ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”) is entered into as of March 23,
2017 (the “Effective Date”), by and between Marley Beverage Company, LLC, a
Michigan limited liability company (“MBC” or “Seller”), and New Age Beverages
Corporation, a Washington corporation (“NBEV” or “Buyer”), (Buyer together with
Seller constitute the “Parties” and each individually a “Party”).

 

WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to purchase from
Seller, certain assets of Seller, used in connection with Seller’s business on
the terms and conditions contained herein.

 

WHEREAS, in connection with such sale, the Buyer will assume certain obligations
and liabilities of Seller subject to the terms and conditions contained herein.

 

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.

PURCHASE AND SALE OF ASSETS

 

SECTION 1.1 Sale and Purchase of Purchased Assets.

 

(a) Purchased Assets. Subject to the terms and conditions of this Agreement, at
the Closing, Seller shall sell, convey, assign, transfer and deliver to Buyer,
and Buyer shall purchase, free and clear of all Encumbrances other than
Permitted Encumbrances, all right, title and interest in and to all of Seller’s
Assets, other than the Excluded Assets, to the extent used in, related to, or
necessary for, the operation of the Business as conducted immediately prior to
the Closing, (collectively, the “Purchased Assets”). Without limiting the
generality of the foregoing, the Purchased Assets shall include all of the
following Assets of Seller existing on the Closing Date:

 

(i) all (A) Contracts set forth on the attached Schedule 1.1(a)(i) and (B) other
Contracts entered into by Seller prior to the date of this Agreement to the
extent that Buyer notifies Seller in writing not less than five (5) Business
Days prior to the Effective Date that such other Contracts shall be Purchased
Assets (collectively, the “Assumed Contracts”);

 

(ii) all inventory (including raw materials, supplies, containers, labels,
packing and shipping materials, work in process and finished goods)
(collectively, the “Inventory”);

 

(iii) all systems, tools, equipment, content management systems, databases and
other Tangible Personal Property, other than those items set forth on Schedule
1.2(x);

 

(iv) all of Seller’s IP and Seller’s rights in Seller’s Licensed IP, including,
to the extent permitted under the License Agreement, the right to use all names
licensed to Seller under the License Agreement;

 

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(v) copies of all 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 Seller’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;

 

(vi) all customer lists, user lists, goodwill and other intangible Assets;

 

(vii) all cash, cash equivalents and marketable securities, security deposits,
refunds, deposits and prepaid expenses of the Seller and all vendor rebate
accounts and prospective rebates, whether soft dollar or hard dollar (other than
those constituting Excluded Assets);

 

(viii) all accounts receivable; and

 

(ix) all prepaid expenses.

 

SECTION 1.2 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 Purchased Assets and
shall remain the property of Seller after the Closing:

 

(i) all minute books, seals, equity record books and equity transfer records of
Seller and the books and records of Seller;

 

(ii) all Contracts set forth on the attached Schedule 1.2(ii) (the “Excluded
Contracts”);

 

(iii) all personnel records and other records that Seller is required by Legal
Requirement to retain in its possession;

 

(iv) all rights and interests under or in connection with, and any assets of,
any of the Employee Plans maintained by Seller solely for the benefit of its
employees and any related trusts or funding vehicles;

 

(v) all rights of Seller under this Agreement and the other Transaction
Documents, including with respect to the NBEV Shares and the Earnout Amount;

 

(vi) all rights, claims, and causes of action against third parties existing as
of the Closing;

 

(vii) all Tax refunds relating to Seller’s operations prior to the Closing;

 

(viii) all rebates, credits, refunds or other reimbursements earned or due on
account of Seller’s operations prior to the Closing;

 

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(ix) all rights and claims under or with respect to Seller’s insurance policies;
and

 

(x) those items set forth on the attached Schedule 1.2(x);

 

SECTION 1.3 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 the
following liabilities (collectively, the “Assumed Liabilities”):

 

(i) the accounts payable of the Seller;

 

(ii) accrued liabilities of the Seller;

 

(iii) obligations of the Seller with respect to any Purchased Asset, including
any Contracts and Assumed Contracts;

 

(iv) all liabilities owing by the Seller to any employees which arose or were
incurred by the Seller with respect to the terms of such employment on or prior
to the Closing or which became payable on account of the termination of such
employees in connection with this transaction, including without limitation, any
Taxes or paid-time-off relating to time periods before the Closing; and

 

(v) all categories of liabilities set forth on the Balance Sheet other than
Excluded Liabilities; and

 

(vi) all liabilities set forth on the Interim Balance Sheet and other
liabilities of Seller incurred thereafter in the ordinary course of business,
other than Excluded Liabilities.

 

SECTION 1.4 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
1.3(iv) above;

 

(ii) all Liabilities of Seller under Environmental Laws;

 

(iii) all Liabilities of Seller and the ERISA Affiliates arising under, or with
respect to, the Employee Plans;

 

(iv) all Liabilities with respect to any current or former employee, director,
member, manager, stockholder, partner, agent or independent contractor of
Seller, other than as set forth in Section 1.3(iv) above;

 

(v) all Liabilities arising out of, or relating to, any conduct or alleged
conduct of any employee or independent contractor of Seller;

 

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(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 Seller or any
event, circumstance, condition, breach or default occurring on or prior to the
Closing Date (other than those relating to any Purchased Assets);

 

(vii) all Liabilities arising out of, or resulting from, Seller’s compliance or
noncompliance with any Legal Requirement or Order occurring on or prior to the
Closing Date;

 

(viii) all Liabilities of Seller to Seller’s stockholders or any Affiliate of
any of Seller’s stockholders, originating prior to Closing, or originating prior
to or after Closing due to any acts or omissions of Seller;

 

(ix) all Liabilities relating to, or resulting from, Seller’s IP to the extent
arising on or prior to the Closing Date; and

 

(x) all Liabilities based upon Seller’s acts or omissions occurring after the
Closing Date (other than those relating to the Buyer’s ownership of the
Purchased Assets).

 

SECTION 1.5 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 Seller
has not obtained any Consent required to assign or transfer any Assumed Contract
to Buyer, Seller shall use commercially reasonable efforts to obtain such
Consent as promptly as practicable thereafter. Until such Consent is obtained,
Seller shall cooperate and shall cause its representatives to cooperate with
Buyer in any arrangement designed to provide Buyer with the interests, rights
and benefits of Seller 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 Purchased Assets any Assets set forth above in Section 1.1;
provided, however, that Buyer shall be responsible for, and shall promptly pay,
(x) all costs and expenses of 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 Seller shall not incur without Buyer’s prior written consent, and (y) 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 Seller to cooperate with Buyer set forth in this Section 1.5 shall
not require 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.

SALE CONSIDERATION

 

SECTION 2.1 Consideration; Payment. In consideration of the sale to Buyer of the
Purchased Assets, and for each other right acquired by Buyer under this
Agreement, Buyer shall:

 

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(a) at the Closing, issue to Seller, or its designees set forth on a notice
delivered before Closing, Two Million Eight Hundred Fifty Thousand (2,850,000)
shares (subject to adjustment as provided below) of Buyer’s common stock, $0.001
par value per share (the “NBEV Shares”);

 

(b) at the Closing, deliver the Cash Amount in immediately available funds to an
account designated by Seller, which Seller will use to pay the broker fee it
will owe to LPE Securities, LLC if the transactions contemplated by this
Agreement close;

 

(c) pay the Earnout Amount (as defined in Section 2.2(a)) to Seller or its
designees if and to the extent payable under Section 2.2(a); and

 

(d) assume the Assumed Liabilities.

 

If Buyer effects a stock split, reverse split or similar transaction before the
Closing, the number of NBEV Shares to be issued to Seller or its designees shall
be adjusted accordingly.

 

SECTION 2.2 Earnout Amount.

 

(a) If the Gross Revenues of the Business (as defined below) during any trailing
twelve calendar month period after the Closing are equal to or greater than
$15,000,000 (the “Earnout Condition”), Buyer will pay Seller or its designees
$1,250,000 (the “Earnout Amount”). The Earnout Amount will be paid as follows:

 

(i) Buyer will pay $625,000 of the Earnout Amount not later than the 15th day
(the “First Payment Date”) after the end of the first trailing twelve calendar
month period in which the Earnout Condition is satisfied;

 

(ii) Buyer will pay $312,500 of the Earnout Amount not later than the first
anniversary of the First Payment Date; and

 

(iii) Buyer will pay the remaining $312,500 of the Earnout Amount not later than
the second anniversary of the First Payment Date.

 

The payment of each portion of the Earnout Amount shall be made by wire transfer
of immediately available funds to Seller or its designees.

 

(b) “Gross Revenues of the Business” means the gross revenues of the Business
acquired by Buyer under this Agreement, including gross revenues from (i)
products developed or sold by Seller as of the Closing, (ii) other
Marley-branded products that may be developed or sold by Buyer after the Closing
under the License Agreement, and (iii) any other products developed or sold by
Buyer after the Closing that are related to or an extension of the products
described in the preceding clauses (i) and (ii). Gross Revenues of the Business
shall be determined in accordance with GAAP.

 

(c) From the Closing until the date the entire Earnout Amount has been paid,
Buyer will in devote commercially reasonable marketing and sales resources to
the Business and will not accelerate or delay any purchase orders or sales
relating to the Business other than in the ordinary course of business
consistent with Seller’s past practices.

 

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(d) From the Closing until the date the entire Earnout Amount has been paid,
Buyer will operate and account for the Business and report the Gross Revenues of
the Business as a subsidiary or division separate from its other subsidiaries,
divisions and lines of business.

 

(e) Not later than 15 days after each calendar month from the Closing until the
date the entire Earnout Amount has been paid, Buyer shall prepare and deliver to
Seller or its designee a statement setting forth its calculation of the Gross
Revenues of the Business for such calendar month and for the trailing twelve
calendar months (each, a “Gross Revenue Statement”). Each Gross Revenue
Statement shall contain sufficient detail to permit Seller to adequately
understand and evaluate the Gross Revenues of the Business for the periods
included in the Gross Revenue Statement.

 

(f) After receipt of any Gross Revenue Statement, Seller shall have a thirty
(30) day period (the “Review Period”) to review such Gross Revenue Statement.
During the Review Period, Seller and its representatives shall have reasonable
access to the relevant books and records of Buyer relating to the Business (and
with the consent of Buyer, which consent shall not be unreasonably withheld or
delayed, to the personnel of, and work papers prepared by, Buyer) as Seller may
reasonably request for the purpose of confirming the Gross Revenues of the
Business set forth in the Gross Revenue Statement, provided, that such access
shall be in a manner that does not interfere with the normal business operations
of Buyer. Seller agrees that it and its representatives will hold in confidence
any and all financial information disclosed by the Buyer under this Section
2.2(f) and Seller and its representatives will not disclose any such financial
information to parties other than the representatives of Seller, except to the
extent otherwise required by applicable law or any applicable Order.

 

(g) On or prior to the last day of each Review Period, Seller may object to the
Gross Revenue Statement by delivering to Buyer a written statement (a “Statement
of Objections”) setting forth Seller’s objections in reasonable detail,
indicating each disputed item or amount and the basis for Seller’s disagreement
therewith. If Seller fails to deliver the Statement of Objections before the
expiration of the Review Period, the applicable Gross Revenue Statement and the
Gross Revenues of the Business reflected in such statement shall be deemed to
have been accepted by Seller. If Seller delivers the Statement of Objections
before the expiration of the Review Period, Buyer and Seller shall negotiate in
good faith to resolve such objections within a thirty (30) day period (a
“Resolution Period”) after the delivery of the Statement of Objections, and, if
the same are so resolved within the Resolution Period, the Gross Revenue
Statement and the Gross Revenues of the Business reflected in such statement,
with such changes as may have been previously agreed in writing by Buyer and
Seller, shall be final and binding.

 

(h) If Seller and Buyer fail to reach an agreement with respect to all of the
matters set forth in the Statement of Objections before expiration of the
Resolution Period, then any amounts remaining in dispute (“Disputed Amounts”)
and any amounts not so disputed, (the “Undisputed Amounts”) shall be submitted
for resolution to an independent accounting firm mutually agreeable to Buyer and
Seller (the “Independent Accountant”) who, acting as experts and not
arbitrators, shall resolve the Disputed Amounts only and make any adjustments to
the Gross Revenue Statement. Buyer and Seller shall provide such additional
information to the Independent Accountant as it or the other party may
reasonably request. The Independent Accountant shall only decide the specific
items under dispute by the parties and its decision for each Disputed Amount
must be within the range of values assigned to each such item in the Gross
Revenue Statement and the Statement of Objections, respectively. The fees and
expenses of the Independent Accountant shall be paid by Seller, on the one hand,
and Buyer, on the other hand, based upon the percentage that the amount of Gross
Revenues of the Business actually contested but not decided in favor of Seller
or Buyer, respectively, bears to the aggregate amount of Gross Revenues of the
Business actually contested by Seller and Buyer. The Independent Accountant’s
determination shall be final and binding on Seller and Buyer.

 

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ARTICLE III.

CLOSING; DELIVERIES

 

SECTION 3.1 Closing. The closing of the transactions (the “Closing”) will take
place at the offices of New Age Beverages Corporation, 1700 East 68th Ave,
Denver, CO 80229 as soon as practicable following the date as of 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”.

 

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) evidence that Seller has, at Seller’s expense and without cost or other
adverse consequence to Buyer, sent all notices, made all filings and obtained
all Consents and Orders required to be sent, made and obtained by Seller in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby;

 

(ii) the Bill of Sale, dated the Closing Date, in the form attached hereto as
Exhibit A (the “Bill of Sale”) executed by Seller; the executed counterpart
signature page of Seller to the Assignment and Assumption Agreement, dated the
Closing Date, in the form attached hereto as Exhibit B (the “Assignment and
Assumption Agreement”); and such other 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;

 

(iii) the Registration Rights Agreement, duly executed by Seller and any of its
designees to whom the NBEV Shares are issued at Closing;

 

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(iv) a certificate, dated as of the Closing Date and executed by a manager or
executive officer of Seller, certifying as to the fulfillment of the conditions
set forth in Sections 8.1(b) and (c);

 

(v) a certificate, dated as of the Closing Date and executed by a manager or
secretary of Seller, certifying as to (A) (1) the certificate of formation of
the Seller and (2) certificates of good standing of the Seller of the
jurisdiction of the Seller’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 managers of the Seller authorizing and approving the
execution, delivery and performance by the Seller of this Agreement and any
other Transaction Documents to which the Seller is a party, and (C) the
incumbency and signatures of the managers and officers of the Seller executing
this Agreement and any Transaction Documents to which the Seller is a party;

 

(vi) a form UIA 1027 (Business Transferor’s Notice to Transferee of Unemployment
Tax Liability and Rate), duly executed by Seller;

 

(vii) a noncompetition agreement between Buyer and each of Seller, Gary Shiffman
and Alon Kaufman, in the forms attached hereto as Exhibits C-1 and C-2, duly
executed by each of Seller, Gary Shiffman and Alon Kaufman;

 

(viii) a termination of the Management Agreement, duly executed by Seller;

 

(ix) 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 NBEV Shares, issued electronically to an account or accounts in the name
of Seller and its designees;

 

(ii) The Registration Rights Agreement, duly executed by Buyer;

 

(iii) the executed counterpart signature page of Buyer to the Assignment and
Assumption Agreement such other documents and other instruments of assumption as
may be reasonably requested by Seller to effect Buyer’s assumption of the
Assumed Liabilities, each in form and substance satisfactory to Buyer and
Seller, dated the Closing Date and duly executed by Buyer;

 

(iv) a legal opinion, dated the Closing Date and addressed to Seller and any
other parties to whom the NBEV Shares are issued at Closing, executed by counsel
to the Buyer in form and substance acceptable to Seller that, among other
things, the NBEV Shares have been duly and validly authorized by all necessary
corporate action on the part of the Buyer and have been validly issued and fully
paid and are nonassessable.

 

(v) a certificate, dated as of the Closing Date and executed by an executive
officer of Seller, certifying as to the fulfillment of the conditions set forth
in Sections 8.2(b) and (c);

 

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(vi) 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;

 

(vii) a termination of the Management Agreement, duly executed by Buyer; and

 

(viii) 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 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 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).

 

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 Seller; result in the
creation of any Encumbrance (other than Permitted Encumbrances) upon the
Purchased 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 Seller is a party or by
which Seller or the Purchased Assets are bound or affected.

 

(b) 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,
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 or the
Purchased Assets. There is no pending or, to Seller’s Knowledge, threatened
Proceeding against 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 Buyer to
own and control the Purchased Assets or to use those assets in a manner
consistent with Seller’s use of the Purchased Assets as of the Effective Date.

 

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SECTION 4.3 Organization and Authority. Seller is a limited liability company,
duly organized, validly existing and in good standing under the laws of the
State of Michigan. Seller does not have any subsidiaries. Seller has all
requisite power and authority to own or lease and operate its properties and
assets. True and correct copies of Seller’s Organizational Documents, including
any amendments thereto, have been made available to Buyer.

 

SECTION 4.4 Properties and Assets of Seller. Seller owns or otherwise has the
right to use all of the Purchased Assets. Upon consummation of the transactions,
Buyer will acquire good and marketable title to the Purchased Assets (other than
Purchased Assets to which Seller does not have title), free and clear of all
Encumbrances other than Permitted Encumbrances. The Purchased Assets constitute
all of the assets, properties and rights used or held for use by Seller in
connection with the Business as conducted as of the Effective Date.

 

SECTION 4.5 Balance Sheet. Attached hereto as Schedule 4.5 is a true and correct
copy of the balance sheet of the Seller as of December 31, 2015 (the “Balance
Sheet”). The Balance Sheet (x) is true, complete and correct in all material
respects and (y) was prepared in accordance with GAAP applied on a consistent
basis in accordance with the past practice of Seller. All liabilities of the
Seller as of December 31, 2015, required to be reflected or reserved for by GAAP
are fully reflected or reserved for in the Balance Sheet.

 

SECTION 4.6 Compliance with laws; permits. Seller 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 Seller or the Purchased 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. Seller has (i) all permits required to conduct the Business as
conducted by Seller as of the Effective Date; and (ii) satisfied all material
bonding requirements pertaining to its operations under applicable Legal
Requirements. All such permits may be transferred to Buyer in accordance with
applicable Legal Requirements without violation of or loss of benefits under
such permits, without consent of or notice to any other person, including any
Governmental Authority. Seller is not in material violation of, nor is there a
basis for the revocation or withdrawal of, any permit. Seller 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 Seller, the Purchased Assets or the Business, or relating to or
involving the transactions contemplated by this Agreement, and Seller is not
aware of any basis for any of the foregoing. Seller is not in default with
respect to any Order known to or served upon Seller.

 

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SECTION 4.8 Tax Matters. Seller has timely filed all Tax Returns required of
Seller under all Legal Requirements to which Seller is subject. Seller has
timely paid all Taxes required by Legal Requirements to be paid by Seller,
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
Seller is in progress. All deficiencies proposed as a result of any examination
or audit of any Tax Return filed by Seller 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 Purchased 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 Seller 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. Seller has conducted its
business only in the ordinary course of business and since December 31, 2015
there has not been any material loss, damage or destruction to, or any material
interruption in the use of any of the Purchased Assets.

 

SECTION 4.11 Affiliated Transactions. No Affiliate of Seller is a party to any
Assumed Contract or has a direct or indirect financial interest in any Assumed
Contract.

 

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 is assignable without any
Consent of any Person; (iii) Seller 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 Seller 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. Seller does not have
any Liability with respect to any Person under Title IV of ERISA. Neither Seller
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 Seller are, and have been,
in material compliance with all Environmental Laws.

 

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SECTION 4.15 Insurance. Seller 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 Seller 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. Seller has never made any claim under any insurance policy.

 

SECTION 4.16 Employees. Seller 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 Seller. Each of the employees of Seller 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 Seller could be deemed to be a misclassified
employee.

 

SECTION 4.17 Brokers’ Fees. Other than Green Circle Capital Partners LLC, LPE
Securities, LLC, and their respective Affiliates, 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 any of its Affiliates.

 

SECTION 4.18 Intellectual Property.

 

(a) Seller exclusively owns all right, title and interest in and to the Seller’s
IP, free and clear of any Encumbrance. Seller is not bound by, and no Seller’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
Seller to use, exploit, assert or enforce any Seller’s IP anywhere in the world.
All documents and instruments necessary to perfect the rights of Seller in the
Seller’s IP have been validly executed, delivered, and filed in a timely manner
with the appropriate Governmental Authority.

 

(b) Each license by which Seller has obtained rights in the Seller’s Licensed IP
represents the complete agreement and understanding between the Seller and the
other respective party or parties thereto relating to the Seller’s Licensed IP
that is the subject of such agreement, or Seller has provided Purchaser with
access to all agreements and understandings pertaining to the same.

 

(c) No member, manager, officer or employee of Seller is (i) bound by or
otherwise subject to any contract, agreement or understanding restricting him or
her from performing his or her duties for Seller 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 Seller.

 

(d) Seller has taken all reasonable steps to maintain the confidentiality of all
of its trade secrets and otherwise maintain its rights in Seller’s IP.

 

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(e) Since Seller’s inception, Seller has not assigned or otherwise transferred
ownership of, or agreed to assign or otherwise transfer ownership of, any
Intellectual Property Right to any other Person.

 

(f) Each item of Seller’s IP that has been registered with the U.S Patent and
Trademark Office or the U.S. Copyright Office is and at all times has been in
material compliance with all Legal Requirements and all filings, payments, and
all other actions required to be made or taken to maintain such item of Seller’s
IP in full force and effect, including any and all priority rights and foreign
filing rights, have been made by the applicable deadline. No application for a
patent or a copyright, mask work or trademark registration or any other type of
Seller’s IP filed by or on behalf of Seller has been abandoned, allowed to lapse
or rejected.

 

(g) No interference, opposition, reissue, reexamination or other Proceeding is
or since the date of Seller’s inception has been pending or, threatened, in
which the scope, validity or enforceability of any Seller’s IP is being, has
been, or would reasonably be expected to be contested or challenged. There is no
basis for a claim that any Seller’s IP is invalid or unenforceable as a result
of patent or copyright misuse or on any other grounds.

 

(h) No Person has infringed, misappropriated or otherwise violated, and no
Person is currently infringing, misappropriating or otherwise violating, any
Seller’s IP. Seller has never infringed (directly, contributorily, by inducement
or otherwise), misappropriated or otherwise violated or made unlawful use of any
right of any other Person. Seller 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
Seller has acquired rights in Seller’s Licensed IP, Seller 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 Seller 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 Seller’s IP in a manner that
obligates Seller to distribute or disclose the source code developed by Seller
on a royalty free basis.

 

(j) No government funding, facility of a university, college, other educational
institution or research center or funding from third parties was used in the
development of any Seller’s IP, and, no officer, employee or independent
contractor of Seller who was involved in, or who contributed to, the creation or
development of any Seller’s IP, has performed services for the government,
university, college, or other educational institution or research center during
a period of time during which such person was also performing services for
Seller.

 

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SECTION 4.19 Accredited Investor. Except as disclosed by Seller to Buyer before
Closing, Seller and each of its designees to whom the NBEV 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 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 Shares are issued reserves the
right to resell or otherwise dispose of all or any of such NBEV Shares pursuant
to a registration statement or exemption under the Securities Act and any state
law or regulations. Seller acknowledges that the NBEV Shares to be issued
pursuant to this Agreement 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.

 

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).

 

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.

 

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(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 Undisclosed 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 September 30, 2016 (rather than in any
notes thereto) included in Buyer’s Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission (“SEC”) on November 14, 2016 and (ii)
Liabilities that have arisen after September 30, 2016 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).

 

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 April 22, 2014. 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 Sarbanes-Oxley 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.

 

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SECTION 5.7 NBEV Shares. The issuance of the NBEV Shares by Buyer at the Closing
has been duly authorized and, when issued and delivered by Buyer as provided in
this Agreement, the NBEV Shares will be validly issued, fully paid,
non-assessable and free of any Encumbrances. Assuming the accuracy of the
representations and warranties of Seller set forth in Section 4.19, the issuance
of the NBEV 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 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 (i) that is
referred to or incorporated by reference in the SEC Filings, or (ii) 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 (x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z)
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.

 

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.

 

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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.

 

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 U.S. generally
accepted accounting principles (“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.

 

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.

 

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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 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.

 

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.

 

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.

 

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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 Sarbanes-Oxley 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
Sarbanes-Oxley 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 Sarbanes-Oxley Act.

 

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.

 

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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 as of the date of this Agreement, except that as of the
date of this Agreement, there are 27,702,890 shares of Buyer’s common stock
issued and outstanding. Except as set forth in the SEC Filings and except for
options issued to Buyer’s employees in the ordinary course of business, there
are not, and as of the Closing there will be no stock options, warrants, or
other rights to purchase or otherwise acquire any authorized, but unissued
shares of Buyer’s common stock or any security convertible or exercisable into
shares of Buyer’s common stock, or any contracts or commitments to issue or sell
shares of Buyer’s common stock or any such options, warrants, rights or
convertible securities.

 

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.

 

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 (A) 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; (B) 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; (C) 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.

 

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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.

 

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.

 

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ARTICLE VI.

COVENANTS

 

SECTION 6.1 Public Announcements; Audit; Disclosure of Acquisition.

 

(a) Neither 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 Party, except as may be required by applicable Law.
Notwithstanding the foregoing, Buyer 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 and Seller.

 

(b) Following the Effective Date, Seller shall use its 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 transaction 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 its 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.

 

(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, dated July 26, 2016, executed by Buyer with respect
to Seller.

 

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(c) Post-Closing Access to Books and Records. Buyer 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 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 Purchased Assets and any audit, litigation or
other Proceeding with respect to such Taxes. In that regard, Buyer and Seller
shall maintain such Tax information, Tax records, documents and information
relating to the Business and the Purchased 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 and Bank upon reasonable written request and at the
expense of the requesting Party or Bank such documents and information as are in
the non-requesting Party’s possession or control relating to the Purchased
Assets, Assumed Liabilities or the Business to the extent the requesting Party
or Bank 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 Sale of Assets. 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 2.1, including the NBEV Shares, the Earnout Amount 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 Purchased 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 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. 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 Purchased Assets.

 

SECTION 6.6 Efforts to Close.

 

(a) Upon the terms and subject to the conditions and other agreements set forth
in this Agreement, Seller 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 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 Seller and such third party.

 

(b) Seller hereby covenants and agrees that it will not enter into any public
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.

 

(c) Promptly after the execution of this Agreement, Seller shall deliver to Hope
Road Merchandising, L.L.C. a notice of the assignment of the License Agreement
in the form attached hereto as Exhibit E as required under Section 20(c) of the
License Agreement.

 

(d) Buyer shall use its reasonable best efforts to obtain as soon as possible
after the date of this Agreement a consent and waiver from Aegis Capital Corp.
so that the NBEV Shares may be issued as soon as all of the other closing
conditions set forth herein have been satisfied or waived, free from the lock-up
restriction set forth in Section 3.17 of the Underwriting Agreement.

 

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SECTION 6.7 Disclosure Schedule Updates/Corrections.

 

(a) Prior to the Closing, the Seller 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 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 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 6.8(a) or Section 6.8(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 6.8(a) and any amendment pursuant to
Section 6.8(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 Purchased Assets. From and after the Closing, Sellers
shall not (a) have any right, license or other interest in or to any of the
Purchased Assets, (b) use, access or possess any of the Purchased Assets or
transfer, assign, license or grant any interest in or to any of the Purchased
Assets to any Person or (c) permit or authorize any Person to use, access or
possess any of the Purchased 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 Purchased Shares or any other transaction contemplated by this
Agreement shall be paid by Buyer.

 

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SECTION 6.11 Board Observer. Buyer covenants and agrees that, from and after the
Closing Date, so long as the parties to whom the NBEV Shares are issued at
Closing and their Affiliates own at least 50,000 NBEV Shares in the aggregate, a
representative designated by Seller (the “Seller Representative”) may be present
at all meetings of Buyer’s Board of Directors or any committee thereof,
including any telephonic meetings, and that Buyer will give the Seller
Representative notice of such meetings, by fax or by such other means as such
notices are delivered to Buyer’s directors and Board of Directors committee
members at the same time notice is provided or delivered to the directors or
committee members; provided, however, the Seller Representative may be excluded
from any meeting or portion thereof if Buyer reasonably believes, upon advice of
counsel, that such exclusion is reasonably necessary to preserve the
attorney-client privilege (a “Limiting Condition”). All information, documents,
financial statements and other materials that are sent, given or otherwise
provided to Buyer’s directors or Board of Directors committee members in their
capacity as such, whether or not in connection with a meeting of the Board of
Directors or a committee thereof, including copies of all minutes, consents,
correspondence and other material shall be sent to the Seller Representative
simultaneously by Buyer by means reasonably designed to insure timely receipt by
the Seller Representative; provided, however, that Buyer may exclude from the
materials sent to the Seller Representative any materials that Buyer reasonably
believes, upon advice of counsel, should be excluded to preserve the
attorney-client privilege. The Seller Representative shall maintain the
confidentiality of all materials delivered to it under his Section 6.11.

 

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 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; and

 

(c) 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 (i) the operation of the Business prior to the Closing Date, or (ii) the
failure of Seller to perform, pay or discharge any Excluded Liability.

 

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Notwithstanding anything to the contrary in this Agreement, the Buyer
Indemnified Parties shall not be entitled to indemnification for any Losses
which arise or are related to any act or omission of Buyer or its Affiliates,
including any act or omission in connection with Buyer’s management of the
Business pursuant to the Management Agreement.

 

SECTION 7.2 Indemnification of Seller Indemnified Parties. Buyer shall
indemnify, defend and hold harmless Seller and its Affiliates, officers,
managers, members, employees, independent contractors, agents, 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 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;

 

(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; and

 

(c) 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.

 

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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.

 

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 4.1, 4.2, 4.3, 4.17, 4.19, 5.1, 5.2, 5.3, 5.7,
5.8, and 5.9 shall survive the Closing forever, and (b) the representations and
warranties set forth in Sections 4.8, 4.13, 4.14, 5.4, and 5.30 shall survive
until 60 days after the expiration of the applicable statute of limitations
period. 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 Limitation on Indemnification Obligations. Any provision of this
Agreement to the contrary notwithstanding, except with respect to any fraud,
willful breach or criminal acts committed by Seller, the Seller shall have no
obligation to indemnify the Buyer Indemnified Parties with respect to Losses
arising under Section 7.1 in excess of an amount equal to (i) 750,000,
multiplied by (ii) the average of the closing prices of Buyer’s common stock on
the 10 trading days immediately preceding the Closing Date, as reported on the
NASDAQ Capital Market.

 

SECTION 7.7 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 7.8 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.

 

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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 3.2(a).

 

(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 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.

 

(e) Lock-Up Waiver. The 90-day lock-up period set forth in Section 3.17 of the
Underwriting Agreement shall have expired or Aegis Capital Corp. shall have
granted a consent and waiver in a form acceptable to Seller so that the NBEV
Shares may be issued as soon as all of the other closing conditions set forth
herein have been satisfied or waived, free from the lock-up restriction set
forth in Section 3.17 of the Underwriting Agreement.

 

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:

 

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(a) Required Deliverables. Seller shall have received all items are required by
Section 3.2(b).

 

(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).

 

(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 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 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.

 

(f) Lock-Up Waiver. The 90-day lock-up period set forth in Section 3.17 of the
Underwriting Agreement shall have expired or Aegis Capital Corp. shall have
granted a consent and waiver in a form acceptable to Seller so that the NBEV
Shares may be issued as soon as all of the other closing conditions set forth
herein have been satisfied or waived, free from the lock-up restriction set
forth in Section 3.17 of the Underwriting Agreement.

 

(g) Termination of Guarantees. All guarantees of any Assumed Contracts by any
Affiliate of Seller shall have been terminated.

 

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:

 

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(i) there has been a breach, inaccuracy in or failure to perform any
representation, warranty, covenant or agreement made by 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

 

(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.

 

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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.

 

ARTICLE XI.

as-is; where-is sale

 

BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ARTICLE IV OF THIS AGREEMENT, THE SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING
TO SELLER, ITS BUSINESS, the assumed liabilities OR THE PURCHASED 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 Purchased ASSETS. BUYER FURTHER ACKNOWLEDGES THAT BUYER
HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF SELLER, ITS
BUSINESS, the assumed liabilities AND THE PURCHASED ASSETS. ACCORDINGLY, BUYER
WILL ACCEPT THE assumed liabilities AND THE PURCHASED 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.

 

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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: Brent Willis       1700 68th Avenue       Denver, CO 90503       Phone:
(303) 289-8655       E-mail: bwillis@newagebev.us               with a copy to
(which will not constitute notice):               Bart and Associates, LLC      
Attn: Ken Bart       8400 East Prentice Avenue       Suite 1500       Greenwood
Village, CO 80111       Telephone: (720)-226-7511       E-mail:
Kbart@kennethbartesq.com  

 

  (b) If to Seller, addressed to:               Marley Beverage Company, LLC    
  Attn: Daniel Epstein       27777 Franklin Road       Suite 1640      
Southfield, MI 48034       Phone: (248) 802-8905       E-mail:
depstein@vivabeverages.com               with a copy to (which shall constitute
notice):               Jaffe Raitt Heuer & Weiss, P.C.       Attn: Matthew
Murphy       27777 Franklin Road       Suite 2500       Southfield, MI 48034    
  Telephone: (248) 727-1433       E-mail: mmurphy@jaffelaw.com  

 

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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.

 

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 Chicago, Illinois; and (ii) the
arbitration proceeding shall be conducted before a panel of three neutral
arbitrators, one to be appointed by each party, and a third to be selected by
the two arbitrators appointed by the parties and who shall serve as chairperson.
If a party fails to nominate an arbitrator as provided herein, then JAMS shall
appoint the arbitrator in accordance with the Rules. In the event that the two
party-selected arbitrators should fail to agree upon the chairperson within a
period of fourteen (14) days of the appointment of the last party-selected
arbitrator, then, upon application of either party, the chairperson shall be
named by JAMS in accordance with the Rules. The award of the arbitrators shall
be final and binding on the parties, and judgment upon the award rendered by the
arbitrators 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.

 

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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 including the non-binding letter of intent
dated October 11, 2016 between the Parties.

 

SECTION 12.6 Assignment and Successors. Neither 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.

 

SECTION 12.9 Counterparts. This Agreement may be executed in one 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.

 

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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) ten percent (10%) 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,
fixed or contingent, choate or inchoate, known or unknown, wherever located.

 

“Business” means the business of developing, manufacturing, selling and
marketing nonalcoholic relaxation teas and sparking waters, and ready-to-drink
coffee drinks, as conducted by Seller prior to the Closing.

 

“Business Day” means any day which is not a Saturday, Sunday or a day on which
banks in Colorado or Michigan are authorized by applicable Legal Requirements or
executive orders to be closed.

 

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“Cash Amount” means an amount equal to (i) 150,000, multiplied by (ii) the
average of the closing prices of Buyer’s common stock on the 10 trading days
immediately preceding the Closing Date, as reported on the NASDAQ Capital
Market.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“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 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).

 

“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.

 

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“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.

 

“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).

 

“Guarantee” means any obligation of a Person directly or indirectly guaranteeing
any Indebtedness or other obligation of any other Person and, without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (b) entered into for the purpose
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part).

 

“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) 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, (b) trade
secrets and other proprietary information which derives independent economic
value from not being generally known to the public, (c) logos, marks (including
brand names, product names, logos, and slogans), (d) 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 (e) 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 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.

 

“License Agreement” means the Merchandise License Agreement dated December 27,
2009 between Seller and Hope Road Merchandising, L.L.C., as amended by the First
Amendment thereto dated March 9, 2015 and the Second Amendment thereto dated
November 7, 2016.

 

“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).

 

“Management Agreement” means the Management and Mutual Representation Agreement
dated October 24, 2016 between Buyer and Seller.

 

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“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 December 31, 2017.

 

“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.

 

“Registration Rights Agreement” means a registration rights agreement among
Buyer and Seller or its designees to whom the NBEV Shares are issued at Closing
pertaining to the registration of the NBEV Shares in the form attached hereto as
Exhibit D.

 

“Sarbanes-Oxley Act” means Sarbanes-Oxley Act of 2002, as amended, and all rules
and regulations promulgated thereunder.

 

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“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 Seller.

 

“Seller’s Knowledge” means the actual knowledge of Gary Shiffman and Daniel
Epstein, without any duty of investigation or inquiry.

 

“Seller’s Licensed IP” means all Intellectual Property Rights licensed to
Seller.

 

“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 Seller (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.

 

“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 Bill of Sale, the Assignment
and Assumption Agreement, the Registration Rights Agreement, the indemnification
agreement referenced in Section 3.2(b)(iii) and all other contracts, instruments
and certificates contemplated hereunder to be delivered by any party hereto at
or prior to the Closing.

 

“Underwriting Agreement” means the Underwriting Agreement dated February 13,
2017 between Buyer and Aegis Capital Corp., as the representative of the several
underwriters name in Schedule 1 attached thereto..

 

 41 

   

 

[Remainder of Page Intentionally Left Blank]

 

 42 

   

 

 

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

 

BUYER:

 

NEW AGE BEVERAGES CORPORATION

 

By:     Name: Brent Willis   Title: Chief Executive Officer  

 

SELLER:

 

MARLEY BEVERAGE COMPANY, LLC

 

By:   Name:     Title:    

 

 43 

   

 

EXHIBIT A

 

BILL OF SALE

 

 

 

 

BILL OF SALE

 

_____________, 2017

 

THIS BILL OF SALE is made effective as of ______________, 2017, between Marley
Beverage Company, LLC (the “Seller”) and New Age Beverages Corporation, a
Washington corporation (“Buyer”) pursuant to that certain Asset Purchase
Agreement, March ___, 2017 (the “Purchase Agreement”), by and between Seller and
Buyer, providing for, inter alia, Seller’s sale to Buyer of all right, title and
interest in and to the Purchased Assets. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings ascribed to them in the
Purchase Agreement.

 

1. Transfer of Assets. Subject to the terms and conditions set forth in the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby sells, conveys,
assigns, transfers and delivers to Buyer, its successors and assigns, forever,
all right, title and interest in and to the Purchased Assets. Notwithstanding
anything to the contrary contained in this Bill of Sale, Seller is not selling,
transferring, assigning, conveying or delivering to Buyer, and Buyer is not
acquiring from Seller, any interest in the Excluded Assets.

 

2. Further Actions. At any time, and from time to time, after the date hereof,
Seller shall execute and deliver or cause to be executed and delivered to Buyer
such other instruments and take such other action, all as Buyer may reasonably
request, in order to carry out the intent and purpose of this Bill of Sale.

 

3. Representations and Warranties; Conflict with Purchase Agreement. This Bill
of Sale is subject to the representations, warranties and covenants set forth in
the Purchase Agreement. In the event of any conflict between the provisions
hereof and the provisions of the Purchase Agreement, the provisions of the
Purchase Agreement shall govern.

 

4. Amendments and Waivers. This Bill of Sale 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 Buyer and Seller or, in
the case of a waiver, by the party waiving compliance.

 

5. Governing Law. THIS BILL OF SALE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, Sellers have executed this Bill of Sale effective as of the
date first set forth above.

 

MARLEY BEVERAGE COMPANY, LLC  

 

By:     Name:     Title:    

 

NEW AGE BEVERAGES CORPORATION  

 

By:   Name:     Title:    

 

[Signature Page to Bill of Sale]

 

 

 

 

EXHIBIT B

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

i 

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made effective as
of the ___ day of __________, 2017, by and between Marley Beverage Company, LLC
(the “Seller” or “Assignor”) and New Age Beverages Corporation, a Washington
corporation (the “Buyer”). All capitalized terms not defined herein shall have
the meanings assigned to them in that certain Asset Purchase Agreement, dated
March ___, 2017, by and between Buyer and Seller (the “Purchase Agreement”).

 

1. Assignment. Subject to the terms and conditions of the Purchase Agreement,
Assignor does hereby assign, grant, transfer and set over unto the Assignee all
of Assignor’s right, title, and interest in and to the Assumed Contracts and
Assumed Liabilities.

 

2. Assumption of Liabilities. Subject to the terms and conditions of the
Purchase Agreement, Assignee hereby accepts the assignment of the Assumed
Contracts and Assumed Liabilities, and assumes and agrees to perform the Assumed
Liabilities.

 

3. Excluded Liabilities. Seller shall retain, and shall be responsible for
paying, honoring and discharging, as and when due, all Excluded Liabilities.
Nothing set forth herein shall be construed to result in the assumption by Buyer
of any Excluded Liabilities.

 

4. Further Actions. At any time, and from time to time, after the date hereof:
(a) Seller shall execute and deliver or cause to be executed and delivered to
Buyer such other instruments and take such other action, all as Buyer may
reasonably request, in order to carry out the intent and purpose of this
Agreement; and (b) Buyer shall execute and deliver or cause to be executed and
delivered to Seller such other instruments and take such other action, all as
Seller may reasonably request, in order to carry out the intent and purpose of
this Agreement.

 

5. Representations and Warranties; Conflict with Purchase Agreement. This
Agreement is subject to the representations, warranties and covenants set forth
in the Purchase Agreement. In the event of any conflict between the provisions
hereof and the provisions of the Purchase Agreement, the provisions of the
Purchase Agreement shall govern.

 

6. Amendments and 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 the parties hereto or, in the
case of a waiver, by the party waiving compliance.

 

7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES.

 

8. Counterparts; Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument. Original signatures
hereto may be delivered by facsimile or electronic transmission which shall be
sufficient to bind the parties.

 

[remainder of page intentionally left blank; signatures to follow]

 

 1 

   

 

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

 

BUYER:

 

NEW AGE BEVERAGES CORPORATION

 

By:     Name: Brent Willis   Title: Chief Executive Officer  

 

SELLER:

 

MARLEY BEVERAGE COMPANY, LLC

 

By:     Name:     Title:    

 

[Signature Page to Assignment and Assumption]

 

   

   

 

EXHIBIT C-1

 

FORM OF SELLER NONCOMPETITON AGREEMENT

 

i 

 

 

NONCOMPETITION AGREEMENT

 

THIS NONCOMPETITION AGREEMENT (the “Agreement”) is made and entered into as of
________, 2017, by Marley Beverage Company, LLC, a Michigan limited liability
company (the “Covenantor”) in favor of New Age Beverages Corporation, a
Washington corporation (“Buyer”).

 

RECITALS:

 

A. The Covenantor and Buyer are parties to an Asset Purchase Agreement of even
date herewith (the “Purchase Agreement”), pursuant to which Buyer purchased
certain assets from the Covenantor (the “Acquisition”). All capitalized terms
used but not defined herein, shall have the same meaning ascribed to them in the
Purchase Agreement.

 

B. The Covenantor has agreed to execute and deliver this Agreement in connection
with the Acquisition.

 

NOW, THEREFORE, the Covenantor agrees as follows:

 

1. Covenantor covenants, warrants and agrees, for the benefit of Buyer, that
without first obtaining Buyer’s consent, Covenantor shall not, from the date of
this Agreement until the third anniversary of the date of this Agreement (the
“Covenant Period”) compete with Buyer in the Restricted Business anywhere within
the United States. As used in this Agreement, “Restricted Business” means the
business of developing, manufacturing, selling and marketing nonalcoholic
relaxation teas and sparking waters, and ready-to-drink coffee drinks, as
conducted by Covenantor prior to the Closing.       Notwithstanding anything to
the contrary herein, nothing in this Agreement shall restrict Covenantor or its
Affiliates from (i) engaging in the business currently or previously conducted
by Quick Beverages, LLC, including the development, manufacturing, sale and
marketing of “energy” beverages, or (ii) investing in Buyer or investing in any
other publicly-held corporation engaged in the Restricted Business, if
Covenantor’s aggregate investment does not exceed 5% in value of the issued and
outstanding capital stock of such corporation.     2. The Covenantor covenants,
warrants and agrees, for the benefit of the Buyer, that without first obtaining
Buyer’s consent, the Covenantor shall not during the Covenant Period, disclose
any Confidential Information to any third party. As used in this Agreement, the
term “Confidential Information” means any and all confidential or proprietary
information directly related to the Buyer, Seller, Seller’s business as
conducted prior to the Closing, the Purchased Assets or the Assumed Liabilities.
Notwithstanding the foregoing, any information that: (a) prior to the date of
this Agreement was generally publicly available, or (b) after the date of this
Agreement, (i) becomes publicly available without fault of or action on the part
of Covenantor, or (ii) is acquired by the Covenantor from a third party, free of
any restrictions as to its disclosure, or (iii) is independently developed by
Covenantor without use of any Confidential Information, shall not be deemed to
be Confidential Information. Notwithstanding anything herein to the contrary,
the Covenantor may make disclosures required by any Legal Requirement.

 

   

   

 

3. The parties acknowledge that the remedy at law for a breach or threatened
breach of any of the covenants set forth in this Agreement may be inadequate.
The parties covenant and agree that in the event of a breach of any of the
covenants set forth in this Agreement, in addition to any and all legal and
equitable remedies immediately available, Buyer may seek to have such covenants
enforced by a temporary and/or permanent injunction in an action in equity.    
4. This Agreement and the rights and obligations hereunder shall not be
assignable or transferable by any party without the prior written consent of the
other party. This Agreement shall be binding on and shall inure to the benefit
of Covenantor and Buyer and their respective successors and permitted assigns.  
  5. This Agreement shall be construed and enforced in accordance with the laws
of the State of Michigan without regard to the conflicts of law principles
thereof. Any dispute arising out of or relating in any way to this Agreement
shall be addressed and adjudicated in and any judgment shall be enforced by and
in the state courts located in the County of Oakland, State of Michigan or the
federal court located in the Eastern District of Michigan (collectively “The
Courts”). Each party hereto irrevocably and unconditionally (a) consents to the
sole and exclusive jurisdiction and venue of The Courts with respect to any
action, suit or proceeding arising out of or relating in any way to this
Agreement; (b) waives any defense of lack of personal jurisdiction in connection
with any action, suit or proceeding arising out of or relating in any way to
this Agreement that is filed or pending in The Courts; (c) waives any objection
to and will not challenge the venue of any action, suit or proceeding arising
out of or relating in any way to this Agreement or the transactions contemplated
hereby in The Courts; (d) agrees that each of The Courts is a convenient and
proper forum for any action, suit or proceeding arising out of or relating in
any way to this Agreement; and (e) waives any right to and will not seek to
transfer (by filing a motion to transfer, a motion to dismiss or any other
motion) any action, suit or proceeding in The Courts to any other forum or court
for any reason.     6. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
instrument. Facsimile or photostatic copies of signatures to this Agreement
shall be deemed to be originals and may be relied on to the same extent as the
originals.

 

[Remainder of Page Intentionally Left Blank]

 

2 

 

 

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

 

  COVENANTOR:

 

Marley Beverage Company, LLC, a Michigan limited liability company

 

  By:     Name:     Its:           BUYER:  

 

New Age Beverages Corporation, a Washington corporation

 

  By:     Name:     Its:  

 

3 

 

 

EXHIBIT C-2

 

FORM OF INDIVIDUAL NONCOMPETITON AGREEMENT

 

i 

 

 

NONCOMPETITION AGREEMENT

 

THIS NONCOMPETITION AGREEMENT (the “Agreement”) is made and entered into as of
________, 2017, by _____________ (the “Covenantor”) in favor of New Age
Beverages Corporation, a Washington corporation (“Buyer”).

 

RECITALS:

 

A. The Covenantor is an affiliate of Marley Beverage Company, LLC (“Marley”),
and Marley and Buyer are parties to an Asset Purchase Agreement of even date
herewith (the “Purchase Agreement”), pursuant to which Buyer purchased certain
assets from Marley (the “Acquisition”). All capitalized terms used but not
defined herein, shall have the same meaning ascribed to them in the Purchase
Agreement.

 

B. The Covenantor has agreed to execute and deliver this Agreement in connection
with the Acquisition.

 

NOW, THEREFORE, the Covenantor agrees as follows:

 

1. Covenantor covenants, warrants and agrees, for the benefit of Buyer, that
without first obtaining Buyer’s consent, Covenantor shall not, from the date of
this Agreement until the third anniversary of the date of this Agreement (the
“Covenant Period”) compete with Buyer in the Restricted Business anywhere within
the United States. As used in this Agreement, “Restricted Business” means the
business of developing, manufacturing, selling and marketing nonalcoholic
relaxation teas and sparking waters, and ready-to-drink coffee drinks, as
conducted by Covenantor prior to the Closing.       Notwithstanding anything to
the contrary herein, nothing in this Agreement shall restrict Covenantor or his
Affiliates from (i) engaging in the business currently or previously conducted
by Quick Beverages, LLC, including the development, manufacturing, sale and
marketing of “energy” beverages, or (ii) investing in Buyer or investing in any
other publicly-held corporation engaged in the Restricted Business, if
Covenantor’s aggregate investment does not exceed 5% in value of the issued and
outstanding capital stock of such corporation.     2. The Covenantor covenants,
warrants and agrees, for the benefit of the Buyer, that without first obtaining
Buyer’s consent, the Covenantor shall not during the Covenant Period, disclose
any Confidential Information to any third party. As used in this Agreement, the
term “Confidential Information” means any and all confidential or proprietary
information directly related to the Buyer, Seller, Seller’s business as
conducted prior to the Closing, the Purchased Assets or the Assumed Liabilities.
Notwithstanding the foregoing, any information that: (a) prior to the date of
this Agreement was generally publicly available, or (b) after the date of this
Agreement, (i) becomes publicly available without fault of or action on the part
of Covenantor, or (ii) is acquired by the Covenantor from a third party, free of
any restrictions as to its disclosure, or (iii) is independently developed by
Covenantor without use of any Confidential Information, shall not be deemed to
be Confidential Information. Notwithstanding anything herein to the contrary,
the Covenantor may make disclosures required by any Legal Requirement.

 

 

 

 

3. The parties acknowledge that the remedy at law for a breach or threatened
breach of any of the covenants set forth in this Agreement may be inadequate.
The parties covenant and agree that in the event of a breach of any of the
covenants set forth in this Agreement, in addition to any and all legal and
equitable remedies immediately available, Buyer may seek to have such covenants
enforced by a temporary and/or permanent injunction in an action in equity.    
4. 4. This Agreement and the rights and obligations hereunder shall not be
assignable or transferable by any party without the prior written consent of the
other party. This Agreement shall be binding on and shall inure to the benefit
of Covenantor and Buyer and their respective successors and permitted assigns.  
  5. This Agreement shall be construed and enforced in accordance with the laws
of the State of Michigan without regard to the conflicts of law principles
thereof. Any dispute arising out of or relating in any way to this Agreement
shall be addressed and adjudicated in and any judgment shall be enforced by and
in the state courts located in the County of Oakland, State of Michigan or the
federal court located in the Eastern District of Michigan (collectively “The
Courts”). Each party hereto irrevocably and unconditionally (a) consents to the
sole and exclusive jurisdiction and venue of The Courts with respect to any
action, suit or proceeding arising out of or relating in any way to this
Agreement; (b) waives any defense of lack of personal jurisdiction in connection
with any action, suit or proceeding arising out of or relating in any way to
this Agreement that is filed or pending in The Courts; (c) waives any objection
to and will not challenge the venue of any action, suit or proceeding arising
out of or relating in any way to this Agreement or the transactions contemplated
hereby in The Courts; (d) agrees that each of The Courts is a convenient and
proper forum for any action, suit or proceeding arising out of or relating in
any way to this Agreement; and (e) waives any right to and will not seek to
transfer (by filing a motion to transfer, a motion to dismiss or any other
motion) any action, suit or proceeding in The Courts to any other forum or court
for any reason.     6. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
instrument. Facsimile or photostatic copies of signatures to this Agreement
shall be deemed to be originals and may be relied on to the same extent as the
originals.

 

[Remainder of Page Intentionally Left Blank]

 

 2 

   

 

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

 

  COVENANTOR:                                       BUYER:

 

  New Age Beverages Corporation, a Washington corporation         By:
                                         Name:   Its:

 

 3 

   

 

EXHIBIT D

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

ii 

 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (“Agreement”) is entered into as of
____________, 2017 by and among New Age Beverages Corporation, a Washington
corporation (the “Company”), Marley Beverage Company, LLC, a Michigan limited
liability company (“MBC”), and the other parties that have executed signature
pages to this Agreement as Initial Holders (together with MBC, the “Initial
Holders”). The Company, the Initial Holders and each other Holder is sometimes
referred to herein individually as a “Party” and together as the “Parties”.
Certain capitalized terms used herein shall have the meanings given to them in
Section 1.01 below.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Purchase Agreement, the Company has issued to the
Initial Holders 2,850,000 shares of Common Stock in the aggregate.

 

WHEREAS, as a condition to the closing of the transactions contemplated by the
Purchase Agreement, the Company is required to and has agreed to provide for the
registration under the Securities Act of the Registrable Shares, upon the terms
and subject to the conditions set forth herein.

 

NOW THEREFORE, in consideration of the promises, agreements and covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the Parties hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.01 Definitions The following terms, as used herein, have the following
meanings:

 

“Affiliate” has the meaning set forth in Rule 501 of Regulation D promulgated
under the Securities Act.

 

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

 

“Commission” means the United States Securities and Exchange Commission, and any
successor thereto.

 

“Common Stock” means the Company’s common stock, $0.001 par value per share, and
any securities of the Company into which such shares are converted and for which
such shares are exchanged and any common stock or other securities of the
Company or any successor entity which may be issued or distributed in respect of
the Common Stock by way of stock dividend or stock split or other distribution,
recapitalization, merger, conversion or reclassification.

 

   

   

 

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

 

“Effectiveness Period” has the meaning set forth in Section 3.01(a).

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and all
rules and regulations promulgated thereunder, as in effect from time to time.

 

“Holders” means, collectively, the Initial Holders and their respective
successors and permitted assigns (subject to and in accordance with Section
5.08).

 

“Indemnified Party” has the meaning set forth in Section 4.03.

 

“Indemnifying Party” has the meaning set forth in Section 4.03.

 

“Initial Holders” has the meaning set forth in the preamble.

 

“Inspector” has the meaning set forth in Section 3.01(j).

 

“Losses” has the meaning set forth in Section 4.01.

 

“Majority Interest of the Holders” means the holders of at least a majority of
the Registrable Shares.

 

“MBC” has the meaning set forth in the preamble.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust, joint venture, unincorporated organization, other
entity or group, or a government or governmental agency.

 

“Piggyback Registration” has the meaning set forth in Section 2.04(a).

 

“Prospectus” means the prospectus included in a Registration Statement
(including a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.

 

“Purchase Agreement” means the Asset Purchase Agreement dated __________, 2017
between MBC and the Company.

 

“Registrable Shares” means the shares of Common Stock which has been issued to
the Initial Holders pursuant to the Purchase Agreement and held at any time by
the Holders; provided, however, that any such securities will cease to be
Registrable Shares when (i) such securities shall have been disposed of in
accordance with a Registration Statement that has become effective under the
Securities Act, (ii) such securities shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) or any other exemption under
the Securities Act, (iii) such shares have been sold for value by a Holder to an
unaffiliated third party; provided however, that for the avoidance of doubt, any
shares of Common Stock distributed by MBC or any other Holder to its direct or
indirect equity owners and any shares of Common Stock pledged as collateral by
MBC or any other Holder to any lender (and any shares of Common Stock foreclosed
upon by any such lender) shall continue to be Registrable Shares, or (iv) such
shares shall have ceased to be outstanding.

 

 2 

   

 

“Registration Statement” means a registration statement in the form required to
register the resale of Registrable Shares under the Securities Act and other
applicable law, and including any Prospectus, amendments and supplements to each
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

 

“Rule 144” means Rule 144 (or any successor rule of similar effect) promulgated
under the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder, as in effect from time to time.

 

“Selling Holder” means any Holder which is selling Registrable Shares pursuant
to a public offering registered hereunder.

 

“Underwriters” shall mean the underwriters, if any, of the offering of
Registrable Shares pursuant to an Underwritten Shelf Take-Down.

 

“Underwritten Shelf Take-Down” shall have the meaning set forth in Section 2.02.

 

Section 1.02 Internal References Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement.

 

ARTICLE II.

 

REGISTRATION RIGHTS AND RULE 144

 

Section 2.01 Demand Registration Rights. At any time after the first anniversary
of this Agreement, upon written notice from one or more Holders to the Company,
the Company shall prepare and file with the Commission a Registration Statement
relating to the resale by the requesting Holders of their Registrable Shares.
The Company shall be entitled to postpone (but not more than twice in any
12-month period), for a reasonable period of time not in excess of 45 days, the
filing or initial effectiveness of, or suspend the use of, any such Registration
Statement (or a Prospectus thereunder) if the Company delivers to the Holders a
certificate signed by both the Chief Executive Officer and Chief Financial
Officer of the Company certifying that, in the good faith judgment of the Board
of Directors of the Company, such registration, offering or use would reasonably
be expected to materially adversely affect or materially interfere with any bona
fide material financing of the Company or any material transaction under
consideration by the Company or would require the disclosure of information that
has not been, and is not otherwise required to be, disclosed to the public, the
premature disclosure of which would materially adversely affect the Company.
Such certificate shall contain a statement of the reasons for such postponement
or suspension and an approximation of the anticipated delay.

 

 3 

   

 

Section 2.02 Underwritten Shelf Take-Down; Selection of Underwriters. Subject to
the terms and conditions of this Agreement, the Company shall conduct an
underwritten resale of Registrable Shares pursuant to Section 2.01 (an
“Underwritten Shelf Take-Down”) upon the written request of a Majority Interest
of the Holders. In connection with any proposed Underwritten Shelf Take-Down,
each Holder participating in such Underwritten Shelf Take-Down agrees, in an
effort to conduct any such Underwritten Shelf Take-Down in the most efficient
and organized manner, to coordinate reasonably with the other Holders prior to
initiating any sales efforts and cooperate reasonably with the other Holders as
to the terms of such Underwritten Shelf Take-Down, including, without
limitation, the aggregate amount of Registrable Shares to be sold and the number
of Registrable Shares to be sold by each Holder in the Underwritten Shelf
Take-Down. The sole or managing Underwriters and any additional investment
bankers and managers to be used in connection with an Underwritten Shelf
Take-Down shall be selected by the Holders of a majority of the Registrable
Shares included in such Underwritten Shelf Take-Down, subject to the prior
written consent of the Company, such consent to not be unreasonably withheld or
delayed. The Holders of a majority of the Registrable Shares included in such
Underwritten Shelf Take-Down shall also have the right to determine the plan of
distribution and select counsel for the Selling Holders. Notwithstanding
anything herein to the contrary, in no event shall Holders be entitled to effect
an Underwritten Shelf Take-Down on more than three (3) occasions.

 

Section 2.03 Underwritten Offerings.

 

(a) Underwritten Shelf Take-Downs. If requested by the sole or lead managing
Underwriter for any Underwritten Shelf Take-Down, the Company shall enter into a
customary underwriting agreement with the Underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the Company and
to the Holders of a majority of the Registrable Shares participating in such
Underwritten Shelf Take-Down and to contain such representations and warranties
by the Company and such other terms as are customary in agreements of that type,
including, without limitation, indemnification and contribution to the effect
and to the extent provided in Section 4.01.

 

(b) Holders to be Party to Underwriting Agreement. The Holders participating in
an Underwritten Shelf Take-Down shall be party to the underwriting agreement
between the Company and such Underwriters and may, at the option of the Holders
of a majority of the Registrable Shares participating in such Underwritten Shelf
Take-Down, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
Underwriters shall also be made to and for the benefit of such Holders and that
any or all of the conditions precedent to the obligations of such Underwriters
under such underwriting agreement be conditions precedent to the obligations of
such Holders; provided, however, that the Company shall not be required to make
any representations or warranties with respect to written information provided
by such Holders for inclusion in the Registration Statement pursuant to Section
3.01(r). No such Holder shall be required to make any representations or
warranties to, or agreements with, the Company or the Underwriters other than
representations, warranties or agreements regarding such Holder, such Holder’s
Registrable Shares and such Holder’s intended method of disposition.

 

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(c) Participation in Underwritten Registration. Notwithstanding anything herein
to the contrary, no Holder may participate in any Underwritten Shelf Take-Down
hereunder unless such Holder (i) agrees to sell its securities on the terms and
conditions provided in any underwriting agreement pertaining to such
Underwritten Shelf Take-Down approved by the Persons entitled hereunder to
approve such arrangement and (ii) accurately completes and executes in a timely
manner all questionnaires, powers of attorney, custody agreements, lock-up
agreements, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.

 

Section 2.04 Piggyback Registration Rights.

 

(a) General. If the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering of securities for its own account or
for the account of another person (other than a registration statement on Form
S-4 or S-8 (or any substitute form that may be adopted by the Commission)), the
Company shall give written notice of such proposed filing to the Holders as soon
as reasonably practicable (but in no event less than ten (10) days before the
anticipated date on which such registration statement will be first filed with
the Commission), undertaking to provide each Holder the opportunity to register
on the same terms and conditions such number and type of Registrable Shares as
such Holder may request (a “Piggyback Registration”). Each Holder will have five
(5) days after receipt of any such notice to notify the Company as to whether it
wishes to participate in a Piggyback Registration; provided that should a Holder
fail to provide timely notice to the Company, such Holder will forfeit any
rights to participate in the Piggyback Registration with respect to such
proposed offering. Subject to Section 2.04(b), the Company will cause the
Registrable Shares that any Holder requests to be included in the securities to
be covered by the Registration Statement proposed to be filed by the Company,
all to the extent required to permit the sale or other disposition by the
requesting Holder (in accordance with its written request) of such Registrable
Shares. In the event that any Piggyback Registration is an underwritten offering
of Common Stock, the Registrable Shares of the Holders to be included in the
registration pursuant to this Section 2.04 will be included in the underwriting
on the same terms and conditions as the Common Stock otherwise being sold
through underwriters under such Piggyback Registration. If the Company shall
determine in its sole discretion not to register or to delay the proposed
offering, the Company shall provide prompt written notice of such determination
to the Holders.

 

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(b) Priority. Subject to the succeeding provisions of this Section 2.04(b), if
the managing Underwriter or Underwriters shall advise the Company that the
inclusion of Registrable Shares requested to be included in a Piggyback
Registration by any Holder would materially and adversely affect the price,
distribution or timing of the offering, the Company will be obligated to include
in such Registration Statement, as to each Holder, only a portion of the
Registrable Shares such Holder has requested be registered as determined below;
provided, however, that the provisions of this sentence shall not be applicable
to the person or persons initiating such Registration Statement. If the Company
initiated the registration, then the Company may include all of its securities
in such Registration Statement and the number of securities which all security
holders (which have the contractual right to request that their shares be
included in such Registration Statement, including the Holders) have requested
or otherwise sought to be included in such Registration Statement shall be
reduced as necessary pro rata in proportion to the relative number of securities
requested or otherwise sought by each such security holder to be included in
such Registration Statement until the number of securities to be included in
such Registration Statement no longer exceeds the number which can be sold in
such offering. If another security holder initiated the registration and the
Company wishes to include any of its securities in such Registration Statement,
then the number of securities which all security holders (which have the
contractual right to request that their shares be included in such Registration
Statement, including the Holders) and the Company have requested or otherwise
sought to be included in such Registration Statement shall be reduced as
necessary pro rata in proportion to the relative number of securities requested
or otherwise sought by each such security holder and the Company to be included
in such Registration Statement until the number of securities to be included in
such Registration Statement no longer exceeds the number which can be sold in
such offering. If, as a result of the provisions of this Section 2.04(b), any
Holder shall not be entitled to include all Registrable Shares in a registration
that such Holder has requested to be so included, such Holder may withdraw such
Holder’s request to include Registrable Shares in such Registration Statement
prior to its effectiveness.

 

Section 2.05 Additional Rights. The Company shall not grant to any Person other
than the Holders the right to request or require the Company to register any
Common Stock, or any securities convertible, exchangeable or exercisable for or
into Common Stock without the prior written consent of a Majority Interest of
the Holders.

 

Section 2.06 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may at any time permit the
sale of the Registrable Shares to the public without registration, the Company
agrees to:

 

(a) Make and keep public information available, as those terms are understood
and defined in Rule 144, at all times while the Company is subject to the
reporting requirements of the Exchange Act;

 

(b) File with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act (at all
times that it is subject to such reporting requirements); and

 

(c) So long as any Holder owns any Registrable Shares, to furnish to any
requesting Holder forthwith upon request a written statement by the Company as
to its compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Exchange Act (at all times that it is subject to the
reporting requirements of the Exchange Act), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as the requesting Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing the Holder to sell any such
securities without registration (at all times that the Company is subject to the
reporting requirements of the Exchange Act).

 

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ARTICLE III.

 

REGISTRATION PROCEDURES

 

Section 3.01 Filings; Information In connection with the registration of
Registrable Shares pursuant to Article II hereof:

 

(a) The Company will use its commercially reasonable efforts to cause the filed
Registration Statement to become and remain effective until all shares of Common
Stock covered by the Registration Statement are no longer Registrable Shares
(the “Effectiveness Period”).

 

(b) The Company will keep the Selling Holders and their counsel apprised of the
status of the registration and shall provide copies of such documents (including
drafts of the Registration Statement or Prospectus or any amendments or
supplements thereto) as the Selling Holders and their counsel may reasonably
request.

 

(c) The Company will notify the Selling Holders, as soon as practicable after
notice thereof is received by the Company, (i) when the Registration Statement
or any amendment thereto has been filed or becomes effective and the Prospectus
or any amendment or supplement to the Prospectus has been filed, and (ii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Shares for offering or sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.

 

(d) After the filing of the Registration Statement, the Company will promptly
notify the Selling Holders of any stop order issued, or, to the Company’s
knowledge, threatened to be issued, by the Commission and use its commercially
reasonable efforts to prevent the entry of such stop order or to remove it if
entered.

 

(e) The Company will prepare and file with the Commission such amendments,
post-effective amendments and supplements to such Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the Effectiveness Period, cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement (to the extent such
compliance obligations fall on the Company) during such period in accordance
with the intended methods of disposition by the Holders set forth in such
Registration Statement.

 

 7 

   

 

(f) The Company will furnish to each Selling Holder and each Underwriter, if
any, without charge, such number of conformed copies of such Registration
Statement, each amendment and supplement thereto, the Prospectus included in
such Registration Statement (including each preliminary Prospectus) and any
amendments or supplements thereto, as any such Selling Holder or Underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Shares.

 

(g) The Company will use its commercially reasonable efforts to qualify (or
exempt) the Registrable Shares for offer and sale under such other securities or
blue sky laws of such jurisdictions in the United States as the Selling Holders
or Underwriter, if any, reasonably request; keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness
Period; and do any and all other acts and things which may be reasonably
necessary or advisable to enable each Selling Holder to consummate the
disposition of the Registrable Shares owned by such Selling Holder in such
jurisdictions; provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph 3.01(g), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction where it is not then so subject.

 

(h) The Company will as promptly as practicable notify the Selling Holders and
the sole or lead managing Underwriter, if any, at any time when a Prospectus
relating to the sale of the Registrable Shares is required by law to be
delivered under the Securities Act, of the occurrence of any event requiring the
preparation of a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and promptly make available to the Selling Holders and the
sole or lead managing Underwriter, if any, any such supplement or amendment.
Upon receipt of any notice of the occurrence of any event of the kind described
in the preceding sentence, the Selling Holders will forthwith discontinue the
offer and sale of Registrable Shares pursuant to the Registration Statement
covering such Registrable Shares until receipt by the Selling Holders of the
copies of such supplemented or amended Prospectus and, if so directed by the
Company, the Selling Holders will deliver to the Company all copies, other than
permanent file copies then in the possession of Selling Holders, of the most
recent Prospectus covering such Registrable Shares at the time of receipt of
such notice.

 

(i) The Company shall use commercially reasonable efforts to cause the
Registrable Shares included in any Registration Statement to be (A) listed on
each securities exchange, if any, on which similar securities issued by the
Company are then listed or (B) authorized to be quoted and/or listed (to the
extent applicable) on the Nasdaq Capital Market (or any other applicable Nasdaq
market), if the Registrable Shares so qualify.

 

(j) Provided that each such Inspector executes a confidentiality agreement in
form and substance reasonably acceptable to the Company, the Company shall make
available for inspection by the Selling Holders, any sole or lead managing
Underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by the Selling
Holders, or any Underwriter (each, an “Inspector” and, collectively, the
“Inspectors”), all financial and other records, pertinent corporate documents
and properties of the Company and any subsidiaries thereof as may be in
existence at such time as shall be necessary, in the opinion of the Holders’ and
such Underwriters’ respective counsel, to enable them to exercise their due
diligence responsibility and to conduct a reasonable investigation within the
meaning of the Securities Act, and cause the Company’s and any subsidiaries’ or
officers, directors and employees, and the independent public accountants of the
Company, to supply all information reasonably requested by any such Inspectors
in connection with such Registration Statement.

 

 8 

   

 

(k) The Company shall obtain an opinion from its counsel and a “cold comfort”
letter from its independent public accountants who have certified the Company’s
financial statements included or incorporated by reference in such Registration
Statement, in each case dated the date of the Prospectus that is part of such
Registration Statement (and if such registration involves an Underwritten Shelf
Take-Down, dated the date of the closing under the underwriting agreement), in
customary form and covering such matters as are customarily covered by such
opinions and “cold comfort” letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be reasonably satisfactory to
the sole or lead managing Underwriter, if any, and to a Majority Interest of the
Holders, and furnish to the Selling Holders and to each Underwriter, if any, a
copy of such opinion and letter addressed to the Selling Holders (in the case of
the opinion) and Underwriter (in the case of the opinion and the “cold comfort”
letter).

 

(l) The Company shall provide a CUSIP number, registrar and transfer agent for
the Registrable Shares included in any Registration Statement not later than the
effective date of such Registration Statement.

 

(m) The Company shall enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers’
certificates and other customary closing documents.

 

(n) The Company shall cooperate with the Selling Holders and the sole or lead
managing Underwriter, if any, to facilitate the timely preparation and delivery
of certificates not bearing any restrictive legends representing the Registrable
Shares to be sold, and cause such Registrable Shares to be issued in such
denominations and registered in such names in accordance with the underwriting
agreement prior to any sale of Registrable Shares to the Underwriters or, if not
an Underwritten Shelf Take-Down, in accordance with the instructions of the
Selling Holders at least three (3) business days prior to any sale of
Registrable Shares.

 

(o) The Company shall take all reasonable actions to ensure that any Free
Writing Prospectus (as defined in Rule 405 of the Securities Act) utilized in
connection with any Registration hereunder complies in all material respects
with the Securities Act, is filed in accordance with the Securities Act to the
extent required thereby, is retained in accordance with the Securities Act to
the extent required thereby and, when taken together with the related
prospectus, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

 9 

   

 

(p) The Company and each Selling Holder shall cooperate in connection with any
filings required to be made with FINRA.

 

(q) The Company shall, during the period when the Prospectus is required to be
delivered under the Securities Act, file all documents required to be filed with
the Commission pursuant to the Exchange Act in accordance with the provisions of
the Exchange Act and the rules and regulations promulgated thereunder.

 

(r) Upon the request of the Company, each Selling Holder shall promptly furnish
in writing to the Company such information regarding such Selling Holder, the
plan of distribution of the Registrable Shares and other information as may be
legally required in connection with such registration, and the Selling Holders
shall do so as promptly as reasonably practicable.

 

Section 3.02 Registration Expenses

 

(a) Except as set forth in Section 3.02(b) below, the Company will pay all
expenses incurred in connection with registering the Registrable Shares
hereunder, including (i) registration and filing fees with the Commission and
the FINRA with respect to registering the Registrable Shares, (ii) fees and
expenses incurred in connection with the listing or quotation of the Registrable
Shares, (iii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Shares), (iv) printing expenses, (v) fees
and expenses of counsel to the Company and independent certified public
accountants for the Company (including fees and expenses associated with the
special audits or the delivery of comfort letters), (vi) fees and expenses of
any additional experts retained by the Company in connection with such
registration and (vii) reasonable fees and expenses of not more than one law
firm (as selected by a Majority Interest of the Holders included in such
registration) incurred by the Selling Holders in connection with such law firm’s
review on behalf of the Selling Holders of the Registration Statement and
Prospectus under which the Registrable Shares are registered; provided that the
Company will not be obligated to incur or reimburse more than $5,000 in fees and
expenses described in this clause (vii).

 

(b) The Selling Holders will pay (i) any and all fees and expenses of counsel to
the Holders incurred in connection with registering and reselling the
Registrable Shares (for the avoidance of doubt, excluding the fees and expenses
to be paid by the Company as specifically provided in Section 3.02(a)(vii)
above) and (ii) any expenses of any Underwriters, underwriting discounts or
commissions or any broker’s fees or other similar selling fees attributable to
the sale of Registrable Shares.

 

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Section 3.03 Lock-Up Agreements. Each Selling Holder in an Underwritten Shelf
Take-Down shall, if requested (pursuant to a written notice) by the managing
Underwriter (pursuant to a lock-up agreement in a customary form requested by
the managing Underwriter), not effect any public sale or distribution of any
Registrable Shares (except as part of such underwritten offering) during the
period commencing seven (7) days prior to and continuing for not more than sixty
(60) days (or such shorter period as the managing Underwriter may permit) after
the date of the Prospectus (or Prospectus supplement if the offering is made
pursuant to a “shelf” Registration Statement) pursuant to which such
Underwritten Shelf Take-Down shall be made.

 

ARTICLE IV.

 

INDEMNIFICATION AND CONTRIBUTION

 

Section 4.01 Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by applicable law, each Selling
Holder and its Affiliates and their respective officers, directors, partners,
stockholders, members, employees, agents and representatives and each Person (if
any) which controls a Selling Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages, liabilities, costs and expenses (including
reasonable attorneys’ fees) (collectively, “Losses”) caused by, arising out of,
resulting from or related to any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement, preliminary Prospectus
or Prospectus relating to the Registrable Shares (as amended or supplemented
from time to time), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the case of the Prospectus, in light of the circumstances
under which they were made, not misleading, except insofar as such Losses are
caused by or contained in or based upon any information furnished in writing to
the Company by or on behalf such Selling Holder or any Underwriter selected by
the Holders expressly for use therein (which was not subsequently corrected in
writing prior to or concurrently with the sale of Registrable Shares to the
Person asserting the Loss in sufficient time to permit the Company to amend or
supplement the Registration Statement or such Prospectus appropriately) or by
the Selling Holder’s failure to deliver a copy of the Registration Statement or
Prospectus or any amendments or supplements thereto after the Company has
furnished the Selling Holder with copies of the same. Notwithstanding the
foregoing, the Company shall have no obligation to indemnify under this Section
4.01 to the extent that any such Losses have been finally determined by a court
of competent jurisdiction (which determination has become nonappealable) to have
resulted from a Selling Holder’s or an Underwriter’s willful misconduct or gross
negligence.

 

Section 4.02 Indemnification by Holders. The Selling Holders, severally but not
jointly, agree to indemnify and hold harmless, to the fullest extent permitted
by applicable law, the Company and its Affiliates and their respective officers,
directors, partners, stockholders, members, employees, agents and
representatives and each Person (if any) which controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all Losses caused by, arising out of, resulting
from or related to any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary Prospectus or
Prospectus relating to the Registrable Shares (as amended or supplemented from
time to time), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus, in light of the circumstances under
which they were made, not misleading, but only insofar as such Losses are caused
by or contained in or based upon any information furnished in writing to the
Company by or on behalf of a Selling Holder expressly for use therein (which was
not subsequently corrected in writing prior to or concurrently with the sale of
Registrable Shares to the Person asserting the Loss in sufficient time to permit
the Company to amend or supplement the Registration Statement or such Prospectus
appropriately). Notwithstanding the foregoing, the Selling Holders shall have no
obligation to indemnify under this Section 4.02 to the extent that any such
Losses have been finally determined by a court of competent jurisdiction (which
determination has become nonappealable) to have resulted from the Company’s
willful misconduct or gross negligence.

 

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Section 4.03 Conduct of Indemnification Proceedings. In case any claim or
proceeding (including any governmental investigation) shall be instituted or
threatened involving any Person in respect of which indemnity may be sought
pursuant to Section 4.01 or Section 4.02, such Person (the “Indemnified Party”)
shall promptly notify the Person against which such indemnity may be sought (the
“Indemnifying Party”) in writing (it being understood that the failure to give
such notice shall not relieve any Indemnifying Party from any liability which it
may have hereunder except to the extent the Indemnifying Party is actually and
materially prejudiced by such failure) and the Indemnifying Party, upon the
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to such Indemnified Party to represent such Indemnified Party and shall pay the
fees and disbursements of such counsel related to such claim or proceeding. If
the Indemnifying Party does not elect within fifteen (15) days after receipt of
the notice required hereby to assume the defense of any claim or proceeding, the
Indemnified Party may assume such defense with counsel of its choice at the cost
and expense of the Indemnifying Party. In any such claim or proceeding where the
Indemnifying Party has assumed the defense, any Indemnified Party shall have the
right to retain its own counsel and participate in, but not control, the
defense, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and, in the written
opinion of counsel for the Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential conflicting
interests between them, in which case the Indemnified Party may retain counsel
of its choice, which counsel shall be reasonably satisfactory to the
Indemnifying Party, and such counsel may defend the Indemnified Party and its
reasonable fees and expenses shall be paid by the Indemnifying Party. It is
understood that the Indemnifying Party shall not, in connection with any claim
or proceeding or related proceedings, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel for each such jurisdiction) at any time for all such Indemnified
Parties, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Indemnified Parties,
such firm shall be designated in writing by the Indemnified Parties. The
Indemnifying Party shall not settle any claim or proceeding without the written
consent of the Indemnified Party (not to be unreasonably withheld), unless such
settlement (x) requires no remedy, relief or penalty other than the payment of
money damages which is to be paid in full by the Indemnifying Party, (y) does
not require any Indemnified Party to admit culpability or fault in any respect
and (z) contains a full and complete release of the Indemnified Party with
respect to all matters arising from the facts giving rise to the underlying
claim or proceeding. The Indemnifying Party shall not be liable for any
settlement of any claim or proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any Loss (to the extent stated above) by reason of such
settlement or judgment.

 

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Section 4.04 Contribution. If the indemnification provided for in this Article
IV is unavailable to an Indemnified Party in respect of any Losses in respect of
which indemnity is to be provided hereunder, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall to the fullest extent
permitted by law contribute to the amount paid or payable by such Indemnified
Party as a result of such Losses in such proportion as is appropriate to reflect
the relative fault of such party in connection with the statements or omissions
that resulted in such Losses, as well as any other relevant equitable
considerations. The relative fault of the Company and each Selling Holder shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each Selling Holder agree
that it would not be just and equitable if contribution pursuant to this Section
4.04 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Party as a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim or
proceeding. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person which was not guilty of such fraudulent misrepresentation.

 

ARTICLE V.

 

MISCELLANEOUS

 

Section 5.01 Participation in Registrations. No Holder may participate in any
resale of Registrable Shares contemplated hereunder unless such Holder (a)
completes and executes all questionnaires, powers of attorney, custody
arrangements, indemnities and other documents reasonably required under the
terms of this Agreement, (b) furnishes in writing to the Company such
information regarding such Holder, the plan of distribution of the Registrable
Shares and other information as the Company may from time to time reasonably
request or as may be legally required in connection with such registration and
(c) sells or otherwise transfers its securities in accordance with the plan of
distribution described in the Prospectus covering such sale and delivers a
current Prospectus in connection therewith in accordance with the requirements
of the Securities Act; provided, however, that no such Holder shall be required
to make any representations or warranties in connection with any such
registration other than representations and warranties as to (i) such Holder’s
ownership of its Registrable Shares to be sold or transferred free and clear of
all liens, claims and encumbrances, (ii) such Holder’s power and authority to
effect such transfer and (iii) such matters pertaining to compliance with
securities laws as may be reasonably requested.

 

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Section 5.02 Compliance. The Company covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act in
accordance with the provisions of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder. Upon the request of any
Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such reporting requirements.

 

Section 5.03 Termination. The registration rights granted under this Agreement
will terminate at such time as there shall no longer be any Registrable Shares.

 

Section 5.04 Amendments, Waivers, Etc. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by the
written consent of a Majority Interest of the Holders. Any such amendment or
waiver shall be binding on all Holders and their respective legal
representatives, successors and permitted assigns.

 

Section 5.05 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Copies (whether
photostatic, facsimile or otherwise) of this Agreement may be made and relied
upon to the same extent as an original.

 

Section 5.06 Entire Agreement. This Agreement (together with the exhibits
hereto) constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties with respect to the subject matter
hereof. There is no statement, promise, agreement or obligation in existence
which may conflict with the terms of this Agreement or which may modify, enlarge
or invalidate this Agreement or any provision hereof. None of the prior and/or
contemporaneous negotiations, preliminary drafts, or prior versions of this
Agreement leading up to its execution and not set forth herein shall be used by
any of the parties to construe or affect the validity of this Agreement.

 

Section 5.07 Controlling Law; Jurisdiction and Venue. This Agreement shall be
governed by, interpreted under, and construed and enforced in accordance with,
the law of the State of Delaware, not taking into account any rules of conflicts
laws that would cause the application of the laws of any other jurisdiction.
Each of the parties irrevocably agrees that any legal action or proceeding
arising out of or relating to this Agreement brought by any other Party or its
successors or assigns shall be brought and determined in the Court of Chancery
of the State of Delaware or, if such court lacks subject matter jurisdiction,
any state or federal court in the State of Delaware, and each of the parties
hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts
for itself and with respect to its property, generally and unconditionally, with
regard to any such action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. Each of the parties agrees
not to commence any action, suit or proceeding relating thereto except in the
courts described above in Delaware, other than actions in any court of competent
jurisdiction to enforce any judgment, decree or award rendered by any such court
in Delaware as described herein. Each of the parties further agrees that notice
as provided herein shall constitute sufficient service of process and the
parties further waive any argument that such service is insufficient. Each of
the parties hereby irrevocably and unconditionally waives, and agrees not to
assert, by way of motion or as a defense, counterclaim or otherwise, in any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, (a) any claim that it is not personally
subject to the jurisdiction of the courts in Delaware as described herein for
any reason, (b) that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) and (c) that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

 

 14 

   

 

Section 5.08 Assignment of Registration Rights. Each Holder of Registrable
Shares may assign all or any part of its rights under this Agreement to any
Person to which such Holder sells, transfers or assigns any of its Registrable
Shares, provided that (i) such sale, transfer or assignment is permitted under
the terms of Company’s charter, any lockup agreements and all other documents
and agreements applicable to such securities, and (ii) such Person agrees in
writing to be bound by the provisions of this Agreement by executing and
delivering a joinder agreement in the form of Exhibit A hereto. In the event
that the Holder shall assign its rights pursuant to this Agreement in connection
with the transfer of less than all its Registrable Shares, the Holder shall also
retain its rights with respect to its remaining Registrable Shares.

 

Section 5.09 Specific Performance. The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any state or United States Federal court
sitting in the Eastern District of Michigan, this being in addition to any other
remedy to which they are entitled at law or in equity. Additionally, each Party
irrevocably waives any defenses based on adequacy of any other remedy, whether
at law or in equity, that might be asserted as a bar to the remedy of specific
performance of any of the terms or provisions hereof or injunctive relief in any
action brought therefor.

 

Section 5.10 Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable, or
void, portions of such provision, or such provision in its entirety, to the
extent necessary, shall be severed from this Agreement and the balance of this
Agreement shall be enforceable in accordance with its terms; provided, that upon
any such declaration by a court of competent jurisdiction, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible.

 

Section 5.11 Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be duly given if (a)
delivered personally, (b) mailed, certified or registered mail with postage
prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by
email. All notices hereunder shall be delivered to the respective parties at the
following addresses (or at such other address for a Party as shall be specified
in a notice given in accordance with this Section 8.2):

 

 15 

   

 

To each Initial Holder, to the address(es) set forth under its signature to this
Agreement.

 

To any other Holder: To such address as such Holder designates in the joinder
agreement executed by such Holder in the form of Exhibit A hereto.

 

To the Company:

 

New Age Beverages Corporation

1700 68th Avenue

Denver, Colorado 90503

Attention: Brent Willis

Email: bwillis@newagebev.us

 

with a copy (which shall not constitute notice) to:

 

Bart and Associates, LLC

8400 East Prentice Avenue, Suite 1500

Greenwood Village, Colorado 80111

Attention: Ken Bart

Email: kbart@kennethbartesq.com

 

All such notices, requests, claims, demands, waivers and other communications
shall be deemed to have been given when received (x) if by personal delivery, on
the day of such delivery, if on a business day and delivered prior to 5:00 p.m.,
otherwise on the business day following such delivery, (y) if by mail, next-day
or overnight mail or delivery, on the day delivered, if on a business day and
delivered prior to 5:00 p.m., otherwise on the business day following such
delivery and (z) if by email, on the business day on which such email was
received, if prior to 5:00 p.m., otherwise on the business day following such
receipt.

 

Section 5.12 Benefit and Construction. The covenants, agreements and
undertakings of each of the Parties hereto are made solely for the benefit of,
and may be relied on only by, the other Parties hereto, their transferees and
assigns, and are not made for the benefit of, nor may they be relied upon, by
any other Person whatsoever. This Agreement shall not be construed more strictly
against one Party than against any other Party, merely by virtue of the fact
that it may have been prepared by counsel for one of the Parties, it being
recognized that each of the Parties has contributed substantially and materially
to the preparation of this Agreement

 

[Signature page follows]

 

 16 

   

 

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

 

  COMPANY:       New Age Beverages Corporation       By:
                              Name:     Title:  

 

 

[Company signature page to Registration Rights Agreement

with New Age Beverages Corporation]

 

 

 

 

  INITIAL HOLDER:   Marley Beverage Company, LLC       By:     Name:     Title:
          Notice for addresses:         Marley Beverage Company, LLC   c/o Gary
A. Shiffman   27777 Franklin Road, Suite 200   Southfield, Michigan 48034  
Email: gshiffman@suncommunities.com         with a copy (which shall not
constitute notice) to:         Jaffe, Raitt, Heuer & Weiss, P.C.   27777
Franklin Road, Suite 2500   Southfield, Michigan 48034   Attention: Arthur A.
Weiss                       Matthew Murphy   Email: aweiss@jaffelaw.com    
mmurphy@jaffelaw.com

 

 

[Initial Holder signature page to Registration Rights Agreement

with New Age Beverages Corporation]

 

 

 

 

  INITIAL HOLDER:       [__________________________]       By:
                                                       Name:     Title:  

 

  Notice for addresses:                                                     
Email:                                  

 

 

[Initial Holder signature page to Registration Rights Agreement

with New Age Beverages Corporation]

 

 

 

 

Exhibit A

 

Form of Joinder Agreement

 

By executing and delivering this Joinder Agreement, the undersigned hereby joins
in and agrees to become a party to the Registration Rights Agreement dated as of
____________, 2017 (the “Registration Rights Agreement”), among New Age
Beverages Corporation, certain Initial Holders named therein, and any other
Holder that has become a party thereto, as if the undersigned was an original
signatory to the Registration Rights Agreement. From and after the date hereof
the undersigned agrees to be bound by, and shall have all rights and obligations
of a Holder under, the Registration Rights Agreement.

 

All notices, requests, claims, demands, waivers and other communications under
the Registration Rights Agreement to the undersigned shall be addressed to:

 

                 

 

The undersigned has executed and delivered this Joinder Agreement, effective as
of ____________________, 20__.

 

  Holder:       [__________________________]         By:                Name:  
  Title:                                              

 

 

 

 

EXHIBIT E

 

FORM OF NOTICE

 

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