Item 1.01 Entry into a Material Definitive
Agreement.
On August 10, 2018 (the “
Closing Date
”), New Age Beverages Corporation, a
Washington corporation (the “
Company
”) and its wholly-owned subsidiaries NABC,
Inc., NABC Properties, LLC and New Age Health Sciences, Inc. (the
“
Subsidiaries
” and collectively with the Company, the
“
Borrowers
”) entered into a loan and security
agreement with Siena Lending Group LLC (the
“
Lender
”) which provides for a $12 million
aggregate principal amount revolving credit facility (the
“
Loan
and Security Agreement
”)
which is subject to availability based on eligible accounts
receivables and eligible inventory of the Company. The Loan and
Security Agreement has a scheduled maturity date of August 10, 2021
(the “
Maturity
Date
”).
Pursuant to the Loan and Security Agreement, the Company and the
Subsidiaries granted to the Lender a security interest in all
assets of the Company and the Subsidiaries. In addition, pursuant
to an intellectual property security agreement (the
“
IP
Security Agreement
”), the
Company and New Age Health Sciences, Inc. granted to the Lender a
continuing security interest in all of their respective
intellectual property. In addition, pursuant to the Collateral
Pledge Agreement, the Company granted the Lender a security
interest in the equity interests of the Subsidiaries. The
Lender’s obligation to fund any loans under the Loan and
Security Agreement is subject to the satisfaction of certain
closing conditions, including the requirement to raise debt or
equity, as described in the Loan and Security
Agreement.
The Loan and Security Agreement contains standard and customary
events of default including, but not limited to:
●
failure
to make payments of principal or interest when due;
●
failure
to comply with certain covenants;
●
bankruptcy
or insolvency.
The Loan and Security Agreement also includes an event of default
if Brent Willis ceases to be employed as chief executive officer or
if Chuck Ence ceases to be employed as the chief financial
officer/controller, unless a successor is appointed within 60 days
and such successor is reasonably satisfactory to the
Lender.
If for any reason the Lender’s commitment to make revolving
loans is terminated prior to the Maturity Date, in addition to the
payment of any outstanding principal and interest, the Borrowers
will be required to pay an early payment/termination premium
consisting of the applicable percentage of the amount of the
revolving loan commitment termination (the
“
Applicable
Percentage”
). The
Applicable Percentage shall be (i) 4%, if such event occurs on or
before the first anniversary of the Closing Date, (ii) 2.25% if
such event occurs after the first anniversary of the Closing Date,
but on or before the second anniversary of the Closing Date, or
(iii) 1.25% if such event occurs after the second anniversary of
the Closing Date
but
before the Maturity Date.
In connection with the financing, pursuant to an advisory agreement
between the Company and Alliance Global Partners
(“
AGP
”), a licensed broker-dealer with FINRA, the
Company has agreed to pay to AGP a cash fee of $240,000 upon
funding of the initial loan.
The foregoing are only brief descriptions of the material terms of
the Loan and Security Agreement, the IP Security Agreement and the
Collateral Pledge Agreement, the forms of which are attached hereto
as exhibits to this Current Report on Form 8-K, and are
incorporated herein by reference. The foregoing does not purport to
be a complete description of the rights and obligations of the
parties thereunder and such descriptions are qualified in their
entirety by reference to such exhibits.