VOTING PROXY AGREEMENT
Exhibit 10.2
This
Voting Proxy Agreement (thee "Agreement")
is entered into this 20th day of December, 2018, by and between the
undersigned (the "Grantee"),
Level Brands, Inc., a North Carolina corporation (the
“Parent”)
and Xxxxxxx X. Xxxxxx who is appointed proxy hereunder (the
"Proxyholder").
WHEREAS, on December 3, 2018 the Parent,
AcqCo LLC, a North Carolina limited liability company and a wholly
owned subsidiary of the Parent (“Merger
Sub”), cbdMD LLC, a North Carolina limited liability
company and wholly owned subsidiary of the Parent
(“Sub
LLC”), and Cure Based Development, LLC, a Nevada
limited liability company (the “Company”)
entered into that certain Agreement and Plan of Merger (the
“Merger
Agreement”) pursuant to which the Merge Sub was merged
into the Company and the Company was merged into the Sub LLC (the
“Mergers”).
WHEREAS, the Grantee was a Company
Member of the Company prior to the Merger.
WHEREAS, the Grantee will receive
certain contractual rights to receive an aggregate of 8,750,000
shares of the Parent’s common stock representing the Second
Tranche Shares (as such term is defined in the Merger Agreement) in
the amounts, and upon the events, set forth in the Merger Agreement
(the “Parent Common
Stock”).
WHEREAS, execution and delivery of this
Agreement by the Grantee is a condition to the execution and
delivery of the Merger Agreement by the Parent, the Merger Sub and
the Sub LLC, and by the Company, respectively.
NOW, THEREFORE, in order to induce the
Parent, the Merger Sub, the Sub LLC and the Company to enter into
the Merger Agreement and in consideration of the mutual covenants
and agreements set forth herein, the parties hereto agree as
follows:
1.
Recitals; Definitions. The
foregoing recitals are true and correct and are incorporated herein
by such reference. Capitalized terms not otherwise defined herein
shall have the same meaning ascribed to them in that certain Merger
Agreement, of even date herewith.
2.
Irrevocable Proxy. The Grantee
hereby irrevocably constitutes and appoints the Proxyholder the
true and lawful attorney, agent and proxy, with full power of
substitution, for the Grantee for the the shares of the Parent
Common Stock that the Grantee has a contractual right to receive
set forth on Exhibit
A attached hereto and incorporated herein, and for the
respective periods set forth in such exhibit (the
“Proxy
Periods”), for and in the name, place and stead of the
Grantee, and to vote such shares of Parent Common Stock at any and
all meetings of the shareholders of the Parent, whether regular or
special, and at any adjournment or adjournments thereof, and to
execute with respect to said shares of Parent Common Stock any and
all instruments, consents, directions or other documents relative
to the corporate affairs of the Parent or calling for the approval
or disapproval of any corporate act or transaction by the
shareholders of the Parent, and the Grantee does hereby authorize
and empower the Proxyholder to vote or otherwise act, as aforesaid,
upon any and all matters and questions relating to the Parent of
whatsoever nature and kind, with all powers the Grantee would
possess as a shareholder if this proxy had not been granted. During
the applicable Proxy Periods, the Proxyholder shall vote the Parent
Common Stock in accordance with the recommendation of a majority of
the independent members of the Parent’s Board of
Directors.
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3.
Prior Proxies. The Grantee
hereby ratifies, confirms and approves everything lawful that the
Proxyholder may do by virtue hereof. The Grantee hereby represents
the Grantee has not executed prior proxies covering any shares of
Parent Common Stock.
4.
Proxy Coupled with an Interest.
This proxy is being given simultaneously with closing of the
Mergers. It is uunderstood and agreed by the Grantee that this
proxy is being given as a material part of the consideration for
the consummation of the Mergers and that the consummation of the
Mergers is conditioned upon the execution and delivery of this
Agreement. All power and authority hereby conferred is coupled with
an interest and is irrevocable, shall not be terminated by any act
of Grantee or by operation of law, by lack of appropriate power or
authority, or by the occurrence of any other event or events and
shall be binding upon all beneficiaries, heirs at law, legatees,
distributees, successors, assigns and legal representatives of
Grantee. If after the execution of this Agreement the Grantee shall
cease to have appropriate power or authority, or if any other such
event or events shall occur, the Proxyholder is nevertheless
authorized and directed to vote the Parent Common Stock in
accordance with the terms of this Agreement as if such lack of
appropriate power or authority or other event or events had not
occurred and regardless of notice thereof.
5.
Scope of Proxy. Until the
termination of this Agreement and the proxy granted hereby, the
Proxyholder shall possess in respect of the Parent Common Stock
deposited hereunder, and shall be entitled to, in his sole,
absolute and uncontrolled discretion, all of the rights and powers
granted hereunder, including but not by way of limitation, the
right to consent for every purpose and to vote or otherwise act
with respect to any and all matters and questions of whatsoever
kind and nature, including, but not by way of limitation: (i) the
purchase, sale, acquisition or other disposition of all or any part
of the assets and business of the Parent; (ii) the readjustment of
its capital structure; or (iii) the reorganization of the
Parent.
6.
Relationship; Delegation. The
Proxyholder is the Chairman of the Audit Committee of the Parent
and is deemed to be an “independent director” under the
rules and regulations of the NYSE America, LLC. The Proxyholder may
appoint aany other person or persons who is then currently serving
on the Parent’s Board of Directors and meets the definition
of an “independent director” under the rules and
regulations of the NYSE American, LLC, or any successor stock
exchange on which the Parentt’s securities are then listed,
to represent him at any meeting of the shareholders of the Parent
and at such meeting to vote and otherwise to exercise all rights
appurtenant to the proxy granted hereby; and such person or persons
appointment shall be deemed the proxy and power of attorney for the
Grantee. The Proxyholder may also cause the Parent Common Stock
subject to the proxy granted hereunder to be voted and the rights
appurtenant thereto to be exercised in any other appropriate and
lawful manner.
7.
Liability. In voting the Parent
Common Stock subject to the proxy granted hereunder, or acting with
respect to this Agreement, the Proxyholder assumes no
responsibility and shall incur no liability because of any act
which he may do or omit to do while acting in good faith. Any act
done or omitted by the Proxyholder pursuant to the advice of his
own attorneys shall be conclusive evidence of such good faith. The
Proxyholder in his individual capacity or any concern in which he
may have an interest may deal with the Parent as if he in fact were
not a Proxyholder hereunder and, without limiting the generality of
the foregoing, any such dealing approved by a majority of the
independent directors of the Parent (as that term is defined in the
rules of the stock exchange on which the Parent’s securities
are there listed) shall be conclusively presumed to be fair to the
Parent.
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8. Legend.
The Grantee hereby agrees that each outstanding certificate
representing the shares Parent Common Stock shall during the
applicable Proxy Period, in addition to any other legends as may be
required in compliance with the Merger Agreement Federal securities
laws, bear a legend reading substantially as follows:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS AND CONDITIONS OF A VOTING PROXY AGREEMENT
DATED DECEMBER 20, 2018 BY AND BETWEEN LEVEL BRANDS, INC., THE
SHAREHOLDER LISTED ON THE FACE HEREOF AND THE
PROXYHOLDER.”
A copy
of this Agreement shall be filed with Parent's transfer agent of
record.
9.
Power and Authority. The
Grantee has the right, power and authority to execute and deliver
this Agreement and to perform his or her obligations hereunder;
such execution, delivery and performance will not violate any
applicable law, rule or regulation or any outstanding agreement or
instrument to which the Grantee is a party. This Agreement
constitutes a legal, valid and binding agreement on the part of the
Grantee enforceable against the Grantee in accordance with its
terms.
10.
Effect of Invalidity. Any term
or provision of this Agreement which is invalid or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is
enforceable.
11.
Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be
an original, but all of which together shall constitute one and the
same agreement.
12.
Governing Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance
with the laws of the North Carolina without giving effect to the
conflicts of laws principles thereof. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, the
Proxyholder shall be entitled to specific performance of the terms
hereof, including an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any state or federal court sitting
in Charlotte, North Carolina, this being in addition to any other
remedy to which such party is entitled at law or in equity. Each of
the parties hereby further waives (a) any defense in any action for
specific performance that a remedy at law would be adequate and (b)
any requirement under any law to post security as a prerequisite to
obtaining equitable relief.
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13.
Binding Effect. This Agreement
shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives,
successors and assigns.
14. Role
of Counsel. The Grantee acknowledges his understanding that
this Agreement was prepared at the request of the Parent by
Xxxxxxxx Law Group LLP, its counsel, and that such firm did not
represent the Company or the Grantee in conjunction with this
Agreement, the Mergers or any of the related transactions. The
Grantee, as further evidenced by his signature below, acknowledges
that he has had the opportunity to obtain the advice of independent
counsel of his choosing prior to his execution of this Agreement
and that he has availed himself of this opportunity to the extent
he deemed necessary and advisable.
[signature
page to follow]
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IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above
written.
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Parent:
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By:
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/s/ Xxxx X.
Xxxxxxx
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Xxxx X.
Xxxxxxx, Chief Financial Officer and Chief Operating
Officer
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Grantee:
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CBD
Holding, LLC
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By:
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/s/ R. Xxxxx
Xxxxxxx
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R.
Xxxxx Xxxxxxx, Manager
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Proxyholder:
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/s/ Xxxxxxx X.
Xxxxxx
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Xxxxxxx
X. Xxxxxx
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5
Exhibit A
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Number of Shares
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Proxy Period Expires
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2,187,500
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December
20, 2019
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2,187,500
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December
20, 2020
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2,187,500
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December
20, 2022
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2,187,500
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December
20, 2024
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8,750,000
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