Document:

ex4_3.htm

Exhibit 4.3

 

TASMAN METALS LTD.

(the “Issuer”)

 

 

STOCK OPTION PLAN 2015, AS AMENDED AND RESTATED TO INCORPORATE AMENDMENT NUMBER ONE TO STOCK OPTION PLAN APPROVED BY SHAREHOLDERS ON MAY 19, 2015”.

 

	
1. 

	
OBJECTIVES

 

The Plan is intended as an incentive to enable the Issuer to:

 

	
  

	
(a)

	
attract and retain qualified Directors, Senior Officers, Employees, Management Issuer Employees and Consultants of the Issuer and its Affiliates;

 

	
  

	
(b)

	
promote a proprietary interest in the Issuer and its Affiliates among its Directors, Senior Officers, Employees, Management Issuer Employees and Consultants; and

 

	
  

	
(c)

	
stimulate the active interest of such Persons in the development and financial success of the Issuer and its Affiliates.

 

	
2. 

	
DEFINITIONS

 

As used in the Plan, the terms set forth below shall have the following respective meanings:

 

“Affiliate” has the meaning ascribed thereto in the Policies of the TSXV;

 

“Associate” has the meaning ascribed thereto in the Policies of the TSXV;

 

“BCBCA” means the Business Corporations Act (British Columbia);

 

“Blackout Period” means a period formally imposed by the Issuer during which the Issuer prohibits Optionees from exercising their Options pursuant to its internal trading policies as a result of the bona fide existence of undisclosed Material Information;

 

“Board” means the board of directors of the Issuer;

 

“Charitable Options” means an Option granted by the Issuer to an Eligible Charitable Organization;

 

“Committee” means a committee of the Board that the Board may, in accordance with subsection 3.1, designate to administer the Plan;

 

“Company” means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual;

 

  

 

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 “Consultant” means an individual or Company, other than an Employee, a Senior Officer, a Management Issuer Employee or a Director of the Issuer, that:

 

	
  

	
(a)

	
is engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Issuer or to an Affiliate of the Issuer, other than services provided in relation to a distribution of securities;

 

	
  

	
(b)

	
provides the services under a written contract between the Issuer or the Affiliate and the individual or the Company, as the case may be;

 

	
  

	
(c)

	
in the reasonable opinion of the Issuer, spends or will spend a significant amount of time and attention on the affairs and business of the Issuer or an Affiliate of the Issuer; and

 

	
  

	
(d)

	
has a relationship with the Issuer or an Affiliate of the Issuer that enables the individual to be knowledgeable about the business and affairs of the Issuer;

 

“Consultant Company” means a Consultant that is a Company;

 

 “Director” means a member of the Board;

 

“Eligible Charitable Organization” has the meaning ascribed thereto in the Policies of the TSXV;

 

“Employee” means an individual who:

 

	
  

	
(a)

	
is considered an employee of the Issuer or its subsidiary under the Income Tax Act (Canada) (i.e. for whom income tax, employment insurance and Canada Pension Plan deductions must be made at source);

 

	
  

	
(b)

	
works full-time for the Issuer or its subsidiary providing services normally provided by an employee and who is subject to the same control and direction by the Issuer over the details and methods of work as an employee of the Issuer, but for whom income tax deductions are not made at source; or

 

	
  

	
(c)

	
works for the Issuer or its subsidiary on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Issuer over the details and methods of work as an employee of the Issuer, but for whom income tax deductions are not made at source;

 

“Insider” has the meaning ascribed thereto by the Policies of the TSXV;

 

“Investor Relations Activities” has the meaning ascribed thereto by the Policies of the TSXV;

 

“Issuer” means Tasman Metals Ltd., a company existing under the BCBCA;

 

“Management Issuer Employee” means an individual employed by a Person providing management services to the Issuer, which are required for the ongoing successful operation of the business enterprise of the Issuer, but excluding a Person engaged in Investor Relations Activities;

 

  

 

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“Market Price” has the meaning ascribed thereto by the Policies of the TSXV;

 

“Material Information” has the meaning ascribed thereto in the Policies of the TSXV;

 

“Option” means an option to purchase Shares granted under or subject to the terms of the Plan;

 

“Option Agreement” means a written agreement or certificate between the Issuer and an Optionee that evidences the Option and sets forth the terms, conditions and limitations applicable to an Option;

 

“Option Period” means the period for which an Option is granted;

 

“Optionee” means a Person to whom an Option has been granted under the terms of the Plan or who holds an Option that is otherwise subject to the terms of the Plan;

 

“Other Share Compensation Arrangement” means, other than the Plan and any Options, any employee stock purchase plan or other compensation or incentive mechanism involving the issuance or potential issuance of Shares, including but not limited to a purchase of Shares from treasury which is financially assisted by the Issuer by way of loan, guarantee or otherwise;

 

“Outstanding Issue” means the number of Shares that are outstanding immediately prior to the Share issuance or Option grant in question;

 

“Person” means a company or individual;

 

“Plan” means this Stock Option Plan of the Issuer;

 

“Policies of the TSXV” means the policies of the TSXV published by the TSXV in its Corporate Finance Manual, as may be amended from time to time;

 

“Securities Acts” means the Securities Act (British Columbia), R.S.B.C. 1996 c. 418, as amended, and the Securities Act (Alberta) R.S.A. 2000 c. S-4, as amended, from time to time;

 

“Senior Officer” means an officer of the Issuer within the meaning ascribed thereto in either the Securities Acts or a senior officer of the Issuer within the meaning ascribed thereto in the BCBCA;

 

“Shares” means common shares without par value in the capital stock of the Issuer as the same are presently constituted; and

 

“TSXV” means the TSX Venture Exchange or any successor thereto; provided that if the Shares are or become listed on a senior stock exchange, then reference to “TSXV” means a reference to such senior stock exchange.

 

	
3. 

	
ADMINISTRATION OF THE PLAN

 

	
3.1

	
The Plan will be administered by the Issuer’s Secretary or such other officer or employee as may be designated by the Board from time to time.  The Secretary or such other officer or employee will report to the Board or to a Committee of two or more Directors who may be designated from time to time to serve as the Committee for the Plan, all of the sitting members of which shall be current Directors.  Notwithstanding the existence of any such Committee, the Board itself will

 

  

 

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retain independent and concurrent power to undertake any action hereunder delegated to the Committee, whether with respect to the Plan as a whole or with respect to individual Options granted or to be granted under the Plan.

 

	
3.2

	
Subject to the limitations of the Plan, the Board shall have full power to grant Options, to determine the terms, limitations, restrictions and conditions respecting such Options and to settle, execute and deliver Option Agreements and bind the Issuer accordingly, to interpret the Plan and to adopt such rules, regulations and guidelines for carrying out the Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of the Issuer and in keeping with the objectives of the Plan.

 

	
3.3

	
Notwithstanding any provision of this Plan, the Board may, in its discretion grant Options as it sees fit, or otherwise accelerate the vesting or exercisability of any Option, eliminate or make less restrictive any restrictions contained in an Option, provide for the extension of the Option Period of an outstanding Option, waive any restriction or other provision of the Plan or an Option or otherwise amend or modify an Option in any manner that is either:

 

	
  

	
(a)

	
not adverse to the Optionee holding such Option; or

 

	
  

	
(b)

	
consented to by such Optionee;

 

subject to any required approvals of any stock exchange or regulatory body having jurisdiction over the securities of the Issuer.

 

	
3.4

	
The Board or Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option in the manner and to the extent deemed necessary or desirable to carry it into effect.  Any decision of the Board or Committee in the interpretation and administration of the Plan shall lie within its absolute discretion and shall be final, conclusive and binding on all parties concerned.  No member of the Board or Committee shall be liable for anything done or omitted to be done by such member, by any other member of the Board or Committee or by any officer of the Issuer, in connection with the performance of any duties under the Plan, except those which arise from such member’s own wilful misconduct or as expressly provided by statute.

 

	
3.5

	
All administrative costs of the Plan shall be paid by the Issuer.

 

	
4. 

	
ELIGIBILITY FOR OPTIONS

 

	
4.1

	
Options may be granted to Directors, Senior Officers, Employees, Management Issuer Employees and Consultants of the Issuer and its Affiliates, including an issuer all the voting securities of which are owned by such Persons, who are, in the opinion of the Board or Committee, in a position to contribute to the success of the Issuer or any of its Affiliates or who, by virtue of their service to the Issuer or any predecessors thereof or to any of its Affiliates, are in the opinion of the Board or Committee, worthy of special recognition.  Except as may be otherwise set out in this Plan, the granting of Options is entirely discretionary.  Nothing in this Plan shall be deemed to give any Person any right to participate in this Plan or to be granted an Option and the designation of any Optionee in any year or at any time shall not require the designation of such Person to receive an Option in any other year or at any other time.  The Board or Committee shall consider such factors as it deems pertinent in selecting participants and in determining the amounts and terms of their respective Options.

 

  

 

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4.2

	
If an Optionee who is granted an Option is an Employee, Management Issuer Employee or Consultant of the Issuer or any of its Affiliates, the Option Agreement pertaining to such Option shall contain a representation by both the Issuer and the Optionee, and the Issuer and the Optionee will be responsible for ensuring and confirming, that the Optionee is a bona fide Employee, Management Issuer Employee or Consultant of the Issuer or its Affiliates.

 

	
4.3

	
Subject to any applicable regulatory approvals, Options may also be granted under the Plan in exchange for outstanding options granted by the Issuer or any predecessor Issuer thereof or any Affiliate thereof, whether such outstanding options were granted under the Plan, under any other stock option plan of the Issuer or any predecessor Issuer or any Affiliate thereof, or under any stock option agreement with the Issuer or any predecessor Issuer or Affiliate thereof.

 

	
4.4

	
Subject to any applicable regulatory approvals, Options may also be granted under the Plan in substitution for outstanding options of one or more other companies in connection with a plan of arrangement or exchange, amalgamation, merger, consolidation, acquisition of property or shares, or other reorganization between or involving such other companies and the Issuer or any of its Affiliates.

 

	
4.5

	
Options may also be granted to Eligible Charitable Organizations.

 

	
5. 

	
NUMBER OF SHARES RESERVED UNDER THE PLAN

 

	
5.1

	
The number of Shares that may be reserved for issuance under the Plan, is limited as follows:

 

	
  

	
(a)

	
the maximum aggregate number of Shares reserved for issuance pursuant to the exercise of Options granted under the Plan shall be 10% of  the Outstanding Issue as at the date of a stock option grant, provided that:

 

	
  

	
(i)

	
if any Option subject to the Plan is forfeited, expires, is terminated or is cancelled for any reason whatsoever (other than by reason of exercise), then the maximum number of Shares for which Options may be granted hereunder shall be increased by the number of Shares which were the subject of such forfeited, expired, terminated or cancelled Option; and

 

	
  

	
(ii)

	
such maximum number of Shares shall be appropriately adjusted in the event of any subdivision or consolidation of the Shares;

 

	
  

	
(b)

	
if and for so long as the Shares are listed on the TSXV:

 

	
  

	
(i)

	
the maximum aggregate number of Shares that may be reserved for issuance under Options granted to Insiders (as a group) pursuant to the Plan may not exceed 10% of the Outstanding Issue at the time of grant, unless the Issuer has obtained “disinterested shareholder” approval in accordance with the Policies of the TSXV; and

 

	
  

	
(ii)

	
the maximum aggregate number of Options granted to Insiders (as a group) under the Plan together with any Other Share Compensation Arrangement within a 12 month period may not exceed 10% of the Outstanding Issue at the time of grant, unless the Issuer has obtained “disinterested shareholder” approval in accordance with the Policies of the TSXV;

 

  

 

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(c)

	
if and for so long as the Shares are listed on the TSX Venture Exchange (excluding any senior stock exchange):

 

	
  

	
(i)

	
the maximum aggregate number of Shares that may be reserved for issuance under Options pursuant to the Plan together with any Other Share Compensation Arrangement to any one Person (and Companies wholly owned by that Person) within a 12 month period shall not exceed 5% of the Outstanding Issue at the time of grant (unless the Issuer has obtained “disinterested shareholder” approval in accordance with the Policies of the TSX Venture Exchange);

 

	
  

	
(ii)

	
the maximum aggregate number of Shares that may be reserved under the Plan or any Other Share Compensation Arrangement for issuance to any one Consultant within a 12 month period shall not exceed 2% of the Outstanding Issue at the time of grant; and

 

	
  

	
(iii)

	
the maximum aggregate number of Shares that may be reserved under the Plan or any Other Share Compensation Arrangement for issuance to Persons who are conducting Investor Relations Activities within a 12 month period shall not exceed 2% of the Outstanding Issue at the time of grant;

 

	
  

	
(c)

	
subject to the policies of the TSXV an Option shall vest and may be exercised (in each case to the nearest full Share) during the Option Period in accordance with any vesting schedule as the Board may determine from time to time in its sole discretion.

 

	
5.2

	
The aggregate number of Options granted and outstanding to Eligible Charitable Organizations must not at any time exceed 1% of the Outstanding Issue, as calculated immediately subsequent to the grant of any Options to Eligible Charitable Organizations.

 

	
6. 

	
NUMBER OF SHARES PER OPTION

 

	
6.1

	
The number of Shares under an Option shall be determined by the Board or Committee, in its discretion, at the time such Option is granted, taking into consideration the Optionee’s present and potential contribution to the success of the Issuer and taking into account all other Options then held by such Optionee, but subject always to the limitations set forth in subsection 5.1.

 

	
7. 

	
HOLD PERIOD

 

	
7.1

	
In addition to any resale restrictions under Securities Acts, where the exercise price of the Option is less than the Market Price, the Option and any Shares issued on the exercise of the Option must be legended with the TSXV hold period commencing on the date the Option was granted as follows:

 

“Without prior written approval of the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until [four months + 1 day from the date of grant].”

 

  

 

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8. 

	
PRICE

 

	
8.1

	
The exercise price per Share under an Option shall be determined by the Board or Committee, in its discretion, at the time such Option is granted, but such price shall not be less than the closing price of the Shares on the TSXV on the trading day immediately preceding the day on which the Option is granted, less any allowable discount (provided that if there are no trades on such day then the last closing price within the preceding ten trading days will be used, and if there are no trades within such ten-day period, then the simple average of the bid and ask prices on the trading day immediately preceding the day of grant will be used) and, in any event, the exercise price per Share will not be less than $0.10, being the minimum exercise price allowable under the Policies of the TSXV.

 

	
8.2

	
The exercise price at which, and the number of Optioned Shares for which, an outstanding Option may be exercised following a subdivision or consolidation of the Shares shall be subject to adjustment in accordance with section 12.

 

	
8.3

	
Subject to TSXV approval, the exercise price per Optioned Share under an Option may be reduced at the discretion of the Board or Committee if:

 

	
  

	
(a)

	
prior TSXV approval is obtained and at least six months has elapsed since the later of the date such Option was granted and the date the exercise price for such Option was last amended; and

 

	
  

	
(b)

	
disinterested shareholder approval is obtained for any reduction in the exercise price under an Option held by an Insider of the Issuer;

 

provided that if the exercise price is reduced to less that Market Price, the TSXV four month hold period will apply from the date of the amendment and further provided that no such conditions will apply in the case of an adjustment made under subsection 5.1(a)(ii).

 

	
9. 

	
OPTION PERIOD AND EXERCISE OF OPTIONS

 

	
9.1

	
The Option Period for an Option shall be determined by the Board or Committee at the time the Option is granted and may be up to ten (10) years from the date the Option is granted.  At the time an Option is granted, the Board or Committee may determine that, with respect to that Option, upon the occurrence of one of the events described in subsection 11.1 there shall come into force a time limit for exercise of such Option which is different than the Option Period, and in the event of such a determination, the Option Agreement for such Option shall contain provisions which specify the events and time limits related to that determination.  Subject to the applicable maximum Option Period provided for in this subsection 9.1 and subject to applicable regulatory requirements and approvals, the Board or Committee may extend the Option Period of an outstanding Option beyond its original expiration date, (whether or not such Option is held by an Insider) if the following requirements are satisfied:

 

	
  

	
(a)

	
the term of the Option is not extended so that the effective term of the Option exceeds ten (10) years in total; and

 

	
  

	
(b)

	
the Option has been outstanding for at least one year at the time of extension.

 

	
9.2

	
If the Option Period for an Option expires during a Blackout Period, the Option Period will be automatically extended, without prior Board or Committee approval, to the date that is 10

 

  

 

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business days after the expiry of the Blackout Period unless the applicable Optionee or the Issuer is subject to a cease trade order (or similar order under securities laws) in respect of the Issuer’s securities.

 

	
9.3

	
If and for so long as the Shares are listed on the TSX Venture Exchange (excluding any senior stock exchange), Options issued to Consultants who perform Investor Relations Activities will be subject to a vesting schedule of at least 12 months whereby no more than 25% of the options granted may be vested in any three month period.

 

	
9.4

	
If there is a takeover bid made for all or any of the issued and outstanding Shares, then all outstanding Options, whether fully vested and exercisable or remaining subject to vesting provisions or other limitations on exercise, shall be exercisable in full to enable the Shares subject to such Options to be issued and tendered to such bid.

 

	
9.5

	
The vested portions of Options will be exercisable, in whole or in part, at any time after vesting.  If an Option is exercised for fewer than all of the Shares for which the Option has then vested, the Option shall remain in force and exercisable for the remaining Shares for which the Option has then vested, according to the terms of such Option.

 

	
9.6

	
The exercise of any Option will be contingent upon receipt by the Issuer of cash payment in full for the exercise price of the Shares being purchased by way of certified cheque, wire transfer or bank draft.  Neither an Optionee nor the legal representatives, legatees or distributees of such Optionee will be, or will be deemed to be, a holder of any Shares subject to an Option under the Plan unless and until certificates for such Shares are issuable to the Optionee or such other Persons pursuant to the Option or the Plan.

 

	
10. 

	
STOCK OPTION AGREEMENT

 

	
10.1

	
Upon the grant of an Option to an Optionee, the Issuer and the Optionee shall enter into an Option Agreement setting out the number of Shares subject to the Option, the Option Period and the vesting schedule for the Option, if any, and incorporating the terms and conditions of the Plan and any other requirements of regulatory authorities and stock exchanges having jurisdiction over the securities of the Issuer, together with such other terms and conditions as the Board or Committee may determine in accordance with the Plan.

 

	
11. 

	
EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH

 

	
11.1

	
An outstanding Option shall remain in full force and effect and exercisable according to its terms for the Option Period until the Optionee ceases to be a Director, Employee, Non-Employee Director, Management Issuer Employee, Senior Officer or Consultant of the Issuer for any reason, excluding death or termination for cause, after which time the Option will expire within 90 days or, for those Optionees engaged in Investor Relations Activities, the Options will expire within 30 days of the cessation date, unless, the Board or Committee, at its own discretion, agrees to extend the period.

 

	
11.2

	
In the event that the Optionee, shall cease to be a Director, Senior Officer, Employee, Management Issuer Employee, or Consultant of the Issuer for termination for cause, the Option shall terminate and shall cease to be exercisable upon such termination for cause.

 

	
11.3

	
In the event of the death of an Optionee, an Option which remains exercisable may be exercised in accordance with its terms by the Person or Persons to whom such Optionee’s rights under the

 

  

 

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Option shall have passed under the Optionee’s will or pursuant to law, for a period not exceeding the earlier of one year from the Optionee’s death and the original expiry date of such Option.

 

	
11.4

	
A Charitable Option shall terminate and shall cease to be exercisable on thh90th day following the date that the holder of the Charitable Option ceases to be an Eligible Charitable Organization.

 

	
12. 

	
ADJUSTMENT IN SHARES SUBJECT TO THE PLAN

 

	
12.1

	
Following the date an Option is granted, the exercise price for and the number of Shares which are subject to an Option will be adjusted, with respect to the then unexercised portion thereof, in the events and in accordance with the provisions and rules set out in this section 12, with the intent that the rights of Optionees under their Options are, to the extent possible, preserved and maintained notwithstanding the occurrence of such events.  Any dispute that arises at any time with respect to any adjustment pursuant to such provisions and rules will be conclusively determined by the Board or Committee, and any such determination will be binding on the Issuer, the Optionee and all other affected parties.

 

	
12.2

	
If the outstanding Shares are changed into or exchanged for a different number of shares or into or for other securities of the Issuer or securities of another company or entity, whether through an arrangement, amalgamation, merger, business combination, sale or other similar procedure or otherwise, or a share recapitalization, subdivision or consolidation, then on each exercise of the Option which occurs following such events, for each Optioned Share for which the Option is exercised, the Optionee shall instead receive the number and kind of shares or other securities of the Issuer or other company into which such Share would have been changed or for which such Share would have been exchanged if it had been outstanding on the date of such event and the exercise price will be similarly adjusted so that the aggregate price to exercise the Option is preserved, and if the Issuer undertakes an arrangement or is amalgamated, merged or combined with another company, the Board shall make such other provision for the protection of the rights of Optionees as it shall deem advisable.

 

	
12.3

	
If the outstanding Shares are changed into or exchanged for a different number of shares or into or for other securities of the Issuer or securities of another company or entity, in a manner other than as specified in subsection 12.2, then the Board or Committee, in its sole discretion, may make such adjustment to the securities to be issued pursuant to any exercise of the Option and the exercise price to be paid for each such security following such event as the Board or Committee in its sole and absolute discretion determines to be equitable to give effect to the principle described in subsection 12.1, and such adjustments shall be effective and binding upon the Issuer and the Optionee and all the other parties for all purposes.

 

	
12.4

	
No adjustment or substitution provided for in this section 12 shall require the Issuer to issue a fractional share in respect of any Option.  Fractional shares shall be eliminated.

 

	
12.5

	
The grant or existence of an Option shall not in any way limit or restrict the right or power of the Issuer to effect adjustments, reclassifications, reorganizations, arrangements or changes of its capital or business structure, or to amalgamate, merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets.

 

	
12.6

	
Notwithstanding any other provision of the Plan, a Charitable Option may not be amended or may subject to amendment after its grant other than to give effect to this Section 12 or to provide for the cancellation of the Charitable Option in order to enable the Issuer to comply with section 5.2.

 

  

 

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13. 

	
NON-ASSIGNABILITY

 

	
13.1

	
The Options under the Plan shall not be assignable or otherwise transferable, except as specifically provided in subsection 11.3 in the event of the death of the Optionee.  During the lifetime of the Optionee, all Options may only be exercised by the Optionee.

 

	
14. 

	
EMPLOYMENT

 

	
14.1

	
Nothing contained in the Plan shall confer upon any Optionee, or any Person employing a Management Issuer Employee, any right with respect to employment or continuance of employment with, or the provision of services to, the Issuer or any of its Affiliates, or interfere in any way with the right of the Issuer or any of its Affiliates to terminate the Optionee’s employment or the services of any such Person at any time.  Participation in the Plan by an Optionee is voluntary.

 

	
15. 

	
REGULATORY ACCEPTANCES

 

	
15.1

	
The Plan is subject to the acceptance of the Plan for filing by the TSXV, and the Board or Committee is authorized to amend the Plan from time to time in order to comply with any changes required from time to time by such applicable regulatory authorities, whether as conditions to the acceptance for filing of the Plan or otherwise, provided that no such amendment will in any way derogate from the rights held by Optionees holding Options (vested or unvested) at the time thereof without the consent of such Optionees.

 

	
15.2

	
The obligation of the Issuer to issue and deliver Shares pursuant to the exercise of any Options granted under the Plan is subject to the acceptance of the Plan for filing by the TSXV.  If any Shares cannot be issued to any Optionee for any reason, including, without limitation, the failure to obtain such acceptance for filing, then the obligation of the Issuer to issue such Shares shall terminate and any amounts paid to the Issuer for such Shares shall be returned to the Optionee forthwith without interest or deduction.

 

	
16. 

	
SECURITIES REGULATION AND TAX WITHHOLDING

 

	
16.1

	
Where necessary to enable the Issuer to use an exemption from requirements to register Shares or file a prospectus or use a registered dealer to distribute Shares under securities laws applicable to the securities of the Issuer in any jurisdiction, an Optionee, upon the acquisition of any Shares on the exercise of Options and as a condition to such exercise, shall provide to the Board or Committee such evidence as the Board or Committee requires to demonstrate that the Optionee or recipient will acquire such Shares with investment intent (i.e. for investment purposes) and not with a view to their distribution, including an undertaking to that effect in a form acceptable to the Board or Committee.  The Board or Committee may cause a legend or legends to be placed upon any certificates for the Shares to make appropriate reference to applicable resale restrictions, and the Optionee or recipient shall be bound by such restrictions.  The Board or Committee also may take such other action or require such other action or agreement by such Optionee or proposed recipient as may from time to time be necessary to comply with applicable securities laws.  This provision shall in no way obligate the Issuer to undertake the registration or qualification of any Options or the Shares under any securities laws applicable to the securities of the Issuer.

 

	
16.2

	
For all purposes of the Plan, the Issuer may take all such measures as it deems appropriate or necessary to comply with applicable laws, including income tax laws and securities laws and

 

  

 

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regulations, as well as the rules of regulatory authorities having jurisdiction over the Issuer or in respect of the securities of the Issuer.  Without limitation to the foregoing, the Issuer may withhold and remit to tax authorities such sums which might otherwise be due or accruing due by the Issuer to an Optionee, if such withholding and remittance are required under applicable income tax laws in connection with the grant or exercise of the Optionee’s Options.

 

	
16.3

	
The Issuer may withhold from any amount payable to a participant (a “Participant”), either under the Plan or otherwise, such amount as may be necessary to enable the Issuer to comply with the applicable requirements of any federal, provincial, state or local law, or any administrative policy of any applicable tax authority, relating to the withholding of tax or any other required deductions with respect to awards hereunder (“Withholding Obligations”). The Issuer shall also have the right in its discretion to satisfy any liability for any Withholding Obligations by selling, or causing a broker to sell, on behalf of any Participant such number of Shares issued to the Participant pursuant to an exercise of Options hereunder as is sufficient to fund the Withholding Obligations (after deducting commissions payable to the broker), or retaining any amount payable which would otherwise be delivered, provided or paid to the Participant hereunder. The Issuer may require a Participant, as a condition to the exercise of an Option to make such arrangements as the Issuer may require so that the Issuer can satisfy applicable Withholding Obligations, including, without limitation, requiring the Participant to (i) remit the amount of any such Withholding Obligations to the Issuer in advance; (ii) reimburse the Issuer for any such Withholding Obligations; or (iii) cause a broker who sells shares acquired by the Participant under the Plan on behalf of the Participant to withhold from the proceeds realized from such sale the amount required to satisfy any such Withholding Obligations and to remit such amount directly to the Issuer.

 

	
16.4

	
Any Shares of a Participant that are sold by the Issuer, or by a broker engaged by the Issuer (the “Broker”), to fund Withholding Obligations will be sold as soon as practicable in transactions effected on the exchange on which the common shares of the Issuer are then listed for trading. In effecting the sale of any such Shares, the Issuer or the Broker will exercise its sole judgment as to the timing and manner of sale and will not be obligated to seek or obtain a minimum price. Neither the Issuer nor the Broker will be liable for any loss arising out of any sale of such Shares including any loss relating to the manner or timing of such sales, the prices at which the Shares are sold or otherwise. In addition, neither the Issuer nor the Broker will be liable for any loss arising from a delay in transferring any Shares to a Participant. The sale price of Shares sold on behalf of Participants will fluctuate with the market price of the Issuer’s shares and no assurance can be given that any particular price will be received upon any such sale.

 

	
16.5

	
Issuance, transfer or delivery of certificates for Shares acquired pursuant to the Plan may be delayed, at the discretion of the Board or Committee, until it is satisfied that the requirements of applicable laws and regulations, and applicable rules of regulatory authorities, have been met.

 

	
17. 

	
AMENDMENT AND TERMINATION OF PLAN

 

	
17.1

	
The Board reserves the right to amend or terminate the Plan at any time if and when it is deemed advisable in the absolute discretion of the Board; provided, however, that no such amendment or termination shall adversely affect any outstanding Options granted under the Plan without the consent of the Optionee.  Any amendment to the Plan shall also be subject to acceptance of such amendment or amended Plan for filing by the TSXV and, where required by the TSXV, the approval of the shareholders of the Issuer.

 

  

 

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18. 

	
NO REPRESENTATION OR WARRANTY

 

	
18.1

	
The Issuer makes no representation or warranty as to the future market value of any Shares.

 

	
19. 

	
GENERAL PROVISIONS

 

	
19.1

	
Nothing contained in the Plan shall prevent the Issuer or any of its Affiliates from adopting or continuing in effect other compensation arrangements (subject to shareholder approval if such approval is required by TSXV) and such arrangements may be either generally applicable or applicable only in specific cases.

 

	
19.2

	
The validity, construction and effect of the Plan, the grant of Options, the issue of Shares, any rules and regulations relating to the Plan any Option Agreement, and all determinations made and actions taken pursuant to the Plan, shall be governed by and determined in accordance with the laws of the Province of British Columbia.

 

	
19.3

	
If any provision of the Plan or any Option Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Option, or would disqualify the Plan or any Option under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Option, such provision shall be stricken as to such jurisdiction, Person, or Option and the remainder of the Plan and any such Option Agreement shall remain in full force and effect.

 

	
19.4

	
Neither the Plan nor any Option shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Issuer or any of its Affiliates and an Optionee or any other Person.

 

	
19.5

	
Headings are given to the sections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

	
20. 

	
TERM OF THE PLAN

 

	
20.1

	
The Plan shall be effective as of May 19, 2015, and is subject to approval by the shareholders of the Issuer on a yearly basis at the Issuer’s meetings of shareholders and acceptance for filing by the TSXV pursuant to section 15.

 

	
20.2

	
The Plan shall be effective until the Plan is terminated by the Board pursuant to section 17, and no Option shall be granted under the Plan after that date.  Unless otherwise expressly provided in the Plan or in an applicable Option Agreement, the Option Period for any Option granted hereunder will, and any authority of the Board to amend, alter, adjust, suspend, discontinue or terminate any such Option or to waive any conditions or rights under any such Option shall, continue after termination of the Plan notwithstanding such termination.Exhibit 10.1

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement"), dated as of September 30, 2015 (the "Effective Date"), is entered into between AMBREW, LLC, a Washington limited liability company ("Buyer") and AMERICAN BREWING COMPANY, INC., a Washington corporation ("Seller").

RECITALS:

WHEREAS, Seller is engaged in the business of production and distribution of malted beverages through the operation of a brewery at 180 W. Dayton Street, Edmonds, Washington, and the related operation of a tap room for the retail sale of malted beverages and brewery related merchandise (the "Business"); and

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, substantially all the assets, and certain specified liabilities described below, of the Business, subject to the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

 definitions

The following terms have the meanings specified or referred to in this Article I:

"Accounts Receivable" has the meaning set forth in Section 2.01(a).

"Action" means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

"Advance Deposit" means the amount set forth in Section 2.06.

"Agreement" has the meaning set forth in the preamble.

"Allocation Schedule" has the meaning set forth in Section 2.07.

"Applicable Law" means the laws of the State of Washington and federal law.

"Assigned Contracts" has the meaning set forth in Section 2.01(c).

"Assignment and Assumption Agreement" has the meaning set forth in Section 3.02(a)(ii).

Exhbit 10.1 Page 1

"Assignment and Assumption of Lease-Production" has the meaning set forth in Section 3.02(a)(vi).

 "Assignment and Assumption of Lease-Warehouse" has the meaning set forth in Section 3.02(a)(vii).

"Assumed Liabilities" has the meaning set forth in Section 2.03.

"Benefit Plan" means an employee benefit plan, within the meaning of ERISA, established and maintained by Seller.

"Bill of Sale" has the meaning set forth in Section 3.02(a)(i).

"Books and Records" has the meaning set forth in Section 2.01(j).

"Business" has the meaning set forth in the recitals.

"Business Day" means any day except Saturday, Sunday or any other day on which commercial banks located in Seattle, Washington are authorized or required by Law to be closed for business.

"Buyer" has the meaning set forth in the preamble.

"Buyer Closing Certificate" has the meaning set forth in Section 7.03(e).

"Buyer Indemnitees" has the meaning set forth in Section 8.02.

"CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.

"Closing" has the meaning set forth in Section 3.01.

"Closing Date" has the meaning set forth in Section 3.01.

"Code" means the Internal Revenue Code of 1986, as amended.

"Contracts" means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

"Direct Claim" has the meaning set forth in Section 8.04(c).

"Disclosure Schedules" means the Disclosure Schedules delivered by Seller concurrently with the execution and delivery of this Agreement.

"Dollars or $" means the lawful currency of the United States.

"Effective Date" means September 30, 2015, at 11:59 PM.

Exhbit 10.1 Page 2

"Employees" mean those Persons employed by Seller in connection with the Business immediately prior to the Closing.

"Encumbrance" means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

"Environmental Claim" means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, clean-up, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

"Environmental Law" means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the clean-up thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term "Environmental Law" includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

Exhbit 10.1 Page 3

"Environmental Notice" means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

"Environmental Permit" means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

"Excluded Assets" has the meaning set forth in Section 2.02.

"Excluded Books and Records" means the minute books of the Seller, records related to operations and assets of Seller other than the Business, and other company records of Seller that relate exclusively to Seller's organizational form or capitalization.

"Excluded Contracts" has the meaning set forth in Section 2.02(a).

"Excluded Liabilities" means any Liabilities of Seller, whether accrued or fixed, absolute or contingent, known or unknown, determined or determinable and whether incurred prior to or after the Closing Date, other than each specific liability that Buyer has expressly identified as an Assumed Liability.

"Financial Statements" has the meaning set forth in Section 4.04.

"GAAP" means United States generally accepted accounting principles in effect from time to time.

"Governmental Authority" means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

"Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

"Hazardous Materials" means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls.

Exhbit 10.1 Page 4

"Indemnified Party" has the meaning set forth in Section 8.04.

"Indemnifying Party" has the meaning set forth in Section 8.04.

"Insurance Policies" has the meaning set forth in Section 4.13.

"Intellectual Property Assets" has the meaning set forth in Section 4.10.

"Inventory" has the meaning set forth in Section 2.01(b).

"Keg Deposits" means amounts conditionally or provisionally held by Seller to be refunded to third parties, including amounts held as security for the return of Seller property included in the Assets, including but not limited to deposits for the rent or use of kegs, dispensing equipment, or other property of Seller.

"Key Employee" means each of Rich Roberts, Adam Frantz, and Amanda K. Johnson.

"Knowledge of Seller or Seller's Knowledge" or any other similar knowledge qualification, means the actual or constructive knowledge of any director or officer of Seller.

"Law" means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

"Lease Agreement-Production" means that certain HARBOR SQUARE Warehouse NNN Lease, dated June 25, 2010, between Seller, as Tenant, and Port of Edmonds, a Washington port district, as Landlord, for 102A, Building 4, 180 West Dayton, Edmonds, Snohomish County, WA, by its terms incorporating Suite 101A, Building 4, 180 West Dayton, Edmonds, Snohomish County, WA, effective as of January 1, 2013, and as (1) amended June 30, 2010, to include shared storage yard space (styled "Memorandum to Lease"), (2) October 28, 2010, to extend the term (styled "Amendment to Lease No. 1"); and (3) amended and extended November 12, 2013, to extend the term of December 31, 2015.

"Lease Agreement-Warehouse" means the Lease dated November 12, 2013, between Seller, as Tenant, and Port of Edmonds, a port district in the state of Washington, as Landlord, as amended by Amendment to Lease No. 1 dated December 24, 2014, for premises identified as Suites 102A-D, in Building 5, located at 170 West Dayton, Edmonds, Snohomish County, WA, and together with the Lease Agreement-Production, each a "Lease Agreement" and together the "Lease Agreements".

"Liabilities" means liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise.

Exhbit 10.1 Page 5

"License Agreement" has the meaning set forth in Section 2.10.

"Losses" means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers.

"Material Adverse Effect" means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, prospects, condition (financial or otherwise) or assets of the Business, (b) the value of the Purchased Assets, or (c) the ability of any party to consummate the transactions contemplated hereby on a timely basis.

"Material Contracts" has the meaning set forth in Section 4.07(a).

"Material Customers" has the meaning set forth in Section 4.12.

"Outside Termination Date" means December 30, 2015, unless the parties mutually agree to a different date.

"Permits" means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.

"Person" means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

"Pinnacle Obligation" means the amount owed by Seller to Pinnacle Capital Partners, LLC, a Washington limited liability company, pursuant to three Equipment Financing Agreements, dated January 15, 2015, June 4, 2015, and June 4, 2015, together with all fees, costs, as of the Closing Date, which such amount owed as of August 31, 2015, was $354,349.78; together with and subject to the Encumbrance granted in connection therewith.

"Pre-Closing Tax Period" means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

"Products" has the meaning set forth in Section 4.20.

"Purchase Price" has the meaning set forth in Section 2.05.

"Purchased Assets" has the meaning set forth in Section 2.01.

Exhbit 10.1 Page 6

"Recipes and Formulas" means the brewer's logs, notes, recipes, formulas, instructions, and know-how related to the operation of the brewery and brewing equipment, the Purchased Assets and the Business, including but not limited to those related to Products.

"Release" means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

"Representative" means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

"Restricted Business" means the ownership or operation of a Small Craft Brewery.

"Restricted Period" has the meaning set forth in Section 6.05(a).

"Seller" has the meaning set forth in the preamble.

"Seller Closing Certificate" has the meaning set forth in Section 7.02(g).

"Seller Indemnitees" has the meaning set forth in Section 8.03.

"Seller's WSLCB License" has the meaning given in Section 8.03(e).

"Small Craft Brewery" means a craft brewery with sales of less than 20,000 barrels per year.

"Sublease" has the meaning set forth in Section 2.11.

"Tangible Personal Property" has the meaning set forth in Section 2.01(d).

"Taxes" means all federal, state, local, foreign and other income, gross receipts, sales, use, production (including TTB), ad valorem, transfer, documentary, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

"Tax Return" means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

Exhbit 10.1 Page 7

"Territory" means the state of Washington.

"Third Party Claim" has the meaning set forth in Section 8.04(a).

"Transaction Documents" means this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, License Agreement, Assignment and Assumption of Lease-Production (with landlord consent), the Assignment and Assumption of Lease-Warehouse (with landlord consent), and the other agreements, instruments and documents required to be delivered at the Closing.

"TTB" means the Alcohol and Tobacco Tax and Trade Bureau, United States Department of Treasury.

"WSLCB" means the Washington State Liquor and Cannabis Board.

"WSLCB Condition" has the meaning given in Section 7.03(i).

ARTICLE II

 purchase and sale

Section 2.01     Purchase and Sale of Assets.  Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of any Encumbrances except as expressly set forth herein, all of Seller's right, title and interest in, to and under all of the assets, properties and rights of every kind and nature, whether personal or mixed, tangible or intangible (including goodwill), wherever located and whether now existing or acquired prior to Closing (other than the Excluded Assets), which relate to, or are used or held for use in connection with, the Business (collectively, the "Purchased Assets"), including, without limitation, the following:

(a)     proceeds from sales charged to Seller's open accounts occurring prior to Closing which have not been paid as of Closing (the "Accounts Receivable");

(b)     all inventory (including merchandise), finished goods, raw materials, work in progress, cans, packaging, supplies, parts and other inventories ("Inventory");

(c)     all Contracts, including hop contracts and forward purchase commitments, and  intellectual property licenses and the software associated with such licenses, set forth on Section 2.01(c) of the Disclosure Schedules (the "Assigned Contracts");

(d)     all furniture, fixtures, equipment, machinery, tools, vehicles, office equipment, supplies, computers, telephones, kegs, leasehold improvements and other tangible personal property (the "Tangible Personal Property") including, without limitation, the Tangible Personal Property set forth on Exhibit A;

Exhbit 10.1 Page 8

(e)     cash on hand in the Seller's cash registers and change fund in the amount of $200.00 and in bank accounts related to the Business in the amount carried therein and resulting from the ordinary course of operations of the Business as of the Effective Date, increased or decreased, as the case may be, only by operating receipts and disbursements from the Effective Date to the Closing Date;

(f)     all Permits which are held by Seller and required for the conduct of the Business as currently conducted or for the ownership and use of the Purchased Assets, including, without limitation, those listed on Section 4.15(b) of the Disclosure Schedules, to the extent such Permits are transferrable, and rights under Seller's WSLCB liquor license;

(g)     all rights to any Actions of any nature available to or being pursued by Seller to the extent related to the Business, the Purchased Assets or the Assumed Liabilities, whether arising by way of counterclaim or otherwise;

(h)     all prepaid expenses (including rent and freight), credits, advance payments, claims, security, refunds, rights of recovery, rights of set-off, rights of recoupment, deposits, charges, sums and fees (excluding any such item relating to the payment of Taxes and insurance premiums prior to Closing);

(i)     all of Seller's rights under warranties, indemnities and all similar rights against third parties to the extent related to any Purchased Assets;

(j)     all books and records of Seller relating to the Purchased Assets or the Business but excluding the Excluded Books and Records (collectively, "Books and Records"); and

(k)     all goodwill and the going concern value of the Business and all of the other intangible assets, rights and claims of Seller of every kind and nature relating to the Business, including but not limited to licenses, customer lists, telephone numbers, advertising and marketing programs and plans, referral relationships, business information, and software owned by Seller, including any enhancements, upgrades and improvements thereto authored by employees of Seller, and used in the operation of the Business.

(l)     all registered and unregistered trademark(s), tradename(s), and trade dress associated with the Business and the Products; and

(m)     the domain name, website and URL of the Business, and to the extent owned by or available to Seller, or that Seller has any rights therein, all rights of ownership to, claims or rights to, or the ability or right to access, update, reply, or comment on, any third party website or content provider related to or describing the Business (e.g., BeerAdvocate.com, Yelp.com), including all user names, passwords and other logins and/or ability to access any of the foregoing.

Exhbit 10.1 Page 9

Section 2.02     Excluded Assets.  Notwithstanding the foregoing, the Purchased Assets shall not include the following assets (collectively, the "Excluded Assets"):

(a)     Contracts that are not Assigned Contracts (the "Excluded Contracts");

(b)     the seals, organizational documents, minute books, stock books, Tax Returns, books of account or other records having to do with the corporate organization of Seller, or that are unrelated to the Business or Purchased Assets or Assumed Liabilities;

(c)     the assets, properties and rights specifically set forth Section 2.02(c) of the Disclosure Schedules;

(d)     any assets related to the Bucha live Kombucha product line or business operations related thereto;

(e)     all cash in the Seller's bank account(s) that are unrelated to the Business;

(f)     the rights which accrue or will accrue to Seller under the Transaction Documents;

(g)     all insurance benefits, including rights and proceeds, arising from or relating to the Business for periods prior to the Closing; and

(h)     prepaid taxes and insurance premiums.

Section 2.03     Assumed Liabilities.  Buyer shall assume and agree to pay, perform and discharge only the Liabilities of Seller listed on Section 2.03 of the Disclosure Schedules (collectively, the "Assumed Liabilities"), and no other Liabilities, which Assumed Liabilities are one of the following:

(a)     all Liabilities in respect of the Assigned Contracts but only to the extent that such Liabilities thereunder are required to be performed after the Closing Date, relate to periods of time or actions taken after the Closing Date, were incurred in the ordinary course of business and do not relate to any failure to perform, improper performance, warranty or other breach, default or violation by Seller on or prior to the Closing;

(b)     the bona fide invoice amount for the purchase of Inventory ordered by Seller in the ordinary course of business but not delivered as of the Closing to the extent such Inventory was not included in the calculation of Inventory Value;

(c)     The Pinnacle Obligations;

(d)     Keg Deposits, severance payments owed to Rich Roberts, and certain specific vendor liabilities, each in the amount set forth on Exhibit B.

Exhbit 10.1 Page 10

Section 2.04     Excluded Liabilities.  Notwithstanding the provisions of Section 2.03 or any other provision in this Agreement to the contrary, Buyer shall not assume and shall not be responsible to pay, perform or discharge any Excluded Liabilities. Seller shall pay and satisfy in due course all Excluded Liabilities. Without limiting the generality of the foregoing, the Excluded Liabilities shall include, but not be limited to, the following:

(a)     any Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including, without limitation, fees and expenses of counsel, accountants, consultants, advisers and others;

(b)     any Liability for (i) Taxes of Seller, or relating to the Business, the Purchased Assets; (ii) Taxes that arise out of the consummation of the transactions contemplated hereby or that are the responsibility of Seller pursuant to Section 6.10 (but excluding any Taxes that are the responsibility of the Buyer pursuant to Section 6.09); (iii) TTB taxes or assessments for periods occurring prior to Closing, including all amounts owed under any pending or future audits of Seller's payment of the same; or (iv) other Taxes of Seller of any kind or description relating to any period ending prior to or concurrent with the Closing (including any Liability for Taxes of Seller that becomes a Liability of Buyer under any common law doctrine of de facto merger or transferee or successor liability or otherwise by operation of contract or Law);

(c)     any Liabilities relating to or arising out of the Excluded Assets;

(d)     any Liabilities in respect of any pending or threatened Action arising out of, relating to or otherwise in respect of the operation of the Business or the Purchased Assets to the extent such Action relates to such operation on or prior to the Closing Date;

(e)     any product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by Seller, or by reason of the improper performance or malfunctioning of a product, improper design or production, failure to adequately package, label or warn of hazards or other related product defects of any products produced, distributed, or sold by Seller prior to the Closing Date;

(f)     any Environmental Claims, or Liabilities under Environmental Laws, to the extent arising out of or relating to facts, circumstances or conditions existing on or prior to the Closing or otherwise to the extent arising out of any actions or omissions of Seller that took place prior to the Closing;

(g)     rent (base and additional), utilities, taxes, and other obligations for periods ending on or prior to the Closing Date arising under the Lease Agreements,

Exhbit 10.1 Page 11

(h)     all Liabilities related to or arising out of the operation of Seller's other business following closing, including but not limited to any Liabilities incurred on account of the use of the name American Brewing Company as Seller's corporate legal name following the Closing for the period set forth in Section 2.09;

(i)     except to the extent included in the Assumed Liabilities under Section 2.03(a) by virtue of being an Assigned Contract under Section 2.01(c), any Liabilities of the Business relating or arising from unfulfilled commitments, quotations, purchase orders, customer orders or work orders that (i) do not constitute part of the Purchased Assets and were issued by the Seller's customers to Seller on or before the Closing; (ii) did not arise in the ordinary course of business; or (iii) are not validly and effectively assigned to Buyer pursuant to this Agreement;

(j)     any Liabilities arising out of, in respect of or in connection with the failure by Seller to comply with any Law or Governmental Order; and

(k)     except to the extent included in the Assumed Liabilities, any Liabilities arising out of, in respect of or in connection with Seller's Employees or former Employees including, but not limited to, amounts owed for wages, salary, withholdings, employer share of withholdings, benefits, profit sharing, pension contributions, retirement contributions, vacation pay, health care savings accounts or other employee benefits or payments of any type or nature related to such persons performance of services for Seller prior to Closing.

Section 2.05     Purchase Price.  The purchase price for the Purchased Assets and the obligations set forth in Section 6.05 (collectively, the "Purchase Price") shall be Seven Hundred Fifty Thousand Dollars ($750,000).

Section 2.06     Payment of Purchase Price and Closing Costs.  On or before October 1, 2015, Buyer shall deliver to Seller by wire transfer or immediately available funds, as an advance deposit of the Purchase Price, an amount equal to the difference between the Purchase Price and the amount required at such date to satisfy and discharge in full the Pinnacle Obligations (the "Advance Deposit").  Subject to the Closing occurring and at such Closing, Buyer shall assume the Pinnacle Obligations (including all interest and other charges due thereon from the Effective Date until the Closing Date), and the Advance Deposit shall be deemed fully earned and released to Seller. The Advance Deposit shall be returned to Buyer if, notwithstanding Buyer's good faith efforts to satisfy the conditions to closing, they have not been satisfied by the Outside Termination Date and the parties do not mutually agree to extend such date.  At the time of delivery of the Advance Deposit, and until its return upon termination of this Agreement or application to the Purchase Price at the Closing, Seller's obligation to refund the Advance Deposit shall be evidenced and secured by the Equipment Finance Agreements in the form attached hereto as Exhibit C (the "Interim Finance Documents").

Exhbit 10.1 Page 12

Section 2.07     Allocation of Purchase Price.  Seller and Buyer agree that the Purchase Price shall be allocated among the Purchased Assets for all purposes (including Tax and financial accounting) as shown on an allocation schedule (the "Allocation Schedule") to be prepared by Buyer prior to the Closing Date in accordance with IRS pronouncements.  For clarification, the parties intend for accounting and tax allocation purposes that the Purchase Price (the $750,000 described in Section 2.05) shall be increased by the Assumed Liabilities (other than those the benefit of which will be realized by Buyer following Closing, such as the Lease Agreements and hop contracts), and that the gross amount will then be allocated as follows:

(a)     First, to cash and bank accounts at their current values;

(b)     Next, to accounts receivable at their agreed net realizable value;

(c)     Next, to inventory in the manner determined consistent with Seller's historical accounting practices consistent with GAAP;

(d)     Next, to the tangible personal property in amounts up to the values indicated therefor on Exhibit A; and

(e)     Finally, any remaining amount shall be allocated to goodwill or other Section 197 intangibles.

Section 2.08     Third Party Consents.  To the extent that Seller's rights under any Contract or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and Seller shall use its reasonable best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair Buyer's rights under the Purchased Asset in question so that Buyer would not in effect acquire the benefit of all such rights, Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as Buyer's agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with Buyer in any other reasonable arrangement designed to provide such benefits to Buyer.  Without releasing Seller form its obligations to take good faith efforts to obtain approval or consent to assignments, or to perform under the Purchased Asset for the benefit of Buyer, Seller shall not be held liable for any inability of Buyer to assume any Contract or Permit to be assumed pursuant to this Agreement.  Notwithstanding any provision in this Section 2.08 to the contrary, Buyer shall not be deemed to have waived its rights under Section 7.02(d) hereof unless and until Buyer either provides written waivers thereof or elects to proceed to consummate the transactions contemplated by this Agreement at Closing.

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Section 2.09     License of Trade Name as Entity Name.  For a period of twelve (12) months commencing on the Closing Date, Seller shall be entitled to the non-exclusive use of the trade name American Brewing solely as its corporate legal name, but not in connection with the active conduct of a trade or business.  In addition, during the 12 month transition period, Buyer shall install a link on Buyer's corporate website that will redirect visitors of the website to Seller's corporate website.  During such period, Seller take commercially reasonable actions to, at the earliest possible times, change its legal name and completely discontinue such use.  Buyer and Seller shall enter into a license agreement (the "License Agreement") in the form attached as Exhibit D setting forth the terms and conditions under which Seller may use such trade name as its legal name.

Section 2.10     Dates and Intent.  The parties intend, to the maximum extent possible, provided that the conditions to Closing have occurred, including specifically the WSLCB Condition, that the benefits and obligations of ownership and operation of the Business shall accrue to Buyer beginning as of the Effective Date.  Accordingly, the provisions of this Agreement are intended to be construed to provide that Seller shall operate the business in the ordinary course between the Effective Date and the Closing or termination, as the case may be, and all risk and rewards of ownership all accrue to Buyer, except to that extent that Seller violates the terms of this Agreement.  Seller shall reasonably consult with Buyer regarding operational decisions, but legal compliance and operations shall remain within the control of Seller.  Seller shall maintain all insurance policies in force and continue to use its best efforts to employ all of its employees from the date hereof until the Closing, and all receipts and expenditures of the business shall continue to be deposited into and paid out of the bank account that is to be included in the Purchased Assets. In the event of any insurable claim arising hereunder against Seller involving the Business, Seller shall promptly notify Buyer and make appropriate claim under its applicable insurance.

ARTICLE III

closing

Section 3.01     Closing.  Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Buyer, in Tacoma Washington, on the second Business Day after all of the conditions to Closing set forth in Article VII are either satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), or at such other time, date or place as Seller and Buyer may mutually agree upon in writing. The date on which the Closing is to occur is herein referred to as the "Closing Date".

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Section 3.02     Closing Deliverables.

(a)     At the Closing, Seller shall deliver to Buyer the following:

(i)     a bill of sale in the form of Exhibit E hereto in form and substance satisfactory to Buyer (the "Bill of Sale") and duly executed by Seller, transferring the tangible personal property included in the Purchased Assets to Buyer;

(ii)     an assignment and assumption agreement in the form of Exhibit F hereto in form and substance satisfactory to Buyer (the "Assignment and Assumption Agreement") and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

(iii)     proof in form satisfactory to Buyer that the Purchased Assets are being sold free and clear of all encumbrances;

(iv)     the Seller Closing Certificate duly executed by Seller;

(v)     the certificates of Seller required by Section 7.02(g) duly executed by Seller;

(vi)     an Assignment and Assumption Agreement for the Lease Agreement-Production in the form of Exhibit G ("Assignment and Assumption of Lease-Production");

(vii)     an Assignment and Assumption Agreement for the Lease Agreement-Warehouse in the form of Exhibit H ("Assignment and Assumption of Lease-Warehouse");

(viii)     the License Agreement executed by Seller;

(ix)     executed corporate resolutions of the Seller;

(x)     such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement, including assignments of intellectual property or other Purchased Assets that require unique or separate instruments of conveyance.

(b)     At the Closing, Buyer shall deliver to Seller the following:

(i)     The portion of the Purchase Price required to be delivered at the Closing pursuant to Section 2.06, payable by wire transfer of immediately available funds delivered to the account designated by Seller;

(ii)     the Bill of Sale duly executed by Buyer;

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(iii)     the Assignment and Assumption Agreement duly executed by Buyer;

(iv)     the Buyer Closing Certificate duly executed by Buyer;

(v)     executed company authorizations of the Buyer;

(vi)     the License Agreement executed by Buyer;

(vii)     the Assignment and Assumption of Lease-Production and Assignment and Assumption of Lease-Warehouse, executed by Buyer;

(viii)     the certificate required by Section 7.03(f);

(ix)     an assumption of the Pinnacle Obligations, together with a release of Seller from any further obligation with respect thereto by the lawful holder thereof; and

(x)     evidence of termination of the Interim Finance Documents.

ARTICLE IV

 representations and warranties of seller

Seller represents and warrants to Buyer that the statements contained in this ARTICLE IV are true and correct as of the date hereof and shall be true and correct as of the Closing.

Section 4.01     Organization and Qualification of Seller.  Seller is a corporation duly organized and validly existing under the Laws of the state of Washington and has full power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted.  Seller has no subsidiaries.

Section 4.02     Authority of Seller.  Seller has full power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Seller. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms. When each other Transaction Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms.

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Section 4.03     No Conflicts; Consents.  Except as disclosed in Section 4.03 of the Disclosure Schedules, the execution, delivery and performance of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of formation, limited liability company agreement or other organizational documents of Seller; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Seller, the Business or the Purchased Assets; (c) conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract or Permit to which Seller is a party or by which Seller or the Business is bound or to which any of the Purchased Assets are subject (including any Assigned Contract); or (d) result in the creation or imposition of any encumbrance on the Purchased Assets. Except for notices to WSLCB and/or TTB, no consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller in connection with the execution and delivery of this Agreement or any of the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

Section 4.04     Financial Information.

(a)     Complete copies of Seller's Balance Sheet and Statement of Operations filed with its securities filings and publicly available for the fiscal years ending December 31, 2013, and December 31, 2014 (the "Financial Statements") have been made available to Buyer on Seller's website as filed with the SEC. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved. The Financial Statements are based on the books and records of the Business, and fairly present the financial condition of the Business as of the respective dates they were prepared and the results of the operations of the Business for the periods indicated. Seller continues to maintain a standard system of accounting for the Business established and administered in accordance with GAAP.

(b)     All Accounts Receivable of the Seller, to the extent included in the Purchased Assets, arise from the bona fide sales of goods or the provision of services in the ordinary course by Seller, are not subject to offset or discount, and to the best of Seller's knowledge, will be fully collectible and collected by Buyer without resort to legal means or costs of collection.

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Section 4.05     Undisclosed Liabilities.  Seller has no Liabilities with respect to the Business, except those which have been incurred in the ordinary course of business consistent with past practice and which are not, individually or in the aggregate, material in amount.  All Assumed Liabilities have been disclosed on the Disclosure Schedules.  Except as set forth on Section 4.05 of the Disclosure Schedules, Seller has no obligations or commitments for (a) the purchase of goods, services, or Inventory, or (b) the sale or delivery of goods, services, or Inventory, and any disclosed obligations are at prices that represent the current fair market value of such goods, services, or Inventory, as the case may be.  Seller has no obligation to purchase any Inventory previously sold by Seller, or to refund all or any portion of the purchase price.

Section 4.06     Absence of Certain Changes, Events and Conditions.  Since December 31, 2014, except as disclosed in the Seller's public filings that have been filed with the Securities and Exchange Commission, there has not been any:

(a)     event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)     material change in any method of accounting or accounting practice for the Business, except as required by GAAP or as disclosed in the notes to the Financial Statements;

(c)     material change in cash management practices and policies, practices and procedures with respect to inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

(d)     entry into any Contract that would constitute a Material Contract, excluding the Asset Purchase Agreement entered into on April 1, 2015 with B&R Liquid Adventure, LLC;

(e)     other than the Encumbrance related to the Pinnacle Obligation to be assumed by Buyer, the incurrence, assumption or guarantee of any indebtedness for borrowed money in connection with the Business except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(f)     transfer, assignment, sale or other disposition of any of the Purchased Assets shown or reflected in the Financial Statements, except for the sale of Inventory in the ordinary course of business;

(g)     cancellation of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets;

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(h)     transfer, assignment or grant of any license or sublicense of any material rights under or with respect to any Intellectual Property Assets or Intellectual Property Licenses;

(i)     material damage, destruction or loss, or any material interruption in use, of any Purchased Assets, whether or not covered by insurance;

(j)     acceleration, termination, material modification to or cancellation of any Assigned Contract or Permit;

(k)     material capital expenditures which would constitute an Assumed Liability;

(l)     other than the Encumbrance related to the Pinnacle Obligation to be assumed by Buyer, the imposition of any Encumbrance upon any of the Purchased Assets;

(m)     grant of any bonuses, whether monetary or otherwise, or any general wage or salary increases in respect of any Employees, other than as provided for in any written agreements or consistent with past practice, or change in the terms of employment for any Employee;

(n)     entry into or termination of any employment agreement or collective bargaining agreement covering any of the Employees, written or oral, or modification of the terms of any such existing agreement, with the exception of an employment agreement the Seller entered into with Rich Roberts;

(o)     loan to, or entry into any other transaction with, any Employees;

(p)     adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

(q)     purchase, lease or other acquisition of the right to own, use or lease any property or assets in connection with the Business for an amount in excess of $5,000.00, individually (in the case of a lease, per annum) or $10,000.00 in the aggregate (in the case of a lease, for the entire term of the lease, not including any option term), except for purchases of Inventory or supplies in the ordinary course of business consistent with past practice;

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(r)     adoption, amendment, modification or termination of any bonus, profit sharing, incentive, severance, or other plan, Contract or commitment for the benefit of any Employees (or any such action taken with respect to any other Benefit Plan); or

(s)     any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

Section 4.07     Contracts.

(a)     Section 4.07(a) of the Disclosure Schedules lists all Contracts by which any of the Purchased Assets are bound or affected or to which Seller is a party and by which any one or more of them is bound in connection with the Business or the Purchased Assets (the "Material Contracts").

(b)     Each Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. Neither Seller nor, to Seller's Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been delivered to Buyer. There are no material disputes pending or threatened under any Contract included in the Purchased Assets.

(c)     Section 4.07(c) of the Disclosure Schedule lists all contracts for the purchase of raw materials (e.g., hops, grain) or supplies (e.g., cans, glass) to which Seller is a party and under which Seller has any right or obligation, whether or not such Contract is a Material Contract, and a summary of any restriction on assignment, transfer, or assumption of each such Contract.

Section 4.08     Title to Purchased Assets.  Except as set forth in Section 4.08 of the Disclosure Schedules: (a) Seller has good and valid title to, or a valid leasehold interest in or license to use, all of the Purchased Assets; and (b) all such Purchased Assets (including leasehold and licensed interests) are free and clear of Encumbrances, except for the Encumbrance related to the Pinnacle Obligation to be assumed by Buyer.

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Section 4.09     Condition and Sufficiency of Assets.  The furniture, trade fixtures, machinery, equipment, and other items of tangible personal property included in the Purchased Assets are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such furniture, trade fixtures, machinery, equipment, and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The Purchased Assets are sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as currently conducted.  None of the Excluded Assets are material to the Business.

Section 4.10     Intellectual Property.

(a)     Section 4.10 of the Disclosure Schedules lists each item of intellectual property owned or licensed by Seller (other than off-the-shelf consumer software) and used in connection with the Business, including all website, domain names, URLs, tradenames, trademarks and confidential information, Recipes and Formulas, concepts, designs, devices, technology and know-how (the "Intellectual Property Assets"). Seller exclusively owns all right, title and interest in and to the Intellectual Property Assets used in the Business

(b)     The Intellectual Property Assets used by Seller or proposed to be used by Buyer, and the conduct of the Business as currently and formerly conducted by Seller and proposed to be conducted by Buyer have not and do not, as of the Closing, infringe, violate or misappropriate the intellectual property of any Person. Seller has not received any communication, and no Action has been instituted, settled or, to Seller's Knowledge, threatened that alleges any such infringement, violation or misappropriation, and none of the Intellectual Property Assets is subject to any outstanding Governmental Order.

Section 4.11     Inventory.  All Inventory, whether or not reflected in the Balance Sheet, consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice. All Inventory is owned by Seller free and clear of all Encumbrances, and no Inventory is held on a consignment basis. The quantities of each item of Inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances of Seller.  Section 4.11 of the Disclosure Schedule lists, by distributor, wholesaler, and retail customer, the location of all Kegs and the Keg Deposits accepted from and returnable to each distributor, wholesaler or customer.

Section 4.12     Customers and Suppliers.  Section 4.12 of the Disclosure Schedules sets forth with respect to the Business (i) each customer who has paid consideration to Seller for products during the previous 12 months in excess of $10,000.00 each year (collectively, the "Material Customers"); and (ii) the amount of consideration paid by each Material Customer during such periods. Except as set forth in Section 4.12 of the Disclosure Schedules, Seller has not received any notice, and has no reason to believe, that any of the Material Customers has ceased, or intends to cease after the Closing, to use the goods or services of the Business or to otherwise terminate or materially alter its relationship with the Business.

Section 4.13     Insurance.  True and complete copies of the Insurance Policies held by Seller have been delivered to Buyer. The insurance policies held by Seller will not be assumed by Buyer, and Buyer shall be responsible for obtaining its own insurance policies as they relate to the Business, the Purchased Assets and the Assumed Liabilities.

Section 4.14     Legal Proceedings; Governmental Orders.

(a)     Except as set forth in Section 4.14(a)  of the Disclosure Schedules, there are no Actions pending or, to Seller's Knowledge, threatened against or by Seller (a) relating to or affecting the Business, the Purchased Assets or the Assumed Liabilities; or (b) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

(b)     Except as set forth in Section 4.14(b) of the Disclosure Schedules, there are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against, relating to or affecting the Business, the Purchased Assets or Seller. Seller is in compliance with the terms of each Governmental Order set forth in Section 4.14(b) of the Disclosure Schedules. No event has occurred or circumstances exist that may constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order.

Section 4.15     Compliance with Laws; Permits.

(a)     Except as set forth in Section 4.15(a) of the Disclosure Schedules, Seller has complied, and is now complying, with all Laws applicable to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets.

(b)     All Permits required for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets have been obtained by Seller and are valid and in full force and effect, with the exception of the Brewer's Notice #3, which is currently pending. All fees and charges with respect to such Permits as of the date hereof have been paid in full. Section 4.15(b) of the Disclosure Schedules lists all current Permits issued to Seller which are related to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets, including the names of the Permits and their respective dates of issuance and expiration. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit set forth in Section 4.15(b) of the Disclosure Schedules.

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(c)     Seller has not received any notification from the WSLCB or any governmental authority alleging any violations of law or Seller's liquor licensure, and Seller has no knowledge that any person has protested, appealed, or filed any complaint or made any similar communication to the WSLCB or any other governmental authority seeking to close, relocate, or curtail the scope or hours of operations of the Business from its present location.

Section 4.16     Environmental Matters.

(a)     To the best of Seller's knowledge, the operations of Seller with respect to the Business and the Purchased Assets are currently and have been in compliance with all Environmental Laws. Seller has not received from any Person, with respect to the Business or the Purchased Assets, any: (i) Environmental Notice or Environmental Claim; or (ii) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

(b)     To the best of Seller's knowledge, Seller has obtained and is in material compliance with all Environmental Permits necessary for the conduct of the Business as currently conducted or the ownership, lease, operation or use of the Purchased Assets and all such Environmental Permits are in full force and effect and shall be maintained in full force and effect by Seller through the Closing Date in accordance with Environmental Law, and Seller is not aware of any condition, event or circumstance that might prevent or impede, after the Closing Date, the conduct of the Business as currently conducted or the ownership, lease, operation or use of the Purchased Assets. With respect to any such Environmental Permits, Seller has undertaken, or will undertake prior to the Closing Date, all measures necessary to facilitate transferability of the same, and Seller is not aware of any condition, event or circumstance that might prevent or impede the transferability of the same, and has not received any Environmental Notice or written communication regarding any material adverse change in the status or terms and conditions of the same.

(c)     To the best of Seller's knowledge, there has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the Business or the Purchased Assets or any real property currently or formerly owned, leased or operated by Seller in connection with the Business, and Seller has not received an Environmental Notice that any of the Business or the Purchased Assets or real property currently or formerly owned, leased or operated by Seller in connection with the Business (including soils, groundwater, surface water, buildings and other structure located thereon) has been contaminated with any Hazardous Material which could reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by, Seller.

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(d)     Seller has not retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental Law.

Section 4.17     Employee Benefit Matters.  Seller is not a party to any Benefit Plan with unfunded liabilities.  Each Benefit Plan complies, and has from its inception complied, in all material respects with all applicable requirements of ERISA, including reporting requirements, and all qualification requirements of the Code.  No Benefit Plan has any amount of unfunded benefit liabilities (within the meaning of Section 4001(a)(18) of ERISA).  Each Benefit Plan (i) has complied with all notification and continuation coverage requirements of COBRA, Section 4980B of the Code and regulations thereunder; (ii) has not engaged in any nonexempt prohibited transaction; (iii) has not experienced any reportable event as defined in ERISA; and (iv) has not terminated.  Seller has no nonqualified deferred compensation, severance pay, or other employee pension plans.

Section 4.18     Employees and Labor Matters.

(a)     Section 4.18 of the Disclosure Schedules lists (i) all current employees of the Business, their hire date, current compensation arrangements (including bonus or incentive), accrued vacation and sick leave (to be paid out by Seller at the Closing Date), and indicates the leave status of any Employee not currently performing service for Seller in the Business; and (ii) all former Employees of the Business that ceased to be employed during the twenty-four (24) months preceding Closing and the circumstances surrounding each such Employee's termination. Except as set forth on Section 4.18 of the Disclosure Schedules, each Employee is employed at-will and not subject to or employed under any employment agreement or contract of employment.  To Seller's Knowledge, no current or former Employee of Seller has appropriated any confidential or proprietary information of a third party (e.g., former employer) to be used (or that was used or is being used) for the benefit of Seller, and no Employee is subject to any agreement that would restrict or prohibits such Employee in the performance of services to Seller or as expected to be performed for Buyer.

(b)     As of the date hereof, all commissions and bonuses payable to Employees, consultants, or contractors of the Business for services performed on or prior to the date hereof have been paid in full and there are no outstanding agreements, understandings or commitments of Seller with respect to any commissions, bonuses or increases in compensation, with the exception of the severance amount listed in Section 2.03(e).

(c)     Seller is not a party to, or bound by, any collective bargaining or other Contract with a labor organization representing any of its Employees, and there are no labor organizations representing, purporting to represent or attempting to represent any Employee. There has never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting Seller or any of its Employees.

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(d)     Seller is in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to the Employees, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, health and safety, workers' compensation, leaves of absence and unemployment insurance. All individuals characterized and treated by Seller as consultants or contractors of the Business are properly treated as independent contractors under all applicable Laws. There are no Actions against Seller pending, or to the Seller's Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any Employee, consultant or independent contractor of the Business, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay or any other employment related matter arising under applicable Laws.

Section 4.19     Taxes.

(a)     All Tax Returns required to be filed by Seller for any Pre-Closing Tax Period have been, or will be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all respects. All Taxes due and owing by Seller (whether or not shown on any Tax Return) have been, or will be, timely paid.  Such taxes include, but are not limited to, sales, B&O, and TTB Taxes.

(b)     Seller has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any Employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of applicable Law.

(c)     No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of Seller.

(d)     All deficiencies asserted, or assessments made, against Seller as a result of any examinations by any taxing authority have been fully paid.

(e)     Except as set forth in Section 4.19(e) of the Disclosure Schedules, Seller is not a party to any Action by any taxing authority, and there are no pending or, to Seller's Knowledge threatened, Actions by any taxing authority.

(f)     There are no Encumbrances for Taxes upon any of the Purchased Assets nor is any taxing authority in the process of imposing any Encumbrances for Taxes on any of the Purchased Assets (other than for current Taxes not yet due and payable).

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(g)     Seller is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2.

(h)     Seller is not, and has not been, a party to, or a promoter of, a "reportable transaction" within the meaning of Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011-4(b).

Section 4.20     Products.  Section 4.20 of the Disclosure Schedule lists all of the Products produced by Seller during the five (5) years preceding the Closing Date.  Each product designed, developed, manufactured, made, produced, provided, distributed, or sold by or on behalf of Seller or the Business ("Products") is and has been, in compliance with (a) all requirements of Law, including all applicable standards for quality and workmanship and (b) the terms and conditions of the Contracts under which the Products have been sold. Except as set forth on Section 4.20 of the Disclosure Schedules, Seller has no Liabilities, whether based on strict liability, negligence, breach of warranty (express or implied), breach of contract or otherwise, in respect of any Product or other item sold by Seller prior to Closing.  All packaging, labeling, branding and similar materials relating to the Products are, and have been, in compliance with all requirements of Law.

Section 4.21     Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller.

Section 4.22     Certain Business Relationships.  Except as set forth in Section 4.22 of the Disclosure Schedule, neither Seller nor any employee, director, officer, shareholder, or other third party: (i) owns any property or right, tangible or intangible, which is used in and material to the Business, (ii) has any claim to or cause of action against Seller or the Purchased Assets, (iii) owes any money or other thing of value to, or is owed any money or other thing of value by, Seller, or (iv) otherwise is party to any Contract or relationship relating to the Business.

Section 4.23     Full Disclosure.  No representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

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ARTICLE V

 representations and warranties of buyer

Buyer represents and warrants to Seller that the statements contained in this ARTICLE V are true and correct as of the date hereof and will be true and correct as of the Closing Date.

Section 5.01     Organization of Buyer.  Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of Washington.

Section 5.02     Authority of Buyer.  Buyer has full entity power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite entity action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms. When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered by Buyer (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of Buyer enforceable against it in accordance with its terms.

Section 5.03     No Conflicts; Consents.  The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of formation, operating agreement, or other organizational documents of Buyer; or (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

Section 5.04     Brokers.  No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

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Section 5.05     Sufficiency of Funds.  Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.

Section 5.06     Legal Proceedings.  There are no Actions pending or, to Buyer's knowledge, threatened against or by Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.

ARTICLE VI

covenants

Section 6.01     Conduct of Business Prior to the Closing.  From the date hereof until the Effective Date, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), Seller shall (a) conduct the Business in the ordinary course of business consistent with past practice, including selling and production practices, including producing and keeping  on hand sufficient inventory to meet the reasonably foreseeable sales of the Business following the Closing date; and (b) use its best efforts to maintain and preserve intact its current Business organization, operations and franchise and to preserve the rights, franchises, goodwill and relationships of its Employees, customers, lenders, suppliers, regulators and others having relationships with the Business.  From the Effective Date to the Closing Date, in addition to the foregoing clauses (a) and (b), Seller shall keep Buyer reasonably apprised of the cash flow needs of the Business and reasonably consult with Buyer regarding material decisions related to the Business (even though in the ordinary course).

Section 6.02     Access to Information.  From the date hereof until the Closing, Seller shall, (a) afford Buyer and its Representatives full and free access to and the right to inspect all of the assets, premises, Books and Records, Contracts and other documents and data related to the Business; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Business as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of Seller to cooperate with Buyer in its investigation of the Business. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.

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Section 6.03     Employees and Employee Benefits.

(a)     Seller shall terminate all Employees of the Business on or before the Closing Date, and pay-out all accrued vacation or other benefits at and through the Closing Date.  Seller will perform all obligations in connection therewith or contemplated by this Agreement, including without limitation giving any required notices under the WARN Act, any comparable state or local statutes, or otherwise.  At Buyer's sole discretion, Buyer may offer employment, on an "at will" basis, to any or all Employees of the Business.

(b)     Seller shall be solely responsible, and Buyer shall have no obligations whatsoever for, any compensation or other amounts payable to any Employee (or former Employee) of Seller, including, without limitation, hourly pay, commission, bonus, salary, accrued vacations, fringe, pension, profit sharing or other benefits, or severance pay payable to any Employee (or former Employee) of Seller for any period relating to the service with Seller at any time prior to the Closing Date and Seller shall pay all such amounts to all entitled Employees on or prior to the Closing Date. In addition, Seller shall be responsible for satisfying all Seller's other obligations to employees or former employees on account of their employment or former employment by Seller, including obligations, if any, for providing COBRA health plan continuation coverage to former employees and their dependents if they are on COBRA health plan continuation coverage on the day before the Closing Date and to employees of Seller who are not employed by Buyer on the Closing Date and their dependents; and performing any obligations required by the Fair Labor Standards Act of 1938, the Equal Pay Act, applicable wage and hour laws, or any other applicable laws.

(c)     Seller shall remain solely responsible for the satisfaction of all claims for medical, dental, life insurance, health, accident, disability or other benefits brought by or in respect of Employees (or former Employees) or agents of Seller which claims relate to events occurring prior to the Closing Date. Seller also shall remain solely responsible for all worker's compensation claims of any Employees (or former Employees) or agents of Seller which relate to events occurring prior to the Closing Date. Seller shall pay, or cause to be paid, all such amounts to the appropriate persons as and when due.

(d)     Seller shall cooperate with Buyer for the interview and potential hiring of the Key Employees, but Seller shall have no authority to extend or promise offers of employment to any Employee.

(e)     Notwithstanding the foregoing, Buyer shall assume and be responsible for the payment of the severance benefit of three (3) months' pay to Rich Roberts under his employment agreement.

Section 6.04     Confi

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dentiality.  From and after the Closing, Seller shall hold, and shall use its best efforts to cause its Representatives to hold, in confidence any and all information, whether written or oral, concerning the Business, except to the extent that Seller can show that such information (a) is generally available to and known by the public through no fault of Seller or its Representatives; or (b) is lawfully acquired by Seller or its Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If Seller or any of its Representatives is compelled to disclose any information by judicial or administrative process or by other requirements of Law, Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information which Seller is advised by its counsel in writing is legally required to be disclosed, provided that Seller shall use best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.  Seller will not terminate, release, or waive the benefits of any confidentiality agreement or other provision protecting Seller's confidential information, and hereby assigns to Buyer all rights to enforce confidentiality provisions for the benefit of Seller as being for the benefit of Buyer, and to the extent that the same are deemed or determined not be enforceable by Buyer, Seller agrees to enforce the same in its own name for the benefit of Buyer.  This Section 6.04 shall exclude any filings required to be made by Seller with the Securities and Exchange Commission, including, but not limited to, a Form 8-K.

Section 6.05     Seller Non-compete and Non-solicitation.

(a)     As used in this Section 6.05, all references to Seller shall mean Seller, Julie Anderson, and Neil Fallon.  For two (2) years after the Closing Date (the "Restricted Period"), Seller shall not directly or indirectly, (i) engage in or assist others in engaging in the Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, officer, director, employee, principal, agent, trustee or consultant; or (iii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the Business (including any existing or former client or customer of Seller and any Person that becomes a client or customer of the Business after the Closing), or any other Person who has a material business relationship with the Business, to terminate or modify any such actual or prospective relationship.

(b)     During the Restricted Period, Seller shall not, directly or indirectly:

(i)     hire or solicit (except pursuant to a general solicitation which is not directed specifically to any such employees) any person who (x) is offered employment by Buyer pursuant to Section 6.03(a), or (y) is or was employed in the Business during the Restricted Period;

(ii)     encourage any such employee to leave Buyer's employment; or

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(iii)     hire any such employee who has left such employment.

Notwithstanding the foregoing provisions of this Subsection 6.05(b), nothing in this Section 6.05(b) shall prevent Seller from hiring, after the expiration of any non-competition periods set forth in any agreement between Buyer and such employee, (i) any employee whose employment has been terminated by Buyer, or (ii) after one year from the date of termination of employment, any employee whose employment has been terminated by the employee.

(c)     If Seller breaches, or threatens to commit a breach of, any of the provisions of this Section 6.05, Buyer shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to Buyer under law or in equity:

(i)     the right and remedy to have such provision specifically enforced by any court having jurisdiction (including but not limited through by injunction, temporary restraining order or permanent restraining order), it being acknowledged and agreed that any such breach or threatened breach may cause irreparable injury to Buyer and that money damages may not provide an adequate remedy to Buyer; and

(ii)     the right and remedy to recover from the Seller all monetary damages suffered by Buyer as the result of any acts or omissions constituting a breach of this Section 6.05.

(d)     Seller acknowledges that the restrictions contained in this Section 6.05 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 6.05 should ever be adjudicated to exceed the time, geographic, product or service or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service or other limitations permitted by applicable Law. The covenants contained in this Section 6.05 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

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Section 6.06     Governmental Approvals and Consents.

(a)     Each party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party; and (ii) use best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the other Transaction Documents. Each party shall cooperate fully with the other party in promptly seeking to obtain all such consents, authorizations, orders and approvals, and in preparing all necessary documents that the Seller must file with the Securities and Exchange Commission. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals.

(b)     Seller shall use best efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 4.03 of the Disclosure Schedules.

Section 6.07     Public Announcements.  Except as required by Applicable Law, prior to Closing, neither Seller nor Buyer shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior consent of the other party.  Buyer acknowledges that Seller is a 34 Act reporting company and is required to make public disclosure of its entry into this Agreement; provided that the terms hereof shall not be disclosed prior to Closing without Buyer's express consent.

Section 6.08     Collection of Accounts Receivable.  From and after the Closing, if Seller receives or collects any funds relating to any Purchased Asset (including but not limited to Accounts Receivable), Seller shall hold the same in trust for the benefit of Buyer and remit any such funds to Buyer within five (5) Business Days after receipt thereof.

Section 6.09     Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne by the party obligated with respect thereto absent a contrary allocation by agreement of the parties.  By way of example and not limitation, Buyer shall be responsible for the payment of any sales or use Taxes on purchased tangible personal property, and Seller shall pay any B&O or similar gross receipts taxes to the extent applicable to the transactions contemplated hereby.

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Section 6.10     Tax Clearance Certificates.  If requested by Buyer, Seller shall notify all of the taxing authorities in the jurisdictions that impose Taxes on Seller or where Seller has a duty to file Tax Returns of the transactions contemplated by this Agreement in the form and manner required by such taxing authorities, if the failure to make such notifications or receive any available tax clearance certificate (a "Tax Clearance Certificate") could subject the Buyer to any Taxes of Seller. If any taxing authority asserts that Seller is liable for any Tax, Seller shall, in its sole discretion, have the right to contest such potential Tax, until a resolution is reached, prior to paying any amount of the Tax.

Section 6.11     Further Assurances.  Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.  Without limiting the foregoing, Seller specifically agrees to provide all documents and consents necessary for the Seller's URL, domain name and other items associated with or related to the Seller's website are transferred to Buyer.

Section 6.12     TTB Notice; Transition.  Promptly following the Closing, and in any event within thirty (30) days thereafter, Buyer shall file a Brewer's Notice with all required supplemental information with the TTB.  Buyer shall have the right to conduct operations and report to the TTB following Closing using Seller's TTB Brewer's Notice and filing numbers, and shall defend, indemnify, and hold Seller harmless from and against any Losses in connection therewith.

Section 6.13     WSLCB Application; Transition.  

(a)     Seller consents to Buyer filing a WSLCB Addendum to its business license application indicating that Buyer is applying to assume Seller's WSLCB License.  Buyer shall submit such application promptly upon execution of this Agreement and shall keep Seller reasonably apprised of the status of the processing of such application.

(b)     As contemplated by Section 6.01 the general statement of intent set forth in Section 2.10, Seller shall continue to operate the Business in the ordinary course, but shall, to the maximum extent considering restrictions imposed on the holder of a liquor license, reasonably consult with Buyer and conduct the Business operations as Buyer directs.

(c)     Buyer shall have the right to have its employees on the Business premises for training or oversight purposes, provided that such employees shall have no authority to direct or control the operations of the Business prior to the Closing.

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Section 6.14     Further Assurances.  Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.  Without limiting the foregoing, Seller specifically agrees to provide all documents and consents necessary to record the transfer of the Intellectual Property Assets, and for the Seller's URL, domain name and other items associated with or related to the Seller's website are transferred to Buyer.

ARTICLE VII

 conditions to closing

Section 7.01     Conditions to Obligations of All Parties.  The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:

(a)     No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

(b)     Seller shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in Section 4.03 in each case, in form and substance reasonably satisfactory to Buyer, and no such consent, authorization, order and approval shall have been revoked.

(c)     The landlord under the Lease Agreements shall have given its consent to the assignment of such Lease Agreements to Buyer and the assumption of the obligations thereunder by Buyer, which shall include a release of Neil Fallon from any personal guarantees under the Lease Agreements.

Section 7.02     Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's written waiver, at or prior to the Closing, of each of the following conditions:

(a)     The representations and warranties of Seller contained in this Agreement shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

Exhbit 10.1 Page 33

(b)     Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

(c)     No Action shall have been commenced against Buyer or Seller that could reasonably be expected to prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

(d)     All approvals, consents and waivers that are listed on Section 4.03 of the Disclosure Schedules shall have been received, and executed counterparts thereof in form satisfactory to Buyer in its sole discretion shall have been delivered to Buyer at or prior to the Closing.

(e)     Seller shall have delivered to Buyer duly executed counterparts to the Transaction Documents (other than this Agreement) and such other documents and deliveries set forth in Section 3.02(b).

(f)     From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

(g)     Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied (the "Seller Closing Certificate").

(h)     Buyer shall have received a certificate of Seller certifying that attached thereto are true and complete copies of all actions adopted by the  Seller authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents by Seller, the persons authorized to sign this Agreement, the Transaction Documents and the other documents to be delivered hereunder and thereunder on behalf of Seller, and the consummation of the transactions contemplated hereby and thereby by Seller, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby

(i)     WSLCB shall have approved Buyer's assumption of Seller's WSLCB License and issued a corresponding license in Buyer's name to operate the Business from and after the Closing (the "WSLCB Condition").

Exhbit 10.1 Page 34

(j)     Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

(k)     Buyer shall have received an opinion of Seller's counsel, in form reasonably satisfactory to Buyer, that Seller is duly formed, validly existing and in good standing, that the Transaction Documents have been duly authorized by all necessary corporate action of Seller, and that the Transaction Documents are valid and binding obligations of Seller enforceable in accordance with their terms, all subject to typical and customary assumptions, qualifications, limitations, and exclusions.

Section 7.03     Conditions to Obligations of Seller.  The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller's written waiver, at or prior to the Closing, of each of the following conditions:

(a)     The representations and warranties of Buyer contained in this Agreement shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

(b)     Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

(c)     No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.

(d)     Buyer shall have delivered to Seller duly executed counterparts to the Transaction Documents (other than this Agreement) and such other documents and deliveries set forth in Section 3.02(b).

(e)     Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 7.03(a) and Section 7.03(b) have been satisfied (the "Buyer Closing Certificate").

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(f)     Seller shall have received a certificate of an officer  of Buyer company certifying that attached thereto are true and complete copies of all resolutions needed to evidence the Buyer's authority to execute, deliver and perform under this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

(g)     Buyer shall have delivered to Seller such other documents or instruments as Seller reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

(h)     Buyer shall have assumed, and shall have delivered to Seller the release of Seller from any further obligation under the Pinnacle Obligations, executed by the holder thereof.

ARTICLE VIII

 indemnification

Section 8.01     Survival.  Subject to the limitations and other provisions of this Agreement, the representations, warranties and covenants contained herein shall survive the Closing indefinitely or for the period explicitly specified therein.

Section 8.02     Indemnification By Seller.  Subject to the other terms and conditions of this ARTICLE VIII, Seller shall indemnify and defend Buyer and its Representatives (collectively, the "Buyer Indemnitees") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

(a)     any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement, the other Transaction Documents or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement;

(b)     any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement, the other Transaction Documents or any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement;

(c)     any Excluded Asset or any Excluded Liability;

(d)     any Third Party Claim based upon, resulting from or arising out of Seller's ownership or operation of the Business or the Purchased Assets on or prior to the Closing Date, other than any Assumed Liability; or

Exhbit 10.1 Page 36

(e)     any Liabilities related to any business operations of Seller other than the Business, whether arising before or after the date of this Agreement or the Closing Date.

Section 8.03     Indemnification By Buyer.  Subject to the other terms and conditions of this ARTICLE VIII, Buyer shall indemnify and defend Seller and its Representatives (collectively, the "Seller Indemnitees") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

(a)     any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to this Agreement;

(b)     any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement;

(c)     any liability related to or created by having Buyer's employees present on the Business premises prior to the Closing, except to the extent caused by Seller's negligence; or

(d)     subject to the Closing having occurred, (i) any Assumed Liability, (ii) any Third Party Claim based upon, resulting from or arising out of the operation of the Business or the Purchased Assets between the Effective Date and the Closing Date (unless and except to the extent caused by Seller's negligence or breach of this Agreement); or (iii) any Third Party Claim based upon, resulting from or arising out of Buyer's use of Seller's WSLCB micro-brewery, direct shipment receiver and tavern-beer/wine license number 406726 ("Seller's WSLCB License") on or after the Closing Date.

Section 8.04     Indemnification Procedures.  The party making a claim under this ARTICLE VIII is referred to as the "Indemnified Party", and the party against whom such claims are asserted under this ARTICLE VIII is referred to as the "Indemnifying Party".

Exhbit 10.1 Page 37

(a)     Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any Person who is not a party to this Agreement or a Representative of the foregoing (a "Third Party Claim") against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying Party is Seller, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that (x) is asserted directly by or on behalf of a Person that is a supplier or customer of the Business, (y) seeks an injunction or other equitable relief against the Indemnified Party or (z) may, in the judgment of the Indemnified Party, impact the future prospects or reputation of the Indemnified Party's business. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 8.04(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party's right to control the defense thereof. The fees and disbursements of such counsel shall be at the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnified Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 8.04(b), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions of Section 6.04) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

Exhbit 10.1 Page 38

(b)     Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 8.04(b). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within 10 days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 8.04(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

(c)     Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a "Direct Claim") shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than thirty (30) days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance (including access to the Indemnified Party's premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such thirty (30) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

Exhbit 10.1 Page 39

(d)     Cooperation. Upon a reasonable request by the Indemnifying Party, each Indemnified Party seeking indemnification hereunder in respect of any Direct Claim, hereby agrees to consult with the Indemnifying Party and act reasonably to take actions reasonably requested by the Indemnifying Party in order to attempt to reduce the amount of Losses in respect of such Direct Claim. Any costs or expenses associated with taking such actions shall be included as Losses hereunder.

Section 8.05     Payments.  Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this ARTICLE VIII, the Indemnifying Party shall satisfy its obligations within thirty (30) days of such final, non-appealable adjudication by wire transfer of immediately available funds. The parties hereto agree that should an Indemnifying Party not make full payment of any such obligations within such thirty (30) day period, any amount payable shall accrue interest from and including the date of agreement of the Indemnifying Party or final, non-appealable adjudication to the date such payment has been made at a rate per annum equal to the lesser of the highest rate allowed by law or twelve percent (12%). Such interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed.  Additionally, if any delay in payment or satisfaction of the underlying Loss or Liability causes the Indemnified Party to incur further Loss or Liabilities, then the Indemnifying Party shall be obligated to pay such costs or obligations and/or indemnify the Indemnified Party from and against the same.

Section 8.06     Tax Treatment of Indemnification Payments.  All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

Section 8.07     Effect of Investigation; Materiality.  The representations, warranties and covenants of the Indemnifying Party, and the Indemnified Party's right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the Indemnified Party's waiver of any condition set forth in Section 7.02 or Section 7.03, as the case may be. For purposes of this ARTICLE VIII, any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such representation or warranty.

Exhbit 10.1 Page 40

ARTICLE IX

 termination

Section 9.01     Termination.  This Agreement may be terminated at any time prior to the Closing:

(a)     by the mutual written consent of Seller and Buyer;

(b)     by Buyer by written notice to Seller if:

(i)     Buyer is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure has not been cured by Seller within 10 days of Seller's receipt of written notice of such breach from Buyer; or

(ii)     any of the conditions set forth in Section 7.01 or Section 7.02 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by the Outside Closing Date, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;

(c)     by Seller by written notice to Buyer if:

(i)     Seller is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer's receipt of written notice of such breach from Seller; or

(ii)     any of the conditions set forth in Section 7.01 or Section 7.03 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by the Outside Closing Date, unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

(d)     by Buyer or Seller in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement or refusing to allow Buyer to assume Seller's WSLCB License, and such Governmental Order shall have become final and non-appealable.

Exhbit 10.1 Page 41

Section 9.02     Effect of Termination.  In the event of termination of this Agreement in accordance with this Agreement, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:

(a)     as set forth in this ARTICLE IX and Section 6.04 and ARTICLE X hereof; and

(b)     that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.

ARTICLE X

 miscellaneous

Section 10.01     Expenses.  Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

Section 10.02     Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.02):

Exhbit 10.1 Page 42

	
If to Buyer

 

 

 

 

 

 

With a copy to:

 

	
AmBrew, LLC

610 Pacific Avenue

Tacoma, WA  98402610 Pacific Ave.

253-284-5601

Attn: Brent Hall, Co-Manager

E-mail: ____________________

 

Mario D. Parisio

Harlowe & Falk LLP

One Tacoma Avenue North, Suite 300

Tacoma, WA 98403

mparisio@harlowefalk.com

	 	 
	
If to Seller

 

 

 

 

 

With a copy to:

 

 

	
American Brewing Company, Inc.

180 W. Dayton St., Warehouse 102

Edmonds, WA 98020

Attn: Neil Fallon, President

E-mail: neil@americanbrewing.com

 

Ken Bart

Bart and Associates, LLC

8400 East Prentice Avenue, Suite 1500

Greenwood Village, CO 80111

kbart@kennethbartesq.com

	 	 
	
If to Seller Principals

	
Neil Fallon

6728 37th St. Ct. W

University Place, WA  98466

 

Julie Anderson

6726 37th St. Ct. W

University Place, WA  98466

Exhbit 10.1 Page 43

Section 10.03     Interpretation.  For purposes of this Agreement, (a) the words "include," "includes" and "including" shall be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto" and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

Section 10.04     Headings.  The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 10.05     Severability.  If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 10.06     Entire Agreement.  This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

Section 10.07     Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed; provided, however, that prior to the Closing Date, Buyer may, without the prior written consent of Seller, assign all or any portion of its rights under this Agreement to one or more of its direct or indirect wholly-owned subsidiaries.

Exhbit 10.1 Page 44

Section 10.08     No Third-party Beneficiaries.  Except as provided in ARTICLE VIII, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 10.09     Amendment and Modification; Waiver.  This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 10.10     Governing Law; Jurisdiction; Service of Process; Waiver of Jury Trial.

(a)     This Agreement shall be governed by and construed in accordance with the internal laws of the State of Washington without giving effect to any choice or conflict of law provision or rule that would cause the application of Laws of any jurisdiction other than those of the State of Washington.

(b)     ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE WESTERN DISTRICT OF WASHINGTON OR THE COURTS OF THE STATE OF WASHINGTON IN SNOHOMISH COUNTY, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Exhbit 10.1 Page 45

(c)     Buyer and Seller, each for itself and its successors and assigns, waives any right to a trial by jury in any litigation brought with respect to this Agreement or any term or provision hereof.

Section 10.11     Specific Performance.  The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 10.12     Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

 

 

Exhbit 10.1 Page 46

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

SELLER:  AMERICAN BREWING COMPANY, INC.

By: /s/                                                       

Name:  Neil Fallon

Its: President

 

 

  

BUYER:  AMBREW, LLC

By: /s/                                                       

Name:  Brent Hall

Its:  Co-Manager

By: /s/                                                         

Name:  Steve Navarro

Its:  Co-Manager

 

 

  

INDIVIDUALLY – AS TO SECTION 6.05 ONLY

 

/s/                                                              

Neil Fallon

/s/                                                              

 Julie Anderson

 

  

LIST OF EXHIBITS

Exhibit A – Tangible Personal Property Listing

Exhibit B – Assumed Liabilities Detail

Exhibit C – Advance Deposit/Interim Finance Agreement

Exhibit D – License for use of name

Exhibit E – Bill of Sale

Exhibit F – Assignment and Assumption Agreement (Contracts)

Exhibit G – Assignment and Assumption of Lease-Production

Exhibit H – Assignment and Assumption of Lease-Warehouse

 

 

Exhbit 10.1 Page 47

 

 

 

 

Exhibit A

 

Tangible Personal Property Listing

 

 

 

Exhbit 10.1 Page 48

 

 

 

 

 

 

 

 

 

Exhbit 10.1 Page 49

 

 

 

Exhibit B

 

Assumed Liabilities Detail

 

 

 

 

 

 

 

 

 

Exhbit 10.1 Page 50

 

 

 

Exhibit C

 

Advance Deposit Agreement

 

 

 

 

 

 

Exhbit 10.1 Page 51

 

 

 

 

Exhibit D

 

Form of License to Use Corporate Name

 

 

LICENSE AGREEMENT

THIS LICENSE AGREEMENT ("Agreement"), effective as of ___________________, 2015 ("Effective Date"), is by and between AMBREW, LLC, a Washington limited liability company, having an address at 615 Commerce Street, Suite 101, Tacoma, WA 98402 ("Licensor") and AMERICAN BREWING COMPANY, INC., having an address at ___________________________________ ("Licensee").

Following Closing under a certain Asset Purchase Agreement dated September ______, 2015 between Licensor and Licensee (the "Purchase Agreement"), Licensor is the exclusive owner of all rights in trade names and trademarks comprised of or including "American Brewing".

Licensee wishes to obtain a license from Licensor for its limited use the trade name "American Brewing" after Closing under the Purchase Agreement.

In consideration of the foregoing, the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the parties agree as follows:

1.            DEFINITIONS

1.1.    "Authorized Use" of the Licensed Intellectual Property shall only include Licensor's winding up and transitioning from using of the corporate name "American Brewing", with such use not including any active conduct of a trade or business, whether related to breweries or otherwise.

1.2.    The term "Licensed Intellectual Property" shall mean the trade name comprised of "American Brewing" and specifically excludes the use of the trade name "American Brewing Company" and other intellectual property rights transferred under the Purchase Agreement, including, without limitation, the domain names americanbrewing.com and americanbrewingcompany.com.

1.3.    The term "License Term" shall be from the Effective Date until earlier of (a) the date that is 12 months thereafter or (b) the date of Licensee's uncured breach hereunder as provided for in Section 5.2.

1.4.    Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

2.            GRANT OF LICENSE.  Licensor hereby grants to Licensee a non-exclusive license to use the Licensed Intellectual Property for the Authorized Use for the License Term.

3.            USE OF LICENSED INTELLECTUAL PROPERTY; INDEMNIFICATION.

3.1.            Licensee shall not use the Licensed Intellectual Property in any manner or engage in any actions it knows or should know may damage or tend to damage or diminish the reputation of Licensor or the value of the Licensed Intellectual Property.

 

Exhbit 10.1 Page 52

 

 

3.2.            At all times Licensee shall comply with all applicable laws pertaining to the Licensed Intellectual Property and its Authorized Use thereof.

3.3.            Regardless of the License Term and the Authorized Use, Licensee agrees to take all commercially reasonable steps to expeditiously change its legal name and discontinue use of the Licensed Intellectual Property as soon as possible after Closing.

3.4.            Licensee agrees to indemnify and hold harmless Licensor (including its managers, members, agents, affiliates and representatives) (collectively, the "Licensor Parties") for and from  any costs, liabilities, expenses, fees (including, without limitation, attorney fees), losses or charges incurred by the Licensor Parties that result from Licensee's use of the Licensed Intellectual Property or a breach of this Agreement.

4.            CONSIDERATION.  The license granted by this Agreement is a material element of the terms of the sale of the Business from Licensor to Licensee pursuant to the Purchase Agreement, and no additional royalties or payments separate from the terms of that sale are required to support the license granted herein.

5.            TERM OF LICENSE.

5.1.            The License granted herein shall be for the License Term.  This Agreement may be renewed or extended by the parties on mutual agreement.

5.2.            Licensor may terminate this Agreement by providing Licensee with ten (10) days' written notice setting forth the breach upon which the termination is based.  If Licensee cures the breach within the 10-day period, then this Agreement and the license granted herein shall remain intact.

6.            ACTIONS UPON TERMINATION OR EXPIRATION.

6.1.            Upon termination or expiration of this Agreement, Licensee shall immediately cease and desist all use of the Licensed Intellectual Property, with the exception that Licensee may keep historical documents necessary to maintain complete records for the ongoing Business acquired by Licensee from Licensor pursuant to the Purchase Agreement.

6.2.            Upon termination or expiration of this Agreement Licensee shall refrain from use or registration of any name that is comprised of or includes "American Brewing" or the like.

 

Exhbit 10.1 Page 53

7.            OWNERSHIP.  Licensee acknowledges that Licensor owns the Licensed Intellectual Property, and nothing in this Agreement alters or changes that ownership.  Licensee acknowledges that its use of the Licensed Intellectual Property inures to the benefit of Licensor.

8.            REPRESENTATIONS AND WARRANTIES.

8.1.            Licensor represents and warrants as follows: (a) Licensor is a limited liability company duly created, validly existing, and in good standing under the laws of the State of Washington and (b) Licensor has the ability and capacity to perform its obligations under this Agreement or to cause such obligations to be performed.

8.2.            Licensee represents and warrants as follows: (a) Licensee is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Washington; and (b) Licensee has the ability and capacity to perform its obligations under this Agreement or to cause such obligations to be performed.

9.            MISCELLANEOUS.

9.1.          This Agreement may not be assigned or encumbered by Assignee, except as otherwise stated herein, and any attempt at such assignment or encumbrance shall be void.

9.2.          Any notice required or permitted to be given hereunder to any parties shall be deemed given when in writing and delivered by a nationally recognized overnight courier or by the U.S. Postal Service.  Notice will be deemed effective at the time of delivery shown on the receipt in each case.  Delivery shall be made to the following addresses indicated for each Party herein or to such other address as such Party may, from time to time by written notice, designate to the other:

 

	
Licensee:

	
AMERICAN BREWING COMPANY, INC.

	 	
ATTN:  ______________________

	 	
_____________________________

	 	
_____________________________

	 	 
	
Licensor:

	
AMBREW, LLC

	 	
ATTN: Bret Hall

	 	
615 Commerce Street, Suite 101

	 	
Tacoma, WA 98402

 

9.3.            Subject to the restriction on assignment, this Agreement shall be binding upon and inure to the benefit of the personal representatives, successors-in-interest, heirs, and permitted assigns or transfers of the Parties hereto.

 

Exhbit 10.1 Page 54

9.4.            The captions at the beginning of each numbered Section in this Agreement are solely for the convenience of the parties and should not be construed as being part of this Agreement or used as an aid in the interpretation hereof.

9.5.            All questions with respect to the construction of this Agreement and the rights and liabilities of the parties shall be governed by the laws of the State of Washington.  Licensor and Licensee consent to a finding of personal jurisdiction and venue in Tacoma, Washington in any action necessary to enforce any terms of this Agreement.  Any proceedings arising out of this Agreement shall take place in the United States District Court in Tacoma, Washington.

9.6.            Nothing in this Agreement creates an agency, partnership, joint venture or similar relationship between the parties.

9.7.            The terms of this Agreement are the final and entire understanding between Licensor and Licensee concerning the use of the Licensed Intellectual Property.

9.8.            This Agreement may only be amended or modified by a writing executed by both parties.

 

9.9.            If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions or portions of this Agreement shall not be affected thereby and shall remain in full force and effect.

9.10.            The waiver by either party hereof of any breach of or failure to comply with any provision of this Agreement shall not be construed as or constitute a continuing waiver of said breach or default, or waiver of any other breach of or failure to comply with any provision of this Agreement.  No waiver of any provision of this Agreement shall be effective unless specifically made in writing and signed by officers of Licensor and Licensee.

9.11.            This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one original instrument.

9.12.            In the event any litigation or arbitration is required to enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable costs, fees and expenses incurred in association with such action (including those incurred on appeal).

 

Exhbit 10.1 Page 55

IN WITNESS WHEREOF, Licensor and Licensee have caused this Agreement to be executed by their duly-authorized officers or managers effective _____________________, 2015.

 

	 

LICENSOR:

 

AMBREW, LLC

	 

LICENSEE:

 

AMERICAN BREWING COMPANY, INC.

	 	 
	 	 
	By:  /s/                                                             	By: /s/                                                              
	Name:  Brent Hall	Name:  Neil Fallon
	
Its:  Co-Manager

	Its:  President
	 	 
	By: /s/                                                               	 
	Name:  Steve Navarro	 
	Its:  Co-Manager	 

 

 

 

Exhbit 10.1 Page 56

 

 

 

 

 

Exhibit E

 

Form of Bill of Sale

 

 

 

BILL OF SALE

__________________, 2015

THIS BILL OF SALE (this "Bill of Sale") is being executed and delivered by AMERICAN BREWING COMPANY, INC., a Washington corporation ("Seller"), pursuant to that certain Asset Purchase Agreement (the "Agreement") dated as of September ___, 2015, by and between Seller and AMBREW, LLC, a limited liability company ("Buyer").  Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement.

1.            NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Seller does hereby transfer, convey and assign to Buyer, all its right, title and interest in and to the Purchased Assets, including, without limitation, the federal trademark "AMERICAN BREWING COMPANY" as currently registered in the supplemental register of the US Patent and Trademark Office, registration number 4333045, serial number 85448257 and all common law and other rights to any of the Business trade names, trademarks, copyrights and other intellectual property.

2.            TO HAVE AND TO HOLD said Purchased Assets unto Buyer, Buyer's representatives, successors and assigns, to and for its or their uses forever.  Seller hereby represents and warrants it has good and marketable title to all such Purchased Assets and has the right to transfer its interest in such Purchased Assets, and Seller will defend Buyer's title to said Purchased Assets against all and every person and persons whomsoever.

3.            To the extent there is a conflict between the terms and provisions of this Bill of Sale and the Agreement, the terms and provisions of the Agreement will govern.

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed effective as of this ___ day of _______________________, 2015.

	
 

SELLER:

 

AMERICAN BREWING COMPANY, INC.

 

 

 

	
By:__________________________________

Name: _______________________________

Title: President

 

 

Exhbit 10.1 Page 57

 

 

 

Exhibit F

 

Assignment and Assumption Agreement (Contracts)

 

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment and Assumption") is entered into as of the ___ day of _________________, 2015, by and between AMBREW, LLC, a Washington limited liability company ("Assignee"), and AMERICAN BREWING COMPANY, INC., a Washington corporation ("Assignor"), pursuant to the Asset Purchase Agreement dated as of September ___, 2015, by and between Assignor and Assignee (the "Agreement").  Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

Section 1.  Assignment.  Subject to the terms and conditions of the Agreement, Assignor does hereby assign, grant, transfer and set over unto the Assignee all of Assignor's rights, benefits, privileges, causes of action and remedies under all of the contracts listed on Exhibit A hereto (the "Assigned Contracts"), together with such other rights, causes of action and remedies as may arise by operation of law, in law or equity, in connection with any of such Assigned Contracts.

Section 2.  Assumption.  Subject to the terms and conditions of the Agreement, Assignee hereby accepts the assignment in Section 1 hereof and, from and after the date hereof, will assume, perform and discharge all of the Assumed Liabilities as provided in Section 2.03 of the Agreement.

Section 3.  No Amendment.  This Assignment and Assumption shall not alter, modify or amend the terms of the Assigned Contracts in any respect, nor shall it subject Assignee to any greater liabilities, obligations or duties in connection therewith than would have been enforceable against Assignor.

Section 4.  Binding Effect.  This Assignment and Assumption shall be binding upon and shall inure to the benefit of the parties thereto and their respective successors and assigns.

Section 5.  Governing Law.  This Assignment and Assumption shall be governed by and interpreted in accordance with the laws of the State of Washington.

Section 6.  Conflicts.  To the extent there is a conflict between the terms and provisions of this Assignment and Assumption and the Agreement, the terms and provisions of the Agreement will govern.

(signatures follow)

The parties hereto have executed this Assignment and Assumption as of the date first written above.

	 

LICENSOR:

 

AMBREW, LLC

	 

LICENSEE:

 

AMERICAN BREWING COMPANY, INC.

	 	 
	 	 
	By:  /s/                                                             	By: /s/                                                              
	Name:  Brent Hall	Name:  Neil Fallon
	
Its:  Co-Manager

	Its:  President
	 	 
	By: /s/                                                               	 
	Name:  Steve Navarro	 
	Its:  Co-Manager	 

 

 

Exhbit 10.1 Page 58

 

 

  

 

Exhibit G

 

Lease Assignment and Assumption Agreement - Production

 

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment and Assumption") is entered into by and between AMBREW, LLC, a Washington limited liability company ("Assignee"), and AMERICAN BREWING COMPANY, INC., a Washington corporation ("Assignor"), pursuant to the Asset Purchase Agreement dated as of September ___, 2015, by and between Assignor and Assignee (the "Agreement").  Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement.  Assignor and Assignee, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, agree as follows:

1.            Assignor, who is the Tenant under the below-described Lease (referred to as the Lease Agreement-Production in the Agreement), hereby bargains and sells, grants, conveys, assigns, transfers, sets over, confirms and delivers to Assignee, its successors and assigns, to have and to hold the same unto the Assignee, its successors and assigns, all of Assignor's right, title and interest in and to the following described lease (the "Lease"), which is also attached as Exhibit A hereto:

		Landlord:    	Port of Edmonds, a Washington port district

 

		Tenant:	American Brewing Company, Inc.

 

		Date of Lease:  	June 25, 2010, as amended on []

 

		Property Leased:	Commonly known as 102A-D, Building 4, 180 West Dayton, Edmonds, Snohomish County, WA; legal description:  see attached Exhibit B

2.            Assignee hereby assumes and agrees to pay, perform and discharge, as they become due, without any charge or cost to Assignor, all covenants and obligations of Assignor under the Lease.

3.            This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be dated and effective on this ___ day of _________________, 2015.

  

	
ASSIGNOR:

AMERICAN BREWING COMPANY, INC.

 

By:_________________________________

Name:  ______________________________

Its:  President

 

CONSENTED TO BY LANDLORD:

PORT OF EDMONDS

___________________________________

By:  _______________________________

Its:  _______________________________

 

	
ASSIGNEE:

AMBREW, LLC

 

By:_________________________________

Name:  Brent Hall

Its:  Co-Manager

By:_________________________________

Name:  Steve Navarro

Its:  Co-Manager

	 	 

(notaries follow)

Exhbit 10.1 Page 59

 

 

  

STATE OF WASHINGTON              )

) ss.

County of _________________      )

On this day personally appeared before me _______________________, to me known to be the President of AMERICAN BREWING COMPANY, INC., a Washington corporation, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said company, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

STATE OF WASHINGTON              )

) ss.

County of _________________      )

On this day personally appeared before me Brent Hall, to me known to be a Co-Manager of AMBREW, LLC, a Washington limited liability company, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

  

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

Exhbit 10.1 Page 60

 

 

  

STATE OF WASHINGTON              )

) ss.

County of ________________          )

On this day personally appeared before me Steve Navarro, to me known to be a Co-Manager of AMBREW, LLC, a Washington limited liability company, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

STATE OF WASHINGTON              )

) ss.

County of _________________      )

On this day personally appeared before me ______________________, to me known to be the ___________________ of the PORT OF EDMONDS, a Washington port district, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said ___________________, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

Exhbit 10.1 Page 61

 

 

 

 

Exhibit H

 

Lease Assignment and Assumption - Warehouse

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment and Assumption") is entered into by and between AMBREW, LLC, a Washington limited liability company ("Assignee"), and AMERICAN BREWING COMPANY, INC., a Washington corporation ("Assignor"), pursuant to the Asset Purchase Agreement dated as of September ___, 2015, by and between Assignor and Assignee (the "Agreement").  Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement.  Assignor and Assignee, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, agree as follows:

1.            Assignor, who is the Tenant under the below-described Lease (referred to as the Lease Agreement-Warehouse in the Agreement), hereby bargains and sells, grants, conveys, assigns, transfers, sets over, confirms and delivers to Assignee, its successors and assigns, to have and to hold the same unto the Assignee, its successors and assigns, all of Assignor's right, title and interest in and to the following described lease (the "Lease"), which is also attached as Exhibit A hereto: 

		Landlord:    	Port of Edmonds, a Washington port district

 

		Tenant:	American Brewing Company, Inc.

 

		Date of Lease:  	November 12, 2013, as amended on December 24, 2014

 

		Property Leased:	Commonly known as 102A-D, Building 5, 170 West Dayton, Edmonds, Snohomish County, WA; legal description:  see attached Exhibit B

 

2.            Assignee hereby assumes and agrees to pay, perform and discharge, as they become due, without any charge or cost to Assignor, all covenants and obligations of Assignor under the Lease.

3.            This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be dated and effective on this ___ day of _________________, 2015.

	
ASSIGNOR:

AMERICAN BREWING COMPANY, INC.

 

By:_________________________________

Name:  ______________________________

Its:  President

 

CONSENTED TO BY LANDLORD:

PORT OF EDMONDS

___________________________________

By:  _______________________________

Its:  _______________________________

 

	
ASSIGNEE:

AMBREW, LLC

 

By:_________________________________

Name:  Brent Hall

Its:  Co-Manager

By:_________________________________

Name:  Steve Navarro

Its:  Co-Manager

	 	 

(notaries follow)

Exhbit 10.1 Page 62

STATE OF WASHINGTON              )

) ss.

County of _________________      )

On this day personally appeared before me _______________________, to me known to be the President of AMERICAN BREWING COMPANY, INC., a Washington corporation, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said company, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

STATE OF WASHINGTON              )

) ss.

County of _________________      )

On this day personally appeared before me Brent Hall, to me known to be a Co-Manager of AMBREW, LLC, a Washington limited liability company, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

Exhbit 10.1 Page 63

STATE OF WASHINGTON              )

) ss.

County of ________________          )

On this day personally appeared before me Steve Navarro, to me known to be a Co-Manager of AMBREW, LLC, a Washington limited liability company, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

STATE OF WASHINGTON             )

) ss.

County of _________________       )

On this day personally appeared before me ______________________, to me known to be the ___________________ of the PORT OF EDMONDS, a Washington port district, that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said ___________________, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument.

Given under my hand and official seal this _____ day of ____________, 2015

___________________________________________

(Print/Type Name): ___________________________

Notary Public in and for the State of Washington

Residing at __________________________________

My appointment expires: _______________________

Exhbit 10.1 Page 64

 

 

 

  

Disclosure Schedule 4.03

Third Party Consents Required

Hops contracts

Lease agreements

Marlin security lease

C02 supplier

Crown

 

 

 

 

 

Exhbit 10.1 Page 65

 

 

Disclosure Schedule 4.05

Outstanding Purchase and Sale Commitments 

 

 

 

Hops Contracts:

I. Country Malt Group, Quote HOPCOO1016

2. Country Malt Group, Quote HOPC001647

3. Country Malt Group, Quote HOPC000858

4. Country Malt Group, Quote HOPC000865

5. Country Malt Group, Quote HOPC000864

6. Country Malt Group, Quote HOPC003942

7. Country Malt Group, Quote HOPC003943

8. Country Malt Group, Quote HOPCOO1941

9. Country Malt Group, Quote HOPC001015

10. Country Malt Group, Quote HOPC001646

Grain, yeast, cans, bottles, are all open account

 

 

 

 

Exhbit 10.1 Page 66

 

 

Disclosure Schedule 4.07

Material Contracts

Hops contracts on DS 4.05

Click Wholesale Distributing, Inc.

 

 

 

 

Exhbit 10.1 Page 67

 

 

 

Disclosure Schedule 4.08

Ownership Exceptions

C02 tanks are owned by supplier

 

 

 

 

 

Exhbit 10.1 Page 68

 

 

 

Disclosure Schedule 4.10

Intellectual Property Listing

Beer names and labels - see 4.20

Trademark Application –

"American Brewing Company", application serial number 85448257, filed October 24,

2011

Domain names:

Americanbrewing.com

Americanbrewingcompany.com

Website and content is owned

Domain and email hosted with Media Temple (mediatemple.com)

 

 

 

 

 

Exhbit 10.1 Page 69

 

 

 

 

 

 

 

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Disclosure Schedule 4.11

Keg Inventory, Location, and Deposit Detail

See Attached

 

 

 

 

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Disclosure Schedule 4.12

Material Suppliers and Customers

See DS 4.05 for hops

Click Wholesale Distributing, Inc. is distributor

 

 

 

 

 

Exhbit 10.1 Page 81

 

 

 

 

Disclosure Schedule 4.14

Actions and Proceedings

None

 

 

 

 

Exhbit 10.1 Page 82

 

 

 

Disclosure Schedule 4.15

Legal Compliance

No exceptions

 

 

 

 

 

Exhbit 10.1 Page 83

 

 

 

 

Disclosure Schedule 4.18

Employee Detail

 

 

See attached

 

 

 

 

 

 

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Job Description

Master Brewer

Assistant Brewer

Cellar man / Distributor Lisason

Cellar Man / Part - Time approx 40 hours / month

Tasting Room Manager

Bar Back                                        Plus $500 p/month to handle all social media

Bar Back

Bar Back

Sales Manager

 

 

 

Exhbit 10.1 Page 88

 

 

 

Disclosure Schedule 4.20

Product Listing

See attached

 

 

Exhbit 10.1 Page 89

 

 

American Brewing Company - Beer Names since 2011

Afternoon Delight

American Blonde

American Session Ale

Baltic Porter

Big Bad Plaid Scotch Ale

Big Pucker Sour Ale

Brave American Brown Ale

Breakaway IPA

Cabernet Stout

Captain Munson IPA

Courage American Wheat Ale

Decadence Imperial Chocolate Stout

Ed's Red

Fall Harvest

Fed White & Brew ESB

Flying Monkey Pale Ale

Harvest Gold Marzen

Harvest Gold Marzen

HatTrick Triple IPA

Heart of Gold Kolsch

High Stick Imperial Red

Hop Skip & Go Natural Organic Pale Ale

Impaler Pale Ale

IPO IPA

Midnight Ride Vanilla Stout Porter

Night Moves Rye Porter

Palegater Session Pale Ale

Penalty Box Pilsner

Piper's Scotch Ale

Power Play ImperiallPA

Red Blooded American Imperial Red IPA

Revolutionary RyePA

Stupid Sexy Flanders

US vs Them Pale Ale

Winter Classic

 

 

Exhbit 10.1 Page 90

 

 

 

 

Disclosure Schedule 4.22

Related Party Transactions

None

 

 

 

 

 

 

 

 

 

Exhbit 10.1 Page 91

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