Document:

Exhibit

Exhibit 10.1

FIRST AMENDMENT
THIS FIRST AMENDMENT (this “Amendment”) dated as of February 15, 2019 to the Credit Agreement referenced below is by and among Compass Group Diversified Holdings LLC, a Delaware limited liability company (the “Borrower”), the Lenders identified on the signature pages hereto and Bank of America, N.A., in its capacity as Administrative Agent (in such capacity, the “Administrative Agent”).
W I T N E S S E T H
WHEREAS, revolving credit and term loan facilities have been extended to the Borrower pursuant to that certain Amended and Restated Credit Agreement dated as of April 18, 2018 (as amended, hereby and as may be further modified, supplemented, increased and extended from time to time,, the “Credit Agreement”) by and among the Borrower, the Lenders identified therein and the Administrative Agent; and
WHEREAS, the Borrower has requested certain amendments to the Credit Agreement and the Required Lenders have agreed to the requested amendments on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

		
	1.
	Defined Terms.  Capitalized terms used herein but not otherwise defined herein shall have the meanings provided to such terms in the Credit Agreement.

2.    Amendments. The Credit Agreement is hereby amended as follows:
2.1.    The following definitions are added to Section 1.01 of the Credit Agreement in the
appropriate alphabetical order:
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Specified Disposition” means the sale of a Portfolio Company disclosed to the Administrative Agent prior to the date of the First Amendment to this Agreement.
2.2.    Section 1.02 of the Credit Agreement is amended by adding a new clause (d) to read as
follows:
(d)    Any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity).

2.3.    Section 5.15 of the Credit Agreement is amended by adding the following sentence at the end of such Section:
As of the date of the First Amendment to this Agreement, the information included in the Beneficial Ownership Certification, if applicable, is true and correct in all respects.

2.4.    Section 6.02 of the Credit Agreement is amended by deleting the word “and” at the end of clause (i), renumbering clause (j) as clause (k) and inserting a new clause (j) to read as follows:
(j)    promptly following any request therefor from the Administrative Agent or any Lender, information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” under the PATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws; and
2.5    Section 7.02 of the Credit Agreement is amended by deleting the word “and” at the end of clause (l), renumbering clause (m) as clause (n) and inserting a new clause (m) to read as follows:
(m)    non-cash consideration received in a Disposition permitted under Section 7.05; and
2.6    Clause (a) of Section 7.05 of the Credit Agreement is amended by deleting “and” at the end of clause (iii), inserting “and” after clause (iv) and adding a new clause (v) to read as follows:
(i)at least 80% of the consideration for such sale (excluding any obligations of the acquiring Person to make earn-out, purchase price adjustment, indemnification or other contingent payments) is cash and Cash Equivalents paid contemporaneously with consummation of such sale (or, with respect to the Specified Disposition, 75% of the consideration for such sale is cash, Cash Equivalents and marketable securities paid contemporaneously with consummation of such sale and the balance is payable within twelve (12) months of the consummation of such sale)
2.7    Clause (b) of Section 7.05 of the Credit Agreement is amended by deleting “and” at the end of clause (iv), inserting “and” after clause (v) and adding a new clause (vi) to read as follows:
(ii)at least 80% of the consideration paid in connection therewith (excluding any obligations of the acquiring Person to make earn-out, purchase price adjustment, indemnification or other contingent payments) is cash and Cash Equivalents paid contemporaneously with consummation of such transaction
2.8    Clause (d) of Section 7.05 of the Credit Agreement is amended to read as follows:
(d)    the Disposition of non-cash consideration received in a Disposition permitted under Section 7.05 for at least fair market value (as determined by the board of directors (or equivalent governing body) of the Borrower provided that no Event of Default exists or would result therefrom; and

3.    Conditions Precedent. This Amendment shall become effective as of the date hereof upon receipt by the Administrative Agent of executed counterparts of this Amendment properly executed by a Responsible Officer of the Borrower, the Lenders constituting Required Lenders (including the Administrative Agent on behalf of each Lender holding a portion of the Term Loan that delivers a consent to this Amendment in a form acceptable to the Administrative Agent) and the Administrative Agent.

4.    Reaffirmation.  The Borrower acknowledges and reaffirms that (a) it is bound by all of the terms of the Loan Documents to which it is a party and (b) it is responsible for the observance and full performance of all Obligations, including, without limitation, the repayment of the Loans and reimbursement of any drawings on any Letter of Credit. Furthermore, the Borrower acknowledges and confirms that (a) the Administrative Agent, the Lenders and the L/C Issuer have performed fully all of their obligations under the Credit Agreement and the other Loan Documents and (b) by entering into this Amendment, the Administrative Agent, the Lenders and the L/C Issuer do not waive or release any term or condition of the Credit Agreement or any of the other Loan Documents or any of their rights or remedies under such Loan Documents or any applicable law or any of the obligations of the Borrower thereunder.

5.    Miscellaneous.
5.1    The Credit Agreement (as amended hereby) and the obligations of the Borrower thereunder and under the other Loan Documents are hereby ratified and confirmed and shall remain in full force and effect according to their terms. This Amendment shall not be deemed or construed to be a satisfaction, reinstatement, novation or release of any Loan Document or a waiver by the Administrative Agent, any Lender or the L/C Issuer of any rights and remedies under the Loan Documents, at law or in equity.
5.2    The Borrower hereby represents and warrants to the Administrative Agent, the Lenders and the L/C Issuer as follows:
(a)The Borrower has taken all necessary action to authorize the execution, delivery and performance of this Amendment. This Amendment and the execution and performance hereof by the Borrower do not conflict with the Borrower’s Organization Documents or any law, agreement or obligation by which the Borrower is bound.
(b)This Amendment has been duly executed and delivered by the Borrower and constitutes the Borrower’s legal, valid and binding obligations, enforceable in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.
(c)No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Amendment.
(d)The representations and warranties of the Borrower contained in Article V of the Credit Agreement or in any other Loan Document, or which are contained in any document furnished at any time under or in connection therewith, are true and correct in all material respects (or, in the case of any such representations and warranties qualified by materiality or Material Adverse Effect, in all respects as drafted) as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct in all material respects (or, in the case of any such representations and warranties qualified by materiality or Material Adverse Effect, in all respects as drafted) as of such earlier date.

(e)    No event has occurred and is continuing which constitutes a Default or an Event of Default.
5.3    This Amendment shall constitute a Loan Document for all purposes. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Amendment by telecopy or other electronic means (such as by email in “pdf” or “tif” format) shall be effective as an original and shall constitute a representation that an executed original shall be delivered. This Amendment constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
5.4 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TERMS OF SECTIONS  10.14 AND 10.15 OF THE CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS.
[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this First Amendment to be duly executed and delivered as of the date first above written.

	
				
	BORROWER:
	 
	COMPASS GROUP DIVERSIFIED HOLDINGS LLC,

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 

	 
	 
	By:
	/s/ Ryan Faulkingham

	 
	 
	Name:
	Ryan Faulkingham

	 
	 
	Title:
	Chief Financial Officer

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

[SIGNATURE PAGES CONTINUE]

	
				
	ADMINISTRATIVE AGENT: 

	 
	BANK OF AMERICA, N.A., as Administrative Agent on behalf of itself and on behalf of each approving Lender holding a portion of the Term Loan

	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/ Charlene Wright-Jones

	 
	 
	Name:
	Charlene Wright-Jones

	 
	 
	Title:
	Vice President

	 
	 
	 
	 

	
				
	LENDERS:
	 
	BANK OF AMERICA, N.A.

	 
	 
	 
	 

	 
	 
	By:
	/s/ Christopher T. Phelan

	 
	 
	Name:
	Christopher T. Phelan

	 
	 
	Title:
	Senior Vice President

	 
	 
	 
	 

	 
	 
	SUNTRUST BANK

	 
	 
	 
	 

	 
	 
	By:
	/s/ Steve Curran

	 
	 
	Name:
	Steve Curran

	 
	 
	Title:
	Director

	 
	 
	 
	 

	 
	 
	TD BANK USA, N.A.

	 
	 
	 
	 

	 
	 
	By:
	/s/ Anna N. O' Connor

	 
	 
	Name:
	Anna N. O' Connor

	 
	 
	Title:
	Chief Administrative Officer

	 
	 
	 
	 

	 
	 
	U.S. BANK NATIONAL ASSOCIATION

	 
	 
	 
	 

	 
	 
	By:
	/s/ Alan G. Rwambuya

	 
	 
	Name:
	Alan G. Rwambuya

	 
	 
	Title:
	Senior Vice President

	 
	 
	 
	 

	 
	 
	CIBC BANK USA,

	 
	 
	 
	 

	 
	 
	By:
	/s/ Sam L. Dendrinos

	 
	 
	Name:
	Sam L. Dendrinos

	 
	 
	Title:
	Managing Director

	 
	 
	 
	 

	 
	 
	FIFTH THIRD BANK

	 
	 
	 
	 

	 
	 
	By:
	/s/ Nick Jevic

	 
	 
	Name:
	Nick Jevic

	 
	 
	Title:
	Managing Director

	 
	 
	 
	 

	 
	 
	MUFG UNION BANK, N.A.

	 
	 
	 
	 

	 
	 
	By:
	/s/ Liwei Liu

	 
	 
	Name:
	Liwei Liu

	 
	 
	Title:
	Vice President

	 
	 
	 
	 

	 
	 
	JPMORGAN CHASE BANK, N.A.

	 
	 
	 
	 

	 
	 
	By:
	/s/ Kelly Milton

	 
	 
	Name:
	Kelly Milton

	 
	 
	Title:
	Executive Director

	
				
	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	FIRST TENNESSEE BANK NATIONAL ASSOCIATION

	 
	 
	 
	 

	 
	 
	By:
	/s/ Keith A. Sherman

	 
	 
	Name:
	Keith A. Sherman

	 
	 
	Title:
	Senior Vice President

	 
	 
	 
	 

	 
	 
	WEBSTER BANK, NATIONAL ASSOCIATION

	 
	 
	 
	 

	 
	 
	By:
	/s/ George G. Sims

	 
	 
	Name:
	George G. Sims

	 
	 
	Title:
	Senior Vice PresidentAgreement - Ablis Holding Company and Ablis, Inc. - Jim Bendis (00115120-4).DOC

 

STOCK SALE AND PURCHASE

AGREEMENT 

 

 

THIS AGREEMENT is dated as of April 30, 2019 (this "Agreement") by and among Ablis Holding Company, an Oregon corporation ("Ablis HC"), Ablis, Inc., an Oregon corporation (“Ablis”), and James A. Bendis ("Bendis").

 

and

 

Acquired Sales Corp., a Nevada corporation ("Buyer"), Gerard M. Jacobs ("GJacobs") and William C. "Jake" Jacobs ("WJacobs").

 

Ablis HC is hereafter sometimes referred to individually as "Seller." Ablis HC, Ablis, Bendis, Buyer, GJacobs and WJacobs are hereafter sometimes referred to individually as a "Party" and are hereafter sometimes referred to collectively as the "Parties".

 

In consideration of the mutual benefits to be derived and the representations and warranties, conditions and promises herein contained, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

 

ARTICLE 1 

SALE AND PURCHASE OF OWNERSHIP INTERESTS 

 

1.1Sale and Purchase of Ablis HC Common Stock.  

 

(a) Ablis HC shall sell, transfer, assign and deliver unto Buyer, and Buyer shall purchase (the "First Tranche Ablis HC Purchase") from Ablis HC, newly issued, fully paid and non-assessable shares of common stock of Ablis HC evidencing ownership of 4.99% of the ownership equity of Ablis HC following the First Tranche Ablis HC Purchase ("Buyer's First Tranche Ablis HC Stock") for a purchase price of $399,200 in cash payable via wire transfer to Bendistillery, Inc., an Oregon corporation. 

 

(b)Ablis HC shall sell, transfer, assign and deliver unto Buyer, and Buyer shall purchase (the "Second Tranche Ablis HC Purchase") from Ablis HC, newly issued, fully paid and non-assessable shares of common stock of Ablis HC evidencing ownership of up to an additional 15% of the ownership equity of Ablis HC following the Second Tranche Ablis HC Purchase ("Buyer's Second Tranche Ablis HC Stock") for a purchase price of $80,000 per additional 1% of the ownership equity of Ablis HC (or a total of $1,200,000 if all additional 15% of the ownership equity of Ablis HC is purchased by Buyer in the Second Tranche Ablis HC Purchase, so that Buyer would then own 19.99% of the ownership equity of Ablis HC) in cash payable via wire transfer to Bendistillery, Inc., an Oregon corporation.  

 

1.2Equity Percentages Purchased in Second Tranche. The additional percentage of the ownership equity of Ablis HC purchased by Buyer in the Second Tranche Ablis HC Purchase, shall be determined by Buyer and shall all be the exact same percentage as Buyer’s Second Tranche purchase of stock in Bendistillery, Inc., an Oregon corporation (the "Second Tranche Equity Percentage"). 

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1.3Closing of Purchase.  

 

(a)The closing (the "First Tranche Closing") of the First Tranche Ablis HC Purchase (the "First Tranche Purchase"), shall occur on the date (the "First Tranche Closing Date") and at the location specified in Section 7.1 (a). 

 

(b)The closing (the "Second Tranche Closing") of the Second Tranche Ablis HC Purchase (the "Second Tranche Purchase"), shall occur on the date (the "Second Tranche Closing Date") and at the location specified in Section 7.1 (b). 

 

(c) The First Tranche Purchase and the Second Tranche Purchase are hereafter sometimes referred to collectively as the "Purchase". 

 

ARTICLE 2 

PAY OFF OF OUTSTANDING LIABILITIES 

 

2.1 Outstanding Liabilities. Seller and Bendis agree, represent and warrant to Buyer that at the First Tranche Closing, the aggregate liabilities of Seller shall not exceed a total of $400,000.00. 

 

2.2Pay Off. At the First Tranche Closing, Seller and Bendis shall cause Seller to pay off at least $381,000.00 of Seller’s liabilities, and shall provide satisfactory evidence of such pay off to Buyer, provided that Buyer understands and acknowledges that (a) Seller has contractual performance obligations on certain outstanding contracts that will continue following the First Tranche Closing, and (b) Seller has on-going business operations that regularly generate liabilities including but not limited to typical trade payables that are not yet due and payable and accrued employee payroll obligations that are due and payable periodically, and that such on-going business operations will continue following the First Tranche Closing, and that such liabilities which are not yet due and payable will not be paid off at the First Tranche Closing (collectively the "Liabilities Payoff"). 

 

ARTICLE 3 

REPRESENTATIONS AND WARRANTIES OF 

SELLER, ABLIS AND BENDIS

 

3.1Pursuant to an Assignment and Assumption Agreement dated April 29, 2019 (the “A and A Agreement”), Ablis, as Assignor, transferred and assigned to Seller, as Assignee, all of its right, title and interest in and to all of its assets and Seller accepted the assignment of those assets and assumed responsibility for payment of all Ablis’ liabilities, excepting only as described in that certain letter from Alan Dietrich and GJacobs dated April 30, 2019.  In the A and A Agreement, Ablis represented and warranted to Seller, and with the intention of being fully bound, Ablis hereby warrants and represents to Buyer the following: 

 

3.1.1Organization.  Ablis is a duly organized corporation, validly existing and in good standing under the laws of the State of Oregon, with the corporate power and authority to conduct its business as it is presently being conducted and to own its assets.  

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3.1.2Authorization. The A and A Agreement and this Agreement have  been duly executed and delivered by Ablis and are valid and binding obligations of Ablis, enforceable against Ablis, in accordance with their terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, relating to or limiting creditors rights generally and (b) general principles of equity (whether considered in an action in equity or at law).  

 

3.1.3No Conflict.  Neither the execution and delivery of the A and A Agreement or this Agreement by Ablis, nor the fulfillment by Ablis, of the terms of the A and A Agreement or this Agreement will: 

 

(a)conflict with or result in a breach by Ablis of, or constitute a default under, or create an event that, with the giving of notice or the lapse of time, or both, would be a default under or breach of, or give a right to terminate or cancel under, any of the terms, conditions or provisions of (1) any loan or credit agreement, or any other material contract, arrangement or agreement to which Ablis is a party or to which any material portion of the assets of Ablis, is subject, (2) the Articles of Incorporation, Bylaws or organizational documents of Ablis, or (3) any judgment, order, writ, injunction, decree or demand of any governmental entity which materially affects Ablis, or is likely to adversely affect Ablis’s ability to conduct its business or own, rent or convey its assets; 

 

(b)result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any material assets of Ablis, or which materially affects Ablis’s ability to conduct its business as conducted prior to the date of this Agreement; or 

 

(c)cause a loss or adverse modification of any permit, license, or other authorization granted by a governmental entity to or otherwise held by Ablis.   

 

Except for the A and A Agreement or this Agreement, Ablis has no legal obligation, absolute or contingent, to any other person or entity to sell any capital stock or other ownership interest in Seller, or the business or any material assets of Seller, or to effect any merger, consolidation or other reorganization of Seller, or to enter into any agreement with respect thereto.

 

3.1.4Financial Statements. 

 

(a)The unaudited balance sheets and profit & loss statements of Ablis provided to Buyer ("The Financial Statements") present fairly in all material respects the financial position and results of operations and cash flows of Ablis as of the dates and for the periods covered by The Financial Statements, and are in agreement with the books and records of Ablis in all material respects. 

 

(b)Ablis has no known bona fide liabilities which have not been reflected in The Financial Statements.  Except as set forth in The Financial Statements, there are no facts known to Ablis which are reasonably likely to give rise to any bona fide  

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material claims against or liabilities or obligations of Ablis.

 

3.1.5Absence of Certain Facts or Events.   

 

(a)Ablis does not have any employment agreements, bonus agreements, pension plan, other benefit plan other than as disclosed by Ablis to Buyer ("The Due Diligence Disclosures"). 

 

(b)No person or entity has any options or rights to acquire capital stock of Ablis, nor any rights to redeem or repurchase any outstanding shares of common stock of Ablis, nor any rights to any dividend or distribution from Ablis, nor any rights to merge Ablis with or into any entity, nor any rights to any purchase or other acquisition by Ablis of capital stock or other interest in any other entity, nor any rights to any purchase or other acquisition by Ablis of all or substantially all of the business or assets of any other entity, nor any rights in regard to any transfer or sale of a substantial portion of Ablis’s business or assets to any entity, nor any transaction involving the sale, assignment, modification or transfer of any contractual rights or claims of Ablis or any agreement to take any such actions. 

 

(c)Ablis has not received any formal notification, or, to the best knowledge of Ablis any informal notice, from any customer of Ablis that Ablis is in default of any its contractual obligations in any material respect. 

 

3.1.6Equipment and Personal Property. As of the date of the A and A Agreement: (a) Ablis HC will own all items of equipment and other personal property used in or necessary for the conduct its business as currently conducted (the "Equipment and Personal Property"); (b) Ablis HC will have good and marketable title to all of the Equipment and Personal Property, free and clear of all encumbrances of any nature whatsoever; and (c) The Equipment and Personal Property is generally in good condition (subject to ordinary wear and tear), has been generally maintained in accordance with good industry practice and is suitable for the uses for which it is presently being used in the business of Ablis HC.  

 

3.1.7Contracts and Commitments. 

 

(a)Ablis has no (1) collective bargaining agreements; (2) employment, consulting or similar agreement, contract or commitment which is not terminable without penalty or cost by Ablis on notice of 30 days or less; (3) lease of personal property having a term in excess of one year; (4) note or other evidence of indebtedness for borrowed money; (5) agreement of guaranty or indemnification; (6) agreement, contract or commitment limiting the freedom of Ablis to engage in any line of business or compete with any person or entity; (7) agreement, contract or commitment relating to future capital expenditures; or (8) agreement, contract or commitment relating to the acquisition of assets of, or any interest in, any business enterprise.  

 

(b)(1) Ablis is not in violation of, nor has Ablis received any claim that Ablis has breached, any of the terms or conditions of Ablis’s agreements, contracts or  

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commitments in such manner as would permit any other party thereto to cancel or terminate any such agreement, contract or commitment or impose a fee or charge as a result of such breach, if any such breach or breaches singly or in the aggregate is reasonably likely to have a material adverse effect on Ablis; (2) Each of Ablis’s agreements, contracts and commitments is in full force and effect and there is no material breach or default by any party thereto; and (3) There are no facts or conditions which have occurred or are, based on facts presently known to exist, anticipated which, through the passage of time or the giving of notice, or both, would constitute a default under Ablis’s agreements, contracts or commitments giving rise to a right to cancel or a claim for damages in excess of $25,000 or would cause the acceleration of any obligation of any party thereto or the creation of an encumbrance which is reasonably likely to materially limit the use, modification or sale of any asset of Ablis.

 

3.1.8Permits and Authorizations.  

 

(a)Ablis has obtained all approvals, consents, licenses, permits, grants or other authorizations of a governmental entity pursuant to which Ablis conducts its business or holds any of its assets (herein collectively called "Authorizations"); all Authorizations are in full force and effect and constitute all Authorizations required to permit Ablis to operate its assets and conduct its business following the First Tranche Closing Date as such assets and businesses are presently operated and conducted; and the consummation of the transactions contemplated by this Agreement will not require any transfer, renewal or notice with respect to any Authorizations.  

 

(b)Ablis has not been notified or presently has reason to believe any of the Authorizations will not in the ordinary course be renewed upon its expiration. 

 

(c)Ablis has not received in writing, nor does Ablis have any knowledge of, any claim or assertion that Ablis has breached any of the terms or conditions of any Authorizations in such manner as would permit any other person or entity to cancel, terminate or materially amend any Authorization necessary to permit the continued operation of Ablis as presently conducted. 

 

3.1.9No Violations. 

 

(a)To the knowledge of Ablis, Ablis is not in violation of any applicable law, statute, order, rule or regulation promulgated or judgment entered (or, with respect to rules and regulations of administrative agencies, known by Ablis to be proposed) by any governmental entity in a manner which is reasonably likely to have a material adverse effect upon Ablis. 

 

(b)To the knowledge of Ablis, no consent, approval or authorization of, or declaration, filing or registration with, any governmental entity is required to be made or obtained by Ablis in connection with the execution, delivery and performance by Ablis of this Agreement and the Lease and the consummation of the transactions contemplated hereby, or the continued operation of Ablis’s business. 

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3.1.10Proceedings. 

 

(a)There are no suits, actions, arbitrations, mediations, or other legal proceedings or, to Ablis’s knowledge, governmental investigations, pending against Ablis as to which Ablis has received any claim or assertion.   

 

(b)There is no pending or, to the knowledge of Ablis, threatened claim, action, suit, inquiry, proceeding or investigation by any individual or governmental entity in which a product of Ablis are alleged to have a defect and which is reasonably likely to result in a material claim.   

 

(c)There is no suit, action or proceeding or investigation threatened against or affecting Ablis that is likely to prevent or materially delay the ability of Ablis to consummate the transactions contemplated by this Agreement or to carry on its business as now conducted, nor is there any judgment, decree, injunction, rule or order of any governmental entity or arbitrator outstanding against Ablis having, or which in the future could have, any such effect. 

 

3.1.11Insurance Policies.  All of Ablis’s insurance policies are in full force and effect.  

 

3.1.12Proprietary Information and Rights. Ablis has provided to Buyer accurate lists all patents, patent applications, patent and know-how licenses, proprietary formulae, trademarks (registered or unregistered), service marks, trademark registrations and applications, trade names, fictitious business names, computer software and other intellectual property rights owned by Ablis (collectively, "IP"). No IP conflicts with, infringes on or otherwise violates any rights of others, or requires payments to be made to any person or entity, or are subject to any pending or overtly threatened litigation or other adverse claims or infringement by other persons or entities. There has been no written, or to the knowledge of Ablis, other claim of infringement by Ablis of any domestic or foreign patents, trademarks, service marks or copyrights of any other person or entity. Nothing in this Section is intended to suggest that Ablis is exempt from any requirement to pay licensing fees to software companies in any case when Ablis chooses to use such companies' intellectual property. 

 

3.1.13Employee Benefit Plans. Ablis has provided to Buyer information which accurately describes any employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) of Ablis.  

 

3.1.14Employment Laws.   

 

(a)Ablis is in compliance in all material respects with all federal, state or other applicable laws, respecting employment and employment practices, terms and conditions of employment, wages and hours, affirmative action and occupational safety (except for violations or failures to comply which are not reasonably likely to result in penalties  

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in excess of $25,000), and have not received notice of, and are not engaged in, any unfair labor practice.

 

(b)No unfair labor practice complaint against any Ablis is pending before the National Labor Relations Board or any county, municipality, agency or department of the State of Oregon or any other state. 

 

(c)There is no labor strike, dispute, slowdown or stoppage actually pending or against or affecting Ablis. 

 

(d)There are not, and in the past three years have not been, any material claims, grievances or arbitration proceedings, workers compensation proceedings, labor disputes (including charges of violations of any federal, state or local laws or regulations relating to current or former employees (including retirees) or current or former applicants for employment), governmental investigations, or administrative proceedings of any kind pending or, to the best knowledge of Ablis threatened against or relating to Ablis, its employees or employment practices, or operations as they pertain to conditions of employment; nor is Ablis subject to any order, judgment, decree, award, or administrative ruling arising from any such matter. 

 

(e)No collective bargaining agreement is currently in existence or is being negotiated by Ablis and as of the date of this Agreement no labor organization has been certified or recognized as the representative of Ablis, or is actively seeking such certification or recognition. 

 

3.1.15Environmental Laws. The assets and the business of Ablis has been operated in compliance in all material respects with all applicable environmental laws. 

 

3.1.16Taxes.  (a) All federal, state, foreign and local tax returns and tax reports (including information returns) required to be filed by Ablis have been filed with the appropriate governmental entities in all jurisdictions in which such returns and reports are required to be filed, and all such returns and reports are, in all material respects, complete, accurate and in accordance with all legal requirements applicable thereto; (b) all federal, state, foreign and material local income, profits, franchise, sales, use, occupation, property, excise, withholding and other taxes, duties, charges and assessments (including interest and penalties) due from Ablis have been fully paid or are adequately provided for on the books and financial statements of Ablis in accordance with U.S. generally accepted accounting principles; (c) Ablis has not received any written notice or inquiry from the Internal Revenue Service or any other taxing authority in connection with any of their returns and reports of any pending or threatened examination or audit; (d) no extensions or waivers of statutes of limitation have been given or requested with respect to Ablis, and (e) any deficiencies asserted or assessments made as a result of examination by any taxing authorities have been fully paid or are fully reflected on the books of Ablis. 

 

3.1.17No Unlawful Contributions.   Neither Ablis nor any director,  

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officer, agent, employee or other person acting on behalf of Ablis has made or used any corporate funds to make any unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made any direct or indirect unlawful payments to officials or employees of any governmental entity from corporate funds; failed to file any reports required with respect to lawful contributions; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any intentionally false or fictitious entries on the books or records of Ablis; or made or received any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.  

 

3.1.18Warranties.  There are no outstanding warranty claims against Ablis, and no reasonable basis therefor. 

 

3.1.19No Finders or Brokers.  Ablis has not entered into any agreement, arrangement or understanding with any person or entity which could result in the obligation to pay any finder's fee, brokerage commission, advisory fee or similar payment in connection with the transactions contemplated hereby. 

 

3.1.20Contributions and Transfers of Ownership of Businesses and Assets. Ablis has contributed and transferred ownership of all of its rights, titles and interests in and to its business and assets to Assignee. 

 

3.2Seller hereby represents and warrants to Buyer as follows: 

 

3.2.1Organization. Seller is a duly organized corporation, validly existing and in good standing under the laws of the State of Oregon, with the corporate power and authority to conduct its business as it is presently being conducted and to own and lease its properties and assets.  

 

3.2.2Authorization. This Agreement has been duly executed and delivered by Seller and is a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, relating to or limiting creditors rights generally and (b) general principles of equity (whether considered in an action in equity or at law).  

 

3.2.3No Conflict.  Neither the execution and delivery of this Agreement by Seller, nor the consummation of the Purchase and other transactions contemplated hereunder, nor the fulfillment by Seller, of the terms of this Agreement or the Lease will: 

 

(a)conflict with or result in a breach by Seller of, or constitute a default under, or create an event that, with the giving of notice or the lapse of time, or both, would be a default under or breach of, or give a right to terminate or cancel under, any of the terms, conditions or provisions of (1) any loan or credit agreement, or any other material contract, arrangement or agreement to which Seller, is a party or to which any material portion of the assets of Seller, is subject, (2) the Articles of Incorporation, Bylaws or organizational documents of Seller, or (3) any judgment, order, writ, injunction, decree or demand of any governmental entity which materially affects Seller, or is likely to adversely affect Seller's or Ablis' ability to conduct its business or own its assets; 

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(b)result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any material assets of Seller, or which materially affects any Seller's ability to conduct its business as conducted prior to the date of this Agreement; or 

 

(c)cause a loss or adverse modification of any permit, license, or other authorization granted by a governmental entity to or otherwise held by Seller. 

 

Except for this Agreement, Seller has no legal obligation, absolute or contingent, to any other person or entity to sell any capital stock or other ownership interest in Seller, or the business or any material assets of Seller, or to effect any merger, consolidation or other reorganization of Seller, or to enter into any agreement with respect thereto.

 

3.2.4Capitalization; No Subsidiaries. 

 

(a)At the First Tranche Closing: (1) the authorized capital stock of Seller will consist of 100,000 shares of common stock, of which 100,000 shares will be issued and outstanding, and of which 2,495 or 4.99% will be owned by Buyer; (2) All outstanding shares of common stock of each Seller will be duly authorized, validly issued, fully paid and non-assessable; (3) There will be no outstanding options, warrants or other rights to acquire, or any securities or obligations convertible into or exchangeable for, any shares of the capital stock of Seller which have been issued or granted by or are binding upon any Seller; (4) Buyer's First Tranche Ablis HC Stock will be free and clear of all encumbrances; and (5) The delivery to Buyer at the First Tranche Closing of certificates evidencing Buyer's First Tranche Ablis HC Stock, will convey and transfer to Buyer good, complete and marketable title to 2,495 shares of capital stock of Seller, free and clear of any and all restrictions or conditions to transfer or assignment including but not limited to any restrictions or conditions to transfer or assignment contained in Seller's Articles of Incorporation, By Laws, agreements or contracts, all of which restrictions and conditions are expressly and permanently waived by Seller and Bendis excluding only restrictions on transfer imposed by federal or state securities laws, and free and clear of all defects of title or encumbrances. 

 

(b)At the Second Tranche Closing: (1) the authorized capital stock of each Seller will consist of 100,000 shares of common stock, of which a certain number of shares will be issued and outstanding consistent with Article 1, and of which a certain number and percentage will be owned by Buyer consistent with Article 1; (2) All outstanding shares of common stock of each Seller will be duly authorized, validly issued, fully paid and non-assessable; (3) There will be no outstanding options, warrants or other rights to acquire, or any securities or obligations convertible into or exchangeable for, any shares of the capital stock of any Seller which have been issued or granted by or are binding upon any Seller; (4) Buyer's Second Tranche Ablis HC Stock, Buyer's Second Tranche Bendistillery HC Stock and Buyer's Second Tranche Bend Spirits HC Stock will be free and clear of all encumbrances; and (5) The delivery to Buyer at the Second Tranche Closing of certificates evidencing Buyer's Second Tranche Ablis HC Stock, Buyer's Second Tranche Bendistillery HC Stock and Buyer's Second Tranche Bend Spirits HC Stock will convey and transfer to Buyer good, complete and marketable title to a certain number of shares of capital stock of each Seller consistent with Article 1, free and clear of any and all restrictions or conditions to transfer or assignment including but not limited to any restrictions or conditions to transfer or assignment contained in any Seller's Articles of Incorporation, By Laws, agreements or contracts, all of which restrictions and conditions are expressly and permanently waived by Seller and Bendis, excluding only restrictions on transfer imposed by federal or state securities laws, and free and clear of all  

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defects of title or encumbrances.

 

(c)Seller does not own, directly or indirectly, any capital stock or other ownership interest in any corporation, partnership, business association, joint venture or other entity.  

 

(d) At or prior to the First Tranche Closing, Seller will provide to Buyer complete and correct copies of the Articles of Incorporation and Bylaws of Seller, and of all outstanding shares of common stock of Seller. 

 

3.2.5Financial Statements. 

 

(a)The unaudited balance sheets and profit & loss statements of Ablis provided to Buyer by Ablis during Buyer's due diligence investigation ("The Financial Statements") present fairly in all material respects the financial position and results of operations and cash flows of Ablis as of the dates and for the periods covered by The Financial Statements, and are in agreement with the books and records of Ablis in all material respects. 

 

(b)Seller and Ablis have no known bona fide liabilities which have not been reflected in The Financial Statements.  Except as set forth in The Financial Statements, there are no facts known to Seller, Ablis or Bendis which are reasonably likely to give rise to any bona fide material claims against or liabilities or obligations of Seller.  

 

3.2.6Absence of Certain Facts or Events.   

 

(a)Neither Seller nor Ablis have any employment agreements, bonus agreements, pension plan, other benefit plan other than as disclosed by Ablis to Buyer during Buyer's due diligence investigation ("The Due Diligence Disclosures"). 

 

(b)No person or entity has any options or rights to acquire capital stock of Seller, nor any rights to redeem or repurchase any outstanding shares of common stock of Seller, nor any rights to any dividend or distribution from Seller, nor any rights to merge Seller with or into any entity, nor any rights to any purchase or other acquisition by Seller of capital stock or other interest in any other entity, nor any rights to any purchase or other acquisition by Seller of all or substantially all of the business or assets of any other entity, nor any rights in regard to any transfer or sale of a substantial portion of Seller's business or assets to any entity, nor any transaction involving the sale, assignment, modification or transfer of any contractual rights or claims of Seller or its affiliates or any agreement to take any such actions. 

 

(c)At the completion of the First Tranche Closing including the Liabilities Payoff, Seller will not have any obligation or liability as a result of borrowed money, nor any commitment to borrow money, nor any mortgage, pledge, security interest or other lien on Seller’s assets to secure debt, nor any other encumbrance placed on assets of Seller, nor any loans made or agreed to be made by Seller, nor any failure to pay or perform any other monetary obligation of Seller when and to the extent due, excepting only as have been disclosed in The Due Diligence Disclosures. 

 

(d)Neither Seller, Ablis and Bendis have received any formal notification, or, to the best knowledge of Seller, Ablis and Bendis, any informal notice, from any customer of Seller, that Seller is in default of any its contractual obligations in any material respect. 

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3.2.7Equipment and Personal Property. At the First Tranche Closing: (a) Seller will own all items of equipment and other personal property used in or necessary for the conduct of Seller’s business as currently conducted (the "Equipment and Personal Property"); (b) Seller will have good and marketable title to all of the Equipment and Personal Property, in each case, free and clear of all encumbrances of any nature whatsoever; and (c) The Equipment and Personal Property is generally in good condition (subject to ordinary wear and tear), has been generally maintained in accordance with good industry practice and is suitable for the uses for which it is presently being used in the business of Seller.  

 

3.2.8Contracts and Commitments. 

 

(a)Except as set forth in The Due Diligence Disclosures, Seller has no (1) collective bargaining agreements; (2) employment, consulting or similar agreement, contract or commitment which is not terminable without penalty or cost by Seller on notice of 30 days or less; (3) lease of real or personal property having a term in excess of one year; (4) note or other evidence of indebtedness for borrowed money; (5) agreement of guaranty or indemnification; (6) agreement, contract or commitment limiting the freedom of Seller to engage in any line of business or compete with any person or entity; (7) agreement, contract or commitment relating to future capital expenditures; or (8) agreement, contract or commitment relating to the acquisition of assets of, or any interest in, any business enterprise.  

 

(b)Except as set forth in The Due Diligence Disclosures: (1) Seller is not in violation of, nor has Seller received any claim that it or he has breached, any of the terms or conditions of Seller's agreements, contracts or commitments in such manner as would permit any other party thereto to cancel or terminate any such agreement, contract or commitment or impose a fee or charge as a result of such breach, if any such breach or breaches singly or in the aggregate is reasonably likely to have a material adverse effect on Seller; (2) Each of Seller's agreements, contracts and commitments is in full force and effect and there is no material breach or default by any party thereto; and (3) There are no facts or conditions which have occurred or are, based on facts presently known to exist, anticipated which, through the passage of time or the giving of notice, or both, would constitute a default under any Seller's agreements, contracts or commitments giving rise to a right to cancel or a claim for damages in excess of $25,000 or would cause the acceleration of any obligation of any party thereto or the creation of an encumbrance which is reasonably likely to materially limit the use, modification or sale of any asset of Seller. 

 

3.2.9Permits and Authorizations.  

 

(a)Seller has obtained all approvals, consents, licenses, permits, grants or other authorizations of a governmental entity pursuant to which Seller conducts its business or holds any of its assets (herein collectively called "Authorizations"); all Authorizations are in full force and effect and constitute all Authorizations required to permit Seller to operate its assets and conduct its businesses following the First Tranche Closing Date as such assets and businesses are presently operated and conducted; and the consummation of the transactions contemplated by this Agreement will not require any transfer, renewal or notice with respect to any Authorizations.  

 

(b)Neither Seller nor Bendis has been notified or presently has reason to believe any of the Authorizations will not in the ordinary course be renewed upon its expiration. 

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(c)Neither Seller nor Bendis has received in writing, nor does any Seller or Bendis have any knowledge of, any claim or assertion that Seller has breached any of the terms or conditions of any Authorizations in such manner as would permit any other person or entity to cancel, terminate or materially amend any Authorization necessary to permit the continued operation of Seller as presently conducted. 

 

3.2.10No Violations. 

 

(a)To the knowledge of Seller and Bendis, Seller is not in violation of any applicable law, statute, order, rule or regulation promulgated or judgment entered (or, with respect to rules and regulations of administrative agencies, known by Seller or Bendis to be proposed) by any governmental entity in a manner which is reasonably likely to have a material adverse effect upon Seller.  

 

(b)To the knowledge of Seller and Bendis, no consent, approval or authorization of, or declaration, filing or registration with, any governmental entity is required to be made or obtained by Seller in connection with the execution, delivery and performance by Seller of this Agreement and the Lease and the consummation of the transactions contemplated hereby, or the continued operation of Seller’s business. 

 

3.2.11Proceedings. 

 

(a)Except as set forth in The Due Diligence Disclosures, there are no suits, actions, arbitrations, mediations, or other legal proceedings or, to Seller’s or Bendis' knowledge, governmental investigations, pending against Seller, or as to which Seller has received any claim or assertion.   

 

(b)Except as set forth in The Due Diligence Disclosures, there is no pending or, to the knowledge of Seller or Bendis, threatened claim, action, suit, inquiry, proceeding or investigation by any individual or governmental entity in which a product of Seller is alleged to have a defect and which is reasonably likely to result in a material claim.   

 

(c)There is no suit, action or proceeding or investigation threatened against or affecting Seller that is likely to prevent or materially delay the ability of Seller to consummate the transactions contemplated by this Agreement or to carry on their businesses as now conducted, nor is there any judgment, decree, injunction, rule or order of any governmental entity or arbitrator outstanding against Seller having, or which in the future could have, any such effect. 

 

3.2.12Insurance Policies.  All of Seller’s insurance policies are in full force and effect.  

 

3.2.13Proprietary Information and Rights. The Due Diligence Disclosures accurately list all patents, patent applications, patent and know-how licenses, proprietary formulae, trademarks (registered or unregistered), service marks, trademark registrations and applications, trade names, fictitious business names, computer software and other intellectual property rights owned by any Seller (collectively, "IP"). No IP conflicts with, infringes on or otherwise violates any rights of others, or requires payments to be made to any person or entity, or are subject to any pending or overtly threatened litigation or other adverse  

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claims or infringement by other persons or entities. There has been no written, or to the knowledge of Seller or Bendis, other claim of infringement by Seller of any domestic or foreign patents, trademarks, service marks or copyrights of any other person or entity. Nothing in this Section is intended to suggest that Seller is exempt from any requirement to pay licensing fees to software companies in any case when Seller chooses to use such intellectual property.

 

3.2.14Employment Laws.   

 

(a)Seller is in compliance in all material respects with all federal, state or other applicable laws, respecting employment and employment practices, terms and conditions of employment, wages and hours, affirmative action and occupational safety (except for violations or failures to comply which are not reasonably likely to result in penalties in excess of $25,000), and have not received notice of, and are not engaged in, any unfair labor practice. 

 

(b)No unfair labor practice complaint against Seller is pending before the National Labor Relations Board or any county, municipality, agency or department of the State of Oregon or any other state. 

 

(c)There is no labor strike, dispute, slowdown or stoppage actually pending or against or affecting Seller. 

 

(d)There are not any material claims, grievances or arbitration proceedings, workers compensation proceedings, labor disputes (including charges of violations of any federal, state or local laws or regulations relating to current or former employees (including retirees) or current or former applicants for employment), governmental investigations, or administrative proceedings of any kind pending or, to the best knowledge of Seller or Bendis, threatened against or relating to Seller, its employees or employment practices, or operations as they pertain to conditions of employment; nor is Seller, subject to any order, judgment, decree, award, or administrative ruling arising from any such matter. 

 

(e)No collective bargaining agreement is currently in existence or is being negotiated by Seller, and as of the date of this Agreement no labor organization has been certified or recognized as the representative of any employees of Seller, or is actively seeking such certification or recognition. 

 

3.2.15Environmental Laws. The assets and the business of Seller have been operated in compliance in all material respects with all applicable environmental laws. 

 

3.2.16Taxes.  All federal, state, foreign and local tax returns and tax reports (including information returns) required to be filed by Seller and Bendis have been filed with the appropriate governmental entities in all jurisdictions in which such returns and reports are required to be filed, and all such returns and reports are, in all material respects, complete, accurate and in accordance with all legal requirements applicable thereto; (b) all federal, state, foreign and material local income, profits, franchise, sales, use, occupation, property, excise, withholding and other taxes, duties, charges and assessments (including interest and penalties) due from Seller, have been fully paid or are adequately provided for on the books and financial statements of Seller in accordance with U.S. generally accepted accounting principles; (c) Seller has not received any written notice or inquiry from the Internal Revenue Service or any other taxing authority in connection with any of their returns and reports of any pending or threatened  

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examination or audit; (d) no extensions or waivers of statutes of limitation have been given or requested with respect to Seller, and (e) any deficiencies asserted or assessments made as a result of examination by any taxing authorities have been fully paid or are fully reflected on the books of Seller. 

  

3.2.17No Unlawful Contributions.   Neither Seller nor any director, officer, agent, employee or other person acting on behalf of Seller has made or used any corporate funds to make any unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made any direct or indirect unlawful payments to officials or employees of any governmental entity from corporate funds; failed to file any reports required with respect to lawful contributions; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any intentionally false or fictitious entries on the books or records of Seller; or made or received any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.   

 

3.2.18No Related Party Transactions. Neither Bendis nor any of their family members, nor any affiliate of theirs, has or will have, directly or indirectly, any legal or beneficial interest: (a) in any person or entity which sells or provides any services or products to Seller, or which directly or indirectly purchases any services or products from Seller; (b) in any contract, commitment, agreement or understanding to which Seller is a party or by which it may be bound or affected; or (c) in any claim against Seller or any of its assets which could materially and adversely affect Seller's assets, Seller's title to or its right to use its assets, or Seller's right to conduct its business following the First Tranche Closing, excepting only interests and claims of Bendis resulting from him being owners, directors and officers of Seller. 

 

3.2.19Bank Accounts.  That certain letter from Bendis to WJacobs dated as of the First Tranche Closing Date ("Bendis Closing Letter") will list all bank accounts, safe deposit boxes, money market funds, certificates of deposit, stocks, bonds, notes and other securities owned directly or indirectly, beneficially or of record, by Seller and identifies all persons authorized to sign on such accounts, and also lists all credit cards payable by Seller that have been issued to any owner, director, officer, employee or other person associated with Seller, and the names and corporate title of each such person. 

 

3.2.20Warranties.  There are no outstanding warranty claims against Seller, and no reasonable basis therefor. 

 

3.2.21No Finders or Brokers.  Neither Seller or Bendis, nor any of their affiliates, has entered into any agreement, arrangement or understanding with any person or entity which could result in the obligation to pay any finder's fee, brokerage commission, advisory fee or similar payment in connection with the transactions contemplated hereby. 

 

3.2.22Contributions and Transfers of Ownership of Businesses and Assets. Ablis has contributed and transferred ownership of all of its rights, titles and interests in and to its business and assets to Ablis HC (the "Contributions and Transfers of Ownership of Businesses and Assets"). 

 

 

 ARTICLE 4 

REPRESENTATIONS AND WARRANTIES OF BUYER 

 

Buyer hereby represents and warrants to Seller as follows:

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4.1Organization.  Buyer is a duly organized corporation, validly existing and in good standing under the laws of the State of Nevada and has full power and authority to perform this Agreement. 

 

4.2Authorization.  This Agreement has been duly executed and delivered by Buyer, and is a valid and binding obligation of Buyer, enforceable against it in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, relating to or limiting creditors rights generally, and (b) general principles of equity (whether considered in an action in equity or at law), subject to approval by the shareholders of Buyer if necessary, and further subject to all filings necessary to be made by Buyer with the US Securities and Exchange Commission ("SEC") and any approvals necessary to be obtained from the SEC. 

 

4.3No Conflict.  Neither the execution and delivery of this Agreement by Buyer nor the consummation of the transactions contemplated hereunder nor the fulfillment by Buyer of any of its terms will: 

 

(a)conflict with or result in a breach by Buyer of, or constitute a default by it under, or create an event that, with the giving of notice or the lapse of time, or both, would be a default under or breach of, any of the terms, conditions or provisions of (1) any indenture, mortgage, lease, deed of trust, pledge, loan or credit agreement or any other material contract, arrangement or agreement to which Buyer is a party or to which a material portion of its assets is subject, (2) the organizational documents of Buyer, or (3) any judgment, order, writ, injunction, decree or demand of any governmental entity which materially affects Buyer or which materially affects the Buyer's ability to conduct its business;  

 

(b)result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any material portion of the assets of Buyer or which materially affects Buyer's ability to conduct its business as conducted prior to the date of this Agreement; or 

 

(c)cause a loss or adverse modification of any permit, license, or other authorization granted by any governmental entity to or otherwise necessary or materially useful to Buyer's business. 

 

4.4Investment Intent.Buyer is acquiring Buyer's First Tranche Ablis HC Stock, Buyer's Second Tranche Ablis HC Stock, (collectively the "Stock") for investment purposes, and not with a view to the resale or distribution thereof; Buyer has the knowledge and sophistication to purchase the Stock; Buyer has had access to all information regarding Seller that Buyer has requested and has had the opportunity to ask questions regarding Seller, their operations and such other matters that Buyer has deemed material to its investment decision; and Buyer will not dispose of the Stock without compliance with all applicable federal and state securities laws.  

 

 

 

ARTICLE 5 

AGREEMENTS AND COVENANTS 

 

5.1Confidentiality. Buyer shall treat in confidence all non-public  

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documents, materials and other information which Buyer shall have obtained regarding Seller during the course of the negotiations leading to the transactions contemplated hereby, the investigation of Seller and the preparation of this Agreement, and in the event the Purchase shall not be consummated, Buyer shall return or destroy all copies of non-public documents and materials which have been furnished in connection therewith.

 

5.2Pre-Closing Agreements and Covenants. 

 

(a)Commercially Reasonable Best Efforts  Seller and Bendis agree and covenant to use commercially reasonable best efforts to perform, comply with and fulfill all obligations, covenants and conditions required by this Agreement to be performed, complied with or fulfilled by Seller and Bendis prior to or as of the First Tranche Closing Date and the Second Tranche Closing Date, respectively.  Buyer agrees and covenants to use commercially reasonable best efforts to perform, comply with and fulfill all obligations, covenants and conditions required by this Agreement to be performed, complied with or fulfilled by Buyer prior to or as of the First Tranche Closing Date and the Second Tranche Closing Date, respectively. Seller and Bendis agree and covenant to use commercially reasonable best efforts to secure all necessary consents, waivers, permits, approvals, licenses and authorizations and to make all necessary filings in order to enable Seller to consummate the transactions contemplated hereby. Buyer agrees and covenants to use commercially reasonable best efforts to secure all necessary consents, waivers, permits, approvals, licenses and authorizations and to make all necessary filings in order to enable Buyer to consummate the transactions contemplated hereby. 

 

(b) Ordinary Course. Seller and Bendis agree and covenant that from the execution of this Agreement until the Second Tranche Closing Date, Seller and Bendis (1) shall operate Seller’s business solely in the ordinary course of their businesses consistent with past practices in all material respects, primarily focusing upon the manufacturing and sale of CBD-infused beverages, and CBD-infused products, excepting only as expressly contemplated by this Agreement or as required by applicable laws and regulations, and (2) shall refrain from entering into, soliciting or participating in any negotiations, discussions, contracts, term sheets, letters of intent, or other agreements or arrangements of any nature with any third party or parties (other than Buyer) regarding a merger, purchase, sale, acquisition, liquidation, other disposition, and/or debt or equity financing of all or any portion of Seller or of all or any portion of Seller’s business, assets, membership interests or stock, except product sales, asset dispositions and other actions that are normal, customary or otherwise in the ordinary course of the businesses of Seller, and except a possible sale of a portion of Seller’s stock to Bill Davis and/or his affiliates in a way that would not interfere with the closing of the Purchase contemplated by this Agreement. 

 

(c) Availability. Bendis agrees and covenants that from the execution of this Agreement until the Second Tranche Closing Date, Bendis shall make himself reasonably available for meetings and telephone calls with Buyer, Buyer's investment bankers and investors, and Buyer's securities counsel, upon reasonable notice. 

 

(d)Tax Election. On or prior to the First Tranche Closing date, Seller shall file with the US Internal Revenue Service to be treated as a C Corp. 

 

5.3Post-Closing Agreements and Covenants.   

 

(a) Ordinary Course. Seller and Bendis  agree and covenant that from and after the Second Tranche Closing Date, Seller and Bendis shall operate Seller’s business solely in the ordinary course of their business consistent with past practices in all  

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material respects, primarily focusing upon the manufacturing and sale of CBD-infused beverages, and CBD-infused products, excepting only as expressly contemplated by this Agreement or as required by applicable laws and regulations.

 

(b)Board Seat. Seller, Bendis and GJacobs agree and covenant that on the First Tranche Closing Date and at all times after the First Tranche Closing Date: (1) Seller and Bendis shall cause GJacobs to be elected to the Board of Directors of Seller, and to the Board of Directors or Board of Management of any subsidiary or affiliate of any Seller (unless and until any such entity is sold to a third party); (2) GJacobs shall be permitted to attend meetings of such Board via telephone, Skype or other generally available means of electronic participation; and (3) If Bendis desires that GJacobs attend a particular Board meeting in person then GJacobs shall make reasonable efforts to do so, provided that Seller shall pay or reimburse all of GJacobs' reasonable expenses incurred in connection therewith plus a per day fee in an amount which shall be mutually acceptable to Bendis and GJacobs. 

  

(c)Financial Oversight. Seller and Bendis agree and covenant that from and after the First Tranche Closing Date: (1) Seller and Bendis shall install reasonable internal financial controls to prevent material violations of internal financial policies and procedures (e.g. writing of unauthorized checks, entry into unauthorized purchase orders, posting unauthorized journal entries, or payment of unauthorized expenses); (2) Seller and Bendis and Dietrich shall cause Seller to retain an independent certified public accountant (the "CPA") who will be tasked with reviewing Seller's quarterly and annual financial results and balance sheets, and with preparing Seller’s tax returns and other tax forms, all in accordance with generally accepted US accounting principles; (3) WJacobs shall be granted full access to the corporate and financial books and records of Seller, shall monitor and shall be allowed to ask Seller’s internal financial personnel and the CPA questions from time to time regarding Seller’s financial results, balance sheets, transactions, expenses, financial controls, tax returns and other tax forms, and shall be provided accurate and complete answers to such questions including supporting documentation, and shall be copied on all communications between Seller and the CPA; and (4) Seller shall pay or reimburse all of WJacobs' reasonable expenses incurred in connection with business trips to Bend, Oregon, to perform such financial oversight functions and to provide consulting/advisory services to Seller relating thereto. 

 

(d)Press Releases. Seller and Bendis agree and covenant that from and after the First Tranche Closing Date, Seller and Bendis shall cause Seller to issue professionally prepared, accurate press releases, distributed nationally and to the beverage and hemp/CBD/marijuana industries, not less frequently than quarterly, describing how the Seller’s businesses are performing financially, and each of such press releases shall reference Buyer as being a shareholder of Seller, shall include Buyer's name, trading exchange and trading symbol as of the date of such press release, and shall be meta tagged at least for all of the following words and phrases so that such press release is picked up by Yahoo! Finance and other major financial news outlets: the names of Seller; Buyer's name, trading exchange and trading symbol as of the date of such press release; the URL of Buyer's website as of the date of such press release; "CBD"; "beverages"; "cannabis"; "cannabidiol"; "hemp"; "THC"; and "Oregon". 

  

(e)Compensation. Seller and Bendis agree and covenant that from and after the First Tranche Closing Date, Seller and Bendis shall cause the salaries, benefits, bonuses and other compensation of Seller’s officers and employees to be reasonable and consistent with norms for the beverage industry. 

 

(f)Future Dilution. Seller and Bendis agree and covenant that from  

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and after the First Tranche Closing Date, Seller and Bendis shall cause Seller not to issue any new shares of common stock or other equity of Seller ("New Equity") unless: (1) the terms and conditions of such issuance of New Equity is approved unanimously by the Board of Directors of Seller, or (2) Buyer or its designee is afforded a 90-day option to purchase 19.99% of all such New Equity on the most favorable terms and conditions (including but not limited to price) as such New Equity is then offered to any other person or entity whatsoever.

 

(g)Exit Strategy. Seller and Bendis agree and covenant that: (1) Seller and Bendis shall cause Seller to evaluate and seriously consider a sale of Seller or "taking Seller public" within 60 months following the First Tranche Closing Date; (2) Buyer or Buyer's designee shall have a 60-day right of first refusal to purchase Seller, or any portion of Seller, if the decision is made to sell Seller or portion thereof, but if Buyer or Buyer's designee for any reason does not exercise such right of first refusal then Buyer shall have so-called "tag along" rights in any such sale, and Seller shall have so-called "drag along" rights in any such sale; and (3) Buyer shall have so-called "tag along" rights in any "going public" transaction and Seller shall have so-called "drag along" rights in any "going public" transaction.  

 

(h)Fall Back Exit Strategy. Seller and Bendis agree and covenant that if Seller is not sold or "taken public" within 60 months following the First Tranche Closing Date, then Seller and Bendis shall work in good faith with Buyer and Buyer's investment bankers, and use commercially reasonable best efforts, to close a mutually acceptable alternative exit opportunity for Buyer within 72 months following the First Tranche Closing Date. 

 

(i)Samples. Upon request by GJacobs from time to time, Seller shall provide to Buyer samples of Seller’s products that can be shared by GJacobs with stock analysts, investment bankers, investor relations firms, large shareholders, and potential acquisition targets. 

 

(j) Introductions. Seller and Bendis shall from time to time use good faith efforts to introduce GJacobs and WJacobs to the owners of Seller’s CBD isolate suppliers, and any other companies in the hemp, CBD and cannabis industries with whom Seller and/or Bendis have relationships, and whom may potentially be interested in entering into a stock sale or merger with Buyer. 

 

(k)Social Media and Websites. Seller agrees and covenants that on the First Tranche Closing Date and on the Second Tranche Closing Date, Seller’s shall announce the Purchase on all of Seller’s social media accounts and websites, including Buyer's name, trading exchange, trading symbol, and the URL of Buyer's website, and shall explain how the Purchase will help Seller’s to grow and introduce more exciting products to the marketplace. From and after the First Tranche Closing Date, if Seller's website includes an "About Us", "Our Story" or similar page, then Seller shall there accurately describe Buyer's Purchase including Buyer's name, trading exchange, trading symbol, and the URL of Buyer's website. 

 

ARTICLE 6

CONDITIONS OF CLOSING

 

6.1Conditions of Obligations of Buyer.  The obligation of Buyer to consummate the Purchase pursuant to this Agreement is subject to the satisfaction of the following conditions, any of which may be waived by Buyer: 

 

(a)Representations and Warranties; Performance of Obligations.  The disclosures, representations and warranties of Seller, Ablis and Bendis set forth in Article 3  

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hereof, in the Due Diligence Disclosures, in the Bendis Closing Letter, and in all other agreements, documents and instruments executed and delivered pursuant hereto or in connection with the First Tranche Closing and the Second Tranche Closing shall have been and be true and correct in all material respects as of the date hereof and of the First Tranche Closing Date and the Second Tranche Closing Date as though made on and as of the First Tranche Closing Date and the Second Tranche Closing Date. Seller and Bendis shall have performed in all material respects the agreements and obligations necessary to be performed by them under this Agreement prior to the First Tranche Closing Date and the Second Tranche Closing Date, respectively.

 

(b)Certificates of Fulfillment of Conditions.  Buyer shall have received certificates, dated the First Tranche Closing Date and the Second Tranche Closing Date, respectively, signed by Seller and Bendis, certifying that the conditions specified in Section 6.1(a) have been fulfilled. 

 

(c)No Injunction.  No preliminary or permanent injunction or order that would prohibit or restrain the consummation of the transactions contemplated hereunder shall be in effect and no governmental entity or other person or entity shall have commenced or threatened to commence an action or proceeding seeking to enjoin the consummation of such transactions or to impose liability on the Parties in connection therewith. 

 

(d)Other Consents.  Buyer and Seller shall have received all other consents required to be obtained in connection with the consummation of the transactions contemplated hereunder, including but not limited to the approval of the Boards of Directors of Buyer and Seller and of the shareholders of Buyer if necessary. 

 

 (e)Stock Certificates; Instruments of Transfer; Opinion of Legal Counsel.  Seller shall have delivered to Buyer certificates representing Buyer's First Tranche Ablis HC Stock and Buyer's Second Tranche Ablis HC Stock, as appropriate, accompanied by duly executed stock powers, and also accompanied by opinions of Seller's legal counsel to the effect that such Stock evidence the ownership by Buyer of that certain percentage of equity ownership of Ablis HC in accordance with Article 1, free and clear of all liens, encumbrances and restrictions excepting only restrictions imposed by securities laws, and that such equity ownership is fully paid and non-assessable. 

 

(f) Payment of Liabilities. Seller shall have completed the Liabilities Payoff, and shall have provided satisfactory evidence of such pay off to Buyer as provided in Article 2. 

 

(g)Filings.  All filings necessary to be made shall have been made by Buyer with the SEC, and any approvals necessary to be obtained from the SEC shall have been obtained.   

 

(h)Completion of Capital Raise. Buyer shall have completed the first tranche of a private placement in an amount equal to $2,000,000.00 or more in cash prior to the First Tranche Closing Date, and Buyer shall have completed the second tranche of a private placement in an amount equal to the Second Tranche Equity Percentage multiplied by $38,000,000.00, on terms and conditions mutually acceptable to Buyer and to the investors in such private placement (the "Private Placement"). 

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(i) Contributions and Transfers of Ownership of Business and Assets. Seller shall have completed the Contributions and Transfers of Ownership of Businesses and Assets from Ablis to Seller, and shall have provided to Buyer definitive documentation of such completion that is satisfactory to Buyer and Buyer's legal counsel. 

 

6.2Conditions of Obligations of Seller.  The obligations of Seller to consummate the Purchase pursuant to this Agreement are subject to the satisfaction of the following conditions, each of which may be waived by Seller: 

 

(a)Representations and Warranties; Performance of Obligations.  The representations and warranties of Buyer set forth in Article 4 hereof and in all agreements, documents and instruments executed and delivered pursuant hereto or in connection with the First Tranche Closing and the Second Tranche Closing shall have been and be true and correct in all material respects as of the date hereof and as of the First Tranche Closing Date and the Second Tranche Closing Date as though made on and as of the First Tranche Closing Date and the Second Tranche Closing Date.  Buyer shall have performed in all material respects the agreements and obligations necessary to be performed by it under this Agreement prior to the First Tranche Closing Date and the Second Tranche Closing Date. 

 

(b)Certificates of Fulfillment of Conditions.  Seller shall have received certificates, dated the First Tranche Closing Date and the Second Tranche Closing Date, respectively, signed by an officer of Buyer, certifying that the conditions specified in Section 6.2 (a) have been fulfilled. 

 

(c)No Injunction.  No preliminary or permanent injunction or order that would prohibit or restrain the consummation of the transactions contemplated hereunder shall be in effect and no governmental entity or other person or entity shall have commenced or threatened to commence an action or proceeding seeking to enjoin the consummation of such transactions or to impose liability on the Parties in connection therewith. 

 

(d)Other Consents.  Buyer and Seller shall have received all other consents required to be obtained in connection with the consummation of the transactions contemplated hereunder, including but not limited to the approval of the Boards of Directors of Buyer and Seller, of the shareholders of Buyer if necessary. 

 

(e)Purchase Price.  Seller shall have received from Buyer the payment of $399,200.00 payable on the First Tranche Closing Date as provided in Section 1.1, and Seller shall have received from Buyer the payment totaling an aggregate amount equal to the Second Tranche Equity Percentage multiplied by $38,000,000 payable on the Second Tranche Closing Date as provided in Section 1.2. 

 

(f) Subscription Agreements. Buyer shall have executed and delivered to Seller's attorney such subscription agreements and representation letters as Seller's attorney may reasonably request in order to ensure that the Purchase complies with all applicable securities laws. 

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ARTICLE 7

CLOSING DATE AND TERMINATION OF AGREEMENT

 

7.1Closing Date.   

 

(a) The First Tranche Closing shall take place as soon hereafter as is reasonably practicable, at a place and time that is mutually acceptable to the Parties, provided that each condition set forth in Article 7 is satisfied or waived. 

 

(b)The Second Tranche Closing shall take place on the third business day following the receipt by Buyer of the OLCC Approval, or as soon thereafter as is reasonably practicable, at a place and time that is mutually acceptable to the Parties, provided that each condition set forth in Article 7 in satisfied or waived. 

 

7.2Termination of Agreement or Obligations.   

 

(a) This Agreement may be terminated and abandoned at any time by mutual written consent of Buyer and Seller. 

 

(b)This Agreement may be terminated and abandoned by either Buyer or Seller at any time prior to the First Tranche Closing Date if, without fault of such terminating party, the First Tranche Closing shall not have been consummated on or before May 15, 2019. 

 

(c)The obligations of Buyer and Seller to complete the Second Tranche Ablis HC Purchase may be terminated and abandoned by either Buyer or Seller at any time prior to the Second Tranche Closing Date if, without fault of such terminating party, the Second Tranche Closing shall not have been consummated on or before July 31, 2019. 

 

7.3Effect of Termination.   

 

(a)In the event of termination of this Agreement as provided in Section 7.2(a), this Agreement shall forthwith become void, and there shall be no liability or obligation on the part of Buyer or Seller or any of their respective affiliates. 

 

(b) In the event of termination of this Agreement as provided in Section 7.2(b), notice thereof shall be promptly given by the terminating Party to the other Parties and thereafter this Agreement shall forthwith become void, and there shall be no liability or obligation on the part of Buyer or Seller or any of their respective affiliates except that nothing herein will relieve any Party from liability for any breach of any agreement or covenant herein.  

 

(c) In the event of termination of the obligations of Buyer and Seller to complete the Second Tranche Ablis HC Purchase as provided in Section 7.2 (c), notice thereof shall be promptly given by the terminating Party to the other Parties and thereafter such obligations shall forthwith become void, and there shall be no liability or obligation on the part of Buyer or Seller or any of their respective affiliates in regard to such obligations except that nothing herein will relieve any Party from liability for any breach of any agreement or covenant herein.  

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ARTICLE 8

INDEMNIFICATION

 

8.1Indemnification by Seller. 

 

(a)Subject to the provisions of Sections 8.1 (b) and 8.3 below, Seller shall indemnify Buyer against, and hold Buyer harmless from, any and all loss, damage, liability, payment, and obligation (collectively "Losses"), incurred, suffered, sustained or required to be paid, directly or indirectly, or sought to be imposed upon, Buyer resulting from, related to or arising out of any inaccuracy in or breach of any of the representations, warranties or covenants made by Seller or Bendis in or pursuant to this Agreement. 

 

(b) Buyer shall not be entitled to indemnification pursuant to this Section 8.1 in respect of an inaccuracy in or breach of any representation or warranty until such time as the Losses of Buyer exceed Twenty-Five Thousand Dollars (U.S. $25,000) ("Seller's Basket") in the aggregate; provided that all claims by Buyer for indemnification shall accrue in the aggregate until the Losses of Buyer exceed the Seller's Basket and thereupon Seller shall become obligated to indemnify Buyer only for the amount by which all such claims exceed Seller's Basket.   

 

(c) Buyer shall promptly give written notice to Seller of the assertion by any person or entity of any claim, action, suit or proceeding with respect to which Seller are obligated to provide indemnification hereunder. Seller shall have the right, but not the obligation, to contest, defend or litigate, and to retain counsel of their choice in connection with, any claim, action, suit or proceeding by any third party alleged or asserted against Buyer that is subject to indemnification by Seller hereunder, and the cost and expense thereof shall be subject to the indemnification obligations of Seller hereunder. Neither Seller, on the one hand, nor Buyer, on the other hand, shall be entitled to settle or compromise any such claim, action, suit or proceeding without the prior written consent of Buyer or Seller, as the case may be, which consent shall not be unreasonably withheld.  

 

8.2Indemnification by Buyer. 

 

(a) Subject to the provisions of Section 8.2 (b) and 8.3 below, Buyer shall indemnify Seller against, and hold Seller harmless from, any and all Losses incurred, suffered, sustained or required to be paid, directly or indirectly, by or sought to be imposed upon, Seller resulting from, related to or arising out of any inaccuracy in or breach of any of the representations, warranties or covenants made by Buyer in or pursuant to this Agreement. 

 

(b)Seller shall not be entitled to indemnification pursuant to this Section 8.2 in respect of an inaccuracy in or breach of any representation or warranty, until such time as the Losses of Seller exceeds Twenty-Five Thousand Dollars (U.S. $25,000) ("Buyer's Basket") in the aggregate; provided that all claims by Seller for indemnification shall accrue in the aggregate until the Losses of Seller exceeds Buyer's Basket and thereupon Buyer shall become obligated to indemnify Seller only for the amount by which all such claims exceed Buyer's Basket.  

 

(b) Seller shall promptly give written notice to Buyer of the assertion by any person or entity of any claim, action, suit or proceeding with respect to which Buyer is obligated to provide indemnification hereunder. Buyer shall have the right, but not the  

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obligation, to contest, defend or litigate, and to retain counsel of its choice in connection with, any claim, action, suit or proceeding by any third party alleged or asserted against Seller that is subject to indemnification by Buyer hereunder, and the cost and expense thereof shall be subject to the indemnification obligations of Buyer hereunder. Neither Seller, on one hand, nor Buyer, on the other hand, shall be entitled to settle or compromise any such claim, action, suit or proceeding without the prior written consent of Seller or Buyer, as the case may be, which consent shall not be unreasonably withheld.

 

8.3Survival of Representations and Warranties. All representations and warranties contained herein or made pursuant hereto shall survive the First Tranche Closing and the Second Tranche Closing hereunder until the twelve month anniversary of the Second Tranche Closing Date, except that the representations and warranties in Sections 3.1.1, 3.1.2, 3.1.3, 3.1.5, 3.1.8, 3.1.16, 3.2.1, 3.2.2, 3.2.3, 3.2.4 (a), 3.2.6, 3.2.9, and 3.2.16 shall survive the Second Tranche Closing Date until the expiration of the applicable statute of limitations.  The expiration of any representation and warranty shall not affect any claim for indemnification made prior to the date of such expiration. 

 

ARTICLE 9

MISCELLANEOUS

 

9.1Further Actions.  From time to time, as and when requested, each Party shall execute and deliver, or cause to be executed and delivered, such documents and instruments and shall take, or cause to be taken, such further or other actions as another Party may reasonably request in order to carry out the intent and purposes of this Agreement, including effecting the Purchase and carrying out the other covenants and agreements contemplated hereby.  

 

9.2Expenses.  Except as otherwise specifically provided herein, Seller and Buyer shall each bear their own fees and other costs and expenses with respect to the negotiation, execution and delivery of this Agreement and the consummation of the Purchase, including but not limited to any fees and expenses owed to any lawyers, accountants, financial advisers, investment bankers, brokers or finders employed by such Party. Notwithstanding the foregoing, Buyer and Seller shall each pay one-half of any and all sales, transfer or documentary taxes incident to the Purchase. 

 

9.3Entire Agreement. This Agreement contains the entire understanding and agreement between the Parties hereto and their affiliates with respect to the subject matter of this Agreement and supersedes all prior or contemporaneous letters of intent, agreements, representations, warranties, arrangements or understandings of such Parties with respect thereto, whether oral or written. This Agreement shall be construed according to its fair meaning and not strictly for or against any Party regardless of draftsmanship. 

 

9.4Notices.  All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if (a) delivered personally or (b) sent by registered mail, return receipt requested, postage prepaid, or (c) sent by overnight courier with a nationally recognized courier, delivery signature required, as follows: 

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If to Buyer or GJacobs:Gerard M. Jacobs 

31 N. Suffolk Lane 

Lake Forest, IL  60045 

 

 

If to WJacobs:William C. Jacobs 

301 Mission Drive #383 

New Smyrna Beach, FL  32168 

 

If to Seller or Ablis:Ablis Holding Company, 

c/o James A. Bendis and Alan T. Dietrich 

19330 Pinehurst Road 

Bend, OR  97703 

 

If to Bendis:James A. Bendis 

19330 Pinehurst Road 

Bend, OR  97703 

 

If to Dietrich:Alan T. Dietrich 

19330 Pinehurst Road 

Bend, OR  97703 

 

If sent by registered mail, notice shall be considered delivered 5 business days after the date of mailing, and if sent by any other means set forth above, notice shall be considered delivered upon receipt thereof.  Any Party may by notice to the other Parties change the address to which notice or other communications to it are to be delivered or mailed.

 

9.5Descriptive Headings.  The descriptive headings of this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. 

 

9.6Governing Law.  This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Oregon without regard to conflict of law principles.  

 

9.7Assignability.  This Agreement shall not be assignable by any Party without the written consent of the other Parties and any such purported assignment by any Party without such consent shall be void. 

 

9.8Waivers and Amendments.  Any waiver of any term or condition of this Agreement, or any amendment or supplementation of this Agreement, shall be effective only if in writing, signed by the Parties to be bound thereby.  A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive a Party's rights hereunder at any time to enforce strict compliance thereafter with every term or condition of this Agreement. 

 

9.9Third Party Rights.  Notwithstanding any other provision of this Agreement, this Agreement shall not create benefits on behalf of any shareholder or employee of Buyer, Seller or any other person or entity (including without limitation any broker or finder),  

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and this Agreement shall be effective only as between the Parties hereto.

 

9.10Disclosures and Press Releases.  

 

(a) Seller and Bendis acknowledge that Buyer is a publicly traded company and that unauthorized disclosure of any material information regarding Buyer or the transactions contemplated by this Agreement, or purchases or sales of Buyer common stock while in possession of material non-public information regarding Buyer or the transactions contemplated by this Agreement, could subject Seller or Bendis to scrutiny or potential liability under applicable laws and regulations. 

 

(b) Buyer shall be permitted to make a press release in regard to this Agreement per the advice of Buyer's securities attorney, in order to comply with applicable securities laws and regulations. However, before issuing such press release Buyer shall first consult with Bendis and Dietrich, and shall use good faith efforts to develop language for the press release that is both accurate and mutually acceptable to GJacobs and Bendis. 

 

9.11Counterparts.  This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.  Electronically transmitted signatures and facsimile signatures shall be treated as if they were originals. 

 

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of  

the date first above written.

 

 

 

ABLIS HOLDING COMPANY 

 

 

/s/ James A. BendisBy:/s/ James A. Bendis 

James A. Bendis in his individual capacityName: James A. Bendis 

Title: President 

 

 

ACQUIRED SALES CORP.ABLIS, INC. 

 

By:/s/ Gerard M. JacobsBy:/s/ James A. Bendis 

Name:Gerard M. JacobsName:James A. Bendis 

Title:  Chief Executive OfficerTitle:  President 

 

 

/s/ Gerard M. Jacobs/s/ William C. Jacobs 

Gerard M. Jacobs in his individual capacityWilliam C. Jacobs in his individual capacity 

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