ICNB Iconic Brands Inc (CE)

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): SEPTEMBER 10, 2014

Commission File Number: 000-53162

ICONIC BRANDS, INC.
(Exact name of registrant as specified in charter)

NEVADA
(State or other jurisdiction of incorporation or organization)

13-4362274
(IRS Employer Identification Number)

 (Address of principal executive offices)

631-464-4050
(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

 

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Item 1.01. Entry into a Material Definitive Agreement.

Share Exchange Agreement and Subsequent Unwind of Merger

On September 10, 2014, ICONIC BRANDS, INC. (the “Company”) entered into a Share Exchange Agreement (the “Agreement”) and merger with Medical Marijuana Business Academy, LLC, a company organized pursuant to the laws of the State of Colorado (“MMBA”), and MJ Business Academy, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, on September 10, 2014, MMBA  merged with and into Merger Sub, with Merger Sub continuing as the surviving entity that succeeded to all of the assets, liabilities and operations of MMBA and whereby MMBA effectively became our wholly-owned operating subsidiary (the “Merger”).

At the effective time of the Merger, the outstanding membership interest units of MMBA, held by Phillip Stark and Charles Houghton, were exchanged for a total of 60,000,000 newly issued shares of the Company’s common stock as consideration for the Merger, and as such, Mr. Stark and Mr. Houghton, as the sole members of MMBA, held a controlling voting interest in the Company’s outstanding common stock.  At Closing, the Company’s former CEO, Richard DeCicco, also transferred his One (1) Share of Series A Preferred Stock to Mr. Stark and Mr. Houghton, giving them control of the Company’s preferred stock, as well.

The Agreement contained customary terms and conditions for agreements of this type, including completion of due diligence by the parties and approval of the Merger by MMBA members. At the effective time of the Merger, MMBA’s current officers and directors were appointed as officers and directors of the Company. The Merger became effective on September 10, 2014.

A copy of the Agreement is attached hereto as Exhibit 2.1. The description of the Agreement herein is qualified by the terms of the full text of the agreement attached hereto and the terms thereof are incorporated herein by reference.

Effective on April 9, 2015, the Company, MMBA and Merger Sub entered into an Unwind Agreement (the “Unwind Agreement”) whereby Mr. Houghton and Mr. Stark agreed to transfer their 60,000,000 shares of the Company’s common stock, and to return the One (1) Share of Series A Preferred Stock to Mr. DeCicco, in exchange for the unwinding of the merger, and a return to Mr. Houghton and Mr. Stark of all of the membership interest units in MMBA.

At the Closing of the Unwind Agreement on April 23, 2015, Richard DeCicco was appointed President and Director of the Company and Merger Sub.  Following Mr. DeCicco’s appointment, Mr. Stark and Mr. Houghton resigned all officer and director positions in both the Company and Merger Sub, and Mr. DeCicco remains as sole officer and director of Iconic Brands, Inc. and MJ Business Academy, Inc.

As of the Closing of the Unwind Agreement, neither the Company, nor Merger Sub holds any right, title or interest in or to any of the assets of Medical Marijuana Business Academy, LLC, and MMBA is a private entity once again owed solely by its Managing Members, Phillip Stark and Charles Houghton.

A copy of the Unwind Agreement is attached hereto as Exhibit 3.1. The description of the Agreement herein is qualified by the terms of the full text of the agreement attached hereto and the terms thereof are incorporated herein by reference.

On May 15, 2015, the Company entered into a Securities Exchange Agreement, by and among the members of BiVi LLC, a Nevada limited liability company (the “BiVi”)(collectively referred to as the “Seller”) under which the Company is to acquire a 51% majority interest in BiVi in exchange for the issuance (a) 1,000,000 shares of restricted common stock and (b)  1,000 shares of newly created Series C Convertible Preferred Stock.

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Upon satisfaction of the conditions set forth in Section 2.2 of the Securities Exchange Agreement, the Closing is expected to occur at the offices of the Company, or such other location as the parties shall mutually agree, on or before May 31, 2015.   At Closing, BiVi will become a majority owned subsidiary of the Company.  Under the terms of the Securities Exchange Agreement, the Company shall provide working capital, from time to time, of up to $750,000.00 pursuant to a Working Capital Facility, which shall be repaid by BiVi from working capital generated from BiVi’s operations. Provided that, in the event that the Company fails to provide working capital of at least $40,000.00 per month, and such failure shall continue for a period of sixty (60) calendar days thereafter (“Cure Period”) then BiVi may, at its option, by written notice to the Company, declare a default.  In the event of such default, the Company shall surrender the Majority Interest back to BiVi for retirement and the Holders of the Series C Preferred Stock shall surrender all outstanding shares back to Iconic for retirement (“BiVi Unwind”).  In the event of the BiVi Unwind, BiVi shall issue a 5% promissory note to the Company (“Promissory Note”) with a principal amount equal to the then outstanding unpaid balance of the Working Capital Facility advanced to BiVi prior to the Unwind, payable upon the acquisition of the majority of the outstanding stock or assets of BiVi, including but not limited to the BiVi Brand of products, by a third party, but in no event later than 36 months from issuance (“Maturity Date”).

BiVi is beneficially owned and controlled by Richard DeCicco, the majority shareholder, President, CEO and Director of Iconic Brands, Inc.

A copy of the Securities Exchange Agreement is attached hereto as Exhibit 4.1. The description of the Agreement herein is qualified by the terms of the full text of the agreement attached hereto and the terms thereof are incorporated herein by reference.

 

Item 5.01. Changes in Control of Registrant

On September 10, 2014, the issuance of the 60,000,000 new shares of common stock to Mr. Stark and Mr. Houghton constituted a change in control, as did the transfer of the One (1) Share of Series A Preferred Stock from Richard DeCicco to Mr. Stark and Mr. Houghton.   Likewise, the appointment on September 10, 2014 of Mr. Stark and Mr. Houghton to the Company’s Board of Directors, and the resignation of Mr. DeCicco from all officer and director positions in the Company and Merger Sub on September 10, 2014 constituted a change in control.

On April 23, 2015, with the Closing of the Unwind Agreement, Mr. Stark and Mr. Houghton transferred their 60,000,000 shares of the Company’s common stock, and they transferred their One (1) Share of Series A Preferred Stock back to Richard DeCicco.  These transfers were finalized by the Company’s transfer agent on May 8, 2015, once again giving him voting control of the Company, Mr. DeCicco was appointed President, CEO and Director of Iconic Brands, Inc. and MJ Business Academy, Inc., and immediately thereafter, Mr. Stark and Mr. Houghton resigned from all officer and director positions held in the Company and Merger Sub.

 

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Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On May 15, 2015, the Company approved the creation of a new class of preferred stock in order to facilitate the Closing of the Securities Exchange Agreement with BiVi.   Under Section 2 of the Certificate of Designation, the holders of Series C Preferred Stock have preferential rights in comparison to holders of the Company’s common stock.  Upon any Sale, as defined in the Certificate of Designation, the holders of the Series C Preferred Stock, in aggregate, shall be entitled to receive out of the proceeds of such Sale (in whatever form, be it cash, securities, or other assets), a distribution from the Company equal to Seventy Six and Ninety Three One Hundredths percent (76.93%) of all such proceeds received by the Company prior to any distribution of such proceeds to all other classes of equity securities, including any series of preferred stock designated subsequent to this Series C Preferred Stock.

Such Certificate of Designation shall be filed with the Nevada Secretary of State prior to Closing, which is expected to be on May 31, 2015.

A copy of the Certificate of Designation for the newly created Series C Preferred Stock is attached hereto as Exhibit 6.1 and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ARTICLES OF INCORPORATION

                                                                                             

Certificate of Change filed Pursuant to NRS 78.209

For Nevada Profit Corporations

 

 

1.  Name of Corporation:    Iconic Brands, Inc.

Iconic Brands, Inc., a Nevada corporation (the “Company”), does hereby certify:

FIRST: That pursuant to authority expressly vested in it by the Articles of Incorporation of the Company, the Board of Directors of the Company has adopted the following resolution establishing a new series of Preferred Stock of the Company, consisting of One Thousand (1,000) shares designated “Series C Preferred Stock,” with such powers, designations, preferences, and relative participating, optional, or other rights, if any, and the qualifications, limitations, or restrictions thereof, as are set forth in the resolutions:

RESOLVED, that the Company's Board of Directors hereby approves the designation and issuance of the Series C Preferred Stock according to the terms and conditions as set forth in Exhibit A and authorizes and instructs the Company's Executive Officers to proceed in filing the Certificate of Designation with the State of Nevada and to take such other action as shall be appropriate in connection with the issuance of the Series C Preferred Stock.

SECOND: That said resolutions of the directors of the Company were duly adopted in accordance with the provisions of the Nevada Revised Statutes.

IN WITNESS WHEREOF, the undersigned hereby affirms, under penalties of perjury, that the foregoing instrument is the act and deed of the Company and that the facts stated therein are true.

Dated as of the 15th day of May, 2015.

ICONIC BRANDS, INC.,

a Nevada corporation

By:  /s/ Richard DeCicco

Name:  Richard DeCicco

Title:    President

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SERIES C PREFERRED STOCK TERMS

Section 1.  Designation, Amount and Par Value.  The series of preferred stock shall be designated as the Series C Preferred Stock (the “Series C Preferred Stock”), and the number of shares so designated and authorized shall be One Thousand (1,000).  Each share of Series C Preferred Stock shall have a par value of $0.001 per share and a stated value of $1.00 per share (the “Stated Value”).

Section 2.  Liquidation.  Upon any Sale (as defined below), the holders of the Series C Preferred Stock, in aggregate, shall be entitled to receive out of the proceeds of such Sale (in whatever form, be it cash, securities, or other assets), a distribution from the Company equal to Seventy Six and Ninety Three One Hundredths percent (76.93%) of all such proceeds received by the Company prior to any distribution of such proceeds to all other classes of equity securities, including any series of preferred stock designated subsequent to this Series C Preferred Stock.  Such proceeds shall be distributed among the holders of Series C Preferred Stock ratably in accordance with the respective outstanding share amounts held by such holder. The Company shall mail written notice of any such Sale, not less than 45 days prior to the distribution date stated therein, to each record Holder of Series C Preferred Stock.  A “Sale” shall mean a sale of the majority of the assets held by, or majority of the membership interests (equity) of BiVi LLC.   Other than with respect to a Sale, the Series C Preferred Stock will, with respect to rights on liquidation, dissolution and winding-up of the Company, rank on parity with the Common Stock.

Section 3.  Definitions.  For the purposes hereof, the following terms shall have the following meanings:

“Common Stock” means the common stock, $.001 par value per share, of the Company, and stock of any other class into which such shares may hereafter have been reclassified or changed.

“Holder” means a registered holder of a share or shares of Series C Preferred Stock.

THIS AGREEMENT is made effective as of the 10^th day of September, 2014

AMONG:

ICONIC BRANDS, INC., a Nevada corporation with an address at 44 Seabro Avenue, Amityville, New York 11701

(“Pubco”)

MJ BUSINESS ACADEMY, INC., a Nevada private corporation with an address at 44 Seabro Avenue, Amityville, New York 11701, which is a wholly owned subsidiary of Pubco

(“MergerSub”)

AND:

MEDICAL MARIJUANA BUSINESS ACADEMY, LLC, a Colorado limited liability company with an address at 332 East Colorado Avenue, Colorado Springs CO 80903

(“Priveco”)

AND:

PHILLIP STARK AND CHARLES HOUGHTON, as managing members of Priveco as listed on SCHEDULE 1 attached hereto

(collectively, the “Selling Shareholder”)

AND:

RICHARD DECICCO, as a controlling shareholder of ICONIC BRANDS, INC.

WHEREAS:

A.	The Selling Shareholder is the registered and beneficial owner of all of the issued and outstanding LLC Membership Interest Units (the “LLC Interests”) of Priveco;

B.

Pubco has agreed to issue Sixty Million (60,000,000) shares (the “Shares”) of its common stock as of the Closing Date (as defined below) to the Selling Shareholder as consideration for the purchase by MergerSub of all of the issued and outstanding LLC Interests held by the Selling Shareholder (the “Transaction”); and

C.	Upon the terms and subject to the conditions set forth in this Agreement, the Selling Shareholder has agreed to sell all of the issued and outstanding LLC Interests of Priveco held by the Selling Shareholder to MergerSub in exchange for the Shares of Pubco.

 

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D.

It is the intention of the parties that: (i) the Transaction shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) the issuance of the Shares shall be exempted from registration or qualification under the Securities Act; and

THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:

1.	DEFINITIONS

1.1	Definitions.  The following terms have the following meanings, unless the context indicates otherwise:

(a)

“Agreement” shall mean this Agreement, and all the exhibits, schedules and other documents attached to or referred to in this Agreement, and all amendments and supplements, if any, to this Agreement;

(b)

“Closing” shall mean the completion of the Transaction, in accordance with Section 7 hereof, at which the Closing Documents shall be exchanged by the parties, except for those documents or other items specifically required to be exchanged at a later time;

(c)

“Closing Date” shall mean a date mutually agreed upon by the parties hereto in writing and in accordance with Section 10.6 following the satisfaction or waiver by Pubco and Priveco of the conditions precedent set out in Sections 5.1 and 5.2 respectively;

(d)

“Closing Documents” shall mean the papers, instruments and documents required to be executed and delivered at the Closing pursuant to this Agreement;

(e)

“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended;

(f)

“Liabilities” shall include any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted choate or inchoate, liquidated or unliquidated, secured or unsecured;

(g)

“Priveco Accounting Date” shall mean December 31, 2013;

(h)

“Priveco Financial Statements” shall mean the balance sheet of Priveco as of December 31, 2012 and December 31, 2013, together with related statements of income, cash flows, and changes in shareholder’s equity for the fiscal years ended December 31, 2012 and December 31, 2013;

 

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(i)

“Priveco LLC Interests” shall mean the One Hundred Percent (100%) of the LLC membership interest units of Priveco held by the Selling Shareholder, being all of the issued and outstanding LLC membership interest units of Priveco;

(j)

“Pubco Shares” shall mean the Sixty Million (60,000,000) fully paid and non-assessable common shares of Pubco to be issued to the Selling Shareholder by Pubco on the Closing.

(k)

“SEC” shall mean the Securities and Exchange Commission;

(l)

“Securities Act” shall mean the United States Securities Act of 1933, as amended; and

(m)

“Taxes” shall include international, federal, state, provincial and local income taxes, capital gains tax, value-added taxes, franchise, personal property and real property taxes, levies, assessments, tariffs, duties (including any customs duty), business license or other fees, sales, use and any other taxes relating to the assets of the designated party or the business of the designated party for all periods up to and including the Closing Date, together with any related charge or amount, including interest, fines, penalties and additions to tax, if any, arising out of tax assessments.

1.2	Schedules.  The following schedules are attached to and form part of this Agreement:

1.3	Currency.  All references to currency referred to in this Agreement are in United States Dollars (US$), unless expressly stated otherwise.

2.	THE OFFER, PURCHASE AND Sale of Shares

2.1

Offer, Purchase and Sale of Shares.  Subject to the terms and conditions of this Agreement, the Selling Shareholder hereby covenant and agree to sell, assign and transfer to MergerSub, and MergerSub hereby covenants and agrees to purchase from the Selling Shareholder all of the Priveco LLC Interests held by the Selling Shareholder. In addition, all outstanding preferred stock in the Pubco, which consists only of One (1) Share of Series A Preferred Stock of Iconic Brands, Inc.  held by Richard DeCicco shall be transferred to to Charles Houghton and Phillip Stark in the following manner: One Half (1/2) share to Mr. Houghton and One Half (1/2) share to Mr. Stark, at Closing.

2.2	Consideration.  As consideration for the sale of the Priveco LLC Interests by the Selling Shareholder to MergerSub, Pubco shall allot and issue the Pubco Shares to the Selling Shareholder or his nominees in the amount set out opposite the Selling Shareholder’s name on Schedule 1.

 

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2.3

Restricted Securities. The Selling Shareholder acknowledges and agrees that the Pubco Shares are being issued pursuant to an exemption from the prospectus and registration requirements of the Securities Act.  As required by applicable securities law, the Selling Shareholder agrees to abide by all applicable resale restrictions and holding periods imposed by all applicable securities legislation.  All certificates representing the Pubco Shares issued on Closing will be endorsed with the following legend:

“NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.”

2.4

Fractional Shares/Warrants.  Notwithstanding any other provision of this Agreement, no certificate for fractional shares or warrants of the Pubco Securities will be issued in the Transaction.  In lieu of any such fractional shares or warrants the Selling Shareholder would otherwise be entitled to receive upon surrender of certificates representing the Priveco Shares for exchange pursuant to this Agreement, the Selling Shareholder will be entitled to have such fraction rounded up to the nearest whole number of Pubco Shares and will receive from Pubco a stock certificate and warrant certificate representing same.

2.5	Closing Date.  The Closing shall take place, subject to the terms and conditions of this Agreement, on the Closing Date.

3.	REPRESENTATIONS AND WARRANTIES OF Priveco AND THE SELLING SHAREHOLDER

Priveco and the Selling Shareholder, jointly and severally, represent and warrant to Pubco, and acknowledge that Pubco is relying upon such representations and warranties, in connection with the execution, delivery and performance of this Agreement, notwithstanding any investigation made by or on behalf of Pubco, as follows:

 

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3.1

Organization and Good Standing.  Priveco is a limited liability company duly organized, validly existing and in good standing under the laws of Colorado and has the requisite corporate power and authority to own, lease and to carry on its business as now being conducted.  Priveco is duly qualified to do business and is in good standing as a corporation in each of the jurisdictions in which Priveco owns property, leases property, does business, or is otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the business of Priveco taken as a whole.

3.2

Authority.  Priveco has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “Priveco Documents”) to be signed by Priveco and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of each of the Priveco Documents by Priveco and the consummation of the transactions contemplated hereby have been duly authorized by Priveco’s Members.  No other corporate or Member/shareholder proceedings on the part of Priveco is necessary to authorize such documents or to consummate the transactions contemplated hereby.  This Agreement has been, and the other Priveco Documents when executed and delivered by Priveco as contemplated by this Agreement will be, duly executed and delivered by Priveco and this Agreement is, and the other Priveco Documents when executed and delivered by Priveco as contemplated hereby will be, valid and binding obligations of Priveco enforceable in accordance with their respective terms except:

(a)

as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;

(b)

as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and

(c)

as limited by public policy.

3.3

Capitalization of Priveco.  The entire authorized capital stock and other equity securities of Priveco consists of Two (2) LLC Interests with no par value per share.  All of the issued and outstanding Priveco LLC Interests have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to pre-emptive rights and were issued in full compliance with the laws of the State of Colorado.  There are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating Priveco to issue any additional Priveco LLC Interests, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire from Priveco any LLC Interests.  There are no agreements purporting to restrict the transfer of the Priveco LLC Interests, no voting agreements, shareholders’ agreements, voting trusts, or other arrangements restricting or affecting the voting of the Priveco LLC Interests.

3.4

Title and Authority of Selling Shareholder. The Selling Shareholder is and will be as of the Closing, the registered and beneficial owner of and will have good and marketable title to all of the Priveco LLC Interests held by it and will hold such free and clear of all liens, charges and encumbrances whatsoever; and such Priveco LLC Interests held by such Selling Shareholder have been duly and validly issued and are fully paid and non-assessable.  The Selling Shareholder has due and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the registered, legal and beneficial title and ownership of the Priveco LLC Interest held by it.

 

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3.5	Holders of Priveco LLC Interests. Schedule 1 contains a true and complete list of the holders of all issued and outstanding Priveco LLC Interests including each holder’s name, address and number of Priveco LLC Interests held.

3.6	Directors and Officers of Priveco.  The duly elected or appointed directors and the duly appointed officers of Priveco are as set out in Schedule 3.

3.7

Corporate Records of Priveco.  The corporate records of Priveco, as required to be maintained by it pursuant to all applicable laws, are accurate, complete and current in all material respects, and the minute book of Priveco is, in all material respects, correct and contains all records required by all applicable laws, as applicable, in regards to all proceedings, consents, actions and meetings of the shareholders and the board of directors of Priveco.

3.8	Non-Contravention.  Neither the execution, delivery and performance of this Agreement, nor the consummation of the Transaction, will:

(a)

conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the material properties or assets of Priveco or any of its subsidiaries under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Priveco or any of its subsidiaries, or any of their respective material property or assets;

(b)

violate any provision of the organizational documents of Priveco, any of its subsidiaries or any applicable laws; or

(c)

violate any order, writ, injunction, decree, statute, rule, or regulation of any court or governmental or regulatory authority applicable to Priveco, any of its subsidiaries or any of their respective material property or assets.

3.9

Actions and Proceedings.  To the best knowledge of Priveco, there is no basis for and there is no action, suit, judgment, claim, demand or proceeding outstanding or pending, or threatened against or affecting Priveco, any of its subsidiaries or which involves any of the business, or the properties or assets of Priveco or any of its subsidiaries that, if adversely resolved or determined, would have a material adverse effect on the business, operations, assets, properties, prospects, or conditions of Priveco and its subsidiaries taken as a whole (a “Priveco Material Adverse Effect”).  There is no reasonable basis for any claim or action that, based upon the likelihood of its being asserted and its success if asserted, would have such a Priveco Material Adverse Effect.

 

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3.10	Compliance.

(a)

To the best knowledge of Priveco, Priveco and each of its subsidiaries is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance, regulation, rule, decree or other applicable regulation to the business or operations of Priveco and its subsidiaries;

(b)

To the best knowledge of Priveco, neither Priveco nor any of its subsidiaries is subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would constitute a Priveco Material Adverse Effect;

(c)

Each of Priveco and its subsidiaries has duly filed all reports and returns required to be filed by it with governmental authorities and has obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement.  All of such permits and consents are in full force and effect, and no proceedings for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or to the best knowledge of Priveco, threatened, and none of them will be adversely affected by the consummation of the Transaction; and

(d)

Each of Priveco and its subsidiaries has operated in material compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to its business.  Neither Priveco nor any of its subsidiaries has received any notice of any violation thereof, nor is Priveco aware of any valid basis therefore.

3.11

Filings, Consents and Approvals.  No filing or registration with, no notice to and no permit, authorization, consent, or approval of any public or governmental body or authority or other person or entity is necessary for the consummation by Priveco or any of its subsidiaries of the Transaction contemplated by this Agreement or to enable Pubco to continue to conduct Priveco’s business after the Closing Date in a manner which is consistent with that in which the business is presently conducted.

3.12	Absence of Undisclosed Liabilities.  Neither Priveco nor any of its subsidiaries has any material Liabilities or obligations either direct or indirect, matured or unmatured, absolute, contingent or otherwise that exceed $5,000, which:

 

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(a)

will not be set forth in the Priveco Financial Statements or have not heretofore been paid or discharged;

(b)

did not arise in the regular and ordinary course of business under any agreement, contract, commitment, lease or plan specifically disclosed in writing to Pubco; or

(c)

have not been incurred in amounts and pursuant to practices consistent with past business practice, in or as a result of the regular and ordinary course of its business since the date of the last Priveco Financial Statements

3.13	Tax Matters.

(a)

As of the date hereof:

(i)

each of Priveco and its subsidiaries has timely filed all tax returns in connection with any Taxes which are required to be filed on or prior to the date hereof, taking into account any extensions of the filing deadlines which have been validly granted to Priveco or its subsidiaries, and

(ii)

all such returns are true and correct in all material respects;

(b)

each of Priveco and its subsidiaries has paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof, and has established an adequate reserve therefore on its balance sheets for those Taxes not yet due and payable, except for any Taxes the non-payment of which will not have a Priveco Material Adverse Effect;

(c)

neither Priveco nor any of its subsidiaries is presently under or has received notice of, any contemplated investigation or audit by regulatory or governmental agency of body or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof;

(d)

all Taxes required to be withheld on or prior to the date hereof from employees for income Taxes, social security Taxes, unemployment Taxes and other similar withholding Taxes have been properly withheld and, if required on or prior to the date hereof, have been deposited with the appropriate governmental agency; and

(e)

to the best knowledge of Priveco, the Priveco Financial Statements will contain full provision for all Taxes including any deferred Taxes that may be assessed to Priveco or its subsidiaries for the accounting period ended on the Priveco Accounting Date or for any prior period in respect of any transaction, event or omission occurring, or any profit earned, on or prior to the Priveco Accounting Date or for any profit earned by Priveco on or prior to the Priveco Accounting Date or for which Priveco is accountable up to such date and all contingent Liabilities for Taxes have been provided for or disclosed in the Priveco Financial Statements.

3.14	Absence of Changes.  Since the Priveco Accounting Date, neither Priveco nor any of its subsidiaries has:

 

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(a)

incurred any Liabilities, other than Liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any Liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any Liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties;

(b)

sold, encumbered, assigned or transferred any material fixed assets or properties except for ordinary course business transactions consistent with past practice;

(c)

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material assets or properties of Priveco or its subsidiaries to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever;

(d)

made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

(e)

declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares or equity securities;

(f)

suffered any damage, destruction or loss, whether or not covered by insurance, that materially and adversely effects its business, operations, assets, properties or prospects;

(g)

suffered any material adverse change in its business, operations, assets, properties, prospects or condition (financial or otherwise);

(h)

received notice or had knowledge of any actual or threatened labour trouble, termination, resignation, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations, assets, properties or prospects;

(i)

made commitments or agreements for capital expenditures or capital additions or betterments exceeding in the aggregate $5,000;

(j)

other than in the ordinary course of business, increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its employees or directors or made any increase in, or any addition to, other benefits to which any of its employees or directors may be entitled;

 

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(k)

entered into any transaction other than in the ordinary course of business consistent with past practice; or

(l)

agreed, whether in writing or orally, to do any of the foregoing.

3.15	Absence of Certain Changes or Events.  Since the Priveco Accounting Date, there will have not been:

(a)

a Priveco Material Adverse Effect; or

(b)

any material change by Priveco in its accounting methods, principles or practices.

3.16

Subsidiaries.  Priveco does not have any subsidiaries or agreements of any nature to acquire any subsidiary or to acquire or lease any other business operations.  Each subsidiary of Priveco is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to own, lease and to carry on its business as now being conducted.  Each subsidiary of Priveco is duly qualified to do business and is in good standing as a corporation in each of the jurisdictions in which Priveco owns property, leases property, does business, or is otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the business of Priveco and its subsidiaries taken as a whole.  Priveco owns all of the shares of each subsidiary of Priveco and there are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements, or commitments obligating any subsidiary of Priveco to issue any additional common shares of such subsidiary, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire from any subsidiary of Priveco any shares of such subsidiary.

3.17	Certain Transactions.  Neither Priveco nor any of its subsidiaries is a guarantor or indemnitor of any indebtedness of any third party, including any person, firm or corporation.

3.18

Completeness of Disclosure.  No representation or warranty by Priveco in this Agreement nor any certificate, schedule, statement, document or instrument furnished or to be furnished to Pubco pursuant hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not materially misleading.

4.	REPRESENTATIONS AND WARRANTIES OF Pubco

Pubco represents and warrants to Priveco and the Selling Shareholder and acknowledges that Priveco and the Selling Shareholder are relying upon such representations and warranties in connection with the execution, delivery and performance of this Agreement, notwithstanding any investigation made by or on behalf of Priveco or the Selling Shareholder, as follows:

4.1

Organization and Good Standing.  Pubco is duly incorporated, organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to own, lease and to carry on its business as now being conducted.  Pubco is qualified to do business and is in good standing as a foreign corporation in each of the jurisdictions in which it owns property, leases property, does business, or is otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the businesses, operations, or financial condition of Pubco.

 

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4.2

Authority.  Pubco has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “Pubco Documents”) to be signed by Pubco and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of each of the Pubco Documents by Pubco and the consummation by Pubco of the transactions contemplated hereby have been duly authorized by its board of directors and no other corporate or shareholder proceedings on the part of Pubco is necessary to authorize such documents or to consummate the transactions contemplated hereby.  This Agreement has been, and the other Pubco Documents when executed and delivered by Pubco as contemplated by this Agreement will be, duly executed and delivered by Pubco and this Agreement is, and the other Pubco Documents when executed and delivered by Pubco, as contemplated hereby will be, valid and binding obligations of Pubco enforceable in accordance with their respective terms, except:

(a)

as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;

(b)

as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and

(c)

as limited by public policy.

4.3

Capitalization.  The entire authorized capital stock and other equity securities of Pubco consists One (1) Share of Series A Preferred Stock of Iconic Brands, Inc.  held by Richard DeCicco (the “Pubco Preferred Stock”) and 100,000,000 shares of common stock with a par value of $0.001 (the “Pubco Common Stock”).  The reverse split of the Pubco Common Stock became effective on April 11, 2014. All of the issued and outstanding shares of Pubco Preferred Stock and Pubco Common Stock have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to pre-emptive rights and were issued in full compliance with all federal, state, and local laws, rules and regulations.  Except as contemplated by this Agreement, there are no outstanding options, warrants, subscriptions, phantom shares, conversion rights, or other rights, agreements, or commitments obligating Pubco to issue any additional shares of Pubco Preferred Stock or Pubco Common Stock, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire from Pubco any shares of Pubco Preferred Stock or Pubco Common Stock as of the date of this Agreement.  There are no agreements purporting to restrict the transfer of the Pubco Preferred Stock or Pubco Common Stock, no voting agreements, voting trusts, or other arrangements restricting or affecting the voting of the Pubco Preferred Stock or Pubco Common Stock.

 

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4.4

Settlement Shares. On February 4, 2014, Pubco entered into a Settlement Agreement and Release (the “Settlement Agreement”) with Equity Markets Advisory, Inc. (“EMA”), pursuant to which Pubco will issue shares of common stock to EMA not to exceed an amount equal to 21,538,461 shares under the Settlement Agreement pursuant to Section 3(a)(10) of the Securities Act (the “Settlement Shares”). As of the date hereof, a total of 5,073,332 shares of common stock has been issued to EMA and/or its affiliates as Settlement Shares.

4.5

Conversion Shares. In March and April 2014, Pubco issued certain 9% convertible promissory notes (the “Notes”) to certain accredited investors for an aggregate principal amount of $205,000.  Such Notes shall be converted into 4,136,000 shares and for the conversion of the May 2012 Asher Enterprises, Inc. Note (“Asher Note”) Pubco will issue 8,000,000 shares (collectively the “Conversion Shares”) of common stock of Pubco prior to Closing of the Transaction.  Accordingly, with the Conversion of the Conversion Shares and Asher Note, there will be no outstanding debt, whatsoever in the Pubco and/or Mergersub.

4.6	Directors and Officers of Pubco.  The duly elected or appointed directors and the duly appointed officers of Pubco are as listed on Schedule 4.

4.7

Corporate Records of Pubco.  The corporate records of Pubco, as required to be maintained by it pursuant to the laws of the State of Nevada, are accurate, complete and current in all material respects, and the minute book of Pubco is, in all material respects, correct and contains all material records required by the law of the State of Nevada in regards to all proceedings, consents, actions and meetings of the shareholders and the board of directors of Pubco.

4.8	Non-Contravention.  Neither the execution, delivery and performance of this Agreement, nor the consummation of the Transaction, will:

(a)

conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the material properties or assets of Pubco under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Pubco or any of its material property or assets;

(b)

violate any provision of the applicable incorporation or charter documents of Pubco; or

(c)

violate any order, writ, injunction, decree, statute, rule, or regulation of any court or governmental or regulatory authority applicable to Pubco or any of its material property or assets.

 

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4.9

Validity of Pubco Common Stock Issuable upon the Transaction.  The Pubco Shares to be issued to the Selling Shareholder upon consummation of the Transaction in accordance with this Agreement will, upon issuance, have been duly and validly authorized and, when so issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable.

4.10

Actions and Proceedings.  To the best knowledge of Pubco, there is no claim, charge, arbitration, grievance, action, suit, investigation or proceeding by or before any court, arbiter, administrative agency or other governmental authority now pending or, to the best knowledge of Pubco, threatened against Pubco which involves any of the business, or the properties or assets of Pubco that, if adversely resolved or determined, would have a material adverse effect on the business, operations, assets, properties, prospects or conditions of Pubco taken as a whole (a “Pubco Material Adverse Effect”).  There is no reasonable basis for any claim or action that, based upon the likelihood of its being asserted and its success if asserted, would have such a Pubco Material Adverse Effect.

4.11	Compliance.

(a)

To the best knowledge of Pubco, Pubco is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance, regulation, rule, decree or other applicable regulation to the business or operations of Pubco;

(b)

To the best knowledge of Pubco, Pubco is not subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would constitute a Pubco Material Adverse Effect;

(c)

Pubco has duly filed all reports and returns required to be filed by it with governmental authorities and has obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement.  All of such permits and consents are in full force and effect, and no proceedings for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or to the best knowledge of Pubco, threatened, and none of them will be affected in a material adverse manner by the consummation of the Transaction; and

(d)

Pubco has operated in material compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to its business.  Pubco has not received any notice of any violation thereof, nor is Pubco aware of any valid basis therefore.

4.12

Filings, Consents and Approvals.  No filing or registration with, no notice to and no permit, authorization, consent, or approval of any public or governmental body or authority or other person or entity is necessary for the consummation by Pubco of the Transaction contemplated by this Agreement to continue to conduct its business after the Closing Date in a manner which is consistent with that in which it is presently conducted.

 

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4.13	Absence of Undisclosed Liabilities.  Pubco has no material Liabilities or obligations either direct or indirect, matured or unmatured, absolute, contingent or otherwise, which:

(a)

did not arise in the regular and ordinary course of business under any agreement, contract, commitment, lease or plan specifically disclosed in writing to Priveco; or

(b)

have not been incurred in amounts and pursuant to practices consistent with past business practice, in or as a result of the regular and ordinary course of its business.

4.14	Tax Matters.

(a)

As of the date hereof:

(i)

Pubco has timely filed all tax returns in connection with any Taxes which are required to be filed on or prior to the date hereof, taking into account any extensions of the filing deadlines which have been validly granted to them, and

(ii)

all such returns are true and correct in all material respects;

(b)

Pubco has paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof;

(c)

Pubco is not presently under and has not received notice of, any contemplated investigation or audit by the Internal Revenue Service or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof; and

(d)

All Taxes required to be withheld on or prior to the date hereof from employees for income Taxes, social security Taxes, unemployment Taxes and other similar withholding Taxes have been properly withheld and, if required on or prior to the date hereof, have been deposited with the appropriate governmental agency.

4.15	Absence of Changes.  Except as contemplated in this Agreement, Pubco has not:

(a)

incurred any Liabilities, other than Liabilities incurred in the ordinary course of business consistent with past practice, or discharged or satisfied any lien or encumbrance, or paid any Liabilities, other than in the ordinary course of business consistent with past practice, or failed to pay or discharge when due any Liabilities of which the failure to pay or discharge has caused or will cause any material damage or risk of material loss to it or any of its assets or properties;

(b)

sold, encumbered, assigned or transferred any material fixed assets or properties;

 

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(c)

created, incurred, assumed or guaranteed any indebtedness for money borrowed, or mortgaged, pledged or subjected any of the material assets or properties of Pubco to any mortgage, lien, pledge, security interest, conditional sales contract or other encumbrance of any nature whatsoever;

(d)

made or suffered any amendment or termination of any material agreement, contract, commitment, lease or plan to which it is a party or by which it is bound, or cancelled, modified or waived any substantial debts or claims held by it or waived any rights of substantial value, other than in the ordinary course of business;

(e)

declared, set aside or paid any dividend or made or agreed to make any other distribution or payment in respect of its capital shares or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or acquire any of its capital shares or equity securities;

(f)

suffered any damage, destruction or loss, whether or not covered by insurance, that materially and adversely effects its business, operations, assets, properties or prospects;

(g)

suffered any material adverse change in its business, operations, assets, properties, prospects or condition (financial or otherwise);

(h)

received notice or had knowledge of any actual or threatened labor trouble, termination, resignation, strike or other occurrence, event or condition of any similar character which has had or might have an adverse effect on its business, operations, assets, properties or prospects;

(i)

made commitments or agreements for capital expenditures or capital additions or betterments exceeding in the aggregate $5,000;

(j)

other than in the ordinary course of business, increased the salaries or other compensation of, or made any advance (excluding advances for ordinary and necessary business expenses) or loan to, any of its employees or directors or made any increase in, or any addition to, other benefits to which any of its employees or directors may be entitled;

(k)

entered into any transaction other than in the ordinary course of business consistent with past practice; or

(l)

agreed, whether in writing or orally, to do any of the foregoing.

4.16	Absence of Certain Changes or Events.  There has not been:

(a)

a Pubco Material Adverse Effect; or

(b)

any material change by Pubco in its accounting methods, principles or practices.

 

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4.17	Subsidiaries.  Except as disclosed in this Agreement, Pubco does not have any subsidiaries or agreements of any nature to acquire any subsidiary or to acquire or lease any other business operations.

4.18	Personal Property.  There are no material equipment, furniture, fixtures and other tangible personal property and assets owned or leased by Pubco.

4.19	Employees and Consultants.  Pubco does not have any employees or consultants.

4.20

Material Contracts and Transactions.  Other than as expressly contemplated by this Agreement, there are no material contracts, agreements, licenses, permits, arrangements, commitments, instruments, understandings or contracts, whether written or oral, express or implied, contingent, fixed or otherwise, to which Pubco is a party except as disclosed in writing to Priveco.

4.21	No Brokers.  Pubco has not incurred any obligation or liability to any party for any brokerage fees, agent’s commissions, or finder’s fees in connection with the Transaction contemplated by this Agreement.

4.22

Completeness of Disclosure.  No representation or warranty by Pubco in this Agreement nor any certificate, schedule, statement, document or instrument furnished or to be furnished to Priveco pursuant hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not materially misleading.

5.	CLOSING CONDITIONS

5.1

Conditions Precedent to Closing by Pubco.  The obligation of Pubco to consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date mutually agreed upon by the parties hereto in writing and in accordance with Section 10.6.  The Closing of the Transaction contemplated by this Agreement will be deemed to mean a waiver of all conditions to Closing.  These conditions precedent are for the benefit of Pubco and may be waived by Pubco in its sole discretion.

(a)

Representations and Warranties.  The representations and warranties of Priveco and the Selling Shareholder set forth in this Agreement shall be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and Priveco shall have delivered to Pubco a certificate dated as of the Closing Date, to the effect that the representations and warranties made by Priveco in this Agreement are true and correct.

(b)

Performance.  All of the covenants and obligations that Priveco and the Selling Shareholder are required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been performed and complied with in all material respects.

(c)

Transaction Documents.  This Agreement, the Priveco Documents, the Priveco Financial Statements and all other documents necessary or reasonably required to consummate the Transaction, all in form and substance reasonably satisfactory to Pubco, shall have been executed and delivered to Pubco.

 

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(d)

No Material Adverse Change.  No Priveco Material Adverse Effect will have occurred since the date of this Agreement.

(e)

No Action.  No suit, action, or proceeding will be pending or threatened which would:

(i)

prevent the consummation of any of the transactions contemplated by this Agreement; or

(ii)

cause the Transaction to be rescinded following consummation.

(f)

Outstanding Shares. Priveco shall have no more than Two (2) shares of Priveco LLC Interests issued and outstanding on the Closing Date.

(g)

Due Diligence Generally.  Pubco and its solicitors shall be reasonably satisfied with their due diligence investigation of Priveco that is reasonable and customary in a transaction of a similar nature to that contemplated by the Transaction.

5.2

Conditions Precedent to Closing by Priveco.  The obligation of Priveco and the Selling Shareholder to consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date mutually agreed upon by the parties hereto in writing and in accordance with Section 10.6.  The Closing of the Transaction will be deemed to mean a waiver of all conditions to Closing.  These conditions precedent are for the benefit of Priveco and the Selling Shareholder and may be waived by Priveco and the Selling Shareholder in their discretion.

(a)

Representations and Warranties.  The representations and warranties of Pubco set forth in this Agreement shall be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and Pubco will have delivered to Priveco a certificate dated the Closing Date, to the effect that the representations and warranties made by Pubco in this Agreement are true and correct.

(b)

Performance.  All of the covenants and obligations that Pubco are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.  Pubco must have delivered each of the documents required to be delivered by it pursuant to this Agreement.

(c)

Transaction Documents.  This Agreement, the Pubco Documents and all other documents necessary or reasonably required to consummate the Transaction, all in form and substance reasonably satisfactory to Priveco, will have been executed and delivered by Pubco.

 

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(d)

Trading in the Pubco Common Stock shall not have been suspended by any trading market at any time since the date of execution of this Agreement, and the Pubco Common Stock shall have been at all times since such date listed for trading on a trading market.

(e)

There shall not be any outstanding obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due) of the Pubco or the MergerSub, whether or not known to the Pubco or the MergerSub, as of the Closing.

(f)

No Material Adverse Change.  No Pubco Material Adverse Effect will have occurred since the date of this Agreement.

(g)

No Action.  No suit, action, or proceeding will be pending or threatened before any governmental or regulatory authority wherein an unfavorable judgment, order, decree, stipulation, injunction or charge would:

(i)

prevent the consummation of any of the transactions contemplated by this Agreement; or

(ii)

cause the Transaction to be rescinded following consummation.

(h)

Outstanding Shares.  On the Closing Date, not including the Pubco Shares issuable to the Selling Shareholder, Pubco shall have no more than 40,000,000 common shares issued and outstanding in the capital of Pubco, assuming all the Settlement Shares are issued.

(i)

Conversion of Notes. The Notes shall have been converted into shares of common stock of the Pubco on or prior to Closing.

(j)

Due Diligence.  Priveco and the Selling Shareholder shall have completed their legal, accounting and business due diligence of the Pubco and MergerSub and the results thereof shall be satisfactory to the Priveco and the Selling Shareholder in their sole and absolute discretion.

6.	ADDITIONAL COVENANTS OF THE PARTIES

6.1

Notification of Financial Liabilities.  Priveco and Pubco will immediately notify the other in accordance with Section 10.6 hereof, if either party receives any advice or notification from its independent certified public accounts that the other party has used any improper accounting practice that would have the effect of not reflecting or incorrectly reflecting in the books, records, and accounts of such party, any properties, assets, Liabilities, revenues, or expenses. Notwithstanding any statement to the contrary in this Agreement, this covenant will survive Closing and continue in full force and effect.

 

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6.2	Access and Investigation.  Between the date of this Agreement and the Closing Date, Priveco, on the one hand, and Pubco, on the other hand, will cause each of their respective representatives to:

(a)

afford the other and its representatives full and free access to its personnel, properties, assets, contracts, books and records, and other documents and data;

(b)

furnish the other and its representatives with copies of all such contracts, books and records, and other existing documents and data as required by this Agreement and as the other may otherwise reasonably request; and

(c)

furnish the other and its representatives with such additional financial, operating, and other data and information as the other may reasonably request.

All of such access, investigation and communication by a party and its representatives will be conducted during normal business hours and in a manner designed not to interfere unduly with the normal business operations of the other party.  Each party will instruct its auditors to co-operate with the other party and its representatives in connection with such investigations.

6.3

Confidentiality.  All information regarding the business of Priveco including, without limitation, financial information that Priveco provides to Pubco during Pubco’s due diligence investigation of Priveco will be kept in strict confidence by Pubco and will not be used (except in connection with due diligence), dealt with, exploited or commercialized by Pubco or disclosed to any third party (other than Pubco’s professional accounting and legal advisors) without the prior written consent of Priveco.  If the Transaction contemplated by this Agreement does not proceed for any reason, then upon receipt of a written request from Priveco, Pubco will immediately return to Priveco (or as directed by Priveco) any information received regarding Priveco’s business.  Likewise, all information regarding the business of Pubco including, without limitation, financial information that Pubco provides to Priveco during its due diligence investigation of Pubco will be kept in strict confidence by Priveco and will not be used (except in connection with due diligence), dealt with, exploited or commercialized by Priveco or disclosed to any third party (other than Priveco’s professional accounting and legal advisors) without Pubco’s prior written consent.  If the Transaction contemplated by this Agreement does not proceed for any reason, then upon receipt of a written request from Pubco, Priveco will immediately return to Pubco (or as directed by Pubco) any information received regarding Pubco’s business.

6.4

Notification.  Between the date of this Agreement and the Closing Date, each of the parties to this Agreement will promptly notify the other parties in writing if it becomes aware of any fact or condition that causes or constitutes a material breach of any of its representations and warranties as of the date of this Agreement, if it becomes aware of the occurrence after the date of this Agreement of any fact or condition that would cause or constitute a material breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition.  Should any such fact or condition require any change in the Schedules relating to such party, such party will promptly deliver to the other parties a supplement to the Schedules specifying such change.  During the same period, each party will promptly notify the other parties of the occurrence of any material breach of any of its covenants in this Agreement or of the occurrence of any event that may make the satisfaction of such conditions impossible or unlikely.

 

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6.5

Exclusivity.  Until such time, if any, as this Agreement is terminated pursuant to this Agreement, Priveco and Pubco will not, directly or indirectly, solicit, initiate, entertain or accept any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any person or entity relating to any transaction involving the sale of the business or assets (other than in the ordinary course of business), or any of the capital stock of Priveco or Pubco, as applicable, or any merger, consolidation, business combination, or similar transaction other than as contemplated by this Agreement.

6.6

Conduct of Priveco and Pubco Business Prior to Closing.  From the date of this Agreement to the Closing Date, and except to the extent that Pubco otherwise consents in writing, Priveco will operate its business substantially as presently operated and only in the ordinary course and in compliance with all applicable laws, and use its best efforts to preserve intact its good reputation and present business organization and to preserve its relationships with persons having business dealings with it.  Likewise, from the date of this Agreement to the Closing Date, and except to the extent that Priveco otherwise consents in writing, Pubco will operate its business substantially as presently operated and only in the ordinary course and in compliance with all applicable laws, and use its best efforts to preserve intact its good reputation and present business organization and to preserve its relationships with persons having business dealings with it.

6.7	Certain Acts Prohibited – Priveco.  Except as expressly contemplated by this Agreement or for purposes in furtherance of this Agreement, between the date of this Agreement and the Closing Date, Priveco will not, without the prior written consent of Pubco:

(a)

amend its Certificate of Organization, Articles of Organization or other formation documents;

(b)

incur any liability or obligation other than in the ordinary course of business or encumber or permit the encumbrance of any properties or assets of Priveco except in the ordinary course of business;

(c)

dispose of or contract to dispose of any Priveco property or assets, including the Intellectual Property Assets, except in the ordinary course of business consistent with past practice;

(d)

issue, deliver, sell, pledge or otherwise encumber or subject to any lien any  Priveco LLC Interests, or any rights, warrants or options to acquire, any such Units;

6.8	Certain Acts Prohibited - Pubco.  Except as expressly contemplated by this Agreement, between the date of this Agreement and the Closing Date, Pubco will not, without the prior written consent of Priveco:

 

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(a)

incur any liability or obligation or encumber or permit the encumbrance of any properties or assets of Pubco except in the ordinary course of business consistent with past practice;

(b)

dispose of or contract to dispose of any Pubco property or assets except in the ordinary course of business consistent with past practice;

(c)

declare, set aside or pay any dividends on, or make any other distributions in respect of the Pubco Common Stock; or

(d)

materially increase benefits or compensation expenses of Pubco, increase the cash compensation of any director, executive officer or other key employee or pay any benefit or amount to any such person.

6.9

Public Announcements.  Pubco and Priveco each agree that they will not release or issue any reports or statements or make any public announcements relating to this Agreement or the Transaction contemplated herein without the prior written consent of the other party, except as may be required upon written advice of counsel to comply with applicable laws or regulatory requirements after consulting with the other party hereto and seeking their reasonable consent to such announcement.

6.10

Pubco Directors and Officers.  The current director of Pubco shall appoint certain officers from Priveco as officers of Pubco on the Closing Date. In addition, the current director of Pubco shall resign from all officer and director positions (both of the Pubco and the MergerSub) and the Pubco’s board of directors shall be authorized to consist of two individuals, all of whom shall have been designated by Priveco immediately prior to the Closing Date. The names of the directors and officers after the Closing is set forth on Schedule 4.

6.11	No Consolidations.  For a period of 12 months from the Closing Date, Pubco agrees not to undertake any consolidations, or reverse splits, of Pubco Common Stock unless approved in writing by all parties to this Agreement.

7.

CLOSING

7.1

Closing.  The Closing shall take place on the Closing Date at the offices of the lawyers for Pubco or at such other location as agreed to by the parties.  Notwithstanding the location of the Closing, each party agrees that the Closing may be completed by the exchange of undertakings between the respective legal counsel for Priveco and Pubco, provided such undertakings are satisfactory to each party’s respective legal counsel.

7.2	Closing Deliveries of Priveco and the Selling Shareholder.  At Closing, Priveco and the Selling Shareholder will deliver or cause to be delivered the following, fully executed and in the form and substance reasonably satisfactory to Pubco:

 

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(a)

copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of Priveco evidencing approval of this Agreement and the Transaction;

(b)

if any of the Selling Shareholder appoint any person, by power of attorney or equivalent, to execute this Agreement or any other agreement, document, instrument or certificate contemplated by this agreement, on behalf of the Selling Shareholder, a valid and binding power of attorney or equivalent from such Selling Shareholder;

(c)

share certificates, if issued, representing the Priveco LLC Interests;

(d)

all certificates and other documents required by Section 5.1 of this Agreement;

(e)

the Priveco Documents and any other necessary documents, each duly executed by Priveco, as required to give effect to the Transaction; and

(f)

copies of all agreements and arrangements required by Section 6.11 of this Agreement.

7.3	Closing Deliveries of Pubco.  At Closing, Pubco will deliver or cause to be delivered the following, fully executed and in the form and substance reasonably satisfactory to Priveco:

(a)

copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of Pubco and MergerSub evidencing approval of this Agreement and the Transaction;

(b)

all certificates and other documents required by Section 5.2 of this Agreement;

(c)

all certificates, stock powers, and other documents required for the cancellation or consolidation of a sufficient amount of Pubco common shares to comply with Section 5.2(h) herein;

(d)

resolutions and resignations required to effect the changes in directors and officers stipulated by Section 6.10 of this Agreement;

(e)

the Pubco Documents and any other necessary documents, each duly executed by Pubco, as required to give effect to the Transaction.

7.4	Delivery of Financial Statements.  Prior to the Closing Date, Priveco shall have delivered to Pubco the Priveco Financial Statements, for the fiscal years ended December 31, 2012 and December 31, 2013.

7.5	Additional Closing Delivery of Pubco.  At Closing, Pubco shall deliver or cause to be delivered to Selling Shareholder the share certificates representing the Pubco Shares.

8.	TERMINATION

8.1	Termination.  This Agreement may be terminated at any time prior to the Closing Date contemplated hereby by:

 

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(a)

mutual agreement of Pubco and Priveco;

(b)

Pubco, if there has been a material breach by Priveco or any of the Selling Shareholder of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of Priveco or the Selling Shareholder that is not cured, to the reasonable satisfaction of Pubco, within ten business days after notice of such breach is given by Pubco (except that no cure period will be provided for a breach by Priveco or the Selling Shareholder that by its nature cannot be cured);

(c)

Priveco, if there has been a material breach by Pubco of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of Pubco that is not cured by the breaching party, to the reasonable satisfaction of Priveco, within ten business days after notice of such breach is given by Priveco (except that no cure period will be provided for a breach by Pubco that by its nature cannot be cured);

(d)

Pubco or Priveco, if the Transaction is not closed by June 15, 2014, unless the parties hereto agree to extend such date in writing; or

(e)

Pubco or Priveco if any permanent injunction or other order of a governmental entity of competent authority preventing the consummation of the Transaction contemplated by this Agreement has become final and non‑appealable.

8.2

Effect of Termination.  In the event of the termination of this Agreement as provided in Section 8.1, this Agreement will be of no further force or effect, provided, however, that no termination of this Agreement will relieve any party of liability for any breaches of this Agreement that are based on a wrongful refusal or failure to perform any obligations.

9.	INDEMNIFICATION, REMEDIES, SURVIVAL

9.1

Certain Definitions.  For the purposes of this Section 9, the terms “Loss” and “Losses” mean any and all demands, claims, actions or causes of action, assessments, losses, damages, Liabilities, costs, and expenses, including without limitation, interest, penalties, fines and reasonable attorneys, accountants and other professional fees and expenses, but excluding any indirect, consequential or punitive damages suffered by Pubco or Priveco including damages for lost profits or lost business opportunities.

9.2

Agreement of Priveco to Indemnify. Priveco will indemnify, defend, and hold harmless, to the full extent of the law, Pubco and its shareholders from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by Pubco and its shareholders by reason of, resulting from, based upon or arising out of:

(a)

the breach by Priveco of any representation or warranty of Priveco contained in or made pursuant to this Agreement, any Priveco Document or any certificate or other instrument delivered pursuant to this Agreement; or

 

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(b)

the breach or partial breach by Priveco of any covenant or agreement of Priveco made in or pursuant to this Agreement, any Priveco Document or any certificate or other instrument delivered pursuant to this Agreement.

9.3

Agreement of the Priveco to Indemnify.  The Priveco will indemnify, defend, and hold harmless, to the full extent of the law, Pubco and its shareholders from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by Pubco and its shareholders by reason of, resulting from, based upon or arising out of:

(a)

any breach by the Priveco of Section 2.2 of this Agreement; or

(b)

any misstatement, misrepresentation or breach of the representations and warranties made by the Priveco contained in or made pursuant to the Certificate executed by the Priveco or its nominee as part of the share exchange procedure of this Agreement.

9.4

Agreement of Pubco to Indemnify.  Pubco will indemnify, defend, and hold harmless, to the full extent of the law, Priveco and the Selling Shareholder from, against, for, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by Priveco and the Selling Shareholder by reason of, resulting from, based upon or arising out of:

(a)

the breach by Pubco of any representation or warranty of Pubco contained in or made pursuant to this Agreement, any Pubco Document or any certificate or other instrument delivered pursuant to this Agreement; or

(b)

the breach or partial breach by Pubco of any covenant or agreement of Pubco made in or pursuant to this Agreement, any Pubco Document or any certificate or other instrument delivered pursuant to this Agreement.

10.	MISCELLANEOUS PROVISIONS

10.1

Effectiveness of Representations; Survival.  Each party is entitled to rely on the representations, warranties and agreements of each of the other parties and all such representation, warranties and agreement will be effective regardless of any investigation that any party has undertaken or failed to undertake.  Unless otherwise stated in this Agreement, and except for instances of fraud, the representations, warranties and agreements will survive the Closing Date and continue in full force and effect until one (1) year after the Closing Date.

10.2

Further Assurances.  Each of the parties hereto will co-operate with the others and execute and deliver to the other parties hereto such other instruments and documents and take such other actions as may be reasonably requested from time to time by any other party hereto as necessary to carry out, evidence, and confirm the intended purposes of this Agreement.

10.3	Amendment.  This Agreement may not be amended except by an instrument in writing signed by each of the parties.

 

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10.4

Expenses.  Pubco will bear all costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby, including the legal fees for the Priveco, all fees and expenses of agents, representatives and accountants; provided that Pubco and Priveco will bear its respective accounting and auditing costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby.

10.5

Entire Agreement.  This Agreement, the schedules attached hereto and the other documents in connection with this transaction contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior arrangements and understandings, both written and oral, expressed or implied, with respect thereto.  Any preceding correspondence or offers are expressly superseded and terminated by this Agreement.

10.6

Notices.  All notices and other communications required or permitted under to this Agreement must be in writing and will be deemed given if sent by personal delivery, faxed with electronic confirmation of delivery, internationally-recognized express courier or registered or certified mail (return receipt requested), postage prepaid, to the parties at the addresses (or at such other address for a party as will be specified by like notice) on the first page of this Agreement.

All such notices and other communications will be deemed to have been received:

(a)

in the case of personal delivery, on the date of such delivery;

(b)

in the case of a fax, when the party sending such fax has received electronic confirmation of its delivery;

(c)

in the case of delivery by internationally-recognized express courier, on the business day following dispatch; and

(d)

in the case of mailing, on the fifth business day following mailing.

10.7	Headings.  The headings contained in this Agreement are for convenience purposes only and will not affect in any way the meaning or interpretation of this Agreement.

10.8	Benefits.  This Agreement is and will only be construed as for the benefit of or enforceable by those persons party to this Agreement.

10.9	Assignment.  This Agreement may not be assigned (except by operation of law) by any party without the consent of the other parties.

10.10

Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed therein.

10.11

Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

 

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10.12

Gender.  All references to any party will be read with such changes in number and gender as the context or reference requires.

10.13

Business Days.  If the last or appointed day for the taking of any action required or the expiration of any rights granted herein shall be a Saturday, Sunday or a legal holiday in the State of New York, then such action may be taken or right may be exercised on the next succeeding day which is not a Saturday, Sunday or such a legal holiday.

10.14

Counterparts.  This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

10.15

Fax Execution.  This Agreement may be executed by delivery of executed signature pages by fax and such fax execution will be effective for all purposes.

10.16

Schedules and Exhibits.  The schedules and exhibits are attached to this Agreement and incorporated herein.

[REMAINDER INTENTIONALLY BLANK.  SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.

ICONIC BRANDS, INC.

MJ BUSINESS ACADEMY, INC., a Subsidiary of ICONIC BRANDS, INC.


By:  /s/ Richard DeCicco
Authorized Signatory
Name: Richard DeCicco
Title: President

MEDICAL MARIJUANA BUSINESS ACADEMY, LLC
By:  /s/ Phillip Stark		By:  /s/ Charles Houghton
Authorized Signatory		Authorized Signatory
Name: Phillip Stark  Title:   Managing Member		Name: Charles Houghton Title:  Managing Member

 

 

PHILLIP  STARK		CHARLES HOUGHTON
By:  /s/ Phillip Stark		By:  /s/ Charles Houghton
Managing Member		Managing Member

 

RICHARD DECICCO

as Controlling Shareholder of ICONIC BRANDS, INC.

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THIS AGREEMENT is made effective as of the 9th day of April, 2015 by and between ICONIC BRANDS, INC., a Nevada corporation with an address at 44 Seabro Avenue, Amityville, New York 11701 (“ICNB”)  MJ BUSINESS ACADEMY, INC., a Nevada private corporation with an address at 44 Seabro Avenue, Amityville, New York 11701, which is a wholly owned subsidiary of ICNB (“MergerSub”),  MEDICAL MARIJUANA BUSINESS ACADEMY, LLC, a Colorado limited liability company with an address at 332 East Colorado Avenue, Colorado Springs CO 80903 (“Priveco”), PHILLIP STARK AND CHARLES HOUGHTON, as managing members of Priveco (collectively, the “Selling Shareholder”), and RICHARD DECICCO.

RECITALS

E.	On September 10, 2014, the Parties entered into a Share Exchange Agreement under which Priveco became a wholly owned subsidiary of ICNB, and under which Phillip Stark and Charles Houghton became majority shareholders, and officers and directors in ICNB.

F.	On September 10, 2014, under the terms of the Share Exchange Agreement, Richard DeCicco resigned from his position as sole officer and director of ICNB and MergerSub, and those positions were accepted by Mr. Houghton and Mr. Stark.

G.	On September 10, 2014, under the terms of the Share Exchange Agreement, Richard DeCicco transferred his ownership of the One (1) Share of Series A Preferred Stock in ICNB to Mr. Houghton and Mr. Stark, such that each owned ½.

H.

On the date of the Share Exchange Agreement ICNB issued a total of Sixty Million (60,000,000) shares (the “Shares”) of its common stock to Mr. Houghton and Mr. Stark, as consideration for the purchase by MergerSub of all of the issued and outstanding LLC Interests held by MergerSub in Priveco (the “Transaction”); and

I.

Upon the terms and subject to the conditions set forth in this Unwind Agreement, Mr. Houghton and Mr. Stark as Managing Members of Priveco have agreed to unwind the Transaction, such that they will return the Common Shares to ICNB, return the Preferred Stock to Mr. DeCicco, and resign from their respective officer and director positions with ICNB and MergerSub, in exchange for the return by ICNB of all of the issued and outstanding LLC Interests of Priveco which were held by MergerSub prior to the Share Exchange Agreement.

J.

Immediately upon the Closing of this Agreement, Mr. Houghton and Mr. Stark will once again own all of the LLC Interests in MEDICAL MARIJUANA BUSINESS ACADEMY, LLC, and the ICNB Common Shares shall be returned to Treasury, and thereafter cancelled and extinguished by ICNB’s Transfer Agent, such that there shall be 60,000,000 fewer shares of ICNB common stock issued and outstanding.

K.	Immediately upon the Closing of this Agreement, following the return of the Preferred Stock to Richard DeCicco, Mr. DeCicco shall assume all officer and director positions in ICNB and MergerSub left vacant by the departure of Mr. Houghton and Mr. Stark.

 

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L.

It is the intention of the parties that: (i) the Transaction shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) the issuance of the Shares shall be exempted from registration or qualification under the Securities Act; and

THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:

unwind

Offer, Purchase and Sale of Shares.  Subject to the terms and conditions of this Agreement, MergerSub hereby covenants and agrees to sell, assign and transfer to Mr. Houghton and Mr. Stark, all of the Priveco LLC Interests held by MergerSub. Mr. Houghton and Mr. Stark covenant and agree to sell, assign, and transfer to ICNB the 60,000,000 Shares of ICNB Common Stock, subject to any convertible notes and/or agreements set forth in Paragraph 1.5 below.  In addition, all outstanding preferred stock in the ICNB, which consists only of One (1) Share of Series A Preferred Stock of Iconic Brands, Inc. held collectively by Charles Houghton and Phillip Stark shall be returned to Richard DeCicco, at Closing.

Delivery of Stock Certificates and Stock Powers.  Island Stock Transfer has not issued certificates to Mr. Houghton and Mr. Stark for the Common Stock and Preferred Stock, which are currently held in book entry.  At Closing, Mr. Houghton and Mr. Stark shall deliver to ICNB  signed and medallion guaranteed stock powers to the Transfer Agent’s satisfaction in order to cancel and/or transfer title to the Common Stock and Preferred Stock.   No LLC Interest certificates were issued for Priveco, such that this Agreement shall serve to document the transfer of LLC Interests in Priveco from ICNB and MergerSub back to Mr. Houghton and Mr. Stark, and no certificates for such LLC Interests need be cancelled or reissued to Mr. Houghton and Mr. Stark.

No Further Ownership Rights.  Upon Closing, Mr. Houghton and Mr. Stark shall cease to own any rights to any warrants or future equity claims in ICNB or MergerSub.   Likewise, upon Closing, no party affiliated in any way with ICNB or MergerSub shall have any right to warrants or future equity claims in Priveco.

Closing Date.  The Closing shall take place, subject to the terms and conditions of this Agreement, on the Closing Date.

Waiver of Rights/Acknowledgment of Obligations.  Between the date of execution of the Share Exchange Agreement and the date of this Unwind Agreement, Mergersub entered into the agreements set forth below.

(i).

MergerSub, Priveco entered into an Intellectual Property Agreement with Brilliant Direct, LLC.  The Brilliant Direct Agreement was for the benefit of Priveco, with no benefit to ICONIC and/or MergerSub.  Mr. DeCicco, ICONIC and MergerSub hereby waive any and all rights that they may have in or to any agreement(s) with Brilliant Direct, LLC and the parties acknowledge and agree that after the Closing, Priveco shall be entitled to any and all benefits, royalty and/or any other payments flowing from Brilliant Direct, LLC, its agents, affiliates and/or associated companies.

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(ii).

Mr. DeCicco, ICONIC and MergerSub also acknowledge that ICONIC and/or MergerSub entered into a Convertible Note with Sable Ridge Special Equity Fund, LP.  ICONIC agrees to honor the terms of that Convertible Note.

(iii).

MMJBA, LLC agrees to repay the $125,000.00 non-refundable investment to ICONIC by way of a promissory note, bearing one percent( 1%) percent interest, payable over ten (10) years at the rate of $1,095.05 per month, commencing June 5, 2015.  The promissory note will be made payable to ICONIC and will be in form and content as set forth on Exhibit A, attached hereto and incorporated herein by this reference.

REPRESENTATIONS AND WARRANTIES OF Priveco AND MERGERSUB

Capitalization of Priveco.  The entire authorized capital stock and other equity securities of Priveco consist of Two (2) LLC Interests with no par value per share.  These Two (2) LLC Interests were transferred to MergerSub upon the Closing of the Transaction.

Title and Authority of MergerSub. MergerSub is the registered and beneficial owner of and has good and marketable title to all of the Priveco LLC Interests held by it and will hold such free and clear of all liens, charges and encumbrances whatsoever; and such Priveco LLC Interests held by MergerSub have been duly and validly issued and are fully paid and non-assessable.  MergerSub has due and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the registered, legal and beneficial title and ownership of all of the Priveco LLC Interest held by it to Mr. Houghton and Mr. Stark at Closing.

REPRESENTATIONS AND WARRANTIES OF ICNB

ICNB represents and warrants to Priveco and MergerSub and acknowledges that Priveco and MergerSub are relying upon such representations and warranties in connection with the execution, delivery and performance of this Agreement, notwithstanding any investigation made by or on behalf of Priveco or MergerSub, as follows:

Organization and Good Standing.  ICNB is duly incorporated, organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to own, lease and to carry on its business as now being conducted.  ICNB is qualified to do business and is in good standing as a foreign corporation in each of the jurisdictions in which it owns property, leases property, does business, or is otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the businesses, operations, or financial condition of ICNB.

Authority.  ICNB has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “ICNB Documents”) to be signed by ICNB and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of each of the ICNB Documents by ICNB and the consummation by ICNB of the transactions contemplated hereby have been duly authorized by its board of directors and no other corporate or shareholder proceedings on the part of ICNB is necessary to authorize such documents or to consummate the transactions contemplated hereby.  This Agreement has been, and the other ICNB Documents when executed and delivered by ICNB as contemplated by this Agreement will be, duly executed and delivered by ICNB and this Agreement is, and the other ICNB Documents when executed and delivered by ICNB, as contemplated hereby will be, valid and binding obligations of ICNB enforceable in accordance with their respective terms, except:

 

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as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;

as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and

as limited by public policy.

Capitalization.  The entire authorized capital stock and other equity securities of ICNB consists One (1) Share of Series A Preferred Stock of Iconic Brands, Inc. held by Mr. Houghton and Mr. Stark (each holding a ½ share) (the “ICNB Preferred Stock”) and 100,000,000 shares of common stock with a par value of $0.001 (the “ICNB Common Stock”).  The reverse split of the ICNB Common Stock became effective on April 11, 2014. All of the issued and outstanding shares of ICNB Preferred Stock and ICNB Common Stock have been duly authorized, are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to pre-emptive rights and were issued in full compliance with all federal, state, and local laws, rules and regulations.  There are no outstanding options, warrants, subscriptions, phantom shares, conversion rights, or other rights, agreements, or commitments obligating ICNB to issue any additional shares of ICNB Preferred Stock or ICNB Common Stock, or any other securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire from ICNB any shares of ICNB Preferred Stock or ICNB Common Stock as of the date of this Agreement.  There are no agreements purporting to restrict the transfer of the ICNB Preferred Stock or ICNB Common Stock, no voting agreements, voting trusts, or other arrangements restricting or affecting the voting of the ICNB Preferred Stock or ICNB Common Stock.

CLOSING CONDITIONS

Conditions Precedent to Closing by ICNB.  The obligation of ICNB to consummate the Unwind is subject to the satisfaction or written waiver of the conditions set forth below.  The Closing of the Unwind contemplated by this Agreement will be deemed to mean a waiver of all conditions to Closing.  These conditions precedent are for the benefit of ICNB and may be waived by ICNB in its sole discretion.

 

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Representations and Warranties.  The representations and warranties of Priveco and MergerSub set forth in this Agreement shall be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and Priveco shall have delivered to ICNB a certificate dated as of the Closing Date, to the effect that the representations and warranties made by Priveco in this Agreement are true and correct.

Performance.  All of the covenants and obligations that Priveco and MergerSub are required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been performed and complied with in all material respects.

Unwind Documents.  This Agreement and all other documents necessary or reasonably required to consummate the Unwind, all in form and substance reasonably satisfactory to ICNB, shall have been executed and delivered to ICNB.

Conditions Precedent to Closing by Priveco.  The obligation of Priveco and MergerSub to consummate the Unwind is subject to the satisfaction or written waiver of the conditions set forth below.  The Closing of the Unwind will be deemed to mean a waiver of all conditions to Closing.  These conditions precedent are for the benefit of Priveco and MergerSub and may be waived by Priveco and MergerSub in their discretion.

Representations and Warranties.  The representations and warranties of ICNB set forth in this Agreement shall be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and ICNB will have delivered to Priveco a certificate dated the Closing Date, to the effect that the representations and warranties made by ICNB in this Agreement are true and correct.

Performance.  All of the covenants and obligations that ICNB are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.  ICNB must have delivered each of the documents required to be delivered by it pursuant to this Agreement.

Unwind Documents.  This Agreement and all other documents necessary or reasonably required to consummate the Unwind, all in form and substance reasonably satisfactory to Priveco, will have been executed and delivered by ICNB.

ADDITIONAL COVENANTS OF THE PARTIES

Confidentiality of Priveco Business.  All information regarding the business of Priveco including, without limitation, financial information that Priveco provided to ICNB during ICNB’s due diligence investigation of Priveco will be kept in strict confidence by ICNB and will not be used (except in connection with due diligence), dealt with, exploited or commercialized by ICNB or disclosed to any third party (other than ICNB’s professional accounting and legal advisors) without the prior written consent of Priveco.

 

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Confidentiality of Transaction and Unwind.  ICNB is a public company and the dissemination of material non-public information about the Transaction or the Unwind, other than such broad statements as shall be included in any pre-approved press releases made public by ICNB or Priveco may violate certain Securities and Exchange Commission (“SEC”) regulations governing such information.  Such “confidential information” related to the Transactions specifically includes the share structure, the transfer of the Control Block, any name change, symbol change, timing of Closing, any language in this Agreement, any language in the Share Exchange Agreement or the Closing documents and in general anything other than that information which is agreed to be presented and has already been made public in a press release or in the Company’s OTCMarkets.com filings.  Unwittingly releasing knowledge of any of these elements of the transaction could provide someone with what may be construed later as “insider information."

Notification.  Between the date of this Agreement and the Closing Date, each of the parties to this Agreement will promptly notify the other parties in writing if it becomes aware of any fact or condition that causes or constitutes a material breach of any of its representations and warranties as of the date of this Agreement, if it becomes aware of the occurrence after the date of this Agreement of any fact or condition that would cause or constitute a material breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition.  Should any such fact or condition require any change in the Schedules relating to such party, such party will promptly deliver to the other parties a supplement to the Schedules specifying such change.  During the same period, each party will promptly notify the other parties of the occurrence of any material breach of any of its covenants in this Agreement or of the occurrence of any event that may make the satisfaction of such conditions impossible or unlikely.

Certain Acts Prohibited - ICNB.  Except as expressly contemplated by this Agreement, between the date of this Agreement and the Closing Date, ICNB will not, without the prior written consent of Priveco:

incur any liability or obligation or encumber or permit the encumbrance of any properties or assets of ICNB except in the ordinary course of business consistent with past practice;

dispose of or contract to dispose of any ICNB property or assets except in the ordinary course of business consistent with past practice;

declare, set aside or pay any dividends on, or make any other distributions in respect of the ICNB Common Stock; or

materially increase benefits or compensation expenses of ICNB, increase the cash compensation of any director, executive officer or other key employee or pay any benefit or amount to any such person.

Public Announcements.  ICNB and Priveco each agree that they will not release or issue any reports or statements or make any public announcements relating to this Agreement or the Transaction contemplated herein without the prior written consent of the other party, except as may be required upon written advice of counsel to comply with applicable laws or regulatory requirements after consulting with the other party hereto and seeking their reasonable consent to such announcement.

 

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ICNB Directors and Officers.  Mr. Houghton and Mr. Stark shall appoint Richard DeCicco as an officer and director of ICNB and MergerSub on the Closing Date. Following that appointment, Mr. Houghton and Mr. Stark shall resign from all officer and director positions (both of ICNB and the MergerSub).

Indemnification by Priveco, Houghton and Stark.  Priveco, will indemnify, defend, and hold harmless, to the full extent of the law, Pubco and its shareholders from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by Pubco and its shareholders by reason of, resulting from, based upon or arising out of the breach by Priveco of any representation or warranty of Priveco contained in or made pursuant to this Agreement, any Priveco Document or any certificate or other instrument delivered pursuant to this Agreement; or the breach or partial breach by Priveco of any covenant or agreement of Priveco made in or pursuant to this Agreement, any Priveco Document or any certificate or other instrument delivered pursuant to this Agreement.

Indemnification by Pubco.  Pubco will indemnify, defend, and hold harmless, to the full extent of the law, Priveco and its members, including Mr. Houghton and Mr. Stark, from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by Priveco and its members by reason of, resulting from, based upon or arising out of the breach by Pubco of any representation or warranty of Pubco contained in or made pursuant to this Agreement, any Pubco Document or any certificate or other instrument delivered pursuant to this Agreement; or the breach or partial breach by Pubco of any covenant or agreement of Pubco made in or pursuant to this Agreement, any Pubco Document or any certificate or other instrument delivered pursuant to this Agreement.

CLOSING

Closing.  The Closing shall take place on the Closing Date at the offices of the lawyers for ICNB or at such other location as agreed to by the parties.  Notwithstanding the location of the Closing, each party agrees that the Closing may be completed by the exchange of undertakings between the respective legal counsel for Priveco and ICNB, provided such undertakings are satisfactory to each party’s respective legal counsel.

 

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Closing Deliveries of Priveco and MergerSub.  At Closing, Priveco and MergerSub will deliver or cause to be delivered the following, fully executed and in the form and substance reasonably satisfactory to ICNB:

copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of Priveco evidencing approval of this Agreement and the Unwind;

if any of MergerSub appoint any person, by power of attorney or equivalent, to execute this Agreement or any other agreement, document, instrument or certificate contemplated by this agreement, on behalf of MergerSub, a valid and binding power of attorney or equivalent from such Selling Shareholder;

share certificates, if issued, representing the Priveco LLC Interests;

the Priveco Documents and any other necessary documents, each duly executed by Priveco, as required to give effect to the Unwind.

Closing Deliveries of ICNB.  At Closing, ICNB will deliver or cause to be delivered the following, fully executed and in the form and substance reasonably satisfactory to Priveco:

copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of ICNB and MergerSub evidencing approval of this Agreement and the Unwind;

all stock powers, and other documents required for the cancellation of the 60,000,000 ICNB common shares and the transfer of the Preferred Stock;

resolutions and resignations required to effect the changes in directors and officers;

any other necessary documents, each duly executed by ICNB and/or MergerSub, as required to give effect to the Unwind.

MISCELLANEOUS PROVISIONS

Effectiveness of Representations; Survival.  Each party is entitled to rely on the representations, warranties and agreements of each of the other parties and all such representation, warranties and agreement will be effective regardless of any investigation that any party has undertaken or failed to undertake.  Unless otherwise stated in this Agreement, and except for instances of fraud, the representations, warranties and agreements will survive the Closing Date and continue in full force and effect until one (1) year after the Closing Date.

Further Assurances.  Each of the parties hereto will co-operate with the others and execute and deliver to the other parties hereto such other instruments and documents and take such other actions as may be reasonably requested from time to time by any other party hereto as necessary to carry out, evidence, and confirm the intended purposes of this Agreement.

Amendment.  This Agreement may not be amended except by an instrument in writing signed by each of the parties.

Expenses.  Each party will bear their own costs incurred in connection with the preparation, execution and performance of this Agreement and the Unwind.

Entire Agreement.  This Agreement, the schedules attached hereto and the other documents in connection with this transaction contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior arrangements and understandings, both written and oral, expressed or implied, with respect thereto.  Any preceding correspondence or offers are expressly superseded and terminated by this Agreement.

 

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Notices.  All notices and other communications required or permitted under to this Agreement must be in writing and will be deemed given if sent by personal delivery, faxed with electronic confirmation of delivery, internationally-recognized express courier or registered or certified mail (return receipt requested), postage prepaid, to the parties at the addresses (or at such other address for a party as will be specified by like notice) on the first page of this Agreement.

All such notices and other communications will be deemed to have been received:

in the case of personal delivery, on the date of such delivery;

in the case of a fax, when the party sending such fax has received electronic confirmation of its delivery;

in the case of delivery by internationally-recognized express courier, on the business day following dispatch; and

in the case of mailing, on the fifth business day following mailing.

Headings.  The headings contained in this Agreement are for convenience purposes only and will not affect in any way the meaning or interpretation of this Agreement.

Benefits.  This Agreement is and will only be construed as for the benefit of or enforceable by those persons party to this Agreement.

Assignment.  This Agreement may not be assigned (except by operation of law) by any party without the consent of the other parties.

Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed therein.

Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

Gender.  All references to any party will be read with such changes in number and gender as the context or reference requires.

Business Days.  If the last or appointed day for the taking of any action required or the expiration of any rights granted herein shall be a Saturday, Sunday or a legal holiday in the State of New York, then such action may be taken or right may be exercised on the next succeeding day which is not a Saturday, Sunday or such a legal holiday.

Counterparts.  This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

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Fax Execution.  This Agreement may be executed by delivery of executed signature pages by fax and such fax execution will be effective for all purposes.

Schedules and Exhibits.  The schedules and exhibits are attached to this Agreement and incorporated herein.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.

ICONIC BRANDS, INC.

MJ BUSINESS ACADEMY, INC., a Subsidiary of ICONIC BRANDS, INC.


By: /s/ Phillip Stark
Authorized Signatory
Name: Phillip Stark
Title: President

RICHARD DECICCO

 

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SECURITIES EXCHANGE AGREEMENT

 

This Securities Exchange Agreement (this “Agreement”) is dated as of May 15, 2015, by and among the members of BiVi LLC, Nevada limited liability company (the “Company”)(collectively referred to as the Seller”), and Iconic Brands, Inc.  (“Iconic”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), the Seller desires to transfer to Iconic, and Iconic desires to acquire from Seller membership interests in the Company representing fifty-one percent (51%) of the issued and outstanding membership interests (the “Majority Interest”), as more fully described in this Agreement.

 

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 Sellers and the Purchaser agree as follows:

 

ARTICLE I
DEFINITIONS

 

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 144.  

“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Closing” means the closing of the transfer of the Majority Interest pursuant to Section 2.1.

 

“Closing Date” means the Business Day when this Agreement has been executed and delivered by the applicable parties thereto, and all conditions precedent to the Parties’ obligations to transfer the Majority Interest have been satisfied.

  

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

  

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

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“Preferred Stock” means newly designated Series C Convertible Preferred Stock issued by Iconic as consideration to Seller, the form of certificate of designation of which is set forth as Exhibit A attached hereto.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Working Capital Facility” means a working capital advance to the Company in the aggregate amount of up to $750,000.00.

ARTICLE II
PURCHASE AND SALE

 

 

 

(a)  At each Closing the Seller shall deliver to Iconic:

 

(i)  this Agreement duly executed by the Seller; and

 

(ii)  certificate(s) evidencing the Majority Interest registered in the name of Iconic.

 

(b)  At the Closing Iconic shall deliver or cause to be delivered to the Seller the following:

 

(i)  this Agreement duly executed by Iconic; and

 

(ii) 1,000 shares of Preferred Stock as set forth on Schedule A; and

(iii) 1,000,000 shares of restricted common stock.

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(c)  All representations and warranties of the other party contained herein shall remain true and correct as of the Closing Date and all covenants of the other party shall have been performed if due prior to such date.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

 

 

 

 

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3.2          Representations and Warranties of Iconic.  Iconic represents and warrants as of the date hereof and as of the Closing Date as follows:

 

 

  

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ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

 

 

 

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. 

 

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ARTICLE V
MISCELLANEOUS

 

 

 

 

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(Signature Page Follows)

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

ICONIC BRANDS, INC

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