ycbd_ex10-1





Exhibit
10.1










 



ADDENDUM NO. 1



TO THE



AGREEMENT AND PLAN OF MERGER


 


THIS ADDENDUM NO. 1 TO THE AGREEMENT AND PLAN
OF MERGER (the “Agreement”)
is made and entered into as of the date of the last signatory
hereto by and among cbdMD, Inc., a North Carolina corporation with
its principal place of business located at 8845 Red Oak Boulevard,
Charlotte, NC 28217 (the “Corporation”)
and the holders of the Remaining Earnout Rights (as defined herein)
set forth on the signature pages hereto (each a “Holder”
and collectively the “Holders”).
The Corporation and the Holders are sometimes referred to as the
“Parties.”
This Agreement shall be effective upon the execution hereof by all
Parties hereto.


 



W I T N E S S E T H:


 


WHEREAS, on December 3, 2018, the
Corporation, its wholly-owned subsidiaries and Cure Based
Development, LLC, a North Carolina limited liability company
(“Cure Based
Development”) entered into that certain Agreement and
Plan of Merger (the “Merger
Agreement”).


 


WHEREAS, on December 20, 2018 the
transactions contemplated by the Merger Agreement closed (the
“Closing
Date”).


 


WHEREAS, pursuant to the terms of the
Merger Agreement CBD Holding, LLC, a North Carolina limited
liability company (“CBDH”)
received as partial consideration for the transactions contemplated
by the Merger Agreement contractual rights (the “Earnout
Rights”) to receive up to 15,250,000 shares of the
Corporation’s common stock (the “Earnout
Shares”) upon the achievement of certain earnout
targets as set forth in the Merger Agreement.


 


WHEREAS, on February 26, 2020, CBDH, in
connection with its liquidation, distributed the Remaining Earnout
Rights to the Holders.


 


WHEREAS, following the issuance of the
First Marking Period Earnout Shares in February 2020 and the
issuance of the Second Marking Period Earnout Shares in March 2021,
Earnout Rights (the “Remaining Earnout
Rights”) for the possible issuance of up to an
aggregate of 6,773,953 Earnout Shares (the “Remaining Earnout
Shares”) remain under the terms of the Merger
Agreement.


 


WHEREAS, the Parties hereto desire to
amend certain terms of the Merger Agreement as hereinafter set
forth.


 


NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained in this Agreement, the
Parties hereto agree as follows:


 



1.           

Recitals.
The foregoing recitals are true and correct and are incorporated
herein by such reference. All terms not otherwise defined herein
shall have the same meaning as in the Merger
Agreement.






 






 








 






 



2.           

Amendment to Third
Marking Period. The Third Marking Period is
hereby measured as follows:






 

(a) The
determination of the Aggregate Net Revenues within the Third
Marking Period shall be made on a quarterly basis for each of the
six fiscal quarters within the Third Marking Period (the
“Fiscal Quarter
Third Marking Periods”) instead of following Third
Marking Period End Date. The Fiscal Quarter Third Marking Periods
are as follows:


 


	

First
Fiscal Quarter Third Marking Period:

	

January
1, 2021 through March 31, 2021


	

Second
First Quarter Third Marking Period:

	

April
1, 2021 through June 30, 2021


	

Third
Fiscal Quarter Third Marking Period:

	

July 1,
2021 through September 30, 2021


	

Fourth
Fiscal Quarter Third Marking Period:

	

October
1, 2021 through December 31, 2021


	

Fifth
Fiscal Quarter Third Marking Period:

	

January
1, 2022 through March 31, 2022


	

Sixth
Fiscal Quarter Third Marking Period:

	

April
1, 2022 through June 30, 2022







 

(b) The Corporation
shall prepare a Net Revenue Certificate within 45 days following
the end of each of such fiscal quarter within the Third Marking
Period instead of following the end of the Third Marking Period
(the “Quarterly Net
Revenue Certificate”).


 

(c) Following the
determination of the portion of the Third Earnout Shares which
shall have been earned in each of the Fiscal Quarter Third Marking
Periods, the Corporation shall issue such shares to the Holders
pursuant to the terms of the Merger Agreement.


 

(d) Except as set
forth herein with respect to the measure dates within the Third
Marking Period, all other terms and conditions of the Merger
Agreement with respect to the Earnout Rights and the Earnout Shares
remain in full force and effect.


 




3.


Representations and
Warranties of the Holders. Each Holder hereby represents and
warrants to the Corporation as follows:






 


(a)
Power and
Authority. The execution and delivery of this Agreement and
each instrument required hereby to be executed and delivered by
each Holder, the performance of the Holder’s obligations
hereunder, and the consummation by the Holder of the transactions
contemplated hereby have been duly and validly authorized by all
necessary action on the part of the Holder, and no other
proceedings on the part of the Holder us necessary to authorize
this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed by the
Holder,
and, assuming this Agreement has been duly executed by the
Corporation, this Agreement constitutes a valid and binding
agreement of the Holder, enforceable against the Holder in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.


 


(b)
Ownership of Earnout
Rights. The Holder is the sole record and beneficial owner
of the Remaining Earnout Rights in the percentage set forth on the
signature page hereof, which such Remaining Earnout Rights are
owned free and clear of all liens and encumbrances, and have not
been sold, pledged, assigned or otherwise transferred.


  







 

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(c)
Consents and
Approvals. The execution and performance of this Agreement
does not, and the consummation of the transactions contemplated
hereby and compliance with the provisions of this Agreement will
not (a) conflict with or violate any statute, ordinance, rule,
regulation, judgment, order, writ, injunction, decree or law
applicable to the Holder, or (b) by which the Holder or its
properties or assets may be bound or affected, or result in a
violation or breach of or constitute a default (or an event which
with or without notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in any loss
of any benefit under, any contract, agreement or arrangement to
which the Holder is a party. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental entity, is required in
connection with the execution of this Agreement by the Holder or
the consummation by it of the transactions contemplated
hereby.


 




4.



Representations and
Warranties of the Corporation. The Corporation hereby
warrants and represents to Holders as follows:






 


(a)
Organization and Good
Standing. The Corporation is an entity duly incorporated,
validly existing and in good standing under the laws of the State
of North Carolina, with full corporate power and authority to own,
lease and operate its business and properties and to carry on its
business in the places and in the manner as presently conducted or
proposed to be conducted.


 


(b)
Authority and
Enforcement. The Corporation has all requisite corporate
power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby. The Corporation
has taken all corporate action necessary for the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, and this Agreement constitutes the valid and
binding obligation of the Corporation, enforceable against it in
accordance with its terms, except as may be affected by bankruptcy,
insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and subject to the
qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding
therefor may be brought.


 


(c)
No Conflicts or
Defaults. The execution and delivery of this Agreement by
the Corporation and the consummation of the transactions
contemplated hereby do not and shall not (a) contravene its
articles of incorporation or bylaws, or (b) with or without the
giving of notice or the passage of time (i) violate, conflict with,
or result in a material breach of, or a material default or loss of
rights under, any covenant, agreement, mortgage, indenture, lease,
instrument, permit or license to which
it is a party or by which it is bound, or any judgment, order or
decree, or any law, rule or regulation to which it is subject, (ii)
result in the creation of, or give any party the right to create,
any lien upon any assets or properties of the Corporation, or (iii)
terminate or give any party the right to terminate, amend, abandon
or refuse to perform, any material agreement, arrangement or
commitment relating to which the Corporation is a
party.


 




 

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5.


Miscellaneous.






 


(a)
Expenses. Except as otherwise expressly
provided herein, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors
and accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.


 


(b)
Notices. All
notices, requests, consents, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to
have been given: (i) when delivered by hand (with written
confirmation of receipt); (ii) when received by the addressee if
sent by a nationally recognized overnight courier (receipt
requested); (iii) on the date sent by facsimile or e-mail of a .PDF
document (with confirmation of transmission) if sent during normal
business hours of the recipient, and on the next business day if
sent after normal business hours of the recipient; or (iv) on the
third (3rd) day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid. Such
communications must be sent 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
5(b):


 


	

If to
the Corporation:

	

cbdMD,
Inc.


8845
Red Oak Boulevard


Charlotte,
NC 28217


Attention:
T. Ronan Kennedy,


Chief
Financial Officer


email:
ronan.kennedy@cbdMD.com


	
 

	
 


	

with a
copy to:

	

Pearlman
Law Group LLP


200 S.
Andrews Avenue


Suite
901


Fort
Lauderdale, FL 33301


Attention:
Brian A. Pearlman, Esq.


email:
brian@pslawgroup.net


	
 

	
 


	

If to
the Holders:

	

To the
names, addresses and email addresses set forth on the signature
page hereof







 


(c)
Headings. The
headings in this Agreement are for reference only and shall not
affect the interpretation of this Agreement.


 


(d)
Severability. If
any term or provision of this Agreement is invalid, illegal or
unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction. Upon such determination that
any term or other provision is invalid, illegal or unenforceable,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.


 




 

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(e)
Entire Agreement.
This Agreement constitutes the entire agreement of the parties to
this Agreement with respect to the subject matter contained herein,
and supersedes all prior and contemporaneous understandings and
agreements, both written and oral, with respect to such subject
matter.


 


(f)
Successors and
Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party may assign its rights or
obligations hereunder without the prior written consent of the
other parties, which consent shall not be unreasonably withheld or
delayed.


 


(g)
No Third-party
Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person or entity any legal or equitable
right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.


 


(h)
Amendment and
Modification; Waiver. This Agreement may only be amended,
modified or supplemented by an agreement in writing signed by each
party hereto. No waiver by any party of any of the provisions
hereof shall be effective unless explicitly set forth in writing
and signed by the party so waiving. No waiver by any party shall
operate or be construed as a waiver in respect of any failure,
breach or default not expressly identified by such written waiver,
whether of a similar or different character, and whether occurring
before or after that waiver. No failure to exercise, or delay in
exercising, any right, remedy, power or privilege arising from this
Agreement shall operate or be construed as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or
privilege.


 


(i)
Specific
Performance. The parties agree that irreparable damage would
occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition
to any other remedy to which they are entitled at law or in
equity.


 


(j)
Counterparts. This
Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall be deemed to be
one and the same agreement. A signed copy of this Agreement
delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as
delivery of an original signed copy of this Agreement.


 


(k)
Jurisdiction and Governing
Law. This Agreement and all disputes or controversies
arising out of or relating to this Agreement or the transactions
contemplated hereby shall be governed by, and construed in
accordance with, the internal laws of the State of North Carolina,
without regard to the laws of any other jurisdiction that might be
applied because of the conflicts of laws principles of the State of
North Carolina. Each of the parties
hereto expressly and irrevocably: (1) agree that any legal suit,
action or proceeding arising out of or relating to this Agreement
will be instituted exclusively in United States District Court for
the Western District of North Carolina; (2) waive any objection
they may have now or hereafter to the venue of any such suit,
action or proceeding; and (3) consent to the in personam
jurisdiction of United States District Court for the Western
District of North Carolina in any such suit, action or proceeding.
Each of the parties hereto further agrees to accept and acknowledge
service of any and all process which may be served in any such
suit, action or proceeding in the United States District Court for
the Western District of North Carolina and agree that service of
process upon it mailed by certified mail to its address will be
deemed in every respect effective service of process upon it, in
any such suit, action or proceeding.


 




 

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(l)
Role of Counsel.
The Parties acknowledge their understandings that this Agreement
was prepared at the request of the Corporation by Pearlman Law
Group LLP, its counsel, and that such firm did not represent the
Holders in conjunction with this Agreement or any of the related transactions. The
Holder, as further evidenced by its signature below, acknowledges
that it has had the opportunity to obtain the advice (including
advice relating to tax matters) of independent counsel of its
choosing prior to its execution of this Agreement and that it has
availed itself of this opportunity to the extent it deemed
necessary and advisable.


 


 




 

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


 


	

Dated:
March 31, 2021

	


cbdMD, Inc.


	
 

	
 

	
 


	
 

	

By:

	

/s/ T.
Ronan Kennedy


	
 

	
 

	

T.
Ronan Kennedy, Chief Financial Officer


	
 

	
 


	
 

	


Holders:


	
 

	
 

	
 


	

Dated:
March 30, 2021

	


COFFMAN FAMILY OFFICE, LLC, a North Carolina limited
liability company


	
 

	

By:
Coffman Management, LLC, its Manager


	
 

	
 


	
 

	

By:

	

/s/ R.
Scott Coffman


	
 

	
 

	

R.
Scott Coffman, Manager


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest - 65.65%


	
 

	
 

	
 


	

Dated:
March 30, 2021

	


JUSTICE FAMILY OFFICE, LLC, a North Carolina limited
liability company


	
 

	
 

	
 


	
 

	

By:

	

/s/
Shannon L. Justice


	
 

	

Shannon
L. Justice, Manager


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 10.84%


	
 

	
 

	
 


	

Dated:
March 30, 2021

	


SUMICHRAST 2017 FAMILY TRUST


	
 

	
 

	
 


	
 

	

By:

	

/s/
Martin A. Sumichrast


	
 

	
 

	

Martin
A. Sumichrast, Trustee


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 9.0%


	
 

	
 

	
 







 




 

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Dated:
March 30, 2021

	


BCEZ INVESTMENTS, LLC, a North Carolina limited liability
company


	
 

	
 

	
 


	
 

	

By:

	

/s/
Caryn Dunayer


	
 

	
 

	

Caryn
Dunayer, Manager


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 5.0%


	
 

	
 

	
 


	

Dated:
March 31, 2021

	


CBD NOW, LLC, a North Carolina limited liability
company


	
 

	
 

	
 


	
 

	

By:

	

/s/
Thomas E. Wicker


	
 

	
 

	

Thomas
E. Wicker, Manager


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 4.75%


	
 

	
 

	
 


	

Dated:
March 30, 2021

	


A NEW TANK, LLC, a North Carolina limited liability
company


	
 

	
 

	
 


	
 

	

By:

	

/s/
Cameron S. Coffman


	
 

	

Cameron
S. Coffman, Manager


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 3.0%


	
 

	
 


	
 

	

/s/
Paul G. Porter


	

Dated:
March 30, 2021

	


Paul G. Porter


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 1.0%


	
 

	
 

	
 


	

Dated:
March 30, 2021

	


W61, LLC, a South Carolina limited liability
company


	
 

	
 

	
 


	
 

	

By:

	

/s/
Linnie Manos


	
 

	
 

	

Linnie
Manos, Manager


	
 

	
 

	
 


	
 

	
 


	
 

	
 


	
 

	
 


	
 

	

Remaining
Earnout Rights Interest – 0.76%







 




 

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