REGISTRATION RIGHTS AGREEMENT
Exhibit 10.3
This
REGISTRATION RIGHTS
AGREEMENT (this “Agreement”) is made and
entered into as of June 20, 2018, between New Age Beverages
Corporation, a Washington corporation (the “Company”), and the
purchasers signatory hereto (the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, between the Company and each of the
purchasers signatory thereto (the “Purchase
Agreement”).
The
Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms
used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
“Advice” shall have the
meaning set forth in Section 6(d).
“Effectiveness
Date” means, with respect
to the Initial Registration Statement required to be filed
hereunder, the one hundredth twentieth (120th)
calendar day following the Closing Date; provided, however, that in the event the Company is notified by the
Commission that the Registration Statement will not be reviewed or
is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the
fifth (5th) Trading Day following the date on which the Company is
so notified if such date precedes the dates otherwise required
above; provided, further, if such Effectiveness Date falls on a day that
is not a Trading Day, then the Effectiveness Date shall be the next
succeeding Trading Day; provided, further, that upon an Event of Default under the Security
Agreement, the Effectiveness Date shall mean with respect to the
Initial Registration Statement Required hereunder, the thirtieth
(30) day after the earlier of (i) the date on which the Holder
received a notice of an event of default with respect to such Event
of Default and (ii) the date on which the Holder first became aware
of such Event of Default.
“Effectiveness Period”
shall have the meaning set forth in Section 2(a).
“Event” shall have the
meaning set forth in Section 2(d).
“Event Date” shall have
the meaning set forth in Section 2(d).
“Event of Default” shall
have the meaning ascribed to such term in the Security
Agreement.
“Filing
Date” means, with respect
to the Initial Registration Statement required hereunder, the
eightieth (80th)
calendar day after the Closing, and, with respect to any additional
Registration Statements which may be required pursuant to Section
2(c) or Section 3 (c), the earliest practical date on which the
Company is permitted by SEC Guidance to file such additional
Registration Statement related to the Registrable Securities;
provided, however, that upon an Event of Default under the Security
Agreement, the Filing Date shall mean with respect to the Initial
Registration Statement Required hereunder, the fifth (5) day after
the earlier of (i) the date on which the Holder received a notice
of an event of default with respect to such Event of Default and
(ii) the date on which the Holder first became aware of such Event
of Default.
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“Holder”
or “Holders”
means the holder or holders, as the case may be, from time to time
of Registrable Securities.
“Indemnified Party” shall
have the meaning set forth in Section 5(c).
“Indemnifying Party” shall
have the meaning set forth in Section 5(c).
“Initial Registration
Statement” means the
initial Registration Statement filed pursuant to this
Agreement.
“Losses” shall have the
meaning set forth in Section 5(a).
“Prospectus” means the
prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A or Rule 430B
promulgated by the Commission pursuant to the Securities Act), as
amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
Prospectus.
“Registrable Securities”
means, as of any date of determination, (a) all of the shares of
Common Stock then issued and issuable upon conversion in full of
the Notes (assuming on such date the Notes are converted in full
without regard to any conversion limitations therein), (b) all
shares of Common Stock issued and issuable as interest or principal
on the Notes assuming all permissible interest and principal
payments are made in shares of Common Stock and the Notes are held
until maturity and (c) any securities issued or then issuable upon
any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing; provided, however, that any such Registrable
Securities shall cease to be Registrable Securities (and the
Company shall not be required to maintain the effectiveness of any,
or file another, Registration Statement hereunder with respect
thereto) for so long as (a) a Registration Statement with respect
to the sale of such Registrable Securities is declared effective by
the Commission under the Securities Act and such Registrable
Securities have been disposed of by the Holders in accordance with
such effective Registration Statement, (b) such Registrable
Securities have been previously sold in accordance with Rule 144,
or (c) such securities become eligible for resale without
volume or manner-of-sale restrictions and without current public
information pursuant to Rule 144 as set forth in a written opinion
letter to such effect, addressed, delivered and acceptable to the
Transfer Agent and the affected Holders (assuming that such
securities and any securities issuable upon exercise, conversion or
exchange of which, or as a dividend upon which, such securities
were issued or are issuable, were at no time held by any Affiliate
of the Company), as reasonably determined by the Company, upon the
advice of counsel to the Company.
“Registration Statement”
means any registration statement required to be filed hereunder
pursuant to Section 2(a) and any additional registration statements
contemplated by Section 2 or Section 3(c), including (in each case)
the Prospectus, amendments and supplements to any such registration
statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in any such
registration statement.
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“Rule 415” means Rule 415
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Rule 424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“SEC Guidance” means (i)
any publicly-available written or oral guidance of the Commission
staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.
“Security Agreement” means
the Security Agreement, by and among the Company, its subsidiaries
and the Purchasers, dated June 20, 2018.
“Selling Stockholder
Questionnaire” shall have the meaning set forth in
Section 3(a).
2. Registration.
(a) No later than the
Filing Date, the Company shall file with the Commission the Initial
Registration Statement relating to the resale by the Holders of all
(or such other number as the Commission will permit) of the
Registrable Securities. If Form S-3 is not available for the
registration of the resale of Registrable Securities hereunder, the
Company shall (i) register the resale of the Registrable Securities
on another appropriate form and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is
available; provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the
Commission. Subject to the terms of this Agreement, the Company
shall use its commercially reasonable efforts to cause a
Registration Statement filed under this Agreement (including,
without limitation, under Section 3(c)) to be declared effective
under the Securities Act within one hundred twenty (120) days after
the filing thereof, but in any event no later than the applicable
Effectiveness Date, and shall use its commercially reasonable
efforts to keep such Registration Statement continuously effective
under the Securities Act until all Registrable Securities covered
by such Registration Statement (i) have been sold, thereunder or
pursuant to Rule 144, or (ii) may be sold without volume or
manner-of-sale restrictions pursuant to Rule 144 and without the
requirement for the Company to be in compliance with the current
public information requirement under Rule 144, as determined by the
counsel to the Company pursuant to a written opinion letter to such
effect, addressed and acceptable to the Transfer Agent and the
affected Holder (the “Effectiveness Period”).
The Company shall telephonically request effectiveness of a
Registration Statement as of 5:00 p.m. Eastern Time on a Trading
Day. The Company shall immediately notify the Holder via facsimile
or by e-mail of the effectiveness of a Registration Statement on
the same Trading Day that the Company telephonically confirms
effectiveness with the Commission, which shall be the date
requested for effectiveness of such Registration Statement. The
Company shall, by 9:30 a.m. Eastern Time on the Trading Day after
the effective date of such Registration Statement, file a final
Prospectus with the Commission as required by Rule 424. Failure to
so notify the Holders within one (1) Trading Day of such
notification of effectiveness or failure to file a final Prospectus
as foresaid shall be deemed an Event under Section
2(g).
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(b) Notwithstanding the
registration obligations set forth in Section 2(a), if the
Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single
registration statement, the Company agrees to promptly inform each
of the Holders thereof and use its commercially reasonable efforts
to file amendments to the Initial Registration Statement as
required by the Commission, covering the maximum number of
Registrable Securities permitted to be registered by the
Commission, on Form S-3 or such other form available to register
for resale the Registrable Securities as a secondary offering,
subject to the provisions of Section 2(e); with respect to filing
on Form S-3 or other appropriate form, and subject to the
provisions of Section 2(d) with respect to the payment of
liquidated damages; provided, however, that prior to filing such
amendment, the Company shall be obligated to use diligent efforts
to advocate with the Commission for the registration of all of the
Registrable Securities in accordance with the SEC Guidance,
including without limitation, Compliance and Disclosure
Interpretation 612.09.
(c) Notwithstanding any
other provision of this Agreement and subject to the payment of
liquidated damages pursuant to Section 2(d), if the Commission or
any SEC Guidance sets forth a limitation on the number of
Registrable Securities permitted to be registered on a particular
Registration Statement as a secondary offering (and notwithstanding
that the Company used diligent efforts to advocate with the
Commission for the registration of all or a greater portion of
Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will be
reduced as follows:
(i) first, the Company
shall reduce or eliminate any securities to be included by any
Person other than a Holder; and
(ii) second,
the Company shall reduce Registrable Securities represented by
Conversion Shares (applied, in the case that some Conversion Shares
may be registered, to the Holders on a pro rata basis based on the
total number of unregistered Conversion Shares held by such
Holders).
In the event of a cutback hereunder, the Company shall give the
Holder at least five (5) Trading Days prior written notice along
with the calculations as to such Holder’s allotment. In the
event the Company amends the Initial Registration Statement in
accordance with the foregoing, the Company will use its
commercially reasonable efforts to file with the Commission, as
promptly as allowed by Commission or SEC Guidance provided to the
Company or to registrants of securities in general, one or more
registration statements on Form S-3 or such other form available to
register for resale those Registrable Securities that were not
registered for resale on the Initial Registration Statement, as
amended.
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(d) Provided that no
event of default exists under the Purchase Agreement or any of the
other Transaction Documents, if: (i) the Initial Registration
Statement is not filed on or prior to the Filing Date (if the
Company files the Initial Registration Statement without providing
the Holders the opportunity to review and comment on the same as
required by Section 3(a) herein, the Company shall be deemed to
have not satisfied this clause (i)) or (ii) the Company fails to
file with the Commission a request for acceleration of a
Registration Statement in accordance with Rule 461 promulgated by
the Commission pursuant to the Securities Act, within five (5)
Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed” or will
not be subject to further review, or (iii) prior to the effective
date of a Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration
Statement within ten (10) calendar days after the receipt of
comments by or notice from the Commission that such amendment is
required in order for such Registration Statement to be declared
effective, or (iv) a Registration Statement registering for resale
all of the Registrable Securities is not declared effective by the
Commission by the Effectiveness Date of the Initial Registration
Statement, or (v) after the effective date of a Registration
Statement, such Registration Statement ceases for any reason to
remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are
otherwise not permitted to utilize the Prospectus therein to resell
such Registrable Securities, for more than ten (10) consecutive
calendar days or more than an aggregate of fifteen (15) calendar
days (which need not be consecutive calendar days) during any
12-month period (any such failure or breach being referred to as an
“Event”, and for purposes
of clause (i) thirty (30) calendar days after the date on which
such Event occurs, and for purpose of clause (ii), the date on
which such five (5) Trading Day period is exceeded, and for purpose
of clause (iii) the date which such fifteen (15) calendar day
period is exceeded, and for purpose of clause (v) the date on which
such ten (10) or fifteen (15) calendar day period, as applicable,
is exceeded being referred to as “Event Date”), then, in
addition to any other rights the Holders may have hereunder or
under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date thereafter (if the applicable
Event shall not have been cured by such date) or any pro rata
portion thereof, until the applicable Event is cured or sixty (60)
calendar days after the applicable Event Date, whichever occurs
first, the Company shall pay to each Holder an amount in cash, as
partial liquidated damages and not as a penalty, equal to the
product of one percent (1.0%) multiplied by the aggregate
Subscription Amount paid by such Holder pursuant to the Purchase
Agreement; provided that the maximum amount payable thereunder
shall not exceed four percent (4%) of the aggregate Subscription
Amount. If the Company fails to pay any partial liquidated damages
pursuant to this Section in full within seven (7) days after the
date payable, the Company will pay interest thereon at a rate of
eighteen percent (18%) per annum (or such lesser maximum amount
that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are
due until such amounts, plus all such interest thereon, are paid in
full.
(e) Notwithstanding
anything to the contrary contained herein but subject to comments
by the Commission, in no event shall the Company be permitted to
name any Holder or affiliate of a Holder as any Underwriter without
the prior written consent of such Holder.
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3. Registration Procedures. In
connection with the Company’s registration obligations
hereunder, the Company shall have the following
obligations:
(a) Not less than three
(3) Trading Days prior to the filing of each Registration Statement
and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) furnish
to the Holder copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of the
Holders, and (ii) cause its officers and directors, counsel and
independent registered public accountants to respond to such
inquiries as shall be necessary, in the reasonable opinion of
respective counsel to the Holder, to conduct a reasonable
investigation within the meaning of the Securities Act.
Notwithstanding the above, the Company shall not be obligated to
provide the Holders advance copies of any universal registration
statement registering securities in addition to those required
hereunder, or any Prospectus prepared thereto. The Company shall
not file a Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities shall reasonably object in
good faith, provided that, the Company is notified of such
objection in writing no later than five (5) Trading Days after the
Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Holder has been furnished copies
of any related Prospectus or amendments or supplements thereto.
Each Holder agrees to furnish to the Company a completed
questionnaire in the form attached to this Agreement as
Annex A (a
“Selling Stockholder
Questionnaire”) on a date that is not less than two
(2) Trading Days prior to the Filing Date or by the end of the
fourth (4th) Trading Day
following the date on which such Holder receives draft materials in
accordance with this Section.
(b) (i) The Company
shall prepare and file with the Commission such amendments,
including post-effective amendments, to a Registration Statement
and the Prospectus used in connection therewith as may be necessary
to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act
all of the Registrable Securities, (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so
supplemented or amended, to be filed pursuant to Rule 424, (iii)
respond as promptly as reasonably practicable to any comments
received from the Commission with respect to a Registration
Statement or any amendment thereto and provide as promptly as
reasonably practicable to the Holders true and complete copies of
all correspondence from and to the Commission relating to a
Registration Statement (provided that, the Company shall excise any
information contained therein which would constitute material
nonpublic information regarding the Company or any of its
Subsidiaries), and (iv) comply in all material respects with the
applicable provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities
covered by a Registration Statement during the applicable period in
accordance (subject to the terms of this Agreement) with the
intended methods of disposition by the Holders thereof set forth in
such Registration Statement as so amended or in such Prospectus as
so supplemented.
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(c) If during the
Effectiveness Period, the number of Registrable Securities at any
time exceeds 100% of the number of shares of Common Stock then
registered in a Registration Statement, then the Company shall file
as soon as reasonably practicable, but in any case, prior to the
applicable Filing Date, an additional Registration Statement
covering the resale by the Holders of not less than the number of
such Registrable Securities.
(d) The Company shall
notify the Holders of Registrable Securities to be sold (which
notice shall, pursuant to clauses (iii) through (vi) hereof, be
accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made) as promptly as
reasonably possible (and, in the case of (i)(A) below, not less
than one (1) Trading Day prior to such filing) and (if requested by
any such Person) confirm such notice in writing no later than one
(1) Trading Day following the day (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed, (B) when the Commission notifies
the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in
writing on such Registration Statement, and (C) with respect to a
Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or
any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement covering
any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose, (iv) of the receipt by the Company of
any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose, (v)
of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a
Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (vi) of the occurrence or
existence of any pending corporate development with respect to the
Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of
the Company to allow continued availability of a Registration
Statement or Prospectus, provided, however, in no event shall any such
notice contain any information which would constitute material,
non-public information regarding the Company or any of its
Subsidiaries.
(e) The Company shall
use its commercially reasonable efforts to avoid the issuance of,
or, if issued, obtain the withdrawal of (i) any order stopping or
suspending the effectiveness of a Registration Statement, or (ii)
any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
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(f) The Company shall
furnish to each Holder, without charge, at least one conformed copy
of each such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference to
the extent requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which
is available on the XXXXX system (or successor thereto) need not be
furnished in physical form.
(g) Subject to the
terms of this Agreement, the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment
or supplement thereto, except after the giving of any notice
pursuant to Section 3(d).
(h) The Company shall
cooperate with any broker-dealer through which a Holder proposes to
resell its Registrable Securities in effecting a filing with the
FINRA Corporate Financing Department pursuant to FINRA Rule 5110,
as requested by any such Holder, and the Company shall pay the
filing fee required by such filing within two (2) Business Days of
receipt of a request therefor.
(i) Prior to any resale
of Registrable Securities by a Holder, the Company shall use its
commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or
qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under
the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder reasonably requests in writing, to keep
each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all
other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by each
Registration Statement; provided, that, the Company shall not be
required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so
subject or file a general consent to service of process in any such
jurisdiction.
(j) If requested by a
Holder, the Company shall cooperate with such Holder to facilitate
the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to
a Registration Statement, which certificates shall be free, to the
extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holder may
request.
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(k) Upon the occurrence
of any event contemplated by Section 3(d), as promptly as
reasonably possible under the circumstances taking into account the
Company’s good faith assessment of any adverse consequences
to the Company and its stockholders of the premature disclosure of
such event, prepare a supplement or amendment, including a
post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither a
Registration Statement nor such Prospectus will contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance
with clauses (iii) through (vi) of Section 3(d) above to suspend
the use of any Prospectus until the requisite changes to such
Prospectus have been made, then the Holders will immediately
discontinue disposition of Registrable Securities pursuant to the
Registration Statement and Prospectus covering the Registrable
Shares until the Company notifies the Holders that such
Registration Statement and Prospectus are effective and available
for the issuance and sale of the Registrable Securities. The
Company will use its commercially reasonable efforts to ensure that
the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right
under this Section 3(k) to suspend the availability of a
Registration Statement and Prospectus, subject to the payment of
partial liquidated damages otherwise required pursuant to Section
2(g), for a period not to exceed sixty (60) calendar days (which
need not be consecutive days) in any 12-month period.
Notwithstanding anything to the contrary, the Company shall cause
the Transfer Agent to promptly deliver the shares of Common Stock
without any restrictive legend in accordance with the terms of the
Purchase Agreement and the Notes in connection with any sale of
Registrable Securities with respect to which a Holder has entered
into a contract for sale prior to the Holder's receipt of a written
notice from the Company described above and for which the Holder
has not yet settled
(l) The Company shall
comply with all applicable rules and regulations of the
Commission.
(m) The Company shall
use its commercially reasonable efforts to maintain eligibility for
use of Form S-3 (or any successor form thereto) for the
registration of the resale of Registrable Securities.
(n) The Company may
require from each selling Holder a certified statement as to the
number of shares of Common Stock beneficially owned by such Holder
and the name(s) of the natural persons thereof that have voting and
dispositive control over the Common Stock underlying the Note(s).
During any periods that the Company is unable to meet its
obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish
such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as
to such Holder only shall be tolled and any Event that may
otherwise occur solely because of such delay shall be suspended as
to all Holders until such information is delivered to the
Company.
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4. Registration Expenses. All fees
and expenses incident to the performance of or compliance with,
this Agreement by the Company shall be borne by the Company whether
or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees
and expenses of the Company’s counsel and independent
registered public accountants) (A) with respect to filings made
with the Commission, (B) with respect to filings required to be
made with any Trading Market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state
securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of
counsel for the Company in connection with Blue Sky qualifications
or exemptions of the Registrable Securities) and (D) if not
previously paid by the Company in connection with a Company filing,
with respect to any filing that may be required to be made by any
broker through which a Holder intends to make sales of Registrable
Securities with FINRA pursuant to FINRA Rule 5110, so long as the
broker is receiving no more than a customary brokerage commission
in connection with such sale, (ii) printing expenses (including,
without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires
such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. In addition, the
Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit and
the fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange as required
hereunder. In no event shall the Company be responsible for any
broker or similar commissions of any Holder or, except to the
extent provided for in the Transaction Documents, any legal fees or
other costs of the Holders.
5. Indemnification.
(a) Indemnification by the Company.
The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers,
directors, members, partners, agents, brokers (including brokers
who offer and sell Registrable Securities as principal as a result
of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees (and any other Persons
with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title) of
each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, members, stockholders,
partners, agents and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each
such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation,
reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred,
arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement,
any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or supplement
thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state
securities law, or any rule or regulation thereunder, in connection
with the performance of its obligations under this Agreement,
except to the extent, but only to the extent, that (i) such untrue
statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or in any amendment or
supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated, defective or otherwise unavailable
Prospectus after the Company has notified such Holder in writing
that the Prospectus is outdated, defective or otherwise unavailable
for use by such Holder and prior to the receipt by such Holder of
the Advice contemplated in Section 6(d), but only if and to the
extent that following the receipt of the Advice the misstatement or
omission giving rise to such Loss would have been corrected. The
Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding arising from or in connection
with the transactions contemplated by this Agreement of which the
Company is aware. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
indemnified person and shall survive the transfer of any
Registrable Securities by any of the Holders in accordance with
Section 6(h).
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(b) Indemnification by Holders.
Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable
law, from and against all Losses, as incurred, to the extent
arising out of or based solely upon: (x) such Holder’s
failure to comply with any applicable prospectus delivery
requirements of the Securities Act through no fault of the Company
or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they
were made) not misleading (i) to the extent, but only to the
extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company
expressly for inclusion in such Registration Statement or such
Prospectus, (ii) to the extent, but only to the extent, that such
information relates to such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or in any amendment or
supplement thereto or (iii) in the case of an occurrence of an
event of the type specified in Section 3(d)(iii)-(vi), to the
extent, but only to the extent, related to the use by such Holder
of an outdated, defective or otherwise unavailable Prospectus after
the Company has notified such Holder in writing that the Prospectus
is outdated, defective or otherwise unavailable for use by such
Holder and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d), but only if and to the extent that
following the receipt of the Advice the misstatement or omission
giving rise to such Loss would have been corrected. In no event
shall the liability of any selling Holder under this Section 5(b)
be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an
“Indemnified
Party”), such Indemnified Party shall promptly notify
the Person from whom indemnity is sought (the “Indemnifying Party”) in
writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided,
that, the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have materially and
adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; (2) the
Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and
counsel to the Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a
party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
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Subject
to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred,
within ten (10) Trading Days of written notice thereof to the
Indemnifying Party; provided, that, the Indemnified Party shall
promptly reimburse the Indemnifying Party for that portion of such
fees and expenses applicable to such actions for which such
Indemnified Party is finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or
further review) not to be entitled to indemnification
hereunder.
(d) Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party,
in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with
the actions, statements or omissions that resulted in such Losses
as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party
shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set
forth in this Agreement, any reasonable attorneys’ or other
fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of
this Section 5(d), no Holder shall be required to contribute
pursuant to this Section 5(d), in the aggregate, any amount in
excess of the amount by which the net proceeds actually received by
such Holder from the sale of the Registrable Securities subject to
the Proceeding exceeds the amount of any damages that such Holder
has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged
omission.
The
indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6. Miscellaneous.
(a) Remedies. In the event of a
breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery
of damages, shall be entitled to specific performance of its rights
under this Agreement. Each of the Company and each Holder agrees
that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such
breach, it shall not assert or shall waive the defense that a
remedy at law would be adequate.
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(b) No Piggyback on Registrations;
Prohibition on Filing Other Registration Statements.
Except as required by the agreement
set forth on Schedule 6(i),
neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of
the Company in any Registration Statements other than the
Registrable Securities. Except as may be required pursuant to
existing registration rights granted by the Company pursuant to
that certain Registration Agreement by
and among the Company, Marley Beverage Company, LLC and the Initial
Holders, signatory thereto, dated as of June 13, 2017, the
Company shall not file any other registration statements until all
Registrable Securities are registered pursuant to a Registration
Statement that is declared effective by the Commission, provided
that this Section 6(b), (i) shall not prohibit the Company from
filing amendments to registration statements filed prior to the
date of this Agreement and (ii) shall not prohibit the Company from
filing a registration statement on Form S-3 for a primary offering
by the Company, provided that the Company makes no offering of
securities pursuant to such shelf registration statement prior to
the effective date of the Registration Statement required hereunder
that includes all of the Registrable Securities.
(c) Compliance. Each Holder
covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it
(unless an exemption therefrom is available) in connection with
sales of Registrable Securities pursuant to a Registration
Statement.
(d) Discontinued Disposition. By
its acquisition of Registrable Securities, the Holder agrees that,
upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(d)(iii) through (vi), such
Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in
writing (the “Advice”) by the Company
that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its
commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable. The
Company agrees and acknowledges that any periods during which the
Holder is required to discontinue the disposition of the
Registrable Securities hereunder shall be subject to the provisions
of Section 2(d).
(e) Piggy-Back Registrations. If,
at any time during the Effectiveness Period, there is not an
effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8
(each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with the Company’s stock
option or other employee benefit plans, then the Company shall
deliver to the Holder a written notice of such determination and,
if within ten (10) days after the date of the delivery of such
notice, any such Holder shall so request in writing, the Company
shall include in such registration statement all or any part of
such Registrable Securities such Holder requests to be registered;
provided, however, that the Company shall not be required to
register any Registrable Securities pursuant to this Section 6(e)
that are eligible for resale pursuant to Rule 144 (without volume
restrictions or current public information requirements)
promulgated by the Commission pursuant to the Securities Act or
that are the subject of a then effective Registration
Statement.
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(f) Amendments and Waivers. The
provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the
Company and the Holders of 67% or more of the then outstanding
Registrable Securities (for purposes of clarification, this
includes any Registrable Securities issuable upon exercise or
conversion of any Security). If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or
amendment done in compliance with the previous sentence, then the
number of Registrable Securities to be registered for each Holder
shall be reduced pro rata among all Holders and each Holder shall
have the right to designate which of its Registrable Securities
shall be omitted from such Registration Statement. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the
rights of a Holder or some Holders and that does not directly or
indirectly affect the rights of other Holders may be given only by
such Holder or Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the first sentence of this
Section 6(f). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.
(g) Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase
Agreement.
(h) Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties hereto and
shall inure to the benefit of each Holder. The Company may not
assign (except by merger) its rights or obligations hereunder
without the prior written consent of all of the Holders of the then
outstanding Registrable Securities. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as
permitted under Section 5.7 of the Purchase Agreement.
(i) No
Inconsistent Agreements.
Neither the Company nor any of its Subsidiaries has entered, as of
the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement
with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as set forth
on Schedule
6(i), neither the Company nor
any of its Subsidiaries has previously entered into any agreement
granting any registration rights with respect to any of its
securities to any Person that have not been satisfied in
full.
(j) Execution and Counterparts.
This Agreement may be executed in two or more counterparts, all of
which when taken together 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, it being
understood that all parties hereto need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a
“.pdf” format data file, such signature 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 “.pdf” signature page were an
original thereof.
14
(k) Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be determined in accordance
with the provisions of the Purchase Agreement.
(l) Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any
other remedies provided by law.
(m) Severability. If any term,
provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties hereto that they would have executed
the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(n) Headings. The headings in this
Agreement are for convenience only, do not constitute a part of the
Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
(o) Independent Nature of Holders’
Obligations and Rights. The obligations of each Holder
hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any
way for the performance of the obligations of any other Holder
hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any
Holder pursuant hereto or thereto, shall be deemed to constitute
the Holders as a partnership, an association, a joint venture or
any other kind of group or entity, or create a presumption that the
Holders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated
by this Agreement or any other matters, and the Company
acknowledges that the Holders are not acting in concert or as a
group, and the Company shall not assert any such claim, with
respect to such obligations or transactions. Each Holder shall be
entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall
not be necessary for any other Holder to be joined as an additional
party in any proceeding for such purpose. The use of a single
agreement with respect to the obligations of the Company contained
was solely in the control of the Company, not the action or
decision of any Holder, and was done solely for the convenience of
the Company and not because it was required or requested to do so
by any Holder. It is expressly understood and agreed that each
provision contained in this Agreement is between the Company and a
Holder, solely, and not between the Company and the Holders
collectively and not between and among Holders.
* * * * * * ** * * * * * ** * * * * *
(Signature Pages Follow)
15
IN
WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
NEW AGE BEVERAGES CORPORATION
By:
Title:
Chief Executive Officer
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
16
[SIGNATURE PAGE OF HOLDERS TO RRA]
Name of Holder: Dominion Capital
LLC
Signature of Authorized Signatory of
Holder: /s/Xxxxxxx
Xxxxxxxx
Name of Authorized Signatory: Xxxxxxx
Xxxxxxxx
Title of Authorized Signatory: Managing
Member
17
