries as currently carried on. To the knowledge of Buyer, no
action or use by Buyer or any of its Subsidiaries necessary for the
conduct of its business as currently carried on will involve or
give rise to any infringement of, or license or similar fees for,
any Intellectual Property or Intellectual Property Rights of
others. Neither Buyer nor any of its Subsidiaries has received any
notice alleging any such infringement, fee or conflict with
asserted Intellectual Property or Intellectual Property Rights of
others. Except as would not reasonably be expected to result,
individually or in the aggregate, in a material adverse
change in the financial position or
results of operations of Buyer (i) to the knowledge of Buyer, there
is no infringement, misappropriation or violation by third parties
of any of the Intellectual Property or Intellectual Property Rights
owned by Buyer; (ii) there is no pending or, to the knowledge of
Buyer, threatened action, suit, proceeding or claim by others
challenging the rights of Buyer in or to any such Intellectual
Property or Intellectual Property Rights, and Buyer is unaware of
any facts which would form a reasonable basis for any such claim,
that would, individually or in the aggregate, together with any
other claims in this Section 5.29, reasonably be expected to result
in a material adverse change in
the financial position or results of operations of Buyer; (iii) the
Intellectual Property and Intellectual Property Rights owned by
Buyer and, to the knowledge of Buyer, the Intellectual Property
Rights licensed to Buyer have not been adjudged by a court of
competent jurisdiction invalid or unenforceable, in whole or in
part, and there is no pending or, to Buyer’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property or
Intellectual Property Rights, and Buyer is unaware of any facts
which would form a reasonable basis for any such claim that would,
individually or in the aggregate, together with any other claims in
this Section 5.29, reasonably be expected to result in a
material adverse change in the
financial position or results of operations of Buyer; (D) there is
no pending or, to Buyer’s knowledge, threatened action, suit,
proceeding or claim by others that Buyer infringes, misappropriates
or otherwise violates any Intellectual Property or Intellectual
Property Rights or other proprietary rights of others, Buyer has
not received any written notice of such claim and Buyer is unaware
of any other facts which would form a reasonable basis for any such
claim that would, individually or in the aggregate, together with
any other claims in this Section 5.29, reasonably be expected to
result in a material adverse change in the financial position or results of operations
of Buyer; and (E) to Buyer’s knowledge, no employee of Buyer
is in or has ever been in violation in any material respect of any
term of any employment contract, patent disclosure agreement,
invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any
restrictive covenant to or with a former employer where the basis
of such violation relates to such employee’s employment with
Buyer, or actions undertaken by the employee while employed with
Buyer and could reasonably be expected to result, individually or
in the aggregate, in a material adverse change in the financial position or results of operations
of Buyer. To Buyer’s knowledge, all material technical
information developed by and belonging to Buyer which has not been
patented has been kept confidential. None of the technology
employed by Buyer has been obtained or is being used by Buyer in
violation of any contractual obligation binding on Buyer or, to
Buyer’s knowledge, any of its officers, directors or
employees, or otherwise in violation of the rights of any
persons.
SECTION 5.30 ERISA
Compliance. Buyer and any
“employee benefit plan” (as defined under ERISA)
established or maintained by Buyer or its ERISA Affiliates are in
compliance in all material respects with ERISA.
No “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
Buyer or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by Buyer or any of
its ERISA Affiliates, if such “employee benefit plan”
were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). Neither Buyer nor any
of its ERISA Affiliates has incurred or reasonably expects to incur
any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit
plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each “employee benefit plan” established or maintained
by Buyer or any of its ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and, to
the knowledge of Buyer, nothing has occurred, whether by action or
failure to act, which would cause the loss of such
qualification
SECTION 5.31 Compliance with
Laws; Permits. Buyer is not now, and has not since December
31, 2014, (a) been in material violation of any provision of any
Legal Requirement or Order applicable to Buyer, its assets or its
business, or (b) directly or indirectly made any payment of funds
to any person, or received or retained any funds from any person in
violation of any applicable Legal Requirement. Buyer has (i) all
permits required to conduct its business as conducted by it as of
the Effective Date; and (ii) satisfied all material bonding
requirements pertaining to its operations under applicable Legal
Requirements. Buyer is not in material violation of, nor is there a
basis for the revocation or withdrawal of, any permit.
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SECTION 5.32 Properties and
Assets of Buyer. Buyer owns or otherwise has the right to
use all of assets it uses in its business.
ARTICLE VI.
COVENANTS
SECTION 6.1 Public
Announcements; Audit; Disclosure of Acquisition.
(a) Neither BWR, Seller
nor Buyer or any of their respective Affiliates shall issue or
cause the publication of any press release or other public
announcement with respect to this Agreement or the transactions
contemplated hereby without prior consultation with the other
Parties, except as may be required by applicable Law.
Notwithstanding the foregoing, Buyer, BWR and Seller shall
cooperate to prepare a joint press release to be issued on the
Closing Date, which press release shall be mutually acceptable to
Buyer, BWR and Seller.
(b) Following the
Effective Date, Seller and BWR shall
use commercially reasonable efforts to provide all cooperation
reasonably requested by the Buyer in connection with enabling Buyer
to prepare financial statements in compliance with the requirements
of Rule 3-05 of Regulation S-X promulgated under the Exchange Act
and enable Buyer’s accountants to audit such financial
statements.
(c) Upon completion of
the transactions contemplated by this Agreement, Buyer shall file
all necessary forms with all federal and state regulatory agencies
to properly disclose the transaction, which shall include a Form
8-K that includes the audited financial statements described in
Section 6.1(b). Buyer will furnish a copy of such Form 8-K to
Seller for his review and approval (which approval will not be
unreasonably withheld or delayed) at least three days prior to the
due date for filing such Form 8-K. Buyer shall adopt all reasonable
comments of the Seller with respect to such Form 8-K
SECTION 6.2 Cooperation.
(a) Further Assurances. Each of the
Seller and Buyer agrees that in the event after the Closing Date
any further action is necessary or desirable to carry out the
purposes of this Agreement, each such Party will take such further
action (including the execution and delivery of such further
instruments and documents) as the other Party reasonably may
request, without payment of further consideration.
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(b) Pre-Closing Access to Books and
Records. From the date hereof through the Closing, each
Party (the “Subject
Party”) shall (a) provide the other Party (the
“Investigating
Party”) and its representatives (including legal
counsel and accountants) with reasonable access to such information
as the Investigating Party may from time to time reasonably request
with respect to the Subject Party’s business, and (b) upon
reasonable notice during normal business hours and under reasonable
circumstances in a manner so as not to interfere with the normal
business operations of the Subject Party, provide the Investigating
Party and its representatives (including legal counsel and
accountants) with reasonable access to the premises, management,
books, records, Contracts and documents of or pertaining to the
Subject Party as the Investigating Party may from time to time
reasonably request; provided, however, (i) in no event will
the Subject Party be required to furnish the Investigating Party or
its representatives with any documents or information that the
Subject Party is required by Legal Requirement, Order, or Contract
to keep confidential, or that would reasonably be expected to
jeopardize the status of such document or information as
privileged, work product or as a trade secret, (ii) any such access
shall not unreasonably interfere with the business or operations of
the Subject Party, and (iii) the Investigating Party shall not
contact any customer, supplier, landlord or other material business
relation of the Subject Party without the prior written approval of
the Subject Party. All such information and access shall be subject
to the terms and conditions of the Confidentiality and
Nondisclosure Agreement executed by Buyer with respect to
Seller.
(c) Post-Closing Access to Books and
Records. Buyer, BWR and Seller acknowledge that subsequent
to Closing each Party may need access to books, records,
information or documents in the control or possession of the other
Party for such purposes as preparing Tax Returns, responding to
audits and the prosecution or defense of third-party claims. After
the Closing, to the extent permitted by Legal Requirements, Buyer,
BWR, and Seller shall cooperate fully, as and to the extent
reasonably requested by each other, in connection with the filing
of Tax Returns related to the Business or the Acquired Assets and
any audit, litigation or other Proceeding with respect to such
Taxes. In that regard, Buyer, BWR and Seller shall maintain such
Tax information, Tax records, documents and information relating to
the Business and the Acquired Assets for a period of six (6) years
from the Closing Date and, upon reasonable written request, provide
to such other Party such Tax information, Tax records, documents
and information as are in the non-requesting Party’s
possession or control and which are reasonably relevant to any such
audit, litigation or other Proceeding or any other proper business
purpose. Notwithstanding the foregoing, (i) no Party shall be
obligated to provide any other Party with access to any books,
records documents or other information (including personnel files)
pursuant to this Section 6.2(c) where such access (A) would violate
any Legal Requirement, or (B) could undermine or otherwise
jeopardize attorney-client privilege or result in a conflict of
interest; and (ii) this Section 6.2(c) shall not apply in the event
of any pending or threatened Proceeding among the Parties, the
Buyer Indemnified Parties or the Seller Indemnified Parties (in
which case the applicable rules of discovery shall
apply).
(d) Accordingly, each
Party agrees that until the third anniversary of the Closing Date,
to the extent permitted by Law, each Party will make reasonably
available to the other Party upon reasonable written request and at
the expense of the requesting Party such documents and information
as are in the non-requesting Party’s possession or control
relating to the Acquired Assets, Assumed Liabilities or the
Business to the extent the requesting Party needs such books,
records, information or documents for any proper business purpose,
and, with respect to each Party, not adverse to the interests of
the non-requesting Party.
SECTION 6.3 Payment of Taxes
Resulting from Merger. Seller shall be responsible
for the preparation and filing of all Tax Returns for the Business
due either before or after the Closing Date that cover periods
ending on or before the Closing Date. Seller shall make all
payments required with respect to any such Tax Returns. Buyer shall
be responsible for the preparation and filing of all Tax Returns
for the Business due after the Closing Date that cover periods
ending after the Closing Date. Buyer will make all payments
required with respect to any such Tax Returns; provided, however,
that Seller shall reimburse Buyer concurrently with the filing of
such Tax Returns to the extent any payment Buyer makes relates to
the operation of the Business by Seller for any period ending on or
before the Closing Date.
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SECTION 6.4 Allocation of
Consideration. The
consideration delivered by Buyer to Seller under Section 1.5(a),
including the NBEV Shares, and the Assumed Liabilities that are
treated as liabilities for federal income Tax purposes, shall be
allocated in accordance with Section 1060 of the Code and the
Treasury regulations promulgated thereunder (among the Acquired
Assets as of the Closing Date for all purposes (including Tax and
financial accounting) as set forth in a manner to be agreed by the
parties prior to Closing). Buyer, BWR and Seller shall cooperate
with each other in preparing IRS Form 8594 consistent with such
allocation and shall not otherwise take a position on any Tax
Return or in any proceeding that is inconsistent with such
allocation unless required by a final and non-appealable
determination of the IRS or any other applicable Governmental
Authority.
SECTION 6.5 Post-Closing
Matters.
(a) After the Closing,
Seller will promptly refer to Buyer all inquiries and promptly
after receipt thereof deliver to Buyer all correspondence, funds,
checks and other items and materials relating to the Business or
the Acquired Assets.
(b) Promptly after the
Closing Seller shall cause BWR to terminate the Line of Credit or,
in the alternative, Buyer will negotiate to substitute itself for
the Seller as the guarantor of the obligations of BWR under the
Line of Credit.
SECTION
6.6 Efforts to
Close.
(a) Upon the terms and
subject to the conditions and other agreements set forth in this
Agreement, Seller, BWR, Sub and Buyer shall (a) refrain from taking
any actions that could reasonably be expected to impair, delay or
impede the Closing, and (b) without limiting any other provision of
this Agreement, use commercially reasonable efforts to cause all
the conditions to the obligations of the other party to consummate
the transactions contemplated by this Agreement to be met as soon
as reasonably practicable. Notwithstanding the foregoing or
anything else in this Agreement, nothing in this Agreement shall
require BWR or Seller to agree to or execute any material changes
to any Contracts, offer or grant any accommodation (financial or
otherwise), commence any Proceeding or make any payments to any
third party in order to obtain third party consents to the
transactions contemplated by this Agreement, except in the case
where such material change shall only be effective upon the Closing
and where such payments are expressly contemplated by a Contract
between BWR, and such third party.
(b) Seller and BWR
hereby covenant and agree that they will not enter into any
offering, merger, combination, divestiture, financing, joint
venture, sale and/or acquisition agreement in whatever form, except
for agreements in the ordinary course of business (including,
without limitation, joint venture, sale license or distribution
agreements) or enter into any other transaction that would preclude
the consummation of the transactions contemplated by this
Agreement.
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SECTION 6.7 Disclosure Schedule
Updates/Corrections.
(a) Prior to the
Closing, the Seller and BWR may supplement and update the
Disclosure Schedule to reflect any matter or information arising
after the date of this Agreement which, if existing, occurring or
known at the date of this Agreement, would have been required to be
set forth or described in the Disclosure Schedule.
(b) Prior to the
Closing, if the Seller or BWR becomes aware of any matter existing,
occurring or known as of the date of this Agreement that was
required to be set forth or described in the Disclosure Schedule,
but that is not so set forth or described thereon, the Seller and
BWR may amend the Disclosure Schedule to this Agreement in any
manner which is necessary to correct any existing inaccuracy or
incorrect or incomplete information in such Disclosure
Schedule.
(c) Unless otherwise
agreed by Buyer, no such supplement or amendment to the Disclosure
Schedule pursuant to Section 6.7(a) or Section 6.7(b) shall be
deemed to have modified the representations, warranties or
covenants of the Seller herein for purposes of determining whether
the conditions set forth in Section 8.1(b) have been satisfied, or
shall affect whether a breach of such representations, warranties
or covenants has occurred for purposes of determining Buyer’s
rights to terminate this Agreement under Section 9.1(b)(i).
Notwithstanding the foregoing, from and after the Closing, any
supplement to the Disclosure Schedule pursuant to Section 6.7(a)
and any amendment pursuant to Section 6.7(b) shall be deemed to
have modified the Disclosure Schedule and the representations,
warranties and covenants of the Seller contained herein for all
purposes, including any determination of the rights of the Buyer
Indemnified Parties under Article VII.
SECTION 6.8 Conduct of Business
Prior to Closing. Except as contemplated by this
Agreement or Legal Requirement, or as the other Party may otherwise
consent to in writing (which consent shall not be unreasonably
withheld, conditioned or delayed), or as otherwise set forth in the
Disclosure Schedule, from the date hereof through the Closing, each
Party will use its commercially reasonable efforts to operate its
business in all material respects in the ordinary
course.
SECTION 6.9 No Right to
Acquired Interests or
Assets. From and after the Closing, Seller shall not (a)
have any right, license or other interest in or to any of the
Acquired Interests or Assets, (b) use, access or possess any of the
Acquired Interests or Assets or transfer, assign, license or grant
any interest in or to any of the Purchased Interests or Assets to
any Person or (c) permit or authorize any Person to use, access or
possess any of the Acquired Interests or Assets.
SECTION 6.10 Transfer
Taxes. All transfer, sales, use, stamp, recording,
registration documentary, property, or similar Taxes and fees
(including any penalties and interest) applicable to, imposed upon
or arising out of the transfer of the Acquired Shares or any other
transaction contemplated by this Agreement shall be paid by
Buyer.
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SECTION 6.11 Working Capital
Loan. Promptly
after the Effective Date, but in no event more than two business
days thereafter, Buyer shall make a demand loan to BWR in the
amount of no more than one million thousand dollars ($1,000,000.00)
(the “Demand
Loan”) which funds BWR shall use for working capital
purposes in the ordinary course of business. In case Closing does
not materialize, then the Demand Loan shall bear interest at the
short term applicable federal rate as of the Effective Date. Buyer
agrees that it shall not demand payment of principal or interest on
the Demand Loan until December 31, 2019 without the prior written
consent of BWR. Further, Seller and BWR covenant and agree that
until the Demand Loan is paid in full with interest, BWR shall not
borrow funds from any other lender or obtain funds from any line of
credit without the prior written consent of Buyer.
ARTICLE VII.
INDEMNIFICATION
SECTION 7.1 Indemnification of
Buyer Indemnified Parties. Seller shall indemnify, defend
and hold harmless Buyer and its Affiliates, officers, directors,
shareholders, employees, independent contractors, agents,
successors and assigns (collectively, the “Buyer Indemnified
Parties”) from and against any and all Losses which
any of the Buyer Indemnified Parties may suffer or for which any of
the Buyer Indemnified Parties may become liable and which are based
on, the result of, arise out of or are otherwise related to any of
the following:
(a) any
material inaccuracy or misrepresentation in, or breach of any
representation or warranty of Seller in this Agreement, any of the
other Transaction Documents or any certificate, schedule, list or
other instrument to be furnished by Seller to Buyer pursuant to
this Agreement or any of the other Transaction
Documents;
(b) any
breach or failure of Seller to perform any covenant or agreement
required to be performed by it pursuant to this Agreement or any of
the other Transaction Documents after expiration of a reasonable
cure period;
(c) all
Excluded Liabilities; and
(d) any
claim, demand, suit, action or legal, administrative or other
proceeding by any person (other than a party) or any federal, state
or local department, agency or other governmental body (a
“Third Party
Claim”) against any of the Buyer Indemnified Parties
resulting from, arising out of or in any way related to the failure
of Seller to perform, pay or discharge any Excluded
Liability.
SECTION 7.2 Indemnification of
Seller Indemnified Parties. Buyer shall indemnify, defend
and hold harmless Seller and his successors and assigns
(collectively, the “Seller Indemnified
Parties”) from and against any and all Losses which
any of the Seller Indemnified Parties may suffer or for which any
of the Seller Indemnified Parties may become liable and which are
based on, the result of, arise out of or are otherwise related to
any of the following:
(a) any material
inaccuracy or misrepresentation in, or breach of any representation
or warranty of Buyer in this Agreement, any of the other
Transaction Documents or any certificate, schedule, list or other
instrument to be furnished by Buyer to Seller pursuant to this
Agreement or any of the other Transaction Documents;
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(b) any breach or
failure of Buyer to perform any covenant or agreement required to
be performed by it pursuant to this Agreement or any of the other
Transaction Documents after expiration of a reasonable cure
period;
(c) all Assumed
Liabilities; and
(d) any Third-Party
Claim against any of the Seller Indemnified Parties resulting from,
arising out of or in any way related to (i) the operation of the
Business after the Closing Date, or (ii) the failure of Buyer to
perform, pay or discharge any Assumed Liability.
SECTION 7.3 Claims for
Indemnification. Whenever any claim shall arise for
indemnification under this Article VII, even if no payment is then
due on account thereof, the party seeking indemnification (the
“Indemnified
Party”) shall provide written notice (the
“Notice”) to the party
against whom indemnification is sought (the “Indemnifying Party”) of
the claim. In the event of any Third Party Claim, the Indemnified
Party shall provide the Notice within 30 days after the Indemnified
Party has actual knowledge of its existence and, when known, the
facts constituting the basis for such claim in reasonable detail,
but the failure to so notify the Indemnifying Party shall not
relieve the Indemnifying Party of any liability that it may have to
the Indemnified Party, except to the extent that the Indemnifying
Party demonstrates that the defense of such Third Party Claim is
materially prejudiced by the Indemnified Party’s failure to
give such Notice. In the event of any Third-Party Claim, the Notice
shall specify, if known, the amount or an estimate of the amount of
the liability arising therefrom. The Indemnified Party shall not
settle or compromise any Third Party Claim without the prior
written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld, conditioned or delayed, unless suit shall
have been instituted against the Indemnified Party and the
Indemnifying Party shall not have taken control of such suit in
accordance with Section 7.4 below.
SECTION 7.4 Defense by the
Indemnifying Party. Within seven days after
receipt of the Notice, the Indemnifying Party, at its sole cost and
expense, may, upon written notice to the Indemnified Party, assume
the defense of any Third Party Claim. If the Indemnifying Party
timely assumes the defense of any Third Party Claim, the
Indemnifying Party shall select counsel reasonably acceptable to
the Indemnified Party to conduct the defense of such Third Party
Claim and, at the sole cost and expense of the Indemnifying Party,
the Indemnifying Party shall take all steps necessary in the
defense or settlement thereof. The Indemnified Party shall be
entitled to participate in (but not control) the defense of any
Third Party Claim, with its own counsel and at its own expense;
provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party, and the Indemnified Party has been
advised by counsel that there may be one or more legal defenses
available to it that are different from or additional to those
available to the Indemnifying Party, then the Indemnified Party may
employ separate counsel at the expense of the Indemnifying Party.
The Indemnifying Party shall not consent to a settlement of, or the
entry of any judgment arising from, any Third Party Claim without
the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld, conditioned or delayed. If the
Indemnifying Party fails to assume and continually maintain the
defense of the Third Party Claim within seven days after the
Indemnifying Party’s receipt of the Notice, the Indemnified
Party may assume sole control of defense or settlement of such
claim at the sole cost and expense of the Indemnifying
Party.
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SECTION 7.5 Survival.
The representations and warranties set forth in Articles IV and V
of this Agreement shall survive the Closing for a period of one
year after the Closing Date; provided, however that (a) the
representations and warranties set forth in Sections 7.1 and 7.2
(the “Fundamental
Representations”) shall survive the Closing forever.
Notwithstanding anything to the contrary in this Agreement, if an
Indemnified Party delivers to an Indemnifying Party, before
termination or expiration of a representation or warranty or
indemnity obligation, a notice claiming indemnification under this
Article VII then the applicable representation or warranty or
indemnity obligation shall survive until, but only for purposes of,
the resolution of the matter covered by such notice.
SECTION 7.6 Minimization of
Indemnities. Each party shall use reasonable efforts to
minimize the indemnification obligations of the other parties under
this Article VII by, among other reasonable things and without
limiting the generality of the foregoing, taking such reasonable
remedial action as it believes may minimize such obligation and
seeking to the maximum extent possible reimbursement from insurance
carriers under applicable insurance policies covering any such
liability.
SECTION 7.7 Sole
Remedy. Except with
respect to any Fraud, willful breach or criminal acts committed by
a Party, and except as set forth in Sections 9.2 and 12.11, the
indemnification provided in this Article VII (including all
limitations contained herein) shall be the sole and exclusive
remedy for all matters relating to this Agreement, the transactions
contemplated hereby and for the breach of any representation,
warranty, covenant or agreement contained herein.
SECTION 7.8 Certain
Limitations. Notwithstanding anything to the contrary in
this Agreement, the indemnification provided for in Sections 7.1
and 7.2 shall be subject to the following limitations:
(a) No Indemnifying
Party shall be liable to any Indemnified Party for indemnification
under Section 7.1(a), in the case of claims by a Buyer Indemnified
Party, or Section 7.2(a), in the case of claims by a Seller
Indemnified Party:
(i) until the aggregate
amount of all Losses requiring indemnification under Sectin 7.1(a)
or Section 7.2(a), as applicable, exceeds on a cumulative basis an
amount equal to $50,000 (the “Basket”), in which event
the Indemnifying Party shall be liable for such Losses only to the
extent of such Losses in excess of the Basket; or
(ii) on an aggregate
cumulative basis in excess of one hundred percent (100%) of the
cash purchase price.
(b) Notwithstanding
anything contained in this Agreement to the contrary, the
limitations set forth above in Section 7.8(a) shall not apply to
any claim or Losses based upon or arising out of (i) Fraud or
criminal or intentional misconduct or (ii) any breach of any
Fundamental Representation.
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ARTICLE VIII.
CLOSING CONDITIONS
SECTION
8.1 Conditions
Precedent to the Obligations of Buyer.
The
obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or prior to
the Closing Date, of the following conditions precedent, unless
waived in writing by Buyer:
(a)
Required
Deliverables. Buyer shall have received all items required
by Section 3.
(b)
Representations and
Warranties. The representations and warranties by Seller in
this Agreement shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect as
though such representations and warranties had been made at and as
of the Closing Date (unless such representations and warranties are
limited to such other date in which case such representations and
warranties shall be limited to such date).
(c)
Performance. Seller
shall have performed and complied in all material respects with all
agreements and covenants to be performed or complied with by it
pursuant to this Agreement at or prior to the Closing.
(d)
Proceedings and
Orders. No Proceeding shall have been commenced against
Buyer, BWR or Seller, which would prevent the Closing. No
injunction or restraining order shall have been issued by any
Governmental Authority, and be in effect, which restrains or
prohibits any transaction contemplated hereby. No Governmental
Authority shall have enacted, issued, promulgated, enforced or
entered any Order which is in effect and has the effect of making
the transactions contemplated by this Agreement illegal, otherwise
restraining or prohibiting consummation of such transactions or
causing any of the transactions contemplated hereunder to be
rescinded following completion thereof.
SECTION 8.2 Conditions
Precedent to the Obligations of Seller.
The
obligations of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or prior
to the Closing Date, of the following conditions precedent, unless
waived in writing by Seller:
(a)
Required
Deliverables. Seller shall have received all items are
required by Section 3.
(b)
Representations and
Warranties. The representations and warranties by Buyer in
this Agreement shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect as
though such representations and warranties had been made at and as
of the Closing Date (unless such representations and warranties are
limited to such other date in which case such representations and
warranties shall be limited to such date).
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(c)
Performance. Buyer
shall have performed and complied in all material respects with all
agreements and covenants to be performed or complied with by it
pursuant to this Agreement at or prior to the Closing.
(d)
Listing of NBEV
Shares. The NBEV Restricted
Shares to be issued at Closing shall have been authorized for
listing on the Nasdaq Capital Market, subject to official notice of
issuance.
(e)
Proceedings and
Orders. No Proceeding shall have been commenced against
Buyer, BWR or Seller, which would prevent the Closing. No
injunction or restraining order shall have been issued by any
Governmental Authority, and be in effect, which restrains or
prohibits any transaction contemplated hereby. No Governmental
Authority shall have enacted, issued, promulgated, enforced or
entered any Order which is in effect and has the effect of making
the transactions contemplated by this Agreement illegal, otherwise
restraining or prohibiting consummation of such transactions or
causing any of the transactions contemplated hereunder to be
rescinded following completion thereof.
ARTICLE IX.
TERMINATION
SECTION 9.1 Method of
Termination. This Agreement may be terminated:
(a) by the mutual
written consent of Seller and Buyer;
(b) by Buyer by written
notice to Seller if:
(i) there has been a
breach, inaccuracy in or failure to perform any representation,
warranty, covenant or agreement made by BWR or Seller pursuant to
this Agreement that would give rise to the failure of any of the
conditions specified in Section 8.1 and such breach, inaccuracy or
failure has not been cured by Seller within the earlier of the
Outside Date and ten (10) days of Seller’s receipt of written
notice of such breach from Buyer; or
(ii) any of the
conditions set forth in Section 8.1 shall not have been, or if it
becomes apparent that any of such conditions will not be, fulfilled
by the Outside Date, unless such failure shall be due to the
failure of Buyer to perform or comply with any of the covenants,
agreements or conditions hereof to be performed or complied with by
it prior to the Closing;
(c) by Seller by written
notice to Buyer if:
(i) there has been a
breach, inaccuracy in or failure to perform any representation,
warranty, covenant or agreement made by Buyer pursuant to this
Agreement that would give rise to the failure of any of the
conditions specified in Section 8.2 and such breach, inaccuracy or
failure has not been cured by Buyer within the earlier of the
Outside Date and ten (10) days of Buyer’s receipt of written
notice of such breach from Seller; or
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(ii) any of the
conditions set forth in Section 8.2 shall not have been, or if it
becomes apparent that any of such conditions will not be, fulfilled
by the Outside Date, unless such failure shall be due to the
failure of Seller to perform or comply with any of the covenants,
agreements or conditions hereof to be performed or complied with by
it prior to the Closing; or
(d) by Buyer or Seller
in the event that (i) there shall be any Legal Requirement that
makes consummation of the transactions contemplated by this
Agreement illegal or otherwise prohibited or (ii) any Governmental
Authority shall have issued an Order restraining or enjoining the
transactions contemplated by this Agreement, and such Order shall
have become final and non-appealable.
SECTION 9.2 Effect of
Termination. If
terminated in accordance with Section 9.1 above, this Agreement
shall be null and void and have no further force or effect, except
as provided in the remaining provisions of this Section 9.2. In the
event a Party terminates this Agreement as a result of a breach by
another Party, then such non-breaching Party shall be entitled to
recover from the defaulting Party all out-of-pocket expenses
incurred by it and any of its affiliates (including, without
limitation, reasonable legal and accounting fees and expenses) in
connection with (a) the preparation, drafting and negotiation of
this Agreement and any other document related to the transactions
contemplated in this Agreement, and (b) the due diligence review by
such Party of the other Party.
ARTICLE X.
CONFIDENTIALITY
Each
Party will keep confidential all information and documents obtained
from the other Party pursuant this Agreement (except for any
information disclosed to the public pursuant to a press release
authorized by the Parties or for information required to be
provided in a filing with the SEC, in each case pursuant to Section
6.1); and in the event the Closing does not occur or this Agreement
is terminated for any reason, will promptly return such documents
and all copies of such documents and all notes and other evidence
thereof, including material stored on a computer, and will not use
such information for its own advantage, except to the extent that
(i) the information must be disclosed by Legal Requirement, (ii)
the information becomes publicly available by reason other than
disclosure by the party subject to the confidentiality obligation,
(iii) the information is independently developed without use of or
reference to the other party’s confidential information, (iv)
the information is obtained from another source not obligated to
keep such information confidential, or (v) the information is
already publicly known or known to the receiving party when
disclosed as demonstrated by written documentation in the
possession of such party at such time.
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ARTICLE XI.
AS-IS; WHERE-IS SALE
BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN ARTICLE IV OF THIS AGREEMENT, NEITHER THE
SELLER NOR BWR MAKES ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO SELLER
OR BWR, ITS BUSINESS, THE INTERESTS, THE ASSUMED LIABILITIES OR THE
ACQUIRED ASSETS.
WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER HEREBY DISCLAIMS
ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE ACQUIRED ASSETS. BUYER
FURTHER ACKNOWLEDGES THAT BUYER HAS CONDUCTED AN INDEPENDENT
INSPECTION AND INVESTIGATION OF SELLER, BWR, ITS BUSINESS, THE
INTERESTS, THE ASSUMED LIABILITIES AND THE ACQUIRED ASSETS. ACCORDINGLY,
BUYER WILL ACCEPT THE INTERESTS, THE ASSUMED LIABILITIES AND THE
ACQUIRED ASSETS
AT THE CLOSING “AS IS,” “WHERE IS,” AND
“WITH ALL FAULTS.”
ARTICLE XII.
MISCELLANEOUS
SECTION 12.1 Expenses.
Except as otherwise expressly provided in this Agreement, each
Party shall pay its own expenses in connection with the
negotiation, preparation and performance of this Agreement and the
consummation of the transactions contemplated hereby, including all
fees and expenses of investment bankers, financial advisors, legal
counsel, and independent accountants.
SECTION 12.2 Notices.
All notices, requests, demands,
claims, and other communications under this Agreement
shall be in writing and shall be
deemed to have been duly given (i) at the time of delivery if physically
delivered, (ii) at the time of
transmission if transmitted by facsimile transmission or email,
provided that such transmission is confirmed by prompt delivery
made pursuant to subsections (i),(iii) or (iv) of
this Section 12.2, (iii) three days after having been deposited in the
United States Mail, as certified or
registered mail (with return receipt requested and with first class
postage pre-paid), or (iv) one
business day after having been transmitted to a third party
providing delivery services in
the ordinary course of business which guarantees delivery on the
next business day after such transmittal (e.g., via Federal Express), all of which notices or
other communications shall be sent to the recipient at the
following address or such other address as such party may
hereafter specify by like notice to the other parties
hereto:
(a) If to Buyer,
addressed to:
New Age
Beverages Corporation
Attn:
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Morinda
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addressed to:
Olivier
Sonnois
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SECTION 12.3 Disclosure
Schedule. The Disclosure Schedule constitutes a part of this
Agreement and is incorporated into this Agreement for all purposes
as if fully set forth herein. Any disclosure made in any Section of
the Disclosure Schedule shall be deemed to be a disclosure made
with respect to all of Seller’s representations, warranties
and covenants contained in this Agreement, regardless of
whether or not a specific cross-reference is made thereto to the
extent that the relevance of any such disclosure in any other
Section is reasonably apparent from the text of such disclosure in
such Section of the Disclosure Schedule. The disclosure of any
matter in the Disclosure Schedule is not to be deemed an admission
by the Seller, or otherwise imply, that such matter is material for
purposes of this Agreement, gives rise to a material adverse effect
or is outside the ordinary course of business. Matters reflected in
the Disclosure Schedule are not necessarily limited to matters
required by this Agreement to be reflected in the Disclosure
Schedule. Such additional matters are set forth for informational
purposes and do not necessarily include other matters of a similar
nature. All references in the Disclosure Schedule to the
enforceability of agreements with third parties, the existence or
non-existence of third-party rights, the absence of breaches or
defaults by third parties, or similar matters or statements, are
intended only to allocate rights and risks among the Parties and
are not intended to be admissions against interests, give rise to
any inference or proof of accuracy, be admissible against any Party
by any Person who is not a Party, or give rise to any claim or
benefit to any Person who is not a Party. In addition, the
disclosure of any matter in the Disclosure Schedule is not to be
deemed an admission that such matter actually constitutes
noncompliance with, or a violation of any Legal Requirement, Order,
license, permit or Contract or other topic to which such disclosure
is applicable. The headings contained in the Disclosure Schedule
are for convenience of reference only and shall not be deemed to
modify or influence the interpretation of the information contained
in the Disclosure Schedule or this Agreement.
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SECTION 12.4 Governing Law;
Arbitration. This
Agreement will be governed by and any dispute arising out of or
relating to this Agreement will be resolved in accordance with the
laws of the State of Colorado, without giving effect to conflict of
laws principles. Any dispute arising out of, in connection with, or
relating to this Agreement or the Transaction Documents, including
but not limited to, any claim or controversy regarding the
existence, validity, construction, interpretation, breach,
termination or enforceability thereof, shall be determined by
arbitration administered by JAMS pursuant to its Comprehensive
Arbitration Rules and Procedures (“Rules”), modified as
follows: (i) the place of arbitration shall be Denver, Colorado;
and (ii) the arbitration proceeding shall be conducted before a
single arbitrator to be appointed by the parties.. If the parties
fail to nominate an arbitrator as provided herein, then JAMS shall
appoint the arbitrator in accordance with the Rules. The award of
the arbitrator shall be final and binding on the parties, and
judgment upon the award rendered by the arbitrator may be entered
and enforced by any competent court. Notwithstanding the provision
in the preceding paragraph with respect to applicable substantive
law, any arbitration conducted pursuant to the terms of this
Agreement shall be governed by the Federal Arbitration Act (9
U.S.C., Secs. 1-16). The parties shall maintain the confidential
nature of the arbitration proceeding (including the hearing, all
submissions, and any award) except as may be necessary in
connection with a judicial application for a preliminary remedy, a
judicial challenge to an award or its enforcement, or unless
otherwise required by law or judicial decision.
Without
prejudice to the validity of the arbitration provisions set forth
herein, the parties to this Agreement may resort to the competent
judicial authority, if and when necessary, for the sole purposes of
(i) enforcing obligations subject to judicial enforcement; (ii)
obtaining injunctive relief or precautionary measures as guarantee
for the efficacy of the arbitration proceedings; and (iii)
obtaining mandatory and specific enforcement or specific
performance measures, it being certain that, after achievement of
the mandatory procedure, specific enforcement or specific
performance, the arbitral tribunal to be constituted shall be
granted full and exclusive authority to decide over any and all
matters, whether of a procedural nature or on the merits, which
have given rise to the mandatory claim or specific enforcement. The
filing of any measures under the terms set out in this clause shall
not imply any waiver of the arbitration clause set forth herein or
of the full jurisdiction of the arbitral tribunal.
SECTION 12.5 Entire
Agreement. This Agreement, the Exhibits, the Disclosure
Schedule and the other Transaction Documents together
constitute the entire agreement between the Parties with respect to
the subject matter hereof and thereof and supersede any previous
agreements and understandings between the Parties with respect to
such matters. The Parties agree that they had equal opportunity to
negotiate, review and revise this Agreement, and therefore no
provision shall be construed against any Party as if the draftor of
the Agreement.
SECTION 12.6 Assignment and
Successors. No Party
may assign any of its rights or obligations under this Agreement
without the prior written consent of the other Party. This
Agreement will apply to, be binding in all respects upon and inure
to the benefit of the successors and permitted assigns of the
Parties.
SECTION 12.7 No Third-Party
Rights This Agreement is being entered into solely for the
benefit of the Parties, the Buyer Indemnified Parties and the
Seller Indemnified Parties, and, except as otherwise set forth in
this Agreement, the Parties do not intend that any other Person
shall be a third-party beneficiary of the covenants by either the
Seller or the Buyer contained in this Agreement.
SECTION 12.8 Amendments;
Waivers.
This Agreement may be amended, modified, superseded, cancelled,
renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by each of the Parties
hereto or, in the case of a waiver, by the Party waiving
compliance. No waiver by any Party of any default,
misrepresentation or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation or breach of warranty or
covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
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SECTION 12.9 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which will be deemed to be an original and all of which together
will be deemed to be one and the same instrument, and will become
effective when one or more counterparts have been signed by each of
the Parties. Delivery of an executed counterpart of a signature
page of this Agreement by .pdf attachment to a transmission by
electronic mail or by facsimile transmission shall each be
effective as delivery of a manually executed original counterpart
hereof.
SECTION 12.10 Severability.
In the event any provision, or portion thereof, of this Agreement
is held by a court of competent jurisdiction to be unenforceable in
any jurisdiction, then such portion or provision will be deemed to
be severable as to such jurisdiction (but, to the extent permitted
by Legal Requirements, not elsewhere) and will not affect the
remainder of this Agreement, which will continue in full force and
effect. If any provision of this Agreement is held to be so broad
as to be unenforceable, such provision will be interpreted to be
only as broad as is necessary for it to be
enforceable.
SECTION 12.11 Specific
Performance. The
Parties hereto agree that, if any of the provisions of this
Agreement or any other document contemplated by this Agreement were
not performed in accordance with their specific terms or were
otherwise breached, irreparable damage would occur, no adequate
remedy at law would exist and damages would be difficult to
determine, and, therefore, the Parties shall be entitled to
specific performance of the terms hereof and thereof, in addition
to any other remedy at law or in equity.
ARTICLE XIII.
DEFINITIONS
Certain Definitions. In this
Agreement, the following terms have the meanings set forth below,
which shall be equally applicable to both the singular and plural
forms. Any agreement or document referred to below shall mean such
agreement or document as amended, supplemented and modified from
time to time to the extent permitted by the applicable provisions
thereof and by this Agreement.
“Affiliate or Affiliated”
with respect to any specified Person, means any (a) Person that
owns or holds (beneficially or of record) twenty percent (20%) or
more of the voting or equity interests of such specified Person,
(b) Person that directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under common
Control with, such specified Person and (c) family members of such
specified Person.
“Assets” means all
properties, assets and rights of every kind, nature and description
whatsoever whether tangible or intangible, real, personal or mixed,
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located.
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“Business”
means the business of developing, manufacturing, selling and
marketing micronutrient products and formulations, as conducted by
BWR prior to the Closing.
“Business Day” means any
day which is not a Saturday, Sunday or a day on which banks in
Colorado and/or New York are authorized by applicable Legal
Requirements or executive orders to be closed.
“Consent”
means any approval, consent, ratification, waiver, or other
authorization of, notice to or registration, qualification,
designation, declaration or filing with, any Person including,
without limitation, any customer or Governmental
Authority.
“Contract” means any
agreement, contract, option, license, instrument, obligation,
commitment, arrangement, promise or undertaking, in each such case,
whether written or oral and whether express or
implied.
“Control” (including the
terms “Controlled by” and “under common Control
with”) means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction
of the management or policies of a Person, whether through the
ownership of stock, as trustee or executor, by Contract or
otherwise.
“Disclosure Schedule”
means the schedules attached to this Agreement and entitled
Disclosure Schedule.
“Employee Plan” means any
“employee pension benefit plan” (as defined in Section
3(2) of ERISA), any “employee welfare benefit plan” (as
defined in Section 3(1) of ERISA), and any other plan, program,
policy, practice, Contract or other arrangement providing for
compensation, severance, termination pay, deferred compensation,
performance awards, stock or stock-related awards, fringe benefits
or other employee benefits or remuneration of any kind, whether
written, unwritten or otherwise, funded or unfunded, that is or has
been maintained, contributed to, or required to be contributed to,
by BWR or Seller for the benefit of any employee or with respect to
which Seller has or may have any Liability.
“Encumbrance” means any
security interest, pledge, lien, mortgage, charge, encumbrance,
claim, condition, easement, covenant, warrant, equitable interest,
option, purchase right, community property interest, right of first
refusal, or other right of third parties or other restriction of
any kind including, without limitation, any restriction on the
exercise of any attribute of ownership (including any restriction
on the use, voting, transfer or receipt of income related to any
Asset).
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“Environmental Law” means
any applicable Legal Requirement, Order or Contract with any
Governmental Authority: (a) relating to pollution (or the cleanup
thereof) or the protection of natural resources, endangered or
threatened species, human health or safety, or the environment
(including ambient air, soil, surface water or groundwater, or
subsurface strata); or (b) concerning the presence of, exposure to,
or the management, manufacture, use, containment, storage,
recycling, reclamation, reuse, treatment, generation, discharge,
transportation, processing, production, disposal or remediation of
any Hazardous Materials. The term “Environmental Law”
includes, without limitation, the following (including their
implementing regulations and any state analogs): the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of
1976, as amended by the Hazardous and Solid Waste Amendments of
1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water
Pollution Control Act of 1972, as amended by the Clean Water Act of
1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances
Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et
seq.; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of
1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C.
§§ 7401 et seq.; and the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. §§ 651 et
seq.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means
any entity that would be deemed a “single employer”
with Seller under Section 414(b), (c), (m) or (o) of the Code
or Section 4001 of ERISA.
“Exchange
Act” means
Securities and Exchange Act of 1934,
as amended, and all rules and regulations promulgated
thereunder.
“Fraud” means
common law fraud under the laws of the State of Colorado, including
the need for the plaintiff in a claim of Fraud to show that the
defendant knew or believed that the representation was false or
made the representation with a reckless indifference to the
truth.
“GAAP” means generally accepted accounting principles in
the United States of America as applied
consistently.
“Governmental Authority”
means any federal, state, local, municipal, foreign or other
governmental or quasi-governmental authority including, without
limitation, any administrative, executive, judicial, legislative,
regulatory or taxing authority of any nature of any jurisdiction
(including, without limitation, any governmental agency, branch,
department, official or entity and any court or other
tribunal).
“Hazardous Materials”
means: (a) any material, substance, chemical, waste, product,
derivative, compound, mixture, solid, liquid, mineral or gas, in
each case, whether naturally occurring or manmade, that is
hazardous, acutely hazardous, toxic, or words of similar import or
regulatory effect under Environmental Laws; and (b) any petroleum
or petroleum-derived products, radon, radioactive materials or
wastes, asbestos in any form, lead or lead-containing materials,
urea formaldehyde foam insulation and polychlorinated
biphenyls.
“Indebtedness” means (a)
the principal of and premium, if any, and interest in respect of
any indebtedness for money borrowed or any obligations evidenced by
notes or other instruments, (b) capital lease obligations, (c)
obligations issued or assumed as the deferred purchase price of
property or services and (d) obligations in respect of surety
bonds, letters of credit or other similar instruments.
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“Intellectual Property”
means and includes all (a) license agreements, (b) patents and applications therefor and all
reissues, divisions, re-examinations, renewals, extensions,
provisionals, substitutions, continuations and
continuations-in-part thereof, and equivalent or similar rights
anywhere in the world in inventions and discoveries including,
without limitation, invention disclosures, (c) trade secrets and other proprietary information
which derives independent economic value from not being generally
known to the public, (d) logos, marks (including brand
names, product names, logos, and slogans), (e) all works of authorship, copyrights, copyrights registrations and
applications therefor, software, software code (in any form
including source code and executable or object code), and (f)
all uniform resource locators, e-mail
and other internet addresses and domain names and applications and
registrations therefor.
“Intellectual Property
Rights” means all
worldwide rights in, arising from or associated with Intellectual
Property, whether protected, created, or arising under the laws of
any Governmental Authority.
“IRS” means the Internal
Revenue Service.
“Legal Requirement” means
any federal, state, local, municipal, foreign, international,
multinational or other statute, law, Order, constitution, rule,
regulation, ordinance, principle of common law, treaty or other
requirement of any Governmental Authority.
“Liability” means all
material liabilities of any kind whatsoever whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, due or to become due, and
whether or not reflected or required by GAAP to be reflected on a
balance sheet including, without limitation, any direct or indirect
Guarantee of any Liability of any other Person.
“Losses” means any claims,
Liabilities, obligations, damages, losses, costs, expenses,
penalties, fines and judgments (at equity or at law, including
statutory and common) and damages whenever arising or incurred
(including interest, court costs, reasonable fees of attorneys,
accountants and other experts), but excluding punitive or exemplary
damages (except as may be awarded in connection with a third party
claim).
“Order” means any award,
decision, injunction, judgment, order, decree, ruling, subpoena or
verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Authority or by any
referee, arbitrator or mediator.
“Organizational Documents”
means any certificate or articles of incorporation, formation or
organization, by-laws, limited liability company operating
agreement, certificate of limited partnership, business certificate
of partners, partnership agreement, declaration of trust or other
similar documents.
“Outside Date” means June
30, 2019.
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“Permitted Encumbrances”
means any (a) Encumbrances for Taxes not yet delinquent and
Encumbrances for Taxes that the taxpayer is contesting in good
faith through appropriate proceedings and, in each case, for which
adequate reserves have been established pursuant to GAAP, (b)
statutory Encumbrances, including Encumbrances of landlords,
carriers, warehousemen, mechanics, laborers, materialmen,
consignees of inventory, arising in the ordinary course of business
by operation of Law with respect to a Liability that is not yet due
or delinquent, (c) purchase money Encumbrances and Encumbrances
securing rental payments under capital lease obligations,
(d) zoning, building codes and other land use regulations
imposed by any Governmental Authority which are not violated by the
current use or occupancy of any leased real property or the
operation of the Business thereon, (e) such rights, if any, of
any utility company to construct and/or maintain lines, pipes,
wires, cables, poles, conduits and distribution boxes and equipment
in, over, under, and/or upon any portion of the leased real
property which rights do not or would not materially impair the use
or occupancy of any leased real property in the operation of the
Business conducted thereon, (f) defects or imperfections of
title, easements, rights-of-way, covenants, conditions,
restrictions and other similar matters of record, all of which do
not materially impair the use or occupancy of the leased real
property or other assets in the operation of the Business by
Seller, (g) Encumbrances resulting from any actions of the Buyer or
any of its Affiliates, (h) other Encumbrances arising in the
ordinary course of business and not incurred in connection with the
borrowing of money, and (i) Encumbrances granted to any lender at
the Closing in connection with any financing by the Buyer of the
transactions contemplated hereby.
“Person” means any
individual, corporation, general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, labor union, Governmental Authority or other
entity.
“Proceeding” means any
action, claim, arbitration, mediation, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any court
or other Governmental Authority or referee, trustee, arbitrator or
mediator.
“▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act” means
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended, and all rules and regulations promulgated
thereunder.
“SEC
Filings” means all
reports and filings made by Buyer under the Securities Act and the Exchange
Act.
“Securities
Act” means
Securities Act of 1933, as amended,
and all rules and regulations promulgated
thereunder.
“Seller’s IP” means
all Intellectual Property Rights owned by BWR as of the Effective
Date.
“Seller’s Knowledge”
means the actual knowledge of Olivier Sonnois, without any duty of
investigation or inquiry.
“Seller’s Licensed
IP” means all Intellectual Property Rights licensed to
BWR.
“Tangible Personal
Property” means all machinery, equipment, tools,
furniture, fixtures, computer hardware, supplies, materials,
servers, routers, desktop computers, laptop computers, fixed and
mobile computer storage devices, mobile phones, personal digital
assistants, network equipment, telephone systems, back-up systems,
non-fixed media and all other computer and electronic equipment of
any kind and other items of tangible personal property of every
kind owned, leased or licensed by BWR (wherever located and whether
or not carried on the books of Seller) to the extent used in,
related to, or necessary for, the operation of the Business as
conducted immediately prior to the Closing, together with all
express and implied warranties by the manufacturers, sellers,
lessors and licensors of such items or components thereof and all
maintenance records and other documents relating
thereto.
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“Tax” or
“Taxes”
means any and all taxes, fees, levies, duties, tariffs and
governmental impositions or charges of any kind in the nature of,
or similar to, taxes, payable to any federal, state, provincial,
local or foreign taxing authority including, without limitation
(a) income, franchise, profits, gross receipts, ad valorem,
net worth, value added, sales, use, service, real or personal
property, special assessments, capital stock, license, payroll,
withholding, employment, social security, workers’
compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits,
transfer and gains taxes and (b) interest, penalties,
additional taxes and additions to taxes imposed with respect
thereto.
“Tax Returns” means any
return, report or information statement with respect to Taxes
(including, but not limited to, statements, schedules and
appendices and other materials attached thereto) filed or required
to be filed with the IRS or any other Governmental Authority
including, without limitation, consolidated, combined and unitary
tax returns.
“Transaction Documents”
means this Agreement, the Assignment of Membership Interests and
all other contracts, instruments and certificates contemplated
hereunder to be delivered by any party hereto at or prior to the
Closing.
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IN WITNESS WHEREOF, the Parties have
executed this Asset Purchase Agreement as of the date first written
above.
BUYER:
NEW
AGE BEVERAGES CORPORATION
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇
Title:
Chief Executive Officer
SUB:
BWR
ACQUISITION CORP.
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇
Title:
Chief Executive Officer
SELLER:
/s/ Olivier
Sonnois
Name: Olivier Sonnois
Title:
Individually
BWR:
BRANDS
WITHIN REACH, LLC
By:
/s/ Olivier
Sonnois
Name: Olivier Sonnois
Title:
President
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