Exhibit 10.4

PROMISSORY NOTE AGREEMENT

PROMISSORY NOTE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, the "Note"), dated as of June 30, 2016, by and among Bucha, Inc., a Washington corporation ("Bucha"), NABC, Inc., a Colorado Corporation ("NABC") and NABC Properties, LLC, a Colorado limited liability company ("NABC Properties" and together with Bucha and NABC, collectively, the "Borrower"),  the lenders party hereto (the "Lenders") and Daniel M. Carney, as agent for the Lenders (in such capacity, the "Agent").

RECITALS

WHEREAS, reference is made to that certain Asset Purchase Agreement (the "APA") entered into as of May 20, 2016 (the "Effective  Date"), by and among NEW AGE BEVERAGES, L.L.C., a Colorado limited liability company ("NAB"), NEW AGE PROPERTIES, LLC, a Colorado limited liability company ("NAP"), and XING BEVERAGE, LLC, a Colorado limited liability company ("Xing" and together with NAP and NAB, the "Sellers"), and Borrower, as buyer.

WHEREAS, in accordance with Section 2.1(c) of the APA the Borrower is obligated to enter into this Note as of the Closing Date (as defined in the APA).

NOW THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

AGREEMENT

"Agent" has the meaning set forth in the Preable hereto.

"APA" has the meaning set forth in the Recitals hereto.

"Asset Sale" means the sale, transfer, lease or other disposition (by way of merger, casualty, condemnation or otherwise) by Borrower to any Person of any assets of Borrower other than sales in the ordinary course of business.

"Bankruptcy Code" means title 11 of the United States Code entitled "Bankruptcy" as now or hereafter in effect or any successive statutes.

"Borrower" has the meaning set forth in the Preamble hereto.

 

 

 

"Capital Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.

"Closing Date" means June 30, 2016.

"Collateral" means all of Borrower's right, title and interest in, to and under all personal property and fixtures, whether now owned by or owing to, or hereafter acquired by or arising in favor of Borrower, and whether owned or consigned by or to, or leased from or to, Borrower, and regardless of where located, including (a) all Accounts, (b) all Chattel Paper, (c) all Copyrights, Patents and Trademarks, (d) all Documents, (e) all Equipment, (f) all Fixtures, (g) all General Intangibles, (h) all Goods, (i) all Instruments, (j) all Inventory, (k) all Investment Property, (l) all cash or cash equivalents, (m) all letters of credit, Letter-of-Credit Rights and Supporting Obligations, (n) all Deposit Accounts with any bank or other financial institution, (o) all Commercial Tort Claims, (p) any other contract rights or rights to the payment of money, and (q) all accessions to, substitutions for and replacements, proceeds, insurance proceeds, refunds of any nature (including any and all income tax refunds), and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing; provided, however, that Collateral shall not include any Excluded Collateral.  "Account", "Chattel Paper", "Commercial Tort Claim", "Deposit Account", "Document", "Equipment", "Fixture", "General Intangible", "Goods", "Instrument", "Inventory", "Investment Property", "Letter-of-Credit Right", and "Support Obligations" shall have the meaning set forth in Article 9 of the Uniform Commercial Code.

 "Default" means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

"Event of Default" has the meaning set forth in Paragraph 10 hereto.

"GAAP" means generally accepted accounting principles in the United States as in effect from time to time, consistently applied throughout the period to which reference is made.

 

 

 

 "Indebtedness" means, with respect to any person, without duplication, the following:  (a) all Indebtedness of such person for borrowed money, (b) all obligations of such person for the deferred purchase price of property or services other than accounts payable and accrued liabilities that would be classified as current liabilities under GAAP which payables and expenses are incurred in respect of property or services purchased in the ordinary course of business, (c) all obligations of such person evidenced by notes, bonds, debentures or similar borrowing or securities instruments, (d) all obligations of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person, (e) all obligations of such person as lessee under Capital Leases, (f) all obligations of such person in respect of banker's acceptances and letters of credit, (g) all obligations of such person secured by Liens on the assets and property of such person, (h) all obligations of such person to purchase, redeem, retire, defease or otherwise make any payment in respect of any capital stock or other ownership or profit interest in such person or any other person or any warrants, rights or options to acquire such capital stock, (i) all obligations of such person in respect of any guaranty by such person of any obligation of another person of the type described in clauses (i) through (h) of this definition, and (j) all obligations of another person of the type described in clauses (a) through (i) secured by a Lien on the property or assets of such person (whether or not such person is otherwise liable for such obligations of such other person).

"Interest Period" means consecutive one-month periods, beginning on February 1, 2017 and ending on the Maturity Date; provided that:  (a) any Interest Period that would otherwise end on a day that is not a business day shall, subject to the provisions of clause (c) below, be extended to the next succeeding business day unless such business day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding business day; (b) any Interest Period that begins on the last business day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last business day of a calendar month; (c) any Interest Period that would otherwise end after the Maturity Date shall end on the Maturity Date; and (d) except as otherwise provided under clause (a), (b), or (c) above, no Interest Period shall have a duration of less than one month and if any applicable Interest Period would be for a shorter period, such Interest Period shall not be available hereunder.

"Interest Rate" has the meaning set forth in Paragraph 5 hereto.

"Lenders" has the meaning set forth in the Preamble hereto.

"Lender Indemnified Persons" has the meaning set forth in Paragraph 16(b) hereto.

 

 

 

 

"Lien" means any encumbrance, mortgage, pledge, hypothecation, charge, assignment, lien, restriction or other security interest of any kind securing any obligation of any Person.

"Loans" has the meaning set forth in Paragraph 2(a) hereto.

"Loan Documents" means any of this Note, the Security Documents and all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of the Agent or Lender in connection herewith.

"Maturity Date" means June __, 2017.

"Net Cash Proceeds" means, with respect to any Prepayment Event, the cash proceeds thereof (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of, in each case, to the extent incurred or payable in connection therewith (a) reasonable and customary fees, costs, expenses and commissions and taxes; and (b) with respect to any asset sale, (i) amounts provided as a reserve or in escrow against any liabilities under any indemnification obligations or purchase price adjustment associated with such asset sale (provided that, to the extent and at the time any such amounts are released from such reserve or escrow, such amounts shall constitute Net Cash Proceeds) and (ii) the principal amount of any Indebtedness which is secured by Liens on the asset sold in such asset sale and which is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset).

"Permitted Indebtedness" means (a) any Indebtedness owing to the Agent or Lenders under this Note or the other Loan Documents; (b) Indebtedness listed on Schedule II hereto; (c) Indebtedness in respect of capital expenditures, including Capital Leases and purchase money Indebtedness, in an amount not to exceed $1,000,000.00 in the aggregate during such fiscal year; (d) Indebtedness in respect of taxes or other governmental charges contested in good faith by appropriate proceedings and for which the Borrower have made appropriate reserves; (e) Indebtedness in respect of accounts payable relating to property or services contested in good faith by appropriate proceedings and for which the Borrower have made appropriate reserves; or (f) Indebtedness not to exceed $250,000 solely to pay fees and expenses related to the operation of its business, or in connection with the registration of securities or a stock exchange uplist.

 

 

 

 

"Permitted Liens" means (a) Liens granted to the Agent, for itself and for the benefit of the Lenders, securing the Borrower's obligations under this Note and the other Loan Documents, (b) Liens securing taxes or other governmental charges not yet due or due but contested in good faith by appropriate proceedings and for which the Borrower have made appropriate reserves (so long as the holder of any such Lien is not taking any active steps to enforce or foreclose on such Lien), (c) deposits or pledges made in connection with social security obligations, (d) Liens of landlords, carriers, warehousemen, mechanics and materialmen and other similar statutory Liens arising in the ordinary course of a Borrower's business, less than 120 days old as to obligations not yet due or due but contested in good faith by appropriate proceedings and for which the Borrower have made appropriate reserves (so long as the holder of any such Lien is not taking any active steps to enforce or foreclose on such Lien), (e) easements, rights of way, zoning restrictions and similar minor Liens, and (f) Liens securing Capital Leases and purchase money Indebtedness permitted by clause (c) of the definition of Permitted Indebtedness.

"Person" means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, other legal entities and governmental bodies.

"Prepayment Event" means any (a) any Asset Sale, (b) receipt of any Insurance Proceeds, (c) debt issuance (other than Permitted Indebtedness), or (d) equity issuance in excess of $250,000 in the aggregate, in each case, by Borrower following the Closing Date.

"Security Documents" means any documents evidencing or creating the security interest granted hereby.

"Sellers" has the meaning set forth in the Recitals hereto.

 "UCC" means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect from time to time in the State of Washington or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.  All references in this Note to the provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC.

 

 

 

 

 

 

 

(any such event set forth in clauses (a), (b), (c), (d), (e), (f), (g) or (h) above being, an "Event of Default"), then the Agent may, at its option:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 [signature page follows on next page]

 

 

 

 

 

 

 

 

[Signature Page to Promissory Note]

 

 

 

 

[Signature Page to Promissory Note]

 

 

SCHEDULE I

LENDERS' LOANS

 

 

 

 

SCHEDULE II

PERMITTED INDEBTEDNESS