Blueprint
EXCHANGE AGREEMENT
THIS
EXCHANGE AGREEMENT (the “Agreement”), dated as of
September 20, 2018, is
made by and between New Age Beverages Corporation, a Washington
corporation (“Company”), and the holder of shares of
common stock, $.001 par value per share of the Company (the
“Common Stock”), signatory hereto (each a
“Holder”).
WHEREAS, the Holder
is willing to exchange such number of shares of Common Stock as set
forth on Schedule A
(the “Exchange Securities”);
WHEREAS, the
Company has authorized a new series of convertible preferred stock
of the Company designated as Series C Convertible Preferred Stock,
$0.001 par value, the terms of which are set forth in the
Certificate of Designation of Preferences, Rights and Limitations
of Series C Convertible Preferred Stock (the “Certificate of
Designations”) in the form attached hereto as Exhibit A (together with any
convertible preferred shares issued in replacement thereof in
accordance with the terms thereof, the “Preferred
Stock”), which Preferred Stock shall be convertible into the
Company’s Common Stock, in accordance with the terms of the
Certificate of Designations;
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to exchange with
the Holder, and the Holder desires to exchange with the Company,
the Exchange Securities for shares of the Company’s Preferred
Stock.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and Holder agree as follows:
1.
Terms of the
Exchange. The Company and Holder agree that the Holder will
exchange the Exchange Securities and will relinquish any and all
other rights he may have under the Exchange Securities in exchange
for such number of shares of Preferred Stock (the “Preferred
Shares”, and such Preferred Shares as converted into Common
Stock, the “Conversion Shares”, and together with the
Common Shares and the Preferred Shares, the
“Securities”) as set forth on Schedule A, annexed
hereto.
2.
Closing. Upon
satisfaction of the conditions set forth herein, a closing shall
occur at the principal offices of the Company, or such other
location as the parties shall mutually agree. At closing, Holder
shall deliver the Exchange Securities to the Company pursuant to
this Agreement and the Company shall deliver to such Holder a
certificate evidencing the Preferred Shares, in the name(s) and
amount(s) as indicated on Schedule A annexed hereto. Upon
closing the Exchange Securities shall be cancelled and Holder will
have no remaining rights, powers, privileges, remedies or interests
under the Exchange Securities.
3. Further Assurances. Each party
shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as any
other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.
4.
Representations and
Warranties of the Holder. The Holder represents and warrants
as of the date hereof and as of the closing to the Company as
follows:
a. Authorization;
Enforcement. The Holder
has the requisite power and authority to enter into and to
consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement
by the Holder and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Holder and no further action is
required by the Holder. This Agreement has been (or upon
delivery will have been) duly executed by the Holder and, when
delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Holder enforceable against the
Holder in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
b. Information
Regarding Holder. Holder is an “accredited
investor”, as such term is defined in Rule 501 of Regulation
D promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the Securities Act,
is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of
companies in private placements in the past and, with its
representatives, has such knowledge and experience in financial,
tax and other business matters as to enable the Holder to utilize the information made
available by the Company to evaluate the merits and risks of and to
make an informed investment decision with respect to the proposed
purchase, which represents a speculative investment. Holder has the
authority and is duly and legally qualified to purchase and own the
Securities. Holder is able to bear the risk of such investment for
an indefinite period and to afford a complete loss
thereof.
c. Legend.
The Holder understands that the Securities have been issued (or
will be issued in the case of the Conversion Shares) pursuant to an
exemption from registration or qualification under the Securities
Act and applicable state securities laws, and except as set forth
below, the Securities shall bear any legend as required by the
“blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may
be placed against transfer of such stock
certificates):
[NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO
THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.
d. Restricted
Securities. The Holder
understands that: (i) the Securities have not been and are not
being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) the
Holder shall have delivered to the Company (if requested by the
Company) an opinion of counsel to the Holder, in a form reasonably
acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration, or (C) the Holder
provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A promulgated under the Securities Act (or a successor rule
thereto) (collectively, “Rule 144”); (ii) any sale of
the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144, and further, if Rule 144 is
not applicable, any resale of the Securities under circumstances in
which the seller (or the Person through whom the sale is made) may
be deemed to be an underwriter (as that term is defined in the
Securities Act) may require compliance with some other exemption
under the Securities Act or the rules and regulations of the SEC
promulgated thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the
Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption
thereunder.
5. Representations and
Warranties of the Company. The
Company hereby makes the following representations and warranties
to the Holder:
a.
Authorization;
Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the
transactions contemplated by this Agreement and each of the other
agreements entered into by the parties hereto in connection with
the transactions contemplated by this Agreement (collectively, the
“Exchange Documents”) and otherwise to carry out its
obligations hereunder and thereunder. The execution and
delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of
Directors of the Company or the Company’s stockholders in
connection therewith, including, without limitation, the issuance
of the Preferred Shares, and the reservation for issuance and
issuance of Conversion Shares issuable upon conversion of the
Preferred Shares have been duly authorized by the Company's Board
of Directors and no further filing, consent, or authorization is
required by the Company, its Board of Directors or its
stockholders. This Agreement and any Other Agreement (as
defined herein) have been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.
b.
Organization and
Qualification. Each of the Company and its subsidiaries (the
“Subsidiaries”) are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in
which they are formed, and have the requisite power and
authorization to own their properties and to carry on their
business as now being conducted and as presently proposed to be
conducted. Each of the Company and each of its Subsidiaries is duly
qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on (i) the
business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects
of the Company or any Subsidiary, individually or taken as a whole,
(ii) the transactions contemplated hereby or in any of the other
Exchange Documents or (iii) the authority or ability of the Company
to perform any of its obligations under any of the Exchange
Documents.
c.
No Conflict. The
execution, delivery and performance of the Exchange Documents by
the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance of the Preferred Shares and reservation for issuance and
issuance of the Conversion Shares) will not (i) (i) result in a
violation of the Certificate of Incorporation (as defined below) or
other organizational documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its
Subsidiaries or Bylaws (as defined below) of the Company or any of
its Subsidiaries, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign,
federal and state securities laws and regulations and the rules and
regulations of the Nasdaq Stock Market (the “Principal
Market”) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected except, in the case of clause
(ii) or (iii) above, to the extent such violations that could not
reasonably be expected to have a Material Adverse
Effect.
d.
No Consents.
Neither the Company nor any Subsidiary is required to obtain any
consent from, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory
or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its respective obligations under
or contemplated by the Exchange Documents, in each case, in
accordance with the terms hereof or thereof, except as previously
obtained. All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to
obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date of this Agreement, and neither the
Company nor any of its Subsidiaries is aware of any facts or
circumstances which might prevent the Company or any of its
Subsidiaries from obtaining or effecting any of the registration,
application or filings contemplated by the Exchange
Documents.
e. Securities
Law Exemptions. Assuming the
accuracy of the representations and warranties of the Holder
contained herein, the offer and issuance by the Company of the
Securities is exempt from registration under the Securities Act.
The offer and issuance of the Securities is exempt from
registration under the Securities Act pursuant to the exemption
provided by Section 3(a)(9) thereof. The Company covenants and
represents to the Holder that neither the Company nor any of its
Subsidiaries has received, anticipates receiving, has any agreement
to receive or has been given any promise to receive any
consideration from the Holder or any other Person in connection
with the transactions contemplated by the Exchange
Documents.
f. Issuance
of Securities. The issuance of
the Preferred Shares are duly authorized and upon issuance in
accordance with the terms of the Exchange Documents shall be
validly issued, fully paid and non-assessable and free from all
taxes, liens, charges and other encumbrances with respect to the
issue thereof. Upon issuance or conversion in accordance with the
Certificate of Designations, the Conversion Shares, when issued,
will be validly issued, fully paid and nonassessable and free from
all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common
Stock.
6. Miscellaneous.
a. Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
b. Governing Law. This Agreement
shall be governed by and construed under the laws of the State of
Washington without regard to the choice of law principles
thereof.
c. Severability.
If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in
any other jurisdiction.
d. Counterparts/Execution.
This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an
e-mail which contains an electronic file of an executed signature
page, such signature page shall create a valid and binding
obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
facsimile or electronic file signature page (as the case may be)
were an original thereof.
e. Entire Agreement; Amendments.
This Agreement constitutes the entire agreement between the parties
with regard to the subject matter hereof and thereof, superseding
all prior agreements or understandings, whether written or oral,
between or among the parties. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the terms
and conditions hereof may be waived, only by a written instrument
signed by all parties, or, in the case of a waiver, by the party
waiving compliance. Except as expressly stated herein, no delay on
the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any right, power or privilege hereunder
preclude any other or future exercise of any other right, power or
privilege hereunder.
f. Headings.
The headings used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement.
(Signature
Pages Follow)
IN WITNESS WHEREOF, the parties have
caused this Agreement to be duly executed as of the day and year
first above written.
NEW AGE
BEVERAGES CORPORATION
By:
/s/ Charles
Ence
Name:
Charles Ence
Title:
Vice President Finance
HOLDER:
/s/ Brent
Willis
Brent
Willis
/s/ Neil
Fallon
Neil
Fallon
SCHEDULE
A
|
Name of Holder
|
Number of Shares of Common Stock to be Exchanged
|
Number of Shares of
Preferred Stock to be Issued
|
|
Brent
Willis
|
1,773,000
|
1,773
|
|
Neil
Fallon
|
5,127,000
|
5,127
|