ASSET PURCHASE AGREEMENT
Exhibit 10.5
EXECUTION VERSION
This ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of May 12, 2021 (the “Agreement Date”), by and among BWSC, LLC, a California limited liability company (the “Buyer”), Natural Merchants, Inc., an Oregon corporation (the “Seller”), and Xxxxxx Xxxxx, an individual and sole shareholder of the Seller (the “Owner”). Each of the Seller, the Buyer, and the Owner are sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties.”
WHEREAS, the Buyer is a wholly-owned subsidiary of Winc, Inc., a Delaware corporation (“Winc”), and Winc will have contributed to Buyer immediately prior to the Closing five hundred seventy-one thousand four hundred twenty-eight (571,428) shares of Winc Series F Preferred Stock, par value $0.0001 per share (the “Winc Preferred Shares”);
NOW, THEREFORE, in consideration of the covenants and representations set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
Article I
DEFINITIONS
(a) “Accounting Principles” shall mean the accounting principles, methods and practices used in preparing the Annual Financial Statements.
(b) “Action” shall mean any civil, criminal, or administrative action, claim, suit, demand, charge, citation, reexamination, opposition, interference, decree, injunction, mediation, hearing, notice of violation, demand letter, litigation, proceeding, labor dispute, arbitral action, governmental or other audit, inquiry, criminal prosecution, investigation, unfair labor practice charge, or complaint.
(c) “Adjustment Escrow Account” shall have the meaning set forth in Section 2.04.
(d) “Adjustment Escrow Amount” shall mean one hundred sixty thousand dollars ($160,000).
(e) “Affiliate” shall mean (i) with respect to any non-natural Person, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person and (ii), with respect to any individual, (A) family members of such individual, by blood, adoption, or marriage, (B) such individual’s spouse or ex-spouse, and (C) any Person that is directly or indirectly under the control of any of the foregoing individuals. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by,” and under “common control with”) means the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership of voting securities, by Contract, or otherwise.
(f) “Agreement” shall have the meaning set forth in the preamble to this Agreement.
(g) “Agreement Date” shall have the meaning set forth in the preamble to this Agreement.
(h) “Allocation” shall have the meaning set forth in Section 2.03.
(i) “Annual Financial Statements” has the meaning set forth in Section 3.11(a).
(j) “Anti-Corruption Laws” shall mean the U.S. Foreign Corrupt Practices Act of 1977 and any other anti-corruption or anti-bribery Laws applicable to the Seller.
(k) “Arbitration Firm” shall have the meaning set forth in Section 2.05(c).
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(l) “Assigned Contracts” shall have the meaning set forth in Section 2.01(a).
(m) “Assumed Liabilities” shall have the meaning set forth in Section 2.02.
(n) “Basket” shall have the meaning set forth in Section 7.06.
(o) “Xxxx of Sale and Assignment and Assumption Agreement” shall have the meaning set forth in Section 6.02(c).
(p) “Business” shall mean the distribution, marketing, importation, and sale of wine and related products as conducted by the Seller as of the last twelve (12) months immediately prior to the Closing.
(q) “Business Day” shall mean any day other than a Saturday or Sunday or other day on which banks are required or authorized to close in Los Angeles, California.
(r) “Buyer” shall have the meaning set forth in the preamble to this Agreement.
(s) “Buyer Indemnified Parties” shall have the meaning set forth in Section 7.02.
(t) “Closing” shall have the meaning set forth in Section 6.01.
(u) “Closing Cash Payment” shall have the meaning set forth in Section 2.04.
(v) “Closing Date” shall have the meaning set forth in Section 6.01.
(w) “Closing Date Net Working Capital” shall mean the Net Working Capital as of 11:59 p.m. on the date immediately preceding the Closing Date.
(x) “Closing Date Statement” shall have the meaning set forth in Section 2.05(b).
(y) “Code” shall have the meaning set forth in Section 2.03.
(z) “Confidential Information” shall mean any and all technical, business and other information of, or relating to, the Business or the Purchased Assets that are not generally known to other Persons, whether or not constituting a trade secret, including technical or non-technical data, compositions, devices, methods, techniques, drawings, inventions, know-how, processes, financial data, financial plans, audit plans, lists of actual and potential customers or suppliers, information regarding acquisition and investment plans and strategies, business plans, or operations. Confidential Information includes any such information of Third Parties that Seller is obligated to or does keep or treat as confidential.
(aa) “Consulting Agreement” shall have the meaning set forth in Section 6.02(c).
(bb) “Contract” shall have the meaning set forth in Section 2.01(a).
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(cc) “COVID-19” means the diseases caused by SARS-CoV-2 virus or COVID-19, and any evolutions or mutations thereof or related and/or associated epidemics, pandemic or disease outbreaks.
(dd) “COVID-19 Effect” means any event, condition, state of facts, change, occurrence, circumstance or development related to: (a) the presence, transmission, threat or fear of COVID-19; or (b) any mandatory or advisory restriction, quarantine, “shelter in place,” “stay at home,” workforce reduction, remote or telework policy, social distancing, shut down, closure, sequester or other Law issued by any Governmental Body in connection with, or in response to, COVID-19.
(ee) “Current Assumed Liabilities” shall mean the current Assumed Liabilities of the Seller (consisting solely of the line item current Liabilities specified in the NWC Example), calculated using the methodologies set forth in the NWC Example.
(ff) “Current Purchased Assets” shall mean the current Purchased Assets of the Seller (consisting solely of the line item current assets specified in the NWC Example), calculated using the methodologies set forth in the NWC Example.
(gg) “Direct Claim” shall have the meaning set forth in Section 7.04(c).
(hh) “Disclosure Schedules” shall mean those disclosure schedules being delivered by the Seller on the date hereof and attached hereto as Exhibit A.
(ii) “Dispute Notice” shall have the meaning set forth Section 2.05(c).
(jj) “Earn-Out Objection Statement” shall have the meaning set forth in Section 2.06(f).
(kk) “Earn-Out Statements” shall have the meaning set forth in Section 2.06(d).
(ll) “Employee Benefit Plan” shall mean, with respect to any Person, each plan, fund, program, agreement, arrangement or scheme, including each plan, fund, program, agreement, arrangement or scheme maintained or required to be maintained under applicable Laws, that is at any time sponsored or maintained, or required to be sponsored or maintained, by such Person or to which such Person makes or has made, or has or has had an obligation to make, contributions providing benefits to the current and former employees, directors, managers, officers, consultants, independent contractors, contingent workers or leased employees of such Person or the dependents of any of them (whether written or oral), or with respect to which such Person has any liability or obligation, including (i) each deferred compensation, bonus, incentive compensation, pension, retirement, employee stock ownership, stock purchase, stock option, profit sharing or deferred profit sharing, stock appreciation, phantom stock plan and other equity compensation plan, “welfare” plan (within the meaning of Section 3(1) of ERISA, determined without regard to whether such plan is subject to ERISA); (ii) each “pension” plan (within the meaning of Section 3(2) of ERISA, determined without regard to whether such plan is either subject to ERISA or is tax-qualified under the Code); (iii) each severance plan or agreement, and each other plan providing health, vacation, supplemental unemployment benefits, hospitalization insurance, medical, dental, disability, life insurance, death or survivor benefits, fringe benefits or legal benefits; and (iv) each other employee benefit plan, fund, program, agreement, or arrangement.
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(mm) “Environmental Laws” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq.; the Toxic Substances Xxxxxxx Xxx, 00 X.X.X. §0000 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §6901 et seq.; the Clean Water Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq., and all other applicable Laws, in each case in effect as of the Agreement Date, relating to (i) pollution or the protection of the environment; (ii) human exposure to any Hazardous Material; (iii) worker health and safety; or (iv) the use, generation, storage, treatment, manufacture, distribution, transportation, processing, handling, disposal, or release of any Hazardous Material, petroleum, petroleum products, petroleum by-products, or breakdown products, radioactive materials, asbestos-containing materials or polychlorinated biphenyls, or any chemical, material, or substance defined or regulated as toxic or hazardous or as a pollutant, contaminant, or waste.
(nn) “Environmental Permits” shall mean any local, state, or federal permit, approval, identification number, certification, license, or other authorization required under, or issued pursuant to, any applicable Environmental Law.
(oo) “Equitable Exceptions” shall have the meaning set forth in Section 3.02.
(pp) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
(qq) “Escrow Agent” shall have the meaning set forth in Section 2.04.
(rr) “Escrow Agreement” shall have the meaning set forth in Section 6.02(c).
(ss) “Escrow Deficit” shall have the meaning set forth in Section 2.05(c)(iv).
(tt) “Estimated Closing Date Net Working Capital” shall have the meaning set forth in Section 2.05(a).
(uu) “Estimated Closing Statement” shall have the meaning set forth in Section 2.05(a).
(vv) “Estimated Purchase Price” shall have the meaning set forth in Section 2.05(a).
(ww) “Estimated Working Capital Decrease” shall mean the amount, if any, by which the Estimated Closing Date Net Working Capital is less than the Target Net Working Capital.
(xx) “Estimated Working Capital Increase” shall mean the amount, if any, by which the Estimated Closing Date Net Working Capital exceeds the Target Net Working Capital.
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(yy) “Excluded Assets” shall have the meaning set forth in Section 2.01.
(zz) “Excluded Liabilities” shall have the meaning set forth in Section 2.02.
(aaa) “Excluded Taxes” shall mean (i) all Taxes with respect to the Purchased Assets and the Business for a taxable period (or portion of a Straddle Period) ending on the Closing Date, and (ii) all Taxes of the Seller (excluding the Buyer’s portion of any Transfer Taxes for which the Buyer is liable in accordance with Section 9.02).
(bbb) “Expiration Date” shall have the meaning set forth in Section 8.01(e).
(ccc) “FDA” shall mean the United States Food and Drug Administration.
(ddd) “Final Purchase Price” shall have the meaning set forth in Section 2.05(c).
(eee) “Financial Statements” has the meaning set forth in Section 3.11(a).
(fff) “Fundamental Representations” shall have the meaning set forth in Section 7.01.
(ggg) “GAAP” means United States generally accepted accounting principles, consistently applied.
(hhh) “General Survival Date” shall have the meaning set forth in Section 7.01.
(iii) “Governmental Body” shall mean any: (i) nation, province, state, county, city, town, village, district, or other jurisdiction of any nature; (ii) federal, provincial, state, local, municipal, foreign, or other government; (iii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (iv) multi-national organization or body; or (v) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.
(jjj) “Hazardous Materials” shall mean (i) any chemical, material or substance that is defined as, or included in the definition of, “waste,” “recycled materials,” “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any applicable Environmental Law, (ii) any petroleum or petroleum products, diesel fuel, gasoline, radioactive materials, acids, caustics, asbestos, urea formaldehyde foam insulation, transformers, or other equipment that contain dielectric fluid containing polychlorinated biphenyls, noise, odors, mold and radon gas; or (iii) any chemicals, materials or substances that are regulated by, or controlled pursuant to, any Environmental Laws.
(kkk) “Indebtedness” shall mean, without duplication and with respect to the Seller, whether or not contingent, all: (i) indebtedness for borrowed money; (ii) obligations for the deferred purchase price of property or services (other than Current Assumed Liabilities taken into account in the calculation of Net Working Capital), (iii) long or short-term obligations evidenced by notes, bonds, debentures or other similar instruments; (iv) obligations under any interest rate, currency swap, or other hedging agreement or arrangement; (v) capital lease obligations; (vi) reimbursement obligations under any letter of credit, banker’s acceptance or similar credit transactions; (vii) guarantees made by the Seller on behalf of any third party (including the Owner) in respect of obligations of the kind referred to in the foregoing clauses (i) through (vi); and (viii) any unpaid interest, prepayment penalties, premiums, costs and fees related to the obligations referred to in the foregoing clauses (i) through (vii).
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(lll) “Indemnification Escrow Account” shall have the meaning set forth in Section 2.04.
(mmm) “Indemnification Escrow Amount” shall mean one million dollars ($1,000,000.00).
(nnn) “Indemnified Party” shall mean a Buyer Indemnified Party or a Seller Indemnified Party, as the case may be, making a claim for indemnification under Article VII.
(ooo) “Indemnifying Party” shall mean a Party against whom a claim for indemnification is asserted under Article VII.
(ppp) “Indemnity Cap” shall have the meaning set forth in Section 7.05.
(qqq) “Initial Indemnity Release Amount” shall have the meaning set forth in Section 7.08.
(rrr) “Insurance Policies” shall have the meaning set forth in Section 3.26.
(sss) “Intellectual Property” shall mean any and all of the following in any jurisdiction throughout the world: (i) trademarks and service marks, including all applications and registrations and the goodwill connected with the use of, and symbolized by, the foregoing; (ii) copyrights, including all applications and registrations related to the foregoing; (iii) trade secrets and confidential know-how; (iv) patents and patent applications; (v) websites and internet domain name registrations; and (vi) other intellectual property and related proprietary rights, interests and protections (including all rights to xxx and recover and retain damages, costs and attorneys’ fees for past, present, and future infringement and any other rights relating to any of the foregoing).
(ttt) “Interim Balance Sheet” has the meaning set forth in Section 3.11(a).
(uuu) “Interim Balance Sheet Date” has the meaning set forth in Section 3.11(a).
(vvv) “Interim Financial Statements” has the meaning set forth in Section 3.11(a).
(www) “Interim Period” shall have the meaning set forth in Section 5.01.
(xxx) “IP Assignment Agreement” shall have the meaning set forth in Section 6.02(c).
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(yyy) “Knowledge” shall mean, with respect to the Seller, the actual or constructive knowledge of the Owner and Xxxxx Meroño Cerdán, after due inquiry.
(zzz) “Law” shall mean any law, statute, ordinance, regulation, rule, code, notice requirement, court decision, or agency guideline, of any foreign, federal, state, or local Governmental Body.
(aaaa) “Liabilities” shall mean any direct or indirect liability, Indebtedness, obligation, commitment, expense, claim, deficiency, guaranty, or endorsement of, or by, any Person of any type, known or unknown, and whether accrued, absolute, contingent, matured, unmatured, determined or undeterminable, on- or off-balance sheet, or otherwise.
(bbbb) “Lien” shall mean any mortgage, pledge, lien, charge, claim, security interest, adverse claims of ownership or use, restrictions on transfer, defect of title, or other encumbrance of any sort.
(cccc) “Losses” shall have the meaning set forth in Section 7.02.
(dddd) “Material Customer” shall have the meaning set forth in Section 3.19.
(eeee) “Material Supplier” shall have the meaning set forth in Section 3.19.
(ffff) “Net Working Capital” shall mean an amount (which may be a negative or positive number) in dollars equal to (a) the Current Purchased Assets minus (b) the Current Assumed Liabilities. For the avoidance of doubt, Net Working Capital shall be calculated prior to the application of purchase accounting and without taking into consideration the transactions contemplated by this Agreement.
(gggg) “Notice of Claim” shall have the meaning set forth in Section 7.04(c).
(hhhh) “NWC Example” shall mean the Net Working Capital illustration and the principles set forth on Exhibit B, determined according to the Accounting Principles.
(iiii) “Organizational Documents” shall mean, with respect to a Person, the charter, bylaws, limited liability company agreement, and other organizational documents of such Person, in each case, together with any amendments thereto.
(jjjj) “Outstanding Claim” shall have the meaning set forth in Section 7.08.
(kkkk) “Owner” shall have the meaning set forth in the preamble to this Agreement.
(llll) “Party” or “Parties” shall have the meaning set forth in the preamble to this Agreement.
(mmmm) “Performance Earn-Out Amounts” shall have the meaning set forth in Section 2.06(b).
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(nnnn) “Permit” shall have the meaning set forth in Section 2.01(d).
(oooo) “Permitted Liens” shall mean (i) Liens for Taxes not yet delinquent or being contested in good faith by appropriate proceedings and for which sufficient reserves have been established, (ii) statutory Liens (including materialmen’s, warehousemen’s, mechanic’s, repairmen’s, landlord’s, and other similar Liens) arising in the ordinary course of business securing payments not yet delinquent or being contested in good faith by appropriate proceedings and for which sufficient reserves have been established, and (iii) restrictive covenants, easements, and defects, imperfections or irregularities of title, if any, of a nature that do not materially and adversely affect the assets or properties subject thereto.
(pppp) “Person” shall mean any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, Governmental Body, or other entity.
(qqqq) “Personal Goodwill” shall have the meaning set forth in the recitals to this Agreement.
(rrrr) “Personal Goodwill Sale Agreement” shall have the meaning set forth in Section 6.02(c).
(ssss) “Preferred Financing Documents” shall mean, collectively, that certain Winc Seventh Amended and Restated Right of First Refusal and Co-Sale Agreement, effective April 6, 2021, that certain Winc Seventh Amended and Restated Voting Agreement, effective April 6, 2021, and that certain Winc Seventh Amended and Restated Investors’ Rights Agreement, effective April 6, 2021.
(tttt) “Product” shall mean product imported, sold, or delivered by the Seller in connection with the Business.
(uuuu) “Product Event” shall have the meaning set forth in Section 3.22.
(vvvv) “Property Taxes” shall have the meaning set forth in Section 9.01.
(wwww) “Purchase Price” shall have the meaning set forth in Section 2.04.
(xxxx) “Purchase Price Decrease” shall have the meaning set forth in Section 2.05(c)(iv).
(yyyy) “Purchase Price Increase” shall have the meaning set forth in Section 2.05(c)(iii).
(zzzz) “Purchased Assets” shall have the meaning set forth in Section 2.01.
(aaaaa) “Purchased IP” shall have the meaning set forth in Section 2.01(c).
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(bbbbb) “Regulatory Laws” shall mean the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.; the Federal Alcohol Xxxxxxxxxxxxxx Xxx, 00 X.X.X. §000 et seq.; the Federal Trade Commission Act, 15 U.S.C. §41 et seq.; the Organic Foods Production Act, 7 U.S.C. §6501-6524, the implementing regulations under the aforementioned statutes, and all other applicable Laws, in each case in effect as of the Agreement Date, relating to the development, testing, manufacturing, importation, distribution, labeling, advertising, or promotion of any Product.
(ccccc) “Release” shall mean any release, deposit, disposal, or leakage of any Hazardous Material at, into, upon, or under any land, water, or air, or otherwise into the environment, including, without limitation, by means of burial, disposal, discharge, emission, injection, spillage, leakage, seepage, leaching, dumping, pumping, pouring, escaping, emptying, placement, and the like.
(ddddd) “Restricted Business” shall mean the Business as conducted immediately prior to the Closing.
(eeeee) “Restricted Transfer” shall have the meaning set forth in Section 5.03.
(fffff) “Restriction Period” shall have the meaning set forth in Section 5.06(a).
(ggggg) “Review Period” shall have the meaning set forth in Section 2.05(c).
(hhhhh) “Sanctioned Person” shall mean any Person that is: (i) listed on any Sanctions-related list of designated or blocked persons; (ii) resident in, or organized under the Laws of, a country or territory that is the subject of comprehensive restrictive Sanctions (including Cuba, Iran, North Korea, Sudan, Syria, and the Crimea region of Ukraine); or (iii) majority-owned or controlled by any of the foregoing.
(iiiii) “Sanctions” shall mean economic or financial sanctions or trade embargoes imposed, administered, or enforced by: (i) the United States government, including those administered by the U.S. Department of the Treasury, Office of Foreign Assets Control; (ii) the European Union and implemented by its member States; (iii) the United Nations Security Council; or (iv) Her Majesty’s Treasury of the United Kingdom.
(jjjjj) “Satisfied Amount” shall have the meaning set forth in Section 2.05(c)(iv).
(kkkkk) “Securities Act” shall mean the Securities Act of 1933, as amended.
(lllll) “Seller” shall have the meaning set forth in the preamble to this Agreement.
(mmmmm) “Seller Benefit Plan” shall mean each Employee Benefit Plan sponsored or maintained, or required to be sponsored or maintained, at any time, by the Seller or any of its Affiliates or to which the Seller or any of its Affiliates makes or has made, or has or has had an obligation to make, contributions at any time, or with respect to which, the Seller or any of its Affiliates has any Liability or obligation.
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(nnnnn) “Seller Indemnified Parties” shall have the meaning set forth in Section 7.03.
(ooooo) “Seller Indemnifying Parties” shall have the meaning set forth in Section 7.02.
(ppppp) “Seller Lease” shall have the meaning set forth in Section 3.25.
(qqqqq) “Straddle Period” shall mean any Tax period beginning on or prior to the Closing Date and ending after the Closing Date.
(rrrrr) “Tangible Personal Property” shall have the meaning set forth in Section 2.01(b).
(sssss) “Target Net Working Capital” shall mean one million five hundred ninety thousand three hundred eighty-nine dollars ($1,590,389).
(ttttt) “Tax” or “Taxes” shall mean any U.S. federal, state, local or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, escheat, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
(uuuuu) “Tax Returns” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
(vvvvv) “Termination Fee Agreements” has the meaning set forth in Section 5.07.
(wwwww) “Third Party” or “Third Parties” shall mean any Person other than the Parties or their respective Affiliates.
(xxxxx) “Third-party Claim” shall have the meaning set forth in Section 7.04(a).
(yyyyy) “Total Merchandise Sales” shall mean, for a given period, the gross revenue, net of discounts, allowances, rebates, and returns, in respect of any and all SKUs sold by the Business during such period, whether such SKUs are (i) currently existing on the date hereof, (ii) disclosed on the Product roadmap that is set forth on Section 1.01(1) of the Disclosure Schedules, (iii) sourced/produced in the future from the Business’s suppliers as existing on the date hereof and disclosed on Section 1.01(2) of the Disclosure Schedules or (iv) are sourced/produced in the future from the Business’s future suppliers, so long as, at the time of purchase from any such supplier, (x) neither Buyer nor any of its Affiliates has previously purchased product from such supplier, currently purchases product from such supplier or is not in discussions with such supplier about a supplier arrangement and (y) the product purchased is in the natural, organic and/or biodynamic wine product category.
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(zzzzz) “Total Proceeds” shall have the meaning set forth in Section 2.04.
(aaaaaa) “Trade Laws” shall mean any applicable Sanctions, export controls, and import Laws applicable to the Seller, including: (i) the United States Export Administration Act and implementing Export Administration Regulations; (ii) the Arms Export Control Act and implementing International Traffic in Arms Regulations; and (iii) the regulations of the United States Customs and Border Protection.
(bbbbbb) “Transaction Agreements” shall mean the Escrow Agreement, the Xxxx of Sale and Assignment and Assumption Agreement, the IP Assignment Agreement, the Consulting Agreement, the Personal Goodwill Sale Agreement, and each other agreement, instrument, and/or certificate contemplated by this Agreement or such other agreements to be executed in connection with the transactions contemplated hereby or thereby.
(cccccc) “Transfer Taxes” shall have the meaning set forth in Section 9.02.
(dddddd) “Transferred Permits” shall have the meaning set forth in Section 2.01(d).
(eeeeee) “TTB” shall mean the United States Alcohol and Tobacco Tax and Trade Bureau and any predecessor or successor agency.
(ffffff) “Winc” shall have the meaning set forth in the recitals to this Agreement.
(gggggg) “Winc Preferred Shares” shall have the meaning set forth in the recitals to this Agreement.
(hhhhhh) “Wire Instructions” shall have the meaning set forth in Section 2.03.
(iiiiii) “Working Capital Decrease” shall mean the amount, if any, by which the Closing Date Net Working Capital is less than the Target Net Working Capital.
(jjjjjj) “Working Capital Increase” shall mean the amount, if any, by which the Closing Date Net Working Capital exceeds the Target Net Working Capital.
(kkkkkk) “2021 Base Amount” shall have the meaning set forth in Section 2.06(a).
(llllll) “2021 Earn-Out Period” shall mean the period commencing on May 1, 2021 and ending on April 30, 2022.
(mmmmmm) “2021 Earn-Out Statement” shall have the meaning set forth in Section 2.06(c).
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(nnnnnn) “2021 Natural Merchants Revenue” shall mean the Total Merchandise Sales, calculated in accordance with GAAP, for the 0000 Xxxx-Xxx Period.
(oooooo) “2021 Performance Earn-Out Amount” shall have the meaning set forth in Section 2.06(a).
(pppppp) “2022 Base Amount” shall have the meaning set forth in Section 2.06(b).
(qqqqqq) “2022 Earn-Out Period” shall mean the period commencing on May 1, 2022 and ending on April 30, 2023.
(rrrrrr) “2022 Earn-Out Statement” shall have the meaning set forth in Section 2.06(d).
(ssssss) “2022 Natural Merchants Revenue” shall mean the Total Merchandise Sales, calculated in accordance with GAAP, for the 2022 Earn-Out Period.
(tttttt) “2022 Performance Earn-Out Amount” shall have the meaning set forth in Section 2.06(b).
Article II
ASSIGNMENT AND TRANSFER AND CONSIDERATION
(a) all contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, licenses, franchises, leases, and other instruments or obligations of any kind, whether oral or written, and including any amendments and other modifications thereto (each, a “Contract”) of the Seller and/or the Business set forth on Section 2.01(a) of the Disclosure Schedules (each, an “Assigned Contract” and, collectively, the “Assigned Contracts”);
(b) all furniture, fixtures, office equipment, supplies, computers, telephones, and other tangible personal property, if any, set forth on Section 2.01(b) of the Disclosure Schedules (the “Tangible Personal Property”), together with all express or implied warranties by the manufacturers of each item of Tangible Personal Property, and all maintenance records and other documents, if any, relating thereto;
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(c) all Intellectual Property set forth on Section 2.01(c) of the Disclosure Schedules (the “Purchased IP”), including any Intellectual Property in development by Seller, used or intended for use in connection with any of the Business and/or the Purchased Assets and all variations thereof or uses of the same, and all trademark registrations and applications therefor, and the related goodwill;
(d) all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances, and similar rights obtained from Governmental Bodies regulating or otherwise having jurisdiction over beverage alcohol products used in the Business (each, a “Permit”) listed on Section 2.01(d) of the Disclosure Schedules (collectively, the “Transferred Permits”); and
(e) all inventory set forth on Section 2.01(e) of the Disclosure Schedules.
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Section 2.05. Purchase Price Adjustment.
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(i) If the Seller objects to the Buyer’s calculation of the Closing Date Net Working Capital, the Working Capital Increase or the Working Capital Decrease, as the case may be, or the resulting calculation of the Purchase Price, as set forth in the Closing Date Statement, then, within thirty (30) days after the delivery to the Seller of the Closing Date Statement (the “Review Period”), the Seller shall deliver to the Buyer a written notice (a “Dispute Notice”) describing, in reasonable detail, the Seller’s objections to the Buyer’s calculation of the amounts set forth in the Closing Date Statement and containing a statement setting forth the calculation of the Closing Date Net Working Capital, the Working Capital Increase or Working Capital Decrease, as the case may be, and the resulting calculation of the Purchase Price, in each case, determined by the Seller to be correct and calculated pursuant to the Accounting Principles. If the Seller does not deliver a Dispute Notice to the Buyer during the Review Period, then the Buyer’s calculation of the amounts set forth in the Closing Date Statement shall be binding and conclusive on the Parties.
(ii) If the Seller delivers a Dispute Notice, and if the Buyer and the Seller are unable to agree upon the calculation of the amounts set forth in the Closing Date Statement within fifteen (15) days after such Dispute Notice is delivered to the Buyer, then the Seller and the Buyer shall jointly engage the firm of Xxxxx Xxxxxxxx LLP (the “Arbitration Firm”) to resolve such dispute. Within five (5) days after the Arbitration Firm is appointed, the Buyer shall forward a copy of the Closing Date Statement to the Arbitration Firm, and the Seller shall forward a copy of the Dispute Notice to the Arbitration Firm, together with, in each case, all relevant supporting documentation. The Arbitration Firm’s role shall be limited to resolving such objections and determining the correct calculations to be used on only the disputed portions of the Closing Date Statement and the Arbitration Firm shall not make any other determination, including any determination as to whether any other items on the Closing Date Statement are correct or whether the Target Net Working Capital is correct. The Arbitration Firm shall not assign a value to any item greater than the greatest value for such item claimed by the Seller or the Buyer or less than the smallest value for such item claimed by the Seller or the Buyer and shall be limited to the selection of either the Seller’s or the Buyer’s position on a disputed item (or a position in between the positions of the Seller and the Buyer) based solely on presentations and supporting material provided by the Parties and not pursuant to any independent review. In resolving such objections, the Arbitration Firm shall apply the Accounting Principles and the provisions of this Agreement concerning the determination of the amounts set forth in the Closing Date Statement. The Arbitration Firm shall deliver to the Seller and the Buyer a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Arbitration Firm by the Seller and the Buyer) of the disputed items submitted to the Arbitration Firm within thirty (30) days of receipt of such disputed items. The determination by the Arbitration Firm of the disputed amounts and the Purchase Price shall be conclusive and binding on the Parties, absent manifest error. The Arbitration Firm shall act as an expert and not an arbitrator. The fees and expenses of the Arbitration Firm for such determination shall be borne by the Seller, on the one hand, and the Buyer, on the other hand, in inverse proportion to the manner in which such Person prevails on the items resolved by the Arbitration Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be computed by the Arbitration Firm at the time its determination of the items in dispute is rendered. For example, should the items in dispute total in amount to one thousand dollars ($1,000.00) and the Arbitration Firm awards six hundred dollars ($600.00) in favor of the Seller’s position, sixty percent (60%) of the costs and expenses of the Arbitration Firm would be borne by the Buyer and forty percent (40%) would be borne by the Seller. The Purchase Price, as finally determined pursuant to this Section 2.05(c), shall be referred to herein as the “Final Purchase Price.”
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(iii) If the Final Purchase Price exceeds the Estimated Purchase Price (the amount of any such excess, the “Purchase Price Increase”), then the Buyer shall, within five (5) Business Days following the final determination of the Final Purchase Price, pay the Seller the Purchase Price Increase, by wire transfer of immediately available funds in accordance with the Wire Instructions and the Buyer and the Seller shall jointly instruct the Escrow Agent to release to the Seller all amounts then held in the Adjustment Escrow Account in accordance with the Escrow Agreement, in each case by wire transfer of immediately available funds in accordance with the Wire Instructions.
(iv) If the Estimated Purchase Price exceeds the Final Purchase Price (the amount of such excess, the “Purchase Price Decrease”), then the Buyer and the Seller shall jointly instruct the Escrow Agent to release to the Buyer from the Adjustment Escrow Account an amount equal to the Purchase Price Decrease, and (x) if the Adjustment Escrow Amount exceeds the Purchase Price Decrease, the Buyer and the Seller shall also jointly instruct the Escrow Agent to release to the Seller the remaining balance in the Adjustment Escrow Account (after giving effect to the payment to the Buyer of the Purchase Price Decrease), or (y) if the Purchase Price Decrease exceeds the Adjustment Escrow Amount (the amount of such excess, an “Escrow Deficit”), then the Seller shall pay to the Buyer, within five (5) Business Days following the final determination of the Final Purchase Price, an amount equal to such Escrow Deficit, provided, that, the Buyer, at its sole discretion, may elect to have all or a portion of the Escrow Deficit satisfied from the Indemnification Escrow Amount, and if the Buyer so elects, the Buyer and the Seller shall jointly instruct the Escrow Agent to release from the Indemnification Escrow Account all or a portion of such Escrow Deficit to the Buyer (the amount of Escrow Deficit satisfied from the Indemnification Escrow Amount, the “Satisfied Amount”), all such payments contemplated by this Section 2.05(c)(iv) to be made to the Buyer shall be made by wire transfer of immediately available funds to the account designated by the Buyer; provided, that, in the event that the Buyer elects to have all or a portion of the Escrow Deficit satisfied from the Indemnification Escrow Amount, the Seller shall, within five (5) Business Days of the payment to Buyer from the Indemnification Escrow Account, pay to the Escrow Agent for deposit into the Indemnification Escrow Account an amount equal to the Satisfied Amount, by wire transfer of immediately available funds.
(v) If the Estimated Purchase Price equals the Final Purchase Price, then within five (5) Business Days following the final determination of the Final Purchase Price, the Buyer and the Seller shall jointly instruct the Escrow Agent to release to the Seller from the Adjustment Escrow Account an amount equal to the Adjustment Escrow Amount in accordance with the Escrow Agreement, by wire transfer of immediately available funds in accordance with the Wire Instructions.
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Section 2.06. Performance Earn-Outs.
(a) 2021 Performance Earn-Out. Subject to the terms and conditions set forth in this Section 2.06, as additional consideration for the transactions contemplated by this Agreement, the Seller shall be entitled to receive an amount (the “2021 Performance Earn-Out Amount”) calculated as follows: if the 2021 Natural Merchants Revenue is equal to, or greater than, six million seven hundred thousand dollars ($6,700,000.00) (the “2021 Base Amount”), then the 2021 Performance Earn-Out Amount shall be equal to the sum of (i) one million dollars ($1,000,000.00) and (ii) the product of (A) one million dollars ($1,000,000.00) and (B) the quotient of (x) the difference between the 2021 Natural Merchants Revenue and the 2021 Base Amount and (y) three million three hundred thousand dollars ($3,300,000.00); provided, that, in no event shall the 2021 Performance Earn-Out Amount exceed two million dollars ($2,000,000.00).
(c) Within thirty (30) days following the end of the 2021 Earn-Out Period, the Buyer shall (i) prepare a statement (the “2021 Earn-Out Statement”), signed by an officer of the Buyer, setting forth the Buyer’s calculations of 2021 Natural Merchants Revenue and the 2021 Performance Earn-Out Amount, together with reasonably detailed supporting documentation. The 2021 Earn-Out Statement and all amounts, determinations and calculations contained therein shall be prepared in accordance with the Accounting Principles and the definitions contained in this Agreement.
(d) Within thirty (30) days after the end of the 2022 Earn-Out Period, the Buyer shall (i) prepare a statement (the “2022 Earn-Out Statement” and, together with the 2021 Earn-Out Statement, the “Earn-Out Statements” and each, an “Earn-out Statement”), signed by an officer of the Buyer, setting forth the Buyer’s calculations of 2022 Natural Merchants Revenue and the 2022 Performance Earn-Out Amount, together with reasonably detailed supporting documentation. The 2022 Earn-Out Statement and all amounts, determinations, and calculations contained therein shall be prepared in accordance with the Accounting Principles and the definitions contained in this Agreement.
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(e) Following delivery of an Earn-Out Statement until the final resolution of the calculations set forth on such Earn-Out Statement, the Buyer shall provide the Seller, during normal business hours and upon reasonably advanced notice, reasonable access on a confidential basis to the books, work papers, and other supporting data of the Buyer solely for purposes of the Seller’s review of the calculations set forth in such Earn-Out Statement; provided, that, such access shall not unreasonably interfere with the operation of the business of Buyer, and such access shall be subject to any confidentiality obligations of Buyer and applicable Law.
(f) Following delivery of an Earn-Out Statement, the Seller shall have thirty (30) days to review such Earn-Out Statement. If the Seller has any objections to such Earn-Out Statement or any calculations set forth therein, the Seller shall deliver to the Buyer on or prior to the end of such thirty (30)-day period a written statement setting forth its objections thereto (with reasonable details regarding the nature and amount of each of its objections along with any calculations and supporting documents related to such objections) (each, an “Earn-Out Objection Statement”). In the event the Seller delivers an Earn-Out Objections Statement, for a thirty (30)-day period following such delivery, the Buyer and the Seller shall seek to resolve in good faith any differences that they may have with respect to any matter specified in such Earn-Out Objections Statement. If, following such thirty (30)-day period, the Seller and Buyer do not agree in writing to a resolution of any differences related to the Earn-Out Objections Statement, then determination of the remaining items in dispute shall be submitted to the Arbitration Firm. The Arbitration Firm will be directed to review such items in accordance with the dispute resolution procedures set forth in Section 2.05(c)(ii) as if they applied to the resolution of such objections mutatis mutandis. The resolution of the dispute by the Arbitration Firm will be final and binding on the Parties, absent manifest error. The fees and expenses of the Arbitration Firm shall be borne as specified in the procedures set forth in Section 2.05(c)(ii) of the Agreement as if they applied to the resolution of the objections pursuant to this Section 2.06 mutatis mutandis. If an Earn-Out Objections Statement is not delivered by the Seller within thirty (30) days after delivery by the Buyer of such Earn-Out Statement to the Seller, such Earn-Out Statement shall be final, binding, and non-appealable.
(g) In the event that a Performance Earn-Out Amount becomes payable to the Seller pursuant to this Section 2.06, then the Buyer shall make (or cause to be made) such payment by wire transfer of immediately available funds within five (5) Business Days after such amount has been finally determined in accordance with this Section 2.06 to the Seller. Notwithstanding the foregoing, to the extent required to comply with Section 409A of the Code, in all events the 2021 Performance Earn-Out Amount, if any, will be paid during the 2022 calendar year and the 2022 Performance Earn-out Amount, if any, will be paid during the 2023 calendar year.
(h) The Buyer shall have the right to operate the Business in the manner it deems appropriate after the Closing; provided, that, during the period from the Closing through and including the last day of the 2022 Earn-Out Period, the Buyer (i) will operate the Buyer in good faith in the ordinary course of business, (ii) will not take any action for the purpose of eliminating or reducing the payment of all or any portion of the Performance Earn-Out Amounts, it being understood that Buyer or Buyer’s Affiliates decisions made in good faith regarding future potential suppliers of the Business or the business of Buyer or Buyer’s Affiliates’ shall be deemed not to contravene this Section 2.06(h)(ii) and (iii) will maintain independent financial records for the Business separately from the consolidated records of the Buyer and its Affiliates for purposes of making the calculations used to determine the Performance Earn-Out Amounts; provided, further, that no actions taken by, or with the prior consent of, the Seller and/or the Owner following the Closing Date, shall be considered a breach of any of Buyer’s performance obligations set forth in this Section 2.06(h).
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(i) The Parties understand and agree that (i) the contingent rights to receive all or any portion of the Performance Earn-Out Amounts shall not be represented by any form of certificate or other instrument, are not assignable or otherwise transferable, except by operation of applicable Law relating to descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in the Buyer, (ii) the Seller shall not have any rights as a securityholder of the Buyer as a result of the Seller’s contingent right to receive the Performance Earn-Out Amounts, and (iii) no interest is payable with respect to all or any portion of the Performance Earn-Out Amounts.
Article III
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE OWNER
Except as set forth in the Disclosure Schedules, each of the Seller and the Owner, jointly and severally, represents and warrants to the Buyer, as of the Agreement Date and as of the Closing Date, or, if expressly made as of a specified date, as of such specified date, as follows:
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Section 3.03. Title to, and Sufficiency of, the Purchased Assets.
(a) The Seller has, and shall convey to the Buyer at the Closing, good, valid, transferable, and marketable title to, or valid leasehold interests in, all of the Purchased Assets, free and clear of all Liens, other than Permitted Liens.
(b) The Purchased Assets constitute all of the properties and assets (whether real, personal, or mixed and whether tangible or intangible) necessary and sufficient to permit the Buyer to conduct the Business, after the Closing, in accordance with the Seller’s past practices and as presently conducted, and planned to be conducted, by the Seller.
Section 3.06. Condition of Assets; Inventory.
(a) The items of Tangible Personal Property are in good condition, have been operated and maintained in accordance with industry standards, and are reasonably adequate for the uses to which they are currently being put and no such item of Tangible Personal Property is in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost.
(b) Seller’s inventory: (i) was acquired and is sufficient for the operation of the Business in the ordinary course consistent with past practice and (ii) is of a quality and quantity usable or saleable in the ordinary course of business.
Section 3.07. Intellectual Property and Privacy.
(a) Section 3.07(a) of the Disclosure Schedules lists all Purchased IP, including whether or not the Purchased IP is owned by Seller and, if not, the nature of the Seller’s license to such Purchased IP (e.g., exclusive or non-exclusive, fee structure, duration, and territory). For all registered Intellectual Property, including applications thereto, Section 3.07(a) of the Disclosure Schedules shall specify as to each, as applicable: the title, xxxx, or design; the record owner and inventor(s), if any; the jurisdiction by or in which it has been issued, registered, or filed; the registration and application serial number; the issue, registration, or filing date; and the current status.
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(b) The Seller owns or has adequate, valid, and enforceable rights to use all of the Purchased IP, free and clear of all Liens, other than Permitted Liens, and is not bound by any Law or other obligation materially restricting the Seller’s use of the Purchased IP.
(c) All required filings and fees related to the Seller’s registrations of Intellectual Property have been timely filed with and paid to the relevant Governmental Bodies and authorized registrars, and all such registrations are otherwise in good standing.
(d) The Seller is not bound by any outstanding judgment, injunction, order, or decree restricting the use of the Purchased IP or restricting the licensing thereof to any Person.
(e) The conduct of the Business has not and does not infringe, violate, dilute, or misappropriate the Intellectual Property rights of any Person and there are no claims pending or, to the Knowledge of the Seller, threatened by any Person with respect to the ownership, validity, enforceability, effectiveness, or use of the Purchased IP.
(f) To the Knowledge of the Seller, no Person is infringing, misappropriating, diluting, or otherwise violating any of the Purchased IP, and neither the Seller nor any Affiliate thereof has made or asserted any claim, demand, or notice against any Person alleging any such infringement, misappropriation, dilution, or other violation.
(g) All personnel, including employees, agents, consultants, and contractors, who have contributed to, or participated in, the conception or development, or both, of the Purchased IP have executed valid and enforceable written instruments of assignment in favor of the Seller as assignee that have conveyed to the Seller effective ownership of the rights, title, and interest in and to such Intellectual Property.
(h) No royalties, commissions, fees or other payments are or will become payable by the Buyer to any Person by reason of the exploitation of any Purchased Asset by the Buyer or the execution and delivery of this Agreement or any Transaction Agreement.
(i) The Purchased IP constitutes all the Intellectual Property owned by the Seller that is used by the Seller to conduct the Business as currently conducted and proposed to be conducted.
(j) The Purchased IP is sufficient to conduct the Business as currently conducted and proposed to be conducted.
(k) The Seller’s information technology systems are sufficient for, and operate and perform as required in connection with, the operation of the Business, and the Seller has implemented commercially reasonable measures with respect to data and information technology security, backup, and intrusion detection and prevention.
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(l) The Seller has not sold, licensed, rented or otherwise made available to Third Parties any personal information submitted by individuals in connection with the Business or otherwise and is in compliance with all applicable privacy Laws.
(m) The Seller’s past and present collection, use, retention, and dissemination of personal information is, and has been in the past, in compliance in all material respects with the terms of all Contracts to which the Seller is a party.
(n) The Seller has implemented commercially reasonable policies, programs, and procedures (including administrative, technical, and physical safeguards): (i) to protect against unauthorized access, use, modification, and disclosure of and to protect the confidentiality, integrity, and security of, personal information and proprietary information in the Seller’s possession, custody, or control; and (ii) as required in all material respects to comply with applicable Law.
(o) The Seller has not been subject to any material unauthorized access to (or access in excess of authorization) the Seller’s information technology systems, or unauthorized use, disclosure, or other processing of personal information, and has not received any and is not aware of any basis for claims, notices, or complaints regarding the Seller’s information security practices or the disclosure, retention, or misuse of any personal information, and, to Seller’s Knowledge, there has been no data security breaches that would constitute a breach for which notification to individuals and/or regulatory authorities is required under any applicable Law.
(p) At the Closing, the Buyer will continue to have the right to use personal information collected or obtained by or on behalf of Seller, on terms and conditions identical to those on which the Seller had the right to use such personal information immediately prior to the Closing.
(a) Section 3.08 of the Disclosure Schedules lists a true, correct, and complete list, organized by subsection for each of the following categories, of all Contracts (i) that relate to the Business, (ii) to which the Seller is a party, or (iii) by which the Seller is bound:
(i) any Contract for the performance of services or supply of products by the Seller or, to the extent related to the Business, any of its Affiliates or which involved, or is reasonably expected to involve, consideration to the Seller in excess of ten thousand dollars ($10,000.00) during each of the year ended December 31, 2020 and the year ending December 31, 2021;
(ii) any Contract for the purchase of materials, supplies, products, Intellectual Property, equipment, or services, or the use thereof, which involved, or is reasonably expected to involve, payments by the Seller or, to the extent related to the Business, any of its Affiliates, in excess of ten thousand dollars ($10,000.00) during each of the year ended December 31, 2020 and the year ending December 31, 2021;
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(iii) any Contract pursuant to which the Seller sells, distributes, or markets its Products or pursuant to which the Seller authorizes any Third Party to sell, distribute or market its Products;
(iv) any Contract with any Material Customer;
(v) any Contract with any Material Supplier;
(vi) any sales representative, sales and marketing, franchise, distributorship, advertising, or similar Contract;
(vii) any non-disclosure or non-solicitation Contract containing confidentiality provisions binding the Seller or non-solicitation provisions binding the Seller;
(viii) any Contract relating to the acquisition or divestiture of the capital stock or other equity securities, assets, or business of any Person involving the Seller or, to the extent related to the Business, any of its Affiliates or pursuant to which the Seller has any Liability, contingent or otherwise;
(ix) any joint venture or partnership Contract;
(x) any Contract for the employment or engagement of any officer, individual employee, or other Person on a regular full-time, regular part-time, or consulting basis or relating to severance, retention, or change-in-control payments for any such Person;
(xi) any Contract relating to staffing companies, temporary employment agencies, or similar companies that provide services to the Seller;
(xii) any Contract pursuant to which any non-equity holder employee or any other Person will receive a portion of the Total Proceeds or any similar payment in connection with the consummation of the transactions contemplated hereby;
(xiii) any Contract relating to Indebtedness or placing a Lien on any of the Purchased Assets;
(xiv) any Contract of guarantee, credit support, indemnification, assumption or endorsement of, or any similar commitment with respect to, the Liabilities, obligations, or Indebtedness of any other Person, excluding indemnification provisions entered into by the Seller in the ordinary course of business with its suppliers, distributors, customers, employees and contractors;
(xv) any lease Contract under which the Seller is lessor or lessee of any personal property;
(xvi) any Contract containing a non-competition, exclusivity, most-favored nation pricing, or similar provision restricting the business activities of the Seller or which prohibit the Seller from soliciting customers or vendors, or any other business, anywhere in the world;
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(xvii) any Contract (A) under which (x) a Third Party grants the Seller any license or other right under any Intellectual Property (excluding any license for commercially available off-the-shelf software licensed for a one-time fee and that have annual fees of two thousand five hundred dollars ($2,500.00) or less) or (y) the Seller grants a Third Party any license or other right under any material Intellectual Property (excluding non-exclusive licenses granted to customers in the ordinary course of business consistent with past practice) or (B) otherwise relating to the development, ownership, registration, use, or enforcement of any Intellectual Property.
(xviii) any Contract or commitment for capital expenditures or the acquisition or construction of fixed assets in excess of ten thousand dollars ($10,000.00);
(xix) any power of attorney granted by the Seller to any Person; and
(xx) each Assigned Contract.
(b) The Seller has made available to the Buyer true, complete and correct copies of each Contract. Each Assigned Contract is valid and binding on the Seller in accordance with its terms and is in full force and effect, enforceable in accordance with its terms, subject to the Equitable Exceptions. None of the Seller, to the extent related to the Business, any of Seller’s Affiliates, or, to the Knowledge of the Seller, any other party thereto is in material breach of, or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Assigned Contract. To the Knowledge of Seller, no event or circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default under any Assigned Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Assigned Contract have been made available to Buyer. There are no disputes pending or, to the Knowledge of the Seller, threatened under any Assigned Contract.
(a) Section 3.10(a) of the Disclosure Schedules sets forth all material Environmental Permits and operating certifications held in connection with the Business and the Seller’s ownership of the Purchased Assets.
(b) The Seller has been and continues to be: (i) in compliance with all applicable Environmental Laws relating to the ownership of the Purchased Assets and the operation of the Business and (ii) has obtained, and is in compliance with, all material Environmental Permits and operating certifications required to be held in connection with the operation of the Business and/or the Seller’s ownership of the Purchased Assets.
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(c) There is no Action pending or, to the Knowledge of the Seller, threatened against the Seller, in respect of any violation of applicable Environmental Laws or with respect to any operating certifications held by the Seller involving or relating, in any manner, to the Purchased Assets or the operation of the Business.
(d) The Seller has not treated, stored, disposed of, arranged for, or permitted the disposal of, transported, handled, or otherwise Released or contracted with any Person to treat, store, dispose of, arrange for, or permit the disposal of, transport, handle, or otherwise Release any Hazardous Material, during the operation of the Business in any manner that could give rise to any Liability under Environmental Laws or any obligation to take remedial action.
(e) The Seller has not assumed, undertaken, provided indemnity with respect to, or otherwise become subject to any Liability, including any obligation for remedial action, of any other Person relating to any Environmental Law with respect to the Purchased Assets or the operation of the Business.
(f) The Seller has provided to the Buyer true, correct, and complete copies of all material reports, assessments, agreements, notices, audits, investigations, and studies in the possession, custody, or control of the Seller concerning: (i) the Seller’s actual, alleged, or potential non-compliance with any Environmental Laws with respect to the Purchased Assets or the operation of the Business or (ii) any material Liability of the Seller under Environmental Laws with respect to the Purchased Assets or the operation of the Business.
Section 3.11. Financial Statements.
(a) Section 3.11(a) of the Disclosure Schedules sets forth true, correct, and complete copies of the following financial statements: (i) the unaudited balance sheet of the Seller, as of December 31, 2020, and the related statements of income and cash flows for the period then ended (the “Annual Financial Statements”) and (ii) the unaudited balance sheet of the Seller (the “Interim Balance Sheet”), as of March 31, 2021 (the “Interim Balance Sheet Date”) and the related statements of income and cash flows of the Seller for the three (3)-month period then ended (the “Interim Financial Statements” and, together with the Annual Financial Statements, the “Financial Statements”).
(b) The Financial Statements: (i) have been prepared in accordance with the books and records of the Seller and consistent with the Seller’s past practices and (ii) present fairly the financial condition and results of operations of the Seller, as of the dates thereof and for the periods covered thereby (with respect to the Interim Financial Statements, subject to normal year-end adjustments and any other adjustments expressly described therein that are not, individually or in the aggregate, material).
(c) Section 3.11(c) sets forth each item of Indebtedness of the Seller, including, with respect to each such item, the holder thereof and the outstanding amount thereof as of the Agreement Date.
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Section 3.20. Affiliate Transactions.
(a) Except as set forth on Section 3.20(a) of the Disclosure Schedules, no Owner, equityholder, director, manager, officer, employee or agent of the Seller, Affiliate of any of the foregoing, or any other Person in which any of such Persons owns any beneficial interest (other than any publicly-held corporation whose stock is traded on a national securities exchange and less than 3% of the stock of which is beneficially owned by any of such Persons) has any Contract or arrangement with the Seller or any interest in the Business or any Purchased Assets (other than this Agreement).
(b) Except as set forth on Section 3.20(b) of the Disclosure Schedules, no Affiliate of any Seller or the Owner is a competitor of the Seller with respect to any of its businesses or serves as an officer or director, or in another similar capacity, of any Person whose business competes with the Seller.
Section 3.21. International Trade.
(a) Except as set forth on Section 3.21 of the Disclosure Schedules, the Seller operates, and has operated, in compliance in all material respects with all Trade Laws and Anti-Corruption Laws. The Seller has not received any written notice from a Governmental Body asserting any material violation of Trade Laws or Anti-Corruption Laws that has not been resolved.
(b) No proceeding by any Governmental Body concerning the Seller is pending or, to the Knowledge of the Seller, threatened with respect to a violation by the Seller or its agents of any applicable Trade Laws or Anti-Corruption Laws.
(c) None of the Seller’s directors, managers, or officers or, to the Seller’s Knowledge, any of its employees or agents (in each case acting on behalf of the Seller): (i) has provided, promised, or authorized the provision of any contribution, gift, entertainment, or other expenses relating to political activity, or any other money, property, or thing of value, directly or indirectly, to any official of a Governmental Body or any other Person acting in an official capacity, in order to (A) influence official action, (B) secure an improper advantage, or (C) encourage the recipient to breach a duty of good faith or loyalty or the policies of his/her employer; (ii) has otherwise violated any Anti-Corruption laws; (iii) is a Sanctioned Person or has transacted any business, directly or indirectly, with any Sanctioned Person in violation of Sanctions; (iv) has otherwise violated any Sanctions; or (v) has violated any other Trade Laws.
Section 3.22. Regulatory Compliance.
(a) Except as set forth on Section 3.22(a) of the Disclosure Schedules, all Products currently being manufactured, tested, developed, processed, labeled, stored or distributed by, or on behalf of, the Seller, which are subject to the jurisdiction of the FDA, TTB, or any comparable Governmental Body, are being manufactured, tested, developed, processed, labeled, stored, distributed, and marketed and promoted (including promotions on the website of the Seller) in compliance in all material respects with all applicable Regulatory Laws:
(i) none of Products are, or have been, “adulterated” or “misbranded” within the meaning of the U.S. Federal Food, Drug, and Cosmetic Act at the time such Products were sold by the Seller and none of the Products constituted an article prohibited from introduction into interstate commerce by the FDA at the time of its manufacture, distribution, delivery, or sale by the Seller;
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(ii) all of the operations of the Seller are and have been in compliance in all material respects with all applicable Regulatory Laws, including those related to recordkeeping, food safety, food additives, food contact substances, supplier verification, current good manufacturing practices, and food or alcohol labeling and advertising; and
(iii) each Product has conformed in all respects to any promises or affirmations of fact made on the Product container or label or in any Product-related marketing, advertising, promotional, or similar materials and the Seller possesses appropriate certifications or scientifically reliable materials to substantiate all such claims.
(b) The Seller has not received, nor is the Seller subject to, any administrative or regulatory action, warning or untitled letter, notice of violation letter, Form FDA-483, or other similar written notice or complaint or compliance or enforcement action from or by the FDA, TTB, or any comparable Governmental Body asserting that the testing, importation, manufacture, distribution, marketing, or sale of any Product is not in compliance with any applicable Regulatory Laws and, to Seller’s Knowledge, none of the foregoing is threatened. Furthermore, the Seller has made all material notifications, submissions, and reports required by the FDA, TTB, or any comparable Governmental Body.
(c) Neither the Seller nor, to the Seller’s Knowledge, any of its suppliers has received notice of, or been subject to, any seizure, injunction, detention, refusal of admittance, civil penalty, criminal investigation or penalty, disqualification or debarment, in each case of the foregoing, relating to any of (A) the Products, (B) the components or ingredients in such Products or (C) the facilities of the Seller at which such Products are manufactured or stored.
(d) No Product has been subject to any recall (as defined under 21 C.F.R. Part 7 or its equivalent in any other applicable jurisdictions) or any related seizure or detainment of such Product (each a “Product Event”). To the Seller’s Knowledge, there are no facts or circumstances reasonably likely to cause (i) a Product Event, (ii) a safety communication, or (iii) a termination, seizure, or suspension of marketing of any Product. No Action seeking the withdrawal, recall, suspension, import detention, or seizure of any Product is pending or, to Seller’s Knowledge, threatened.
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(a) Except as set forth on Section 3.27 of the Disclosure Schedules, since January 1, 2020, there has been no material impact (directly or indirectly) as a result of COVID-19 on: (i) the Business or (ii) on any of the Seller’s relationships with its customers, suppliers, vendors, landlords, or any Governmental Body having jurisdiction over the Seller.
(b) The Seller has at all times during the COVID-19 pandemic operated in material compliance with the requirements of all applicable Laws, including any Laws enacted in response to COVID-19, including, without limitation, the CARES Act, the Families First Coronavirus Response Act, Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in Employment Act, Equal Pay Act, Fair Labor Standards Act, Family Medical Leave Act, National Labor Relations Act, the Occupational Safety and Health Act, and any foreign employment-related Laws applicable to the Seller. None of the Material Customers or Material Suppliers has changed, amended, or altered (or requested to alter) its relationship, contractual or otherwise, with the Seller as a result (directly or indirectly) of any COVID-19 Effect.
Section 3.29. Stock Consideration.
(a) The Seller is receiving and will hold the Winc Preferred Shares solely for its own account and investment purposes and not with a view to resale or distribution thereof, in whole or in part, in violation of applicable federal or state securities Laws. The Seller does not have any agreement or arrangement, formal or informal, with any Person to sell or transfer all or any part of any of the Winc Preferred Shares and the Seller does not have any plans to enter into any such agreement or arrangement. The Seller is an “accredited investor” as defined in Regulation D under the Securities Act, and is able to bear the economic risk of holding the Winc Preferred Shares for an indefinite period, and, individually or with the Seller’s advisors, has knowledge and experience in financial and business matters such that the Seller is capable of evaluating the risks of the investment in the Winc Preferred Shares.
(b) The Seller understands and acknowledges that the Winc Preferred Shares have not been registered under the Securities Act or any applicable state securities Laws and the Seller understands that the issuance and sale of the Winc Preferred Shares is intended to be exempt from the registration requirements of the Securities Act, by virtue of Section 4(a)(2) thereof and/or Regulation D promulgated thereunder, based, in part, upon the representations, warranties, and agreements of the Seller contained in this Agreement.
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(c) The Seller understands that no public market now exists for any of the Winc Preferred Shares and that no assurance have been made that a public market will ever exist for such securities.
(d) The Seller confirms that it has had the opportunity to ask questions of the officers and management employees of Winc and to acquire such additional material information about the business and financial condition of Winc as the Seller has requested, and all such material information has been received.
(e) The Seller understands and acknowledges that the certificates representing the Winc Preferred Shares, and any securities issued in respect of, or exchange for, the Winc Preferred Shares, may bear one or all of the following legends:
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE NOT BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933;
(ii) any legend set forth in, or required by, the Preferred Financing Documents; and
(iii) any legend required by the securities Laws of any state, to the extent that such Laws are applicable to the shares represented by the certificate so legended.
Article IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller, as of the Agreement Date and as of the Closing Date, or, if expressly made as of a specified date, as of such specified date, as follows:
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Article V
COVENANTS
(a) enter into, terminate, or amend or otherwise change the terms of any Contracts, arrangements, plans, agreements, leases, licenses, permits, authorizations, or commitments, except for the entrance into customer Contracts in the ordinary course of the business, consistent with past practice;
(b) lease, mortgage, pledge, or encumber any Purchased Assets or transfer, sell, or dispose of any Purchased Assets, other than sales of inventory in the ordinary course of business;
(c) cancel, release, or assign any claim related to the Business;
(d) bring or settle any Action related to the Business that would affect the value of the Purchased Assets;
(e) grant or issue any equity securities of, or equity rights, in the Seller;
(f) incur, assume, or guarantee any Indebtedness;
(g) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization;
(h) enter into any acquisition agreement or agreement to acquire by equity purchase, merger, consolidation, or otherwise, or agreement to acquire a substantial portion of the assets of, (in each case, in a single transaction or series of related transactions) any business or material properties or assets of any other Person;
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(i) make any material change in the operations or policies with respect to selling Products or services, accounting for such sales, cash management practices, or any method of accounting or accounting policies;
(j) enter into commitments for capital expenditures; or
(k) knowingly take any action that would, or is reasonably likely to, (i) make any representation or warranty of the Seller contained in this Agreement inaccurate, (ii) result in any of the conditions in Article VI not being satisfied, or (iii) impair the ability of the Seller to consummate the transactions in accordance with the terms of this Agreement.
Section 5.04. Appropriate Actions.
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Section 5.06. Non-Competition and Non-Solicitation.
(a) From the Closing Date until three (3) years thereafter (the “Restriction Period”), each of the Seller and the Owner shall not, and shall not permit their respective Affiliates to, directly or indirectly, (i) engage in, or assist others in engaging in, the Restricted Business; (ii) have an interest in any Person that engages, directly or indirectly, in the Restricted Business in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee, lender, or consultant, except that the “beneficial ownership” by any such Person, either individually or as a member of a “group,” as such terms are used in Regulation 13D of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, of not more than one percent (1%) of the voting stock of any publicly-held corporation shall not constitute a violation of this Agreement; or (iii) cause, induce, or encourage any customer or supplier of the Buyer to terminate or adversely modify its relationship with the Buyer.
(b) During the Restriction Period, each of the Seller and the Owner shall not, and shall not permit any of their respective Affiliates to, directly or indirectly, hire or solicit any Person who is employed by the Buyer or the Business, except pursuant to a general solicitation which is not directed specifically to any such employees.
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(c) Each of the Seller and the Owner shall, and shall cause their respective Affiliates to, from and after the Closing Date, keep the Confidential Information strictly confidential and shall not, and shall cause their respective Affiliates’ respective employees, officers, directors, managers, and agents not to, disclose (except as expressly permitted by this Agreement) any portion of the Confidential Information to any Person; provided, that, in the event that any Person subject to confidentiality under this Agreement is compelled by applicable Law (including by request for information or documents in any Action) to disclose any Confidential Information, the Person compelled to make disclosure shall promptly notify (unless prohibited by Law) the Buyer in writing of such requirement, so that the Buyer may seek an appropriate protective order or waive compliance with the provisions of this Agreement applicable to such portion of the Confidential Information. If, in the absence of a protective order or the receipt of a waiver hereunder, such Person is legally required to disclose any Confidential Information, such Person may disclose only that portion of such Confidential Information that such Person is required to disclose; provided, however, that such Person shall use its reasonable best efforts to obtain a protective order or other assurance that confidential treatment will be accorded to such Confidential Information.
(d) Each of the Seller and the Owner shall not, and shall cause their respective Affiliates not to, directly or indirectly, disparage the Business, the Buyer, or any of its Affiliates in any way that adversely and substantially impacts the goodwill, reputation, or business relationships of the Business, the Buyer, or any of its Affiliates with the public generally, or with any of their customers, suppliers, independent contractors, or employees.
(e) Each of the Seller and the Owner acknowledges that a breach or threatened breach of this Section 5.06 would give rise to irreparable harm to the Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that, in the event of a breach or a threatened breach by the Seller or the Owner of any of the Seller’s or the Owner’s obligations under this Section 5.06, the Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).
(f) Each of the Seller and the Owner acknowledges that the restrictions contained in this Section 5.06 (i) are directly related to the amount that the Buyer is willing to pay for the Purchased Assets, (ii) are reasonable and necessary to protect the legitimate interests of the Buyer, and (iii) constitute a material inducement to the Buyer to enter into this Agreement and consummate transactions contemplated hereby.
(g) Each of the Seller and the Owner, as applicable, shall without undue delay fulfill all requirements, including payment of Tax amounts due pursuant to any voluntary disclosure agreement or otherwise, to finally resolve with the applicable taxing authorities all New Jersey corporation business Tax and California personal income Tax amounts that have not been timely paid, including with respect to any withholding obligations related to such Tax amounts. Each of the Seller and the Owner shall timely fulfill all Tax obligations imposed on Seller and on Owner, as the case may be, by California and New Jersey Laws with respect to the transactions contemplated by this Agreement.
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Article VI
CLOSING
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Article VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
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Section 7.04. Indemnification Procedures.
(a) Promptly following receipt by an Indemnified Party of notice by a Third Party (including any Governmental Body) of any complaint, dispute, or claim or the commencement of any audit, investigation, Action, or proceeding with respect to which such Indemnified Party may be entitled to indemnification pursuant hereto (a “Third-party Claim”), such Indemnified Party shall provide written notice thereof to the Indemnifying Party, provided, however, that the failure to so notify the Indemnifying Party shall relieve the Indemnifying Party from Liability hereunder with respect to such Third-party Claim only if, and only to the extent that, such failure to so notify the Indemnifying Party results in the forfeiture by the Indemnifying Party of material rights and defenses otherwise available to the Indemnifying Party with respect to such Third-party Claim. The Indemnifying Party shall have the right, upon written notice delivered to the Indemnified Party within twenty (20) days thereafter, assuming full responsibility for any Losses resulting from such Third-party Claim, to assume the defense of such Third-party Claim, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of the fees and disbursements of such counsel; provided, however, that the Indemnifying Party shall not be entitled to assume control of such defense and shall pay the fees and expenses of counsel retained by the Indemnified Party if (i) such Third-party Claim relates to, or arises in connection with, any criminal, civil, or administrative action, investigation, or other proceeding instituted by a Governmental Body, (ii) a conflict of interest exists between the Indemnifying Party and the Indemnified Party, (iii) such Third-party Claim seeks an injunction or other equitable relief against the Indemnified Party, or (iv) the amount in controversy under such Third-party Claim is greater than seventy-five percent (75%) of the remaining balance in the Indemnification Escrow Account or is otherwise greater than seventy-five percent (75%) of the amount that the Indemnifying Party would be required to pay to the Indemnified Party pursuant to the indemnification provisions set forth in this Article VII. In the event, however, that the Indemnifying Party declines or fails to assume the defense of such Third-party Claim on the terms provided above or to employ counsel reasonably satisfactory to the Indemnified Party, in either case within such twenty (20)-day period, then any Losses shall include the reasonable fees and disbursements of counsel for the Indemnified Party as incurred. In any Third-party Claim for which indemnification is being sought hereunder, the Indemnified Party or the Indemnifying Party, whichever is not assuming the defense of such Third-party Claim, shall have the right to participate in such matter and to retain its own counsel at such Party’s own expense. The Indemnifying Party or the Indemnified Party (as the case may be) shall at all times use reasonable efforts to keep the Indemnifying Party or Indemnified Party (as the case may be) reasonably apprised of the status of the defense of any matter and to cooperate in good faith with each other with respect to the defense of any such matter.
(b) No Indemnified Party may settle or compromise any Third-party Claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without the prior written consent of the Indemnifying Party (which may not be unreasonably withheld or delayed), unless (i) the Indemnifying Party fails to assume and maintain the defense of such Third-party Claim or (ii) such settlement, compromise, or consent includes an unconditional release of the Indemnifying Party and its officers, directors, employees and Affiliates from all Liability arising out of, or related to, such Third-party Claim. An Indemnifying Party may not, without the prior written consent of the Indemnified Party (which may not be unreasonably withheld or delayed), settle or compromise any Third-party Claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless such settlement, compromise, or consent (A) includes an unconditional release of the Indemnified Party and its officers, directors, employees, and Affiliates from all Liability arising out of, or related to, such Third-party Claim, (B) does not contain any admission or statement suggesting any wrongdoing or Liability on behalf of the Indemnified Party, and (C) does not contain any equitable order, judgment, or term that in any manner affects, restrains, or interferes with the business of the Indemnified Party or any of the Indemnified Party’s Affiliates.
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(c) In the event an Indemnified Party claims a right to payment pursuant hereto with respect to any matter not involving a Third-party Claim (a “Direct Claim”), such Indemnified Party shall send written notice of such claim to the appropriate Indemnifying Party (each, a “Notice of Claim”). Such Notice of Claim shall specify the basis for such Direct Claim. The failure by any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any Liability that it may have to such Indemnified Party with respect to any Direct Claim made pursuant to this Section 7.04(c), it being understood that any Notice of Claim in respect of a breach of a representation or warranty must be delivered prior to the expiration of the survival period for such representation or warranty under Section 7.01. The Indemnifying Party shall reply to the Indemnified Party within thirty (30) days of receipt of the Notice of Claim, and such Indemnified Party and the appropriate Indemnifying Party shall establish the merits and amount of such Direct Claim (by mutual agreement, litigation, arbitration or otherwise) and, within five (5) Business Days following the final determination of the merits and amount of such Direct Claim, the Indemnifying Party shall pay to the Indemnified Party an amount equal to such Direct Claim as determined hereunder. Notwithstanding anything to the contrary contained herein, if the Parties are unable to settle such dispute within such thirty (30)-day period or if the Indemnifying Party fails to timely respond, then the Indemnified Party may commence suit to enforce its right to indemnification with respect to such claim(s), subject to Sections 10.13-10.15.
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Article VIII
TERMINATION
Section 8.01. Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by the written consent of the Parties;
(b) by any Party upon written notice to the other Parties in the event that there shall be any Law that makes the consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited, or any Governmental Body shall have issued an order restraining or enjoining the transactions contemplated by this Agreement and such order shall have become final and non-appealable;
(c) by written notice from the Buyer to the Seller (provided that the Buyer is not then in material breach of any representation, warranty, covenant, or agreement contained in this Agreement), if there has been a breach of any representation, warranty, covenant, or agreement by the Seller, or any such representation or warranty shall become untrue after the date hereof, such that the conditions in Section 6.02(a) and Section 6.02(b) would not be satisfied and such breach is not curable or, if curable, is not cured within the earlier of (i) fifteen (15) days after written notice thereof is given by the Buyer to the Seller and (ii) the Expiration Date;
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(d) by written notice from the Seller to the Buyer (provided that the Seller is not then in material breach of any representation, warranty, covenant, or agreement contained in this Agreement), if there has been a breach of any representation, warranty, covenant, or agreement by the Buyer, or any such representation or warranty shall become untrue after the date hereof, such that the conditions in Section 6.03(a) and Section 6.03(b) would not be satisfied and such breach is not curable or, if curable, is not cured within the earlier of (i) fifteen (15) days after written notice thereof is given by the Seller to the Buyer and (ii) the Expiration Date; or
(e) by any Party upon written notice to the other Parties if the Closing fails to occur by August 31, 2021 (the “Expiration Date”), for any reason whatsoever, unless such failure shall be due to the failure of such Party to perform or comply with any of it covenants or agreements hereunder.
Article IX
Taxes
Section 9.01. In the case of the amount of property Taxes and other similar Taxes imposed on a periodic basis (“Property Taxes”), the amount that is attributable to the portion of the Straddle Period ending on the Closing Date shall be deemed to equal the amount of such Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days in the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period.
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Article X
MISCELLANEOUS
If to the Buyer, addressed to:
BWSC, LLC
00000 Xxxxxx Xxxx., #0
Xxx Xxxxxxx, XX 00000
Email: xxxx.xxxxxx@xxxx.xxx
Attention: Xxxx Xxxxxx, Chief Strategy Officer and General Counsel
With a copy (which shall not constitute notice), addressed to:
K&L Gates LLP
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Email: Xxxxx.Xxxxx@xxxxxxx.xxx
Attention: Xxxxxxx X. Xxxxx, Esq.
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If to the Seller and/or the Owner, addressed to:
Natural Merchants, Inc.
000-X XX X XX #000
Xxxxxx Xxxx, XX 00000
Email: xx@xxxxxxxxxxxxxxxx.xxx
Attention: Xxxxxx Xxxxx
With a copy (which shall not constitute notice), addressed to:
Xxxxxx Xxxxxxxxxx Law PC
0000 X. 0xx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Email: xxxxx@xxxxxxxxxxxxxxx.xxx
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties advance written notice pursuant to the provisions above.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Agreement Date.
“Buyer” | |
BWSC, LLC, | |
a California limited liability company |
By: Winc, Inc., a Delaware corporation, its Sole Member |
By: | /s/ Xxxxxxxx XxXxxxxxx | |
Name: Xxxxxxxx XxXxxxxxx | ||
Title: Chief Executive Officer |
Signature Page to Asset Purchase Agreement
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Agreement Date.
“SELLER” | |
NATURAL MERCHANTS, INC., | |
an Oregon corporation |
By: | /s/ Xxxxxx Xxxxx | |
Name: Xxxxxx Xxxxx | ||
Title: President |
“Owner” | |
/s/ Xxxxxx Xxxxx | |
Xxxxxx Xxxxx |
Signature Page to Asset Purchase Agreement
EXHIBIT A
DISCLOSURE SCHEDULES
EXHIBIT B
NWC EXAMPLE
EXHIBIT C
XXXX OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT D
FORM OF IP ASSIGNMENT AGREEMENT
EXHIBIT E
ESCROW AGREEMENT
EXHIBIT F
FORM OF CONSULTING AGREEMENT
EXHIBIT G
PERSONAL GOODWILL SALE AGREEMENT
EXHIBIT H
JOINDER AGREEMENT