Document:

Exhibit 10.17

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of February 3, 2021, is among Vintage Wine Estates, Inc., a California corporation (“Parent”), Patrick A. Roney in his capacity as the Roney Representative and the parties listed as Investors on the signature pages hereto (collectively, the “Investors”).

 

RECITALS

 

A.  The Investors own shares of Series A Stock of Parent (the “Series A Stock”).

 

B.  Parent and the Investors desire to enter into this Agreement to govern the rights of the Investors to cause Parent to register shares of the Series A Stock owned by the Investors in the event that the Closing as defined in and contemplated by the Transaction Agreement (as defined in Annex A hereto) does not occur.

 

NOW, THEREFORE, the Parties agree as follows:

 

ARTICLE I  REGISTRATION RIGHTS

 

1.1          Demand Registration.

 

(a)           Request.  At any time after the Effective Date, any Major Investor holding not less than 10% of the Registrable Securities held by all Investors (a “Demanding Investor”) may make a written request to Parent for the Registration with the SEC under the U.S. Securities Act of all or part of such Demanding Investor’s Registrable Securities, which request will specify the number of shares of Registrable Securities to be disposed of by such Demanding Investor and the proposed plan of distribution therefor.  Upon the receipt of any request for Registration pursuant to this Section 1.1(a), Parent will promptly notify the other Investors of the receipt of such request.  Upon the receipt of any request for Registration made in accordance with the terms of this Section 1.1(a), Parent will use its reasonable best efforts to effect, at the earliest practicable date, such Registration under the U.S. Securities Act of:

 

(i)            the Registrable Securities that Parent has been so requested to Register by the Demanding Investor, and

 

(ii)           all Registrable Securities that Parent has been requested to Register by the other Investors pursuant to a written request given to Parent within 15 days after the giving of written notice by Parent to such other Investors of the request by the Demanding Investor;

 

all to the extent necessary to permit the disposition (in accordance with Section 1.1(b)) of the Registrable Securities so to be Registered; provided that,

 

(A)          Parent will not be required to effect more than a total of six demand Registrations pursuant to this Section 1.1(a) for the Investors;

 

 

(B)          if the intended method of distribution is an underwritten public offering, then Parent will not be required to effect such Registration pursuant to this Section 1.1(a) unless such underwriting will be conducted on a “firm commitment” basis;

 

(C)          if Parent has previously effected a Registration pursuant to this Section 1.1(a) or has previously effected a Registration of which notice has been given to the Investors pursuant to Section 1.2 or Section 1.3, then Parent will not be required to effect any Registration pursuant to this Section 1.1(a) until a period of 180 days will have elapsed from the date on which such previous Registration ceased to be effective;

 

(D)          any Investor whose Registrable Securities were to be included in any such Registration pursuant to this Section 1.1(a), by written notice to Parent, may withdraw such request and, on Parent’s receipt of notice of such withdrawal with respect to a number of shares of Registrable Securities such that the Investor that has not elected to withdraw does not hold, in the aggregate, the requisite amount of shares of Registrable Securities to require or initiate a request for a Registration under clause (E) of this Section 1.1(a), Parent will not be required to effect such Registration; provided that, if the Investor that has elected to withdraw its request for Registration agrees to pay the Expenses related to such Registration, then the request for Registration will not be counted for purposes of determining the number of Registrations to which such Investor is entitled pursuant to this Section 1.1(a); and

 

(E)           Parent will not be required to effect any Registration to be effected pursuant to this Section 1.1(a) unless the shares of Registrable Securities proposed to be sold in such Registration have an aggregate price (calculated based upon the Market Price of such shares of Registrable Securities as of the date of such request) of at least $10,000,000.

 

(b)           Registration Statement Form.  Registrations under Section 1.1(a) will be on Form S-1 or, if permitted by law, Form S-3 (or, in either case, any successor forms thereto) and will permit the disposition of the Registrable Securities pursuant to an underwritten offering unless the Demanding Investor determines otherwise, in which case pursuant to the method of disposition determined by such Demanding Investor.

 

(c)           Effective Registration Statement.  A Registration requested pursuant to Section 1.1(a) will not be deemed to have been effected:

 

(i)            unless a registration statement with respect thereto has been declared effective by the SEC and remains effective in compliance with the provisions of the U.S. Securities Act and the laws of any state or other jurisdiction applicable to the disposition of the shares of Registrable Securities covered by such registration statement until such time as all of such shares of Registrable

 

2

 

Securities have been disposed of in accordance with such registration statement or there ceases to be any shares of Registrable Securities;

 

(ii)           if, after it has become effective, such Registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental entity or court for any reason other than a violation of applicable law solely by the Demanding Investor, and such Registration has not thereafter again become effective; or

 

(iii)          if, in the case of an underwritten offering, the conditions to closing specified in an underwriting agreement to which Parent is a party are not satisfied or waived other than by reason of any breach or failure by the Demanding Investor.

 

Any holder of Registrable Securities to be included in a registration statement may at any time withdraw a request for registration made pursuant to Section 1.1(a) in accordance with Section 1.1(a)(ii)(D).

 

(d)           Selection of Underwriters.  The managing underwriter of each underwritten offering, if any, of Registrable Securities to be Registered pursuant to Section 1.1(a) will be a nationally recognized investment bank selected by agreement of Parent and the Selling Investor owning the largest number of shares of Registrable Securities to be Registered.

 

(e)           Priority in Requested Registration.  If a Registration under this Section 1.1 involves an underwritten public offering and the managing underwriter of such underwritten offering advises Parent in writing (with a copy to each Selling Investor requesting that Registrable Securities be included in such registration statement) that, in such underwriter’s opinion, the number of shares of Registrable Securities requested to be included in such Registration exceeds the number of such securities that can be sold in such offering within a price range that is acceptable to the Selling Investor owning the largest number of shares of Registrable Securities requested to be included in such Registration, as stated by such Selling Investor to such managing underwriter, then Parent will include in such registration, to the extent of the number and type of securities that Parent is advised can be sold in such offering, the following:  (i) first, all shares of Registrable Securities requested to be Registered and sold for the account of the Demanding Investor; (ii) second, any shares of Registrable Securities that the other Selling Investors have requested be included in such Registration pursuant to Section 1.1(a), (iii) third, any securities to be Registered and sold for the account of Parent, and (iv) fourth, other securities requested to Registered, if any.

 

1.2          Shelf Registration.

 

(a)           Registration Statement Covering Resale of Registrable Securities.  Parent will prepare and file or cause to be prepared and filed with the SEC, no later 45 days following the date that Parent becomes eligible to use Form S-3 or its successor form (the “S-3 Eligibility Date”), a registration statement for an offering to be made on a

 

3

 

continuous basis pursuant to Rule 415 of the U.S. Securities Act Registering the resale from time to time by Investors of all of the Registrable Securities then held by or then issuable to Investors that are not covered by an effective registration statement on the S-3 Eligibility Date (the “Resale Shelf Registration Statement”). The Resale Shelf Registration Statement will be on Form S-3 or another appropriate form permitting Registration of such Registrable Securities for resale by such Investors. Parent will use reasonable best efforts to cause the Resale Shelf Registration Statement to be declared effective as soon as possible after filing, and once effective, to keep the Resale Shelf Registration Statement continuously effective under the U.S. Securities Act at all times until the expiration of the Effectiveness Period.

 

(b)           Notification of Effectiveness.  Parent will notify the Investors in writing of the effectiveness of the Resale Shelf Registration Statement.

 

(c)           SEC Limitations.  Notwithstanding the Registration obligations set forth in this Section 1.2 and Section 1.5, in the event the SEC informs Parent that, as a result of the application of Rule 415, not all of the Registrable Securities can be Registered for resale as a secondary offering on a single registration statement, then Parent agrees to promptly (i) inform each of the holders thereof and use its commercially reasonable efforts to file amendments to the Resale Shelf Registration Statement as required by the SEC and/or (ii) withdraw the Resale Shelf Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be Registered by the SEC on Form S-3 or such other form available to Register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, Parent will be obligated to use its commercially reasonable efforts to advocate with the SEC for the Registration of all of the Registrable Securities in accordance with any publicly-available written or oral guidance, comments, requirements or requests of the SEC staff (the “SEC Guidance”), including the Manual of Publicly Available Telephone Interpretations D.29. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be Registered on a particular registration statement as a secondary offering (and notwithstanding that Parent used diligent efforts to advocate with the SEC for the Registration of all or a greater number of Registrable Securities), then, unless otherwise directed in writing by a holder to further limit its Registrable Securities to be included in such registration statement, the number of securities to be Registered on such registration statement will be reduced pro rata in accordance with the number of shares of Registrable Securities that each Investor has requested be included in such registration statement, regardless of the number of shares of Registrable Securities, subject to a determination by the SEC that certain Investors must be reduced first based on the number of Registrable Securities held by such Investors. In the event that Parent amends the Resale Shelf Registration Statement or files a New Registration Statement, as the case may be, under clause (i) or (ii) above, Parent will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC or SEC Guidance provided to Parent or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to Register for resale those Registrable Securities that were not

 

4

 

Registered for resale on the Resale Shelf Registration Statement, as amended, or the New Registration Statement.

 

(d)           Takedown.

 

(i)            If Parent receives a request from the holders of Registrable Securities with an estimated market value of at least $1,000,000 (the requesting holder(s) will be referred to herein as the “Requesting Holder”) that Parent effect the Underwritten Takedown of all or any portion of the Requesting Holder’s Registrable Securities, and specifying the intended method of disposition thereof, then Parent will promptly give notice of such requested Underwritten Takedown (each such request will be referred to herein as a “Demand Takedown”) at least 10 Business Days prior to the anticipated filing date of the prospectus or supplement relating to such Demand Takedown to the other Investors and thereupon will use its reasonable best efforts to effect, as expeditiously as possible, the offering in such Underwritten Takedown of, (i) subject to the restrictions set forth in Section 1.6(b)(i), all Registrable Securities for which the Requesting Holder has requested such offering under Section 1.2(a), and (ii) subject to the restrictions set forth in Section 1.6(b)(i), all other Registrable Securities that any Selling Investors have requested Parent to offer by request received by Parent within seven Business Days after such holders receive Parent’s notice of the Demand Takedown, all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be offered.  Promptly after the expiration of such seven-Business Day-period, Parent will notify all Selling Investors of the identities of the other Selling Investors and the number of shares of Registrable Securities requested to be included therein.

 

(ii)           Parent will only be required to effectuate two Underwritten Takedowns within any six-month period.

 

(iii)          If the managing underwriter in an Underwritten Takedown advises Parent and the Requesting Holder that, in its view, the number of shares of Registrable Securities requested to be included in such underwritten offering exceeds the largest number of shares that can be sold without having an adverse effect on such offering, including the price at which such shares can be sold, then the shares included in such Underwritten Takedown will be reduced in accordance with the process and priority set forth in Section 1.6(b)(i).

 

(iv)          Registrations effected pursuant to this Section 1.2 will be counted as demand Registrations effected pursuant to Section 1.1.

 

(v)           Selection of Underwriters.  The managing underwriter of each underwritten offering, if any, of Registrable Securities to be Registered pursuant to Section 1.2(a) will be a nationally-recognized investment bank selected by agreement of Parent and the Selling Investor owning the largest number of shares of Registrable Securities to be Registered.

 

5

 

1.3          Piggyback Registration.

 

(a)           After the Effective Date, if Parent proposes to Register any of its securities under the U.S. Securities Act by Registration on any form other than Form S-4 or Form S-8 (or any successor or similar form(s)), whether pursuant to Registration rights granted to other holders of its securities or for sale for its own account, then it will give prompt written notice to each Investor of its intention to do so and of such Investors’ rights under this Section 1.3, which notice, in any event, will be given at least 30 days prior to such proposed Registration.  Upon the written request of an Investor that holds Registrable Securities (a “Piggyback Requesting Investor”) made within 15 days after such Investor’s receipt of any such notice from Parent, which request will specify the Registrable Securities intended to be disposed of by such Piggyback Requesting Investor, Parent will, subject to Section 1.6(b), effect the Registration under the U.S. Securities Act of all Registrable Securities that Parent has been so requested to Register by the Piggyback Requesting Investors; provided that:

 

(i)            prior to the effective date of the registration statement filed in connection with such Registration and promptly following receipt of notification by Parent from the managing underwriter (if an underwritten offering) of the price at which such securities are to be sold, Parent will advise each Piggyback Requesting Investor of such price, and such Piggyback Requesting Investor will then have the right, exercisable in its sole discretion by delivery of written notice to Parent within five Business Days of such Piggyback Requesting Investor being advised of such price, irrevocably to withdraw its request to have its Registrable Securities included in such registration statement, without prejudice to the rights of any holder or holders of Registrable Securities to include Registrable Securities in any future Registration (or Registrations) pursuant to this Section 1.3 or to cause such Registration to be effected as a Registration under Section 1.1(a), as the case may be;

 

(ii)           if at any time after giving written notice of its intention to Register any securities and prior to the effective date of the registration statement filed in connection with such Registration, Parent determines for any reason not to Register or to delay Registration of such securities, then Parent may, at its election, give written notice of such determination to each Piggyback Requesting Investor and (A) in the case of a determination not to Register, will be relieved of its obligation to Register any Registrable Securities in connection with such Registration (but not from any obligation of Parent to pay the Expenses in connection therewith), without prejudice, however, to the rights of any Investor to include Registrable Securities in any future Registration (or Registrations) pursuant to this Section 1.3 or to cause such Registration to be effected as a Registration under Section 1.1(a), as the case may be, and (B) in the case of a determination to delay Registering, will be permitted to delay Registering any Registrable Securities for the same period as the delay in Registering such other securities; and

 

6

 

(iii)          if such Registration was initiated by Parent for its own account and involves an underwritten offering, then each Piggyback Requesting Investor will sell its Registrable Securities on the same terms and conditions as those that apply to Parent, and the managing underwriter of each such underwritten public offering will be a nationally-recognized investment bank selected by Parent.

 

(b)           No registration effected under this Section 1.3 will relieve Parent of its obligation to effect any demand Registration under Section 1.1(a), and no registration effected pursuant to this Section 1.3 will be deemed to have been effected pursuant to Section 1.1(a).

 

1.4          Expenses.  Parent will pay all Expenses in connection with any Registration initiated pursuant to Section 1.1(a) or Section 1.2, whether or not such Registration ultimately becomes effective or all or any portion of the Registrable Securities originally requested to be included in such Registration is ultimately included in such registration.

 

1.5          Registration Procedures.

 

(a)           Obligations of Parent.  Whenever Parent is required to effect any Registration under the U.S. Securities Act as provided in Section 1.1(a), Section 1.2 and Section 1.3, Parent will, as expeditiously as possible:

 

(i)            prepare and file with the SEC (which filing will, in the case of any Registration pursuant to Section 1.1(a), be made on or before the date that is 90 days after the receipt by Parent of the written request from the relevant Demanding Investor) the requisite registration statement to effect such registration and thereafter use its reasonable best efforts to cause such registration statement to become and remain effective; provided, however, that Parent may discontinue any Registration of its securities other than shares of Registrable Securities (and, under the circumstances specified in Section 1.8(b), its securities that are Registrable Securities) at any time prior to the effective date of the registration statement relating thereto;

 

(ii)           prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the U.S. Securities Act and the U.S. Exchange Act with respect to the disposition of all Registrable Securities covered by such registration statement until such time as all of such Registrable Securities have been disposed of in accordance with the plan of distribution disclosed in such registration statement (the “Effectiveness Period”);

 

(iii)          furnish to each Selling Investor and each underwriter, if any, the number of copies reasonably requested by such Selling Investor or underwriter of (A) such drafts and final conformed versions of such registration statement and of each such amendment and supplement thereto (in each case including all

 

7

 

exhibits and any documents incorporated by reference), (B) such drafts and final versions of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the U.S. Securities Act, in conformity with the requirements of the U.S. Securities Act, and (C) such other documents as such Selling Investor or underwriter may reasonably request in writing;

 

(iv)          use its reasonable best efforts to (A) Register or qualify all Registrable Securities and other securities, if any, covered by such registration statement under such securities laws (or “blue sky” laws) of such states or other jurisdictions within the United States as the Selling Investors reasonably request in writing, (B) keep such registrations or qualifications in effect for so long as such registration statement remains in effect, and (C) take any other action that may be necessary or reasonably advisable to enable such Selling Investors to consummate the disposition in such jurisdictions of the securities to be sold by such Selling Investors, except that Parent will not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not (but for the requirements of this subsection) be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

 

(v)           use its reasonable best efforts to cause all Registrable Securities and other securities, if any, covered by such registration statement to be Registered with or approved by such other governmental entity as may be necessary in the opinion of counsel to Parent and counsel to the Selling Investors to enable the Selling Investors to consummate the disposition of such Registrable Securities;

 

(vi)          use its reasonable best efforts to obtain and, if obtained, furnish to each Selling Investor, and each such Selling Investor’s underwriters, if any, (A) a signed opinion of counsel for Parent, dated the effective date of such registration statement (and, if such Registration involves an underwritten offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters), reasonably satisfactory (based on the customary form and substance of opinions of issuers’ counsel customarily given in such offerings) in form and substance to such Selling Investor, and (B) a “cold comfort” letter, dated the effective date of such registration statement (and, if such Registration involves an underwritten offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters) and signed by the independent Registered public accounting firm that has certified Parent’s financial statements included or incorporated by reference in such registration statement, reasonably satisfactory (based on the customary form and substance of “cold comfort” letters of issuers’ independent Registered public accounting firms customarily given in such offerings) in form and substance to such Selling Investor, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the independent Registered public accounting firm’s comfort letter, with

 

8

 

respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuers’ counsel and in independent Registered public accounting firms’ comfort letters delivered to underwriters in underwritten public offerings of securities;

 

(vii)         (A) notify each Selling Investor and seller of any other securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the U.S. Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and (B) at the written request of any such Selling Investor or any seller of other securities, promptly prepare and furnish to such Selling Investor a reasonable number of copies of a supplement to or an amendment of such prospectus so that, as thereafter delivered to the purchasers of such securities, such prospectus, as supplemented or amended, will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

 

(viii)        use its reasonable best efforts to obtain the withdrawal at the earliest possible moment of any order suspending the effectiveness of a registration statement relating to the Registrable Securities;

 

(ix)          make available to its security holders, as soon as reasonably practicable, an earning statement covering a period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the effective date of such registration statement, which earning statement will satisfy the provisions of Section 11(a) of the U.S. Securities Act and Rule 158 promulgated thereunder, and furnish to each Selling Investor and to the managing underwriter, if any, at least 10 days prior to the filing thereof a copy of any amendment or supplement to any registration statement or prospectus containing such earning statement;

 

(x)           otherwise comply with all applicable rules and regulations of the SEC and any other governmental entity having jurisdiction over the offering;

 

(xi)          if the Series A Stock is then listed on a national securities exchange, use its reasonable best efforts to cause all Registrable Securities covered by a registration statement to be listed on such exchange;

 

(xii)         provide a transfer agent and registrar for the Registrable Securities covered by a registration statement no later than the effective date thereof;

 

9

 

(xiii)        enter into such agreements (including an underwriting agreement in customary form) and take such other actions as the Investor holding the largest number of shares of Registrable Securities covered by such registration statement reasonably requests in order to expedite or facilitate the disposition of such Registrable Securities, including customary indemnification;

 

(xiv)        if requested by the managing underwriter(s) or the Selling Investor holding the largest number of shares of Registrable Securities being sold in connection with an underwritten offering, promptly (A) incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter(s) and such Investor agree should be included therein relating to the plan of distribution with respect to such Registrable Securities (including information with respect to the number of shares of Registrable Securities being sold to such underwriters and the purchase price being paid therefor by such underwriters) and relating to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and (B) make all required filings of such prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and

 

(xv)         cooperate with the Selling Investors and the managing underwriter, if any, (A) to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold that do not bear any restrictive legends and (B) to enable such Registrable Securities to be in such share amounts and Registered in such names as the managing underwriter or, if none, the Selling Investor holding the largest number of shares of Registrable Securities being sold, may request at least three Business Days prior to any sale of Registrable Securities.

 

(b)           Delivery of Investor Information.  As a condition to the obligations of Parent to complete any Registration pursuant to this Agreement with respect to the Registrable Securities of an Investor, such Investor must furnish to Parent in writing such information (the “Investor Information”) regarding itself, the Registrable Securities held by it and the intended methods of disposition of the Registrable Securities held by it as are necessary to effect the Registration of such Investor’s Registrable Securities and as may be reasonably requested in writing by Parent.  At least 30 days prior to the first anticipated filing date of a registration statement for any Registration under this Agreement, Parent will notify in writing each Investor of the Investor Information that Parent is requesting from that Investor, whether or not such Investor has elected to have any of its Registrable Securities included in the registration statement.  If within ten days prior to the anticipated filing date Parent has not received the requested Investor Information from an Investor, then Parent may file the registration statement without including Registrable Securities of that Investor.

 

(c)           Prospectus Distribution.  Each Investor agrees that, as of the date that a final prospectus is made available to it for distribution to prospective purchasers of Registrable Securities, such Investor will cease to distribute copies of any preliminary

 

10

 

prospectus prepared in connection with the offer and sale of such Registrable Securities.  Each Investor further agrees that, upon receipt of any notice from Parent of the happening of any event of the kind described in Section 1.5(a)(vii), such Investor will discontinue such Investor’s disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 1.5(a)(vii) and, if so directed by Parent, will deliver to Parent (at Parent’s expense) all copies, other than permanent file copies, then in such Investor’s possession of the prospectus relating to such Registrable Securities current at the time of receipt of such notice.  If any event of the kind described in Section 1.5(a)(vii), occurs and such event is the fault solely of an Investor or Investors due to the inaccuracy of the Investor Information provided by such Investor(s) for inclusion in the registration statement, then such Investor (or Investors) will pay all Expenses attributable to the preparation, filing and delivery of any supplemented or amended prospectus contemplated by Section 1.5(a)(vii).

 

1.6          Underwritten Offerings.

 

(a)           Requested Underwritten Offerings.  If requested by the underwriters in connection with a request for a Registration under Section 1.1(a) that is a firm commitment underwritten offering, then Parent and each Selling Investor will enter into a firm commitment underwriting agreement with such underwriters for such offering, such agreement to (i) be reasonably satisfactory in substance and form to Parent and the Selling Investor owning the largest number of shares of Registrable Securities to be included in such Registration and (ii) contain such representations and warranties by Parent and each Selling Investor and such other terms as are customary in agreements of that type, including indemnification and contribution to the effect and to the extent provided in Section 1.9.

 

(b)           Piggyback Underwritten Offerings; Priority.

 

(i)            If Parent proposes to Register any of its securities under the U.S. Securities Act for its own account as contemplated by Section 1.2 and such securities are to be distributed by or through one or more underwriters, and if the managing underwriter of such underwritten offering advises Parent in writing (with a copy to the Piggyback Requesting Investors) that if all shares of Registrable Securities requested to be included in such Registration were so included, in such underwriter’s opinion, the number and type of securities proposed to be included in such Registration would exceed the number and type of securities that could be sold in such offering within a price range acceptable to Parent (such writing to state the basis for the underwriter’s opinion and the approximate number and type of securities that may be included in such offering without such effect), then Parent will include in such Registration pursuant to Section 1.2, to the extent of the number and type of securities that Parent is so advised can be sold in such offering, (A) first, securities that Parent proposes to issue and sell for its own account, (B) second, shares of Registrable Securities requested to be Registered by Piggyback Requesting Investors pursuant to

 

11

 

Section 1.2, pro rata among the Piggyback Requesting Investors on the basis of the number of shares of Registrable Securities requested to be Registered by all such Piggyback Requesting Investors, and (C) third, other securities, if any.

 

(ii)           Any Investor may withdraw its request to have all or any portion of its Registrable Securities included in any such offering by notice to Parent within 10 days after receipt of a copy of a notice from the managing underwriter pursuant to this Section 1.6(b).

 

(c)           Investors to be Parties to Underwriting Agreement.  The holders of Registrable Securities to be distributed by underwriters in an underwritten offering contemplated by Section 1.6(b) will be parties to the underwriting agreement between Parent and such underwriters, and any such Investor, at its option, may reasonably require that any or all of the representations and warranties by, and the other agreements on the part of, Parent to and for the benefit of such underwriters will also be made to and for the benefit of such Investor and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such Investor.  Neither such Investor nor any of its Affiliates will be required to make any representations or warranties to or agreements with Parent or the underwriters other than representations, warranties or agreements regarding such Investor or Affiliate, such holder’s shares of Registrable Securities and such holder’s intended plan of distribution.

 

(d)           Holdback Agreements.

 

(i)            Each Investor agrees, unless otherwise agreed to by the managing underwriter for any underwritten offering pursuant to this Agreement, not to effect any sale or distribution of any equity securities of Parent or securities convertible into or exchangeable or exercisable for equity securities of Parent, including any sale under Rule 144 under the U.S. Securities Act, during the 10 days prior to the date on which an underwritten Registration of Registrable Securities pursuant to Section 1.1 or Section 1.2 has become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten Registration or to the extent that such Investor is prohibited by applicable law from agreeing to withhold securities from sale or is acting in its capacity as a fiduciary or an investment adviser.  Without limiting the scope of the term “fiduciary,” a holder will be deemed to be acting as a fiduciary or an investment adviser if its actions or the securities proposed to be sold are subject to the Employee Retirement Income Security Act of 1974, as amended, the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended, or if such securities are held in a separate account under applicable insurance law or regulation.

 

(ii)           Parent agrees not to effect any public offering or distribution of any equity securities of Parent, or securities convertible into or exchangeable or exercisable for equity securities of Parent, during the 10 days prior to the date on which any underwritten Registration pursuant to Section 1.1(a) or Section 1.2 has

 

12

 

become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten registration.

 

(iii)          The foregoing restrictions are in addition to any share holdback agreements to which an Investor is party.

 

1.7          Preparation: Reasonable Investigation.

 

(a)           Registration Statements.  In connection with the preparation and filing of each registration statement under the U.S. Securities Act pursuant to this Agreement, Parent will (i) give representatives (designated to Parent in writing) of each Selling Investor, the underwriters, if any, and one firm of counsel, one firm of accountants and one firm of other agents retained on behalf of all underwriters and one firm of counsel, one firm of accountants and one firm of other agents retained on behalf of the Selling Investors (as a group), the reasonable opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the SEC, and each amendment thereof or supplement thereto, (ii) upon reasonable advance notice to Parent, give each of them such reasonable access to all financial and other records, corporate documents and properties of Parent and its subsidiaries as necessary, in the reasonable opinion of such Selling Investors’ and such underwriters’ counsel, to conduct a reasonable due diligence investigation for purposes of the U.S. Securities Act, and (iii) upon reasonable advance notice to Parent, provide such reasonable opportunities to discuss the business of Parent with Parent’s officers, directors and employees and the independent public accounting firm that has certified Parent’s financial statements as is necessary, in the reasonable opinion of such Selling Investors’ and such underwriters’ counsel, to conduct a reasonable due diligence investigation for purposes of the U.S. Securities Act.

 

(b)           Confidentiality.  Each Investor will maintain the confidentiality of any confidential information received from or otherwise made available by Parent to such Investor.  Information that (i) is or becomes available to an Investor from a public source other than as a result of a disclosure by such Investor or any of its Affiliates, (ii) is disclosed to an Investor by a third-party source that the Investor reasonably believes is not bound by an obligation of confidentiality to Parent, (iii) is or becomes required to be disclosed by an Investor by law, including by court order, or (iv) is independently developed by an Investor, will not be deemed to be confidential information for purposes of this Agreement.  No Investor will grant access, and Parent will not be required to grant access, to information under this Section 1.6 to any Person that will not agree to maintain the confidentiality (to the same extent an Investor is required to maintain confidentiality) of any confidential information received from or otherwise made available to such Investor by Parent under this Agreement.

 

1.8          Postponements.

 

(a)           Failure to File.  If Parent fails to file any registration statement to be filed pursuant to a request for Registration under Section 1.1(a), the Demanding Investor requesting such Registration will have the right to withdraw the request for registration.

 

13

 

Any such withdrawal must be made by giving written notice to Parent within 20 days after, in the case of a request pursuant to Section 1.1(a), the date on which a registration statement would otherwise have been required to have been filed with the SEC under Section 1.5(a)(i).  In the event of such withdrawal, the request for Registration will not be counted for purposes of determining the number of registrations to which the Investor is entitled pursuant to Section 1.1.  Parent will pay all Expenses incurred in connection with a request for Registration withdrawn pursuant to this paragraph.

 

(b)                                 Adverse Effect.  Parent will not be obligated to file any registration statement, or file any amendment or supplement to any registration statement, and may suspend any Selling Investor’s rights to make sales pursuant to any effective registration statement, at any time (but not to exceed two times in any 12-month period) Parent, in the good faith judgment of the Parent Board, reasonably believes that the filing thereof at the time requested, or the offering of securities pursuant thereto, would adversely affect a pending or proposed public offering of Parent’s securities, a material financing, or a material acquisition, merger, recapitalization, consolidation, reorganization or similar transaction, or negotiations, discussions or pending proposals with respect thereto.  The filing of a registration statement, or any amendment or supplement thereto, by Parent cannot be deferred, and the Selling Investors’ rights to make sales pursuant to an effective registration statement cannot be suspended, pursuant to the provisions of the immediately preceding sentence for more than 10 days after the abandonment or consummation of any of the foregoing proposals or transactions or for more than 60 days after the date of the Parent Board’s determination referenced in such sentence.  If Parent suspends the Selling Investors’ rights to make sales pursuant hereto, the applicable Registration period will be extended by the number of days of such suspension.

 

1.9                               Indemnification.

 

(a)                                 By Parent.  In connection with any registration statement filed by Parent pursuant to Section 1.1 or Section 1.2, to the fullest extent permitted by law, Parent will and hereby agrees to indemnify and hold harmless (i) each Investor and seller of any Registrable Securities covered by such registration statement, (ii) each other Person who participates as an underwriter in the offering or sale of such securities, (iii) each other Person, if any, who controls (within the meaning of the U.S. Exchange Act) such Investor or seller or any such underwriter, and (iv) their respective shareholders, members, directors, officers, managers, employees, partners, agents and Affiliates (each, a “Parent Indemnitee”), in each case against any losses, claims, damages, liabilities (including actions or proceedings, whether commenced or threatened, in respect thereof, whether or not such indemnified party is a party thereto), joint or several, and expenses, including the reasonable fees, disbursements and other charges of legal counsel and reasonable costs of investigation, in each case to which such Parent Indemnitee may become subject under the U.S. Securities Act or otherwise (collectively, a “Loss” or “Losses”), to the extent such Losses arise out of or are based upon (A) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were Registered or

 

14

 

otherwise offered or sold under the U.S. Securities Act or otherwise, any preliminary prospectus, final prospectus or summary prospectus related thereto, or any amendment or supplement thereto, or any document incorporated by reference therein (collectively, “Offering Documents”), (B) any omission or alleged omission to state in such Offering Documents a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances in which they were made not misleading, or (C) any violation by Parent of any federal or state law, rule or regulation applicable to Parent and relating to action required of or inaction by Parent in connection with any such registration; provided, however, that, Parent will not be liable in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Offering Documents in reliance upon and in conformity with information furnished to Parent in writing by or on behalf of such Parent Indemnitee stating that it is for use therein; and provided, further, that Parent will not be liable to any Person who participates as an underwriter in the offering or sale of shares of Registrable Securities, or who controls (within the meaning of the U.S. Exchange Act) such underwriter, in any such case to the extent that any such Loss arises out of such Person’s failure to send or give a copy of the final prospectus (including any documents incorporated by reference therein), as the same may be then supplemented or amended, to the Person asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus.  The foregoing indemnity will remain in full force and effect regardless of any investigation made by or on behalf of any Parent Indemnitee and will survive the transfer of such securities by such Parent Indemnitee.

 

(b)                                 By Investors and Sellers.  In connection with any registration statement filed by Parent pursuant to Section 1.1 or Section 1.2 in which an Investor has Registered for sale shares of Registrable Securities, each such Investor or seller of shares of Registrable Securities will, and hereby agrees to, indemnify and hold harmless to the fullest extent permitted by law (i) Parent and each of its directors, officers, employees, agents, Affiliates and each other Person, if any, who controls (within the meaning of the U.S. Exchange Act) Parent and (ii) each other seller and such other seller’s directors, officers, managers, agents and Affiliates (each, an “Investor Indemnitee”), in each case against all Losses to the extent such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Offering Document or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of circumstances in which they were made not misleading, if such untrue statement or alleged untrue statement or omission or alleged omission was made by Parent in reliance upon and in conformity with information furnished to Parent in writing by or on behalf of such Investor or other seller of shares of Registrable Securities stating that it is for use therein; provided, however, that the liability of such indemnifying party under this Section 1.9(b) will be limited to the amount of the net proceeds (after giving effect to underwriting discounts and commissions) received by such indemnifying party in the sale of Registrable Securities giving rise to such liability.  The foregoing indemnity will remain in full force and effect regardless of

 

15

 

any investigation made by or on behalf of the Investor Indemnitee and will survive the transfer of such securities by such indemnifying party.

 

(c)                                  Notice of Loss, Etc.  Promptly after receipt by an indemnified party of written notice of the commencement of any action or proceeding involving a Loss referred to in Section 1.9(a) or Section 1.9(b), such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; but the failure of any indemnified party to give notice as provided herein will not relieve the indemnifying party of its obligations under Section 1.9(a) or Section 1.9(b) except to the extent that the indemnifying party is materially and actually prejudiced by such failure to give notice.  In case any such action is brought against an indemnified party, (i) the indemnifying party will be entitled to participate in and, unless in the indemnified party’s reasonable judgment a conflict of interest exists between the indemnified and indemnifying parties in respect of such Loss, to assume and control the defense thereof, at its own expense, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to the indemnified party, and (ii) after its assumption of the defense thereof, the indemnifying party will not be liable to the indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation, unless in the indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof.  No indemnifying party will be liable for any settlement of any such action or proceeding effected without the indemnifying party’s written consent, which will not be unreasonably withheld.  No indemnifying party will, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the indemnified party of a release from all liability in respect of such Loss or which requires action on the part of the indemnified party or otherwise subjects the indemnified party to any obligation or restriction to which it would not otherwise be subject.

 

(d)                                 Contribution.  If the indemnification provided for in Section 1.9(a) or Section 1.9(b) are for any reason be unavailable in respect of any Loss, then, in lieu of the amount paid or payable under Section 1.9(a) or Section 1.9(b), the indemnified party and the indemnifying party under Section 1.9(a) or Section 1.9(b), as applicable, will contribute to the aggregate Losses (including legal or other expenses reasonably incurred in connection with investigating the same) (i) in such proportion as is appropriate to reflect the relative fault of Parent and the prospective sellers of Registrable Securities covered by the registration statement that resulted in such Loss with respect to the statements, omissions or action that resulted in such Loss, as well as any other relevant equitable considerations or (ii) if the allocation provided by the preceding clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect the relative benefits received by Parent, on the one hand, and such prospective sellers, on the other hand, from their sale of Registrable Securities; provided that, for purposes of this clause (ii), the relative benefits received by the prospective sellers will be deemed not to exceed the amount received by such sellers.

 

16

 

No Person guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the U.S. Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  The obligations, if any, of the Selling Investors to contribute as provided in this subsection (d) are not joint but are several in proportion to the relative value of their respective Registrable Securities covered by such registration statement.  In addition, no Person will be obligated to contribute amounts under this Section 1.9(d) in payment for any settlement of any Loss effected without such Person’s consent, not to be unreasonably withheld, conditioned or delayed.

 

(e)                                  Other Indemnification.  Parent will, in connection with any registration statement filed by Parent pursuant to Section 1.1(a) or Section 1.2, and each Investor who has Registered for sale of Registrable Securities will, with respect to any required Registration or other qualification of securities under any federal or state law or regulation of any governmental entity other than the U.S. Securities Act, indemnify Investor Indemnitees and Parent Indemnitees, respectively, against Losses, or, to the extent that indemnification will be unavailable to an Investor Indemnitee or a Parent Indemnitee, contribute to the aggregate Losses of such Investor Indemnitee or Parent Indemnitee in a manner similar to that specified in the preceding subsections of this Section 1.9 (with appropriate modifications).

 

(f)                                   Indemnification Payments.  The indemnification and contribution required by this Section 1.9 will be made by periodic payments of the amount thereof during the course of any investigation or defense, as and when any Loss is incurred and is due and payable.

 

1.10                        Registration Rights to Others.  If Parent at any time hereafter provides to any holder of any securities of Parent rights with respect to the Registration of such securities under the U.S. Securities Act, then such rights must not be in conflict with or adversely affect any of the rights provided to the holders of Registrable Securities in, or conflict (in a manner that adversely affects holders of Registrable Securities) with any other provisions included in, this Agreement without the prior written consent of the Roney Representative.

 

1.11                        Adjustments Affecting Registrable Securities.  Without the written consent of each Investor, Parent will not affect or permit to occur any combination, subdivision or reclassification of Registrable Securities that would materially and adversely affect the ability of the Investors to include shares of such Registrable Securities in any Registration of Parent’s securities under the U.S. Securities Act or the marketability of such Registrable Securities under any such Registration or other offering.

 

1.12                        Rule 144 and Rule 144A.  Parent will take all actions reasonably necessary to enable the Investors to sell Registrable Securities without Registration under the U.S. Securities Act after the Effective Date within the limitation of the exemptions provided by (a) Rule 144 under the U.S. Securities Act, (b) Rule 144A under the U.S. Securities Act, or (c) any similar rules or regulations hereafter adopted by the SEC, including Parent’s filing on a timely basis all reports required to be filed

 

17

 

under the U.S. Exchange Act.  Upon the written request of any Investor, Parent will deliver to such Investor a written statement as to Parent’s compliance with such requirements.

 

1.13                        Calculation of Registrable Securities.  For purposes of this Agreement, all references to a percentage or number of shares of Registrable Securities will be calculated based upon the number of shares of Registrable Securities, as the case may be, reported as outstanding in the last periodic report filed with the SEC at the time such calculation is made and will exclude any Registrable Securities owned by Parent or any subsidiary of Parent.

 

1.14                        Termination of Registration Rights.  Parent’s obligations under Section 1.1, Section 1.2 and Section 1.3 to Register Registrable Securities for sale under the U.S. Securities Act with respect to any Investor will terminate on the first date on which no shares of Registrable Securities are held by such Investor.

 

ARTICLE II  MISCELLANEOUS

 

2.1                               Modification or Amendment.  This Agreement may be amended and Parent may take action herein prohibited, or omit to perform any act herein required to be performed by it, if and only if Parent has obtained the prior written consent of each Major Investor who then holds at least 5% of the outstanding Series A Stock.

 

2.2                               Waiver.  The terms and provisions of this Agreement may be waived only by a written document executed by the Party or Parties granting such waiver.  Each such waiver will be effective only in the specific instance and for the purpose for which it was given, and will not constitute a continuing waiver.  No failure or delay by a Party to exercise any right, power or remedy under this Agreement, and no course of dealing among the Parties, will operate as a waiver of any such right, power or remedy of such Party.  All remedies hereunder are cumulative, and the election of any remedy by a Party will not constitute a waiver of the right of such Party to pursue other available remedies.

 

2.3                               Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts (including by pdf or other readable electronic format), each such counterpart being deemed to be an original instrument, with the same effect as if the signature thereto and hereto were upon the same instrument, and will become effective when one or more counterparts have been signed by each of the Parties and delivered (including by email or DocuSign) to the other Parties, and all such counterparts will together constitute one and the same agreement.  This Agreement will automatically terminate upon the Closing under, and as defined in, the Transaction Agreement.  Each Investor covenants and agrees with the other Investors to execute and deliver, at the Closing, a counterpart of the Investor Rights Agreement in substantially in the form attached to the Transaction Agreement as Exhibit C.

 

18

 

2.4                               Governing law; Venue; Waiver of Jury Trial.

 

(a)                                 This Agreement will be construed and enforced in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles that would result in the application of any law other than the law of the State of Delaware.

 

(b)                                 All actions arising out of or relating to this Agreement will be heard and determined in the Court of Chancery of the State of Delaware (or, only if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware).  The Parties (i) submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, only if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware) for the purpose of any action arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement and (ii) irrevocably waive, and agree not to assert by way of motion, defense or otherwise, in any such action, any claim that they are not subject personally to the jurisdiction of the above-named courts, that the property is exempt or immune from attachment or execution, that any such action is brought in an inconvenient forum, that the venue of such action is improper or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts.  Each of the Parties agrees that mailing of process or other papers in connection with any action or proceeding in the manner provided in Section 2.6 or such other manner as may be permitted by law will be valid and sufficient service of process.

 

(c)                                  EACH PARTY HEREBY IRREVOCABLY WAIVES, AND WILL CAUSE ITS SUBSIDIARIES AND AFFILIATES TO WAIVE, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.

 

2.5                               Specific Performance.  The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions.  Subject to the other provisions of this Section 2.5, the Parties acknowledge and agree (and further agree not to take any contrary position in any litigation concerning this Agreement) that (a) the Parties will be entitled to an injunction or injunctions, specific performance or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof without proof of damages or otherwise, and that such relief may be sought in addition to and will not limit, diminish or otherwise impair, any other remedy to which they are entitled under this Agreement, (b) the provisions set forth herein are not intended to and do not adequately compensate for the harm that would result from a breach of this Agreement and will not be construed to limit, diminish or otherwise impair in any respect any Party’s right to specific enforcement, and (c) the right of specific enforcement is an integral part of this Agreement and without that right, none of Parties would have entered into this Agreement.  The Parties acknowledge and agree that any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms

 

19

 

and provisions of this Agreement in accordance with this Section 2.5 will not be required to provide any bond or other security in connection with any such order or injunction.

 

2.6                               Notices.  All notices, requests and other communications among the Parties will be in writing and will be deemed to have been duly given (a) when delivered in person, (b) when delivered by FedEx or other nationally recognized overnight delivery service, or (c) when delivered by email (so long as the sender of any such e-mail has not received an e-mail from the applicable server indicating a delivery failure) and promptly confirmed by delivery in person or by post or overnight courier as aforesaid in each case, according to the instructions set forth below, or to such other address or addresses as any such Party may from time to time designate to the others in writing.  Such notices will be deemed given: at the time of personal delivery, if delivered in person; one Business Day after being sent, if sent by reputable, overnight delivery service; and at the time sent (so long as the sender of any such e-mail has not received an e-mail from the applicable server indicating a delivery failure), if sent by email prior to 5:00 p.m. local time of the recipient on a Business Day; or on the next Business Day if sent by email after 5:00 p.m. local time of the recipient on a Business Day or on a non-Business Day. Such communications will be delivered:

 

(a)                                 If to Parent, then to:

 

Vintage Wine Estates, Inc.
 937 Tahoe Boulevard
 Incline Village, NV 89451
 E-mail: pat@vintagewineestates.com

 

with copies (which shall not constitute notice) to:

 

Foley & Lardner LLP

321 North Clark Street, Suite 3000

Chicago, IL 60654

Attention: Patrick Daugherty

E-mail: pdaugherty@foley.com

 

(b)                                 If to the Roney Representative, then to:

 

Patrick A. Roney 
 [* * *] 
 [* * *]
 E-mail: pat@vintagewineestates.com

 

(c)                                  If to a Roney Investor, then to such Investor (addressed by name) at:

 

[* * *] 
 [* * *]
 Attention: Patrick A. Roney
 E-mail: pat@vintagewineestates.com

 

20

 

(d)                                 If to a Rudd Investor, then to such Investor (addressed by name) at:

 

Leslie Rudd Investment Co. 
 2416 E. 37th Street North 
 Wichita, KS 67219 
 Attention: Darrell D. Swank
 E-mail: Darrell.Swank@lrico.com

 

with copies (which shall not constitute notice) to:

 

Leslie Rudd Investment Co. 
 2416 E. 37th Street North 
 Wichita, KS 67219 
 Attention: Angie Gregory
 E-mail: Angie.Gregory@lrico.com

 

(e)                                  If to a Sebastiani Investor, then to the person and at the place specified in the signature pages hereto.

 

(f)                                   If to the Wasatch Investor, then to the person and at the place specified in the signature pages hereto.

 

2.7                               Entire Agreement.  This Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties both written and oral, among the Parties, with respect to the subject matter hereof. For avoidance of doubt, the Parties stipulate that the Other Agreements are ratified and confirmed and remain in effect among the parties thereto notwithstanding the execution and delivery of this Agreement.

 

2.8                               No Third-Party Beneficiaries.  The representations, warranties and covenants set forth herein are solely for the benefit of the Parties, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the Parties any rights or remedies hereunder.

 

2.9                               Severability.  The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, then (a) a suitable and equitable provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected by such invalidity or unenforceability, nor will such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

21

 

2.10                        Interpretation; Construction.

 

(a)                                 The headings herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.  Where a reference in this Agreement is made to a Section, such reference will be to a Section of this Agreement unless otherwise indicated.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” All pronouns and all variations thereof will be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Person may require.  Where a reference in this Agreement is made to any agreement (including this Agreement), contract, statute or regulation, such references are to, except as context may otherwise require, the agreement, contract, statute or regulation as amended, modified, supplemented, restated or replaced from time to time (in the case of an agreement or contract, to the extent permitted by the terms thereof); and to any section of any statute or regulation including any successor to the section and, in the case of any statute, any rules or regulations promulgated thereunder.  All references to “days” will be to calendar days unless otherwise indicated as a “Business Day.”

 

(b)                                 The Parties have participated jointly in negotiating and drafting this Agreement.  In the event that an ambiguity or a question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

 

2.11                        Assignment.  This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors, legal representatives and permitted assigns.  No Party may assign any of its rights or delegate any of its obligations under this Agreement, by operation of law or otherwise, without the prior written consent of Parent.  Any purported assignment in violation of this Agreement is void.

 

2.12                        Remedies.  This Agreement may only be enforced, and any claim or cause of action based upon, arising out of, or related to this Agreement may only be brought, against the entities that are expressly named as Parties and then only with respect to the representations, warranties, covenants or other obligations or agreements set forth herein with respect to such Party.

 

2.13                        Further Assurances.  Without further consideration, each Party will execute and deliver or cause to be executed and delivered such additional documents and instruments and take all such further actions as may be reasonably necessary or desirable to effect the transactions contemplated by this Agreement.

 

[Signature Pages Follow]

 

22

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	
 
    	
RONEY REPRESENTATIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Patrick A. Roney
    
	
 
    	
Name:
    	
Patrick A. Roney
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PARENT:
    
	
 
    	
 
    
	
 
    	
VINTAGE WINE ESTATES, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Patrick A. Roney
    
	
 
    	
Name:
    	
Patrick A. Roney
    
	
 
    	
Title:
    	
Chief Executive Officer
    

 

 

	
 
    	
INVESTORS:
    
	
 
    	
 
    
	
 
    	
MARITAL TRUST D UNDER THE LESLIE G. RUDD LIVING TRUST U/A/D   MARCH 31, 1999
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darrell D. Swank
    
	
 
    	
Name:
    	
Darrell   D. Swank
    
	
 
    	
Title:
    	
Co-Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steven Kay
    
	
 
    	
Name:
    	
Steven   Kay
    
	
 
    	
Title:
    	
Co-Trustee
    
				

 

24

 

	
 
    	
SLR NON-EXEMPT   TRUST U/A/D APRIL 21, 2018
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darrell D. Swank
    
	
 
    	
Name:
    	
Darrell   D. Swank
    
	
 
    	
Title:
    	
Co-Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Steven Kay
    
	
 
    	
Name:
    	
Steven   Kay
    
	
 
    	
Title:
    	
Co-Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Patrick A. Roney
    
	
 
    	
Name:
    	
Patrick   A. Roney
    
	
 
    	
Title:
    	
Co-Trustee
    

 

25

 

	
 
    	
PATRICK   A. RONEY AND LAURA G. RONEY TRUST
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Patrick A. Roney
    
	
 
    	
Name:
    	
Patrick   A. Roney
    
	
 
    	
Title:
    	
Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Laura G. Roney
    
	
 
    	
Name:
    	
Laura   G. Roney
    
	
 
    	
Title:
    	
Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SEAN   RONEY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sean Roney
    
	
 
    	
Name:
    	
Sean   Roney
    
				

 

26

 

	
 
    	
SONOMA   BRANDS II, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jonathan Sebastiani
    
	
 
    	
Name:
    	
Jonathan   Sebastiani
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SONOMA   BRANDS II SELECT, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jonathan Sebastiani
    
	
 
    	
Name:
    	
Jonathan   Sebastiani
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SONOMA   BRANDS VWE CO-INVEST, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jonathan Sebastiani
    
	
 
    	
Name:
    	
Jonathan   Sebastiani
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Notices:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Jon   Sebastiani
    
	
 
    	
Address:
    	
117 W. Napa Ste., STE C 

Sonoma, CA 95476
    
	
 
    	
Email:
    	
Jon@sonomabrands.com
    
					

 

27

 

	
 
    	
CASING &   CO. F/B/O WASATCH MICROCAP FUND
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Dan Thurber
    
	
 
    	
Name:
    	
Dan Thurber
    
	
 
    	
Title:
    	
General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
Notices:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Dan Thurber
    
	
 
    	
Address:
    	
505 Wakara Way, 3rd Floor 

Salt Lake City, UT 84108
    
	
 
    	
Email:
    	
dthurber@wasatchglobal.com
    

 

28

 

Annex A

 

Definitions

 

The following capitalized terms used herein have the following meanings:

 

“Affiliate” means, when used with respect to any Person, any other Person who is an “affiliate” of that Person within the meaning of Rule 405 promulgated under the U.S. Securities Act.

 

“Agreement” is defined in the Preamble.

 

“Business Day” means any day ending at 11:59 p.m. (Eastern Time) other than a Saturday or Sunday or other day on which banks are required or authorized to close in the City of New York.

 

“Closing” means the meaning given to it in the Transaction Agreement.

 

“Demand Takedown” is defined in Section 1.2(d)(i).

 

“Effective Date” means that date which is 180 days after the Registration of the IPO.

 

“Effectiveness Period” is defined in Section 1.5(a)(ii).

 

“Expenses” means all expenses incurred by Parent incident to Parent’s performance of or compliance with its obligations under this Agreement, including (a) all registration, filing and listing fees, (b) all fees, disbursements and other charges of counsel for Parent and of its independent registered public accounting firm, including the expenses incurred in connection with “cold comfort” letters required by or incident to such performance and compliance, and (c) all fees and expenses of other Persons retained by Parent, but excluding underwriting discounts and commissions and applicable transfer taxes, if any, which discounts, commissions and transfer taxes will be borne by the seller or sellers of Registrable Securities in all cases, along with all other expenses incurred by them except for the fees and expenses of one law firm engaged to represent all such Selling Investors.

 

“Form S-1” means a registration statement on Form S-1.

 

“Form S-3” means a registration statement on Form S-3 or any similar short-form registration that may be available at such time.

 

“Form S-4” means a registration statement on Form S-4.

 

“Investors” is defined in the Preamble.

 

29

 

“Investor Indemnitee” is defined in Section 1.9(b).

 

“Investor Information” is defined in Section 1.5(b).

 

“IPO” means the Parent’s first underwritten public offering of its Series A Stock under the Securities Act.

 

“Loss” is defined in Section 1.9(a).

 

“Major Investors” means the Sebastiani Investors, the Roney Investors, the Rudd Investors and the Wasatch Investor.

 

“Market Price” means, on any date of determination, the average of the daily closing price of the Registrable Securities during the immediately preceding 30 days on which the national securities exchanges are open for trading.

 

“New Registration Statement” is defined in Section 1.2(c).

 

“Offering Documents” is defined in Section 1.9(a).

 

“Other Agreements” means (i) the Amended and Restated Voting Agreement as of April 3, 2018 among the Company, the Roney Investors and the Rudd Investors and (ii) the Shareholders’ Agreement dated as of April 3, 2018, as amended as of February 2, 2021, among the Company and the shareholders of the Company party thereto.

 

“Parent” is defined in the Preamble.

 

“Parent Board” means the Board of Directors of Parent, composed of nine directors or such other number of directors as may be specified in the certificate of incorporation or bylaws of Parent or as determined by the Parent Board in accordance with such certificate or bylaws.

 

“Parent Indemnitee” is defined in Section 1.9(a).

 

“Parties” means Parent and the Investors.

 

“Person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, governmental entity or other entity of any kind or nature.

 

“Piggyback Requesting Investor” is defined in Section 1.3(a).

 

“Register,” “Registered” and “Registration” mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the U.S. Securities Act and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

“Registrable Securities” means the (a) shares of Series A Stock owned of record by the Investors (whether as of the date of this Agreement or acquired by the Investors

 

30

 

after the date of this Agreement) and (b) shares of Series A Stock issued to any Investor with respect to such securities referred to in clauses (a) and (b) by way of any share split, share dividend or other distribution, recapitalization, share exchange, share reconstruction, amalgamation, contractual control arrangement or similar event. As to any particular Registrable Securities, such securities will cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities has become effective under the U.S. Securities Act and such securities have been sold, transferred, disposed of or exchanged in accordance with such registration statement, (ii) such securities have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer have been delivered by Parent and subsequent public distribution of them will not require Registration under the U.S. Securities Act, (iii) such securities have ceased to be outstanding, or (iv) the Registrable Securities are saleable under Rule 144 without volume limitations under Rule 144.

 

“Requesting Holder” is defined in Section 1.2(d)(i).

 

“Resale Shelf Registration Statement” is defined in Section 1.2(a).

 

“Roney Investors” means the Patrick A. Roney and Laura G. Roney Trust and Sean Roney.

 

“Roney Representative” means Patrick A. Roney or, if he is not then living, the trustee of the Rudd Investor that owns a majority of the total Series A Stock then held by the Rudd Investors.

 

“Rudd Investors” means Marital Trust D under the Leslie G. Rudd Living Trust U/A/D 3/31/1999, as amended, the SLR Non-Exempt Trust U/A/D 4/21/2018 and the Rudd Foundation.

 

“S-3 Eligibility Date” is defined in Section 1.2(a).

 

“Sebastiani Investors” means Sonoma Brands II, L.P., Sonoma Brands II Select, L.P., and Sonoma Brands VWE Co-Invest, L.P.

 

“SEC Guidance” is defined in Section 1.2(c).

 

“Selling Investor” means a holder of Registrable Securities requested to be Registered pursuant to this Agreement.

 

“Transaction Agreement” means that certain Transaction Agreement dated February 3, 2021, as the same may be amended, among Bespoke Capital Acquisition Corp., a special purpose acquisition corporation incorporated under the Laws of the Province of British Columbia, VWE Acquisition Sub Inc., a Delaware corporation, the Company and, for the limited purposes specified therein, Bespoke Sponsor Capital LP, a Cayman Islands limited partnership, and Darrell D. Swank.

 

31

 

“Underwritten Takedown” means an underwritten public offering of Registrable Securities pursuant to a Resale Shelf Registration Statement, as amended or supplemented.

 

“Wasatch Investor” means Casing & Co. f/b/o Wasatch Microcap Fund.

 

32Exhibit 10.19

 

SHAREHOLDERS’ AGREEMENT

 

by and among

 

VINTAGE WINE ESTATES, INC.,

a California corporation,

 

and

 

THE SHAREHOLDERS OF VINTAGE WINE ESTATES, INC.

 

Dated as of April 4, 2018

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   1 DEFINITIONS
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
1.1
    	
Definitions
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   2 REPRESENTATIONS
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
2.1
    	
Shareholder   Representations and Warranties
    	
 
    	
5
    
	
2.2
    	
Additional Agreements   and Understandings
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   3 TRANSFERS
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
3.1
    	
Restrictions on   Transfers of Securities
    	
 
    	
6
    
	
3.2
    	
Joinder
    	
 
    	
7
    
	
3.3
    	
Permitted Transfers
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   4 RIGHT OF FIRST OFFER
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
4.1
    	
Right of First Offer
    	
 
    	
7
    
	
4.2
    	
Closing of Offered   Securities
    	
 
    	
9
    
	
4.3
    	
Effect of Securities in   Hands of the Transferee
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   5 RIGHT OF FIRST REFUSAL
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
5.1
    	
Right of First Refusal
    	
 
    	
9
    
	
5.2
    	
Closing of Offered   Securities
    	
 
    	
11
    
	
5.3
    	
Effect of Securities in   Hands of the Transferee
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   6 LIQUIDITY EVENTS
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
6.1
    	
Approved Sale
    	
 
    	
12
    
	
6.2
    	
Qualified IPO
    	
 
    	
12
    
	
6.3
    	
Major Investor Sale   Right
    	
 
    	
12
    
	
6.4
    	
Drag Along Rights
    	
 
    	
12
    
	
6.5
    	
Tag Along Rights
    	
 
    	
14
    
	
6.6
    	
Share of Costs
    	
 
    	
16
    
	
6.7
    	
Indemnification and   Other Agreements
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   7 PREEMPTIVE RIGHTS
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
7.1
    	
Grant of Preemptive   Rights
    	
 
    	
16
    
	
7.2
    	
Preemptive Rights   Notice
    	
 
    	
17
    
	
7.3
    	
Exercise of Rights
    	
 
    	
17
    
	
7.4
    	
Issuance Subsequent to   Expiration of Offering Period
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   8 PUT OPTION
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
8.1
    	
Grant of Put Option
    	
 
    	
18
    

 

i

 

TABLE OF CONTENTS
  (continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   9 GOVERNANCE
    	
 
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
9.1
    	
Size of the Board
    	
 
    	
20
    
	
9.2
    	
Board Composition
    	
 
    	
20
    
	
9.3
    	
Failure to Designate a   Board Member
    	
 
    	
21
    
	
9.4
    	
Removal of Board   Members
    	
 
    	
21
    
	
9.5
    	
Agreement to Perform
    	
 
    	
21
    
	
9.6
    	
No Liability for   Election of Recommended Directors
    	
 
    	
21
    
	
9.7
    	
Meetings
    	
 
    	
22
    
	
9.8
    	
Insurance
    	
 
    	
22
    
	
9.9
    	
Observer Rights
    	
 
    	
22
    
	
9.10
    	
TGAM Protective Rights
    	
 
    	
22
    
	
9.11
    	
Major Investor   Protective Rights
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   10 INFORMATION RIGHTS
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
10.1
    	
Delivery of Financial   Statements
    	
 
    	
23
    
	
10.2
    	
Termination of   Information Rights
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   11 CONFIDENTIALITY; NON-DISPARAGEMENT
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
11.1
    	
Confidentiality
    	
 
    	
24
    
	
11.2
    	
Non-Disparagement
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   12 COVENANTS REGARDING EMPLOYEES; NONDISCLOSURE
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
12.1
    	
Employee Stock
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   13 LEGEND ON CERTIFICATES
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
13.1
    	
Legend on Certificates
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   14 REMEDIES
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
14.1
    	
Dispute Resolution
    	
 
    	
26
    
	
14.2
    	
Remedies
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE   15 MISCELLANEOUS
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
15.1
    	
Other Business   Activities
    	
 
    	
29
    
	
15.2
    	
Termination of   Agreement
    	
 
    	
29
    
	
15.3
    	
Amendment of Agreement
    	
 
    	
29
    
	
15.4
    	
Termination of Status   as Shareholder
    	
 
    	
29
    
	
15.5
    	
Notices
    	
 
    	
30
    
	
15.6
    	
Construction
    	
 
    	
30
    
	
15.7
    	
Counterparts; Electronic   Signatures
    	
 
    	
30
    

 

ii

 

TABLE OF CONTENTS
  (continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
15.8
    	
Descriptive Headings
    	
 
    	
30
    
	
15.9
    	
Entire Agreement
    	
 
    	
30
    
	
15.10
    	
Binding Effect
    	
 
    	
30
    
	
15.11
    	
Applicable Law
    	
 
    	
30
    
	
15.12
    	
Severability
    	
 
    	
30
    
	
15.13
    	
Headings
    	
 
    	
30
    
	
15.14
    	
No Strict Construction
    	
 
    	
30
    
	
15.15
    	
Interpretation
    	
 
    	
31
    
	
15.16
    	
Spousal Consent
    	
 
    	
31
    
	
15.17
    	
Amendment of Prior   Agreement
    	
 
    	
31
    

 

iii

 

SHAREHOLDERS’ AGREEMENT

 

This Shareholders’ Agreement (this “Agreement”) is made as of April 4, 2018 (the “Effective Date”) by and among Vintage Wine Estates, Inc., a California corporation (the “Company”); each Person identified on Schedule I-A and executing a signature page hereto (each, a “Series A Holder” and, collectively the “Series A Holders”); each Person identified on Schedule I-B and executing a signature page hereto (each, a “Series B Holder” and, collectively the “Series B Holders”); and each other Person who after the Effective Date acquires securities of the Company and agrees to become a party to, and bound by, this Agreement by executing a Joinder Agreement (as defined below).  The Persons listed on Schedules I-A and I-B, and the other Persons who become party to this Agreement and their respective Permitted Transferees are each referred to herein as a “Shareholder” and, collectively, as the “Shareholders”.

 

BACKGROUND

 

A.            The authorized capital structure of the Company consists of shares of Series A Stock, without par value (the “Series A Stock”), shares of Series B Stock, without par value (the “Series B Stock”), each with the rights, qualifications and preferences set forth in the Amended and Restated Articles of Incorporation of the Company (as amended and in effect from time to time, the “Charter”).

 

B.            The Company and certain of the Shareholders (the “Prior Shareholders”) are parties to (i) that certain Voting Agreement dated as of February 1, 2018, and amended and restated as of the date hereof (the “Prior Agreement”).

 

C.            Pursuant to Section 6.6 of the Prior Agreement, the written consent of Prior Shareholders holding more than fifty percent (50%) of the Shares (as defined in the Prior Agreement) of each of the Roney Shareholders and the Rudd Shareholders (each as defined in the Prior Agreement (the “Prior Agreement Requisite Shareholders”) is required to amend or terminate the Prior Agreement or waive any term thereof.

 

F.             The undersigned Shareholders constitute the Prior Agreement Requisite Shareholders, and such Prior Agreement Requisite Shareholders hereby approve the amendment and restatement of the Prior Agreement by entering into this Agreement.

 

G.            As of the Effective Date, the Company and TGAM Agribusiness Fund Holdings LP, a Delaware limited Partnership (“TGAM”) have entered into that certain Stock Purchase Agreement (the “Purchase Agreement”), pursuant to which TGAM has agreed to purchase new shares of Series B Stock of the Company.

 

H.            The execution and delivery of this Agreement by the Company and the Requisite Shareholders is a condition to the closing of the issuance, sale and purchase of the Series B Stock pursuant to the Purchase Agreement.

 

I.             The parties to this Agreement desire to provide for certain restrictions on the disposition of the Company’s securities and the governance and operation of the Company.

 

 

AGREEMENT

 

The parties hereby agree as follows:

 

ARTICLE 1
 DEFINITIONS

 

1.1          Definitions.  The following capitalized terms shall have the following meanings:

 

“Acquisition Transaction” means the acquisition by the Company of another Person’s business (whether by acquisition of stock or assets, or by merger, consolidation or other similar transaction).

 

“Affiliate” means with respect to any Person, any other Person which (directly or indirectly through one or more other Persons) is Controlling, Controlled by, or under Common Control with the Person referred to, and, if the Person referred to is a natural person, such Person’s Immediate Family Members.  An “Affiliate” with respect to the Company includes the Company’s direct or indirect Subsidiaries, whether or not in existence on the Effective Date.

 

“Board” means the Board of Directors of the Company.

 

“Business Day” means any day except Saturday, Sunday or any day on which banks are generally not open for business in San Francisco, California.

 

“Control” (including, with correlative meaning, the terms “controlled by” and “under common control with”) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

“Equity Securities” means any equity securities of the Company, including shares of Series A Stock and Series B Stock, by whatever name called, now owned or subsequently acquired by a Shareholder, however acquired, whether through stock splits, stock dividends, reclassifications, recapitalizations, similar events or otherwise.

 

“Estate Planning Entity” means, with respect to any individual, a trust, limited partnership, limited liability company or other fiduciary relationship for the benefit of such

 

2

 

individual and/or such individual’s spouse and/or lineal descendants or a charitable foundation or organization established by such individual and/or such individual’s Immediate Family Members.

 

“Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, in each case as amended from time to time, or any successor thereto.

 

“Fully-Diluted Basis” means the number of issued and outstanding shares of Series A Stock and Series B Stock determined, as of the date of determination, as if all issued and outstanding Stock Equivalents had been converted or exercised, if any; provided, however, that any Stock Equivalents that are subject to vesting but have not vested as of the date of computation shall be disregarded for purposes of determining Fully-Diluted Basis.

 

“GAAP” means generally accepted accounting principles as in force in the United States of America at the date of the determination thereof, consistently applied.

 

“Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to herein or lineal descendants thereof.

 

“Independent Third Party” means a, with respect to a Shareholder, any Person who is not an Affiliate of such Shareholder.

 

“IPO” means an initial underwritten public offering of the Company’s Equity Securities pursuant to an effective registration statement filed under the Securities Act, other than pursuant to a registration statement on Form S-4, Form S-8 or any similar successor form.

 

“Major Investor” means each of TGAM, Roney and Rudd, so long as each, individually or together with such investor’s Affiliates, holds at least five percent (5%) of the then-outstanding Equity Securities on a Fully-Diluted Basis.

 

“Percentage Interest” means, with respect to any Shareholder, the percentage determined by dividing (i) the number of Shares held by such Shareholder, by (ii) the aggregate number of Shares outstanding at such time, and multiplying the result by 100.

 

“Permitted Transferee” means a Person to whom Securities are Transferred pursuant to Section 3.3.

 

“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, or the United States of America or any other nation, state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of government.

 

“Pro Rata Portion” means, with respect to any ROFO Purchasing Shareholder or any ROFR Purchasing Shareholder, on the date of the ROFO Offering Shareholder Offer Notice or the ROFR Offering Shareholder Offer Notice, respectively the number of Equity Securities equal to the product of (i) the total number of ROFO Offered Shares or ROFR Offered Shares, respectively and (ii) a fraction determined by dividing (x) the number of Shares by such ROFO Purchasing

 

3

 

Shareholder or ROFR Purchasing Shareholder, respectively, by (y) the total number of Shares owned by all of the ROFO Purchasing Shareholders or ROFR Purchasing Shareholders, respectively.

 

“Roney” means (i) Pat Roney, (ii) any Immediate Family Member of Pat Roney, (iii) any trust established by or for the benefit of Pat Roney or any Immediate Family Member of Pat Roney, (iv) any entities controlling, controlled by or under common control with Pat Roney or any Immediate Family Member of Pat Roney, and (v) any charitable trust, foundation or organization established by Pat Roney or any Immediate Family Member of Pat Roney.

 

“Rudd” means (i) Leslie Rudd, (ii) any Immediate Family Member of Leslie Rudd, (iii) any trust established by or for the benefit of Leslie Rudd or any Immediate Family Member of Leslie Rudd, (iv) any entities controlling, controlled by or under common control with Leslie Rudd or any Immediate Family Member of Leslie Rudd, and (v) any charitable trust, foundation or organization established by Leslie Rudd or any Immediate Family Member of Leslie Rudd.

 

“Sale of the Company” means either:  (a) the acquisition of the Company or a subsidiary by another entity by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, reorganization, merger, conversion or consolidation), except any such acquisition involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to acquisition continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such acquisition, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such acquisition, the parent corporation of such surviving or resulting corporation (a “Stock Sale”); (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company; or (c) a Qualified IPO.

 

“SEC” means the Securities and Exchange Commission.

 

“SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

“Securities” means:  (i) all Equity Securities; (ii) all Stock Equivalents; and (iii) all securities of the Company issued or issuable with respect to the securities referred to in clauses (i) or (ii) above, including by way of a stock split, stock dividend or other recapitalization.

 

“Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder, in each case as amended from time to time, or any successor thereto.

 

“Shares” means shares of Equity Securities.

 

4

 

“Stock Equivalents” means any (i) warrants, options or other rights to subscribe for, purchase or otherwise acquire any Equity Securities or (ii) any securities convertible into or exchangeable for Equity Securities.

 

“Subsidiary” means any Person of which the Company owns securities having a majority of the voting power in electing the board of directors directly or through one or more subsidiaries or, in the case of a partnership, limited liability partnership or other similar entity, securities conveying, directly or indirectly, a majority of the economic interests in such partnership or entity.

 

“Transfer” means any transfer, sale, assignment, pledge, encumbrance or other disposition (irrespective of whether any of the foregoing are effected, with or without consideration, voluntarily or involuntarily, by operation of law or otherwise, or whether inter vivos or upon death).

 

ARTICLE 2
 REPRESENTATIONS

 

2.1          Shareholder Representations and Warranties.  By executing this Agreement or a Joinder Agreement (as defined below), each Shareholder represents and warrants to the Company and agrees and acknowledges, that:

 

(a)           Securities acquired by or for such Shareholder are not registered under the Securities Act and must be held by such Shareholder until such Securities are registered under the Securities Act or an exemption from such registration is available; the Company shall have no obligation to take any action that may be necessary to make available any exemption from registration under the Securities Act; and the Company shall give to the party responsible for recording Transfers of Securities “stop transfer” directions prohibiting Transfers in violation of the foregoing provisions of this Section 2.1(a).

 

(b)           Such Shareholder is familiar with Rule 144 adopted by the SEC (“Rule 144”) which establishes guidelines governing, among other things, the resale of “restricted securities” (such as the Securities, which are acquired from the issuer of such securities in a transaction not involving any IPO).

 

(c)           Rule 144 is not presently available for Transfers of the Securities because, among other things, the Company is not presently required to file the reports required to be filed by Section 15(d) of the Exchange Act and does not have a class of securities registered pursuant to Section 12 of that statute; and, even if the Company was required to file reports under the Exchange Act and had filed all reports required to be filed, reliance on Rule 144 to Transfer securities is subject to other restrictions and limitations, as set forth in Rule 144.

 

(d)           In connection with any Transfer of the Securities under Rule 144 or pursuant to any other exemption, such Shareholder may, at the option of the Company, be required to deliver to the Company an opinion of counsel for such Shareholder (reasonably acceptable to the Company), and/or receive an opinion of counsel for the Company, to the effect that all applicable federal and state securities law requirements have been met.

 

5

 

(e)           The execution, delivery and performance of this Agreement by such Shareholder do not and shall not conflict with, violate or cause a breach of any agreement, contract or instrument to which such Shareholder is a party or any judgment, order or decree to which such Shareholder is subject.

 

(f)            Such Shareholder has not and shall not grant any proxy or become party to any voting trust or other agreement that is inconsistent with, conflicts with or violates any provision of this Agreement, provided that the Shareholders and the Company acknowledge and accept the proxy and power of attorney granted pursuant to Section 3 of the Prior Agreement.

 

(g)           The Company has made no representation or warranty to such Shareholder regarding accounting or tax treatment of such Shareholder’s Securities or the acquisition thereof.  The Company will owe no compensation of any kind to such Shareholder if the accounting or tax treatment of such Shareholder’s Securities or the acquisition thereof differs from that desired or expected by such Shareholder.

 

2.2          Additional Agreements and Understandings.  Each Shareholder acknowledges and agrees that Securities issued by the Company pursuant to a stock dividend, stock split, reclassification or like action, or pursuant to the exercise of a right granted by the Company to all holders of Securities to purchase Securities on a proportionate basis, shall be in all cases subject to the terms of this Agreement, including restrictions on Transfer, and for all purposes shall be treated in the same manner as the Securities which were split or reclassified or with respect to which a stock dividend was paid or rights to purchase stock on a proportionate basis were granted.  In the event of a merger of or exchange involving the Company where this Agreement does not terminate, any partnership units, membership units or shares of stock (and/or securities convertible into such units or shares) which are issued in exchange for Securities shall thereafter be deemed to be Securities subject to the terms of this Agreement.

 

ARTICLE 3
 TRANSFERS

 

3.1          Restrictions on Transfers of Securities.  No Shareholder may Transfer any interest in any Securities except pursuant to this Article 3, Article 4, Article 5, or Article 6.  Notwithstanding anything to the contrary contained herein, (a) in no event shall any Shareholder be permitted to Transfer any interest in Securities to a competitor of the Company or Affiliate of a competitor of the Company, except pursuant to Article 6 or otherwise in connection with an Approved Sale (as defined in Section 6.1 below); provided, however, that Transfers to any Shareholder or any Affiliate of a Shareholder that may own, operate or otherwise be affiliated with a business that competes with the Company shall not be prohibited by this provision, and (b) a Transfer of Securities shall not be valid or of any force or effect if such Transfer would result in (i) a violation or breach of any applicable federal or state securities law or any agreement to which the Company or any Subsidiary is a party or (ii) any revocation or failure to qualify for any federal, state or local license or permit required to operate the Company’s business.  Any purported Transfer of Securities which is not made in accordance with the applicable provisions of this Agreement shall not be valid and shall have no force or effect.

 

6

 

3.2          Joinder.  Any Person (including any Permitted Transferee) to whom Securities are to be Transferred shall execute and deliver, as a condition to such Transfer, all documents deemed reasonably necessary by the Company, in consultation with its counsel, to evidence such party’s joinder in, acceptance of, and agreement with, the obligations with respect to such Securities contained in this Agreement, in substantially the form attached as Exhibit A hereto (such document, a “Joinder Agreement”).  Each such transferor of Securities shall, prior to the Transfer, cause the transferee thereof to execute and deliver a Joinder Agreement (and, if the transferee is a married individual and upon the request of the Company, cause such transferee’s spouse to execute and deliver to the Company a Spousal Consent in the form of Exhibit B hereto (“Spousal Consent”)).

 

3.3          Permitted Transfers.  Notwithstanding anything to the contrary contained herein, Securities may be Transferred only:  (i) by a Shareholder to any of such Shareholder’s Immediate Family Members (whether inter vivos or upon death); (ii) by a Shareholder to an Estate Planning Entity; (iii) by a Shareholder that is a Permitted Transferee back to the Shareholder who Transferred such Securities to such Permitted Transferee; (iv) by a Shareholder that is an entity to an Affiliate of such Shareholder, provided that, for Transfers other than those to Estate Planning Entities pursuant to clause (ii) above, such Permitted Transferee is reasonably acceptable to the Board; (v) with respect to Transfers by TGAM (or by a Permitted Transferee of TGAM), to (A) such Shareholder’s limited partners, (B) any successor fund or fund under common management, (C) a current or former Affiliate of TGAM, (D) any of their current employees, directors, managers or officers as of the Effective Date or (E) any current or former holder of equity interests therein, in each case so long as such transferee is managed by AGR Partners LLC, or, in the case of a transfer to an individual, so long as AGR Partners LLC is appointed as an agent or proxyholder with the authority to vote the Shares; (vii) Transfers of Shares owned as of the Effective Date from Roney to Rudd or from Rudd to Roney; or (viii) Transfers of Securities contemplated by and complying with Article 4 and Article 5, or Article 6, or Article 8, hereof.  No Securities may be Transferred pursuant to this Section 3.3 unless, prior to such Transfer, the transferee of such Securities has executed and delivered to the Company a Joinder Agreement (and, if the transferee is a married individual and upon the request of the Company, a Spousal Consent) with respect to the Securities so Transferred, and any Securities Transferred pursuant to this Section 3.3 will be subject thereafter to the rights of the Company and the Shareholders under this Agreement and entitled to the benefits of Securities under this Agreement.

 

ARTICLE 4
 RIGHT OF FIRST OFFER

 

4.1          Right of First Offer.  At any time prior to the consummation of a Qualifying IPO, and subject to the terms and conditions specified in this Section 4.1 and, in the case of an offer received by Rudd or Roney, subject to and following the exercise of the rights of Rudd and Roney pursuant to Section 2.4 of the Prior Agreement, each Shareholder shall have a right of first offer if any other Shareholder (the “ROFO Offering Shareholder”) proposes to Transfer any Equity Securities (the “ROFO Offered Shares”) owned by it to any Independent Third Party.  Each time the ROFO Offering Shareholder proposes to Transfer any ROFO Offered Shares (other than Transfers permitted pursuant to Section 3.3 and Transfers made pursuant to Section 6.4 or Section 6.5), the ROFO Offering Shareholder shall first make an offering of the ROFO Offered Shares to the other Shareholders in accordance with the following provisions of this Section 4.1:

 

7

 

(a)           Offer Notice.

 

(i)            The ROFO Offering Shareholder shall give written notice (the “ROFO Offering Shareholder Notice”) to the Company and the other Shareholders stating its bona fide intention to Transfer the ROFO Offered Shares and specifying the number of ROFO Offered Shares and the material terms and conditions, including the price and the independent Third Party transsferee, pursuant to which the ROFO Offering Shareholder proposes to Transfer the ROFO Offered Shares.

 

(ii)           The ROFO Offering Shareholder Notice shall constitute the ROFO Offering Shareholder’s offer to Transfer the ROFO Offered Shares to the other Shareholders, which offer shall be irrevocable for a period of 30 Business Days (the “ROFO Notice Period”).

 

(b)           Exercise of Right of First Offer.  Upon receipt of the ROFO Offering Shareholder Notice, each Shareholder shall have until the end of the ROFO Notice Period to elect to purchase its Pro Rata Portion of the ROFO Offered Shares by delivering a written notice (a “ROFO Election Notice”) to the ROFO Offering Shareholder and the Company stating that it elects to purchase such ROFO Offered Shares on the terms specified in the ROFO Offering Shareholder Notice.  Any ROFO Offer Notice so delivered shall be binding upon delivery and irrevocable by the applicable Shareholder.  If one or more Shareholders fail to deliver a ROFO Election Notice (the “Non-Electing Shareholders”) and therefore do not offer to purchase their Pro Rata Portion of the ROFO Offered Shares (the “Remaining ROFO Shares”), the remaining Shareholders shall have the opportunity to elect to purchase their Pro Rata Portion of the Remaining ROFO Offered Shares by delivering a second written notice (a “Second ROFO Election Notice”) to the ROFO Offering Shareholder and the Company stating that it elects to purchase such Remaining ROFO Offered Shares on the terms specified in the ROFO Offering Shareholder Notice.  Any Second ROFO Offer Notice so delivered shall be binding upon delivery and irrevocable by the applicable Shareholder.

 

(c)           Consummation of Sale.  If no Shareholder delivers a ROFO Election Notice in accordance with Section 4.1(b), the ROFO Offering Shareholder may, during the 60 day period following the expiration of the ROFO Notice Period (which period may be extended for a reasonable time not to exceed 90 days to the extent reasonably necessary to obtain any required Government Approvals, (the “Waived ROFO Transfer Period”), and subject to the provisions of Section 6.5 with respect to those Shareholders who have not delivered ROFO Election Notices, Transfer all of the ROFO Offered Shares to the Independent Third Party identified in the ROFO Election Notice on terms and conditions no more favorable to the Independent Third Party than those set forth in the ROFO Offering Shareholder Notice.  If the ROFO Offering Shareholder does not Transfer the ROFO Offered Shares within such period or, if such Transfer is not consummated within the Waived ROFR Transfer Period, the rights provided hereunder shall be deemed to be revived and the ROFO Offered Shares shall not be offered to any Person unless first re-offered to the Shareholders in accordance with this Section 4.1.

 

8

 

4.2          Closing of Offered Securities.  If any Purchasing Shareholder has elected to purchase Offered Securities, the Transfer of such Offered Securities shall be consummated as soon as reasonably practical following the delivery of the election notices (the “ROFR Closing”).  The purchaser of such Offered Securities shall pay for the Offered Securities on the same terms and conditions as described in the ROFO Offering Shareholder Notice.  Any Offered Securities transferred pursuant to this Article 4 shall be transferred free and clear of all liens and encumbrances (other than those imposed by this Agreement or applicable law), and the purchasers of any Offered Securities pursuant to this Article 4 shall be entitled to receive customary representations and warranties as to ownership, title, authority to sell and the like from the sellers regarding such sale and to receive such other evidence, including applicable inheritance and estate tax waivers, as may be reasonably necessary (in such purchaser’s judgment) to effect the purchase of the Offered Securities.

 

4.3          Effect of Securities in Hands of the Transferee.  Securities that are Transferred pursuant to this Article 4 to a Person (including, without limitation, pursuant to Section 3.3) shall thereafter continue to be subject to all restrictions on Transfer and shall be entitled to all rights that are contained in this Agreement.  Without limiting the generality of the foregoing, any such transferee must comply with the provisions of this Article 4 if such transferee shall propose to Transfer any such Securities.

 

ARTICLE 5
 RIGHT OF FIRST REFUSAL

 

5.1          Right of First Refusal.  At any time prior to the consummation of a Qualifying IPO, and subject to the terms and conditions specified in this Section 4.1, and, in the case of an offer received by Rudd or Roney, subject to and following the exercise of the rights of Rudd and Roney pursuant to Section 2.4 of the Prior Agreement, each Shareholder shall have a right of first refusal if any other Shareholder (the “ROFR Offering Shareholder”) receives an offer from an Independent Third Party that the ROFR Offering Shareholder desires to accept to purchase all or any portion of the Equity Securities owned by the ROFR Offering Shareholder (the “ROFR Offered Shares”).  Each time the ROFR Offering Shareholder receives an offer for any of its Equity Securities, the Offering Shareholder shall first make an offering of the Offered Shares to the other Shareholders in accordance with the following provisions of this Section 5.1 prior to Transferring such ROFR Offered Shares to the Independent Third Party (other than Transfers that are permitted by Section 3.3 or Transfers made pursuant to Section 6.4).

 

(a)           Offer Notice.

 

(i)            The ROFR Offering Stockholder shall, within five days of receipt of the offer from the Independent Third Party, give written notice (the “ROFR Offering Stockholder Notice”) to the Company and the other Shareholders stating that it has received a bona fide offer from an Independent Third Party and specifying:  (w) the number of ROFR Offered Shares to be sold by the ROFR Offering Stockholder; (x) the name of the person or entity who has offered to purchase such ROFR Offered Shares; (y) the per share purchase price and the other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof; and (z) the

 

9

 

proposed date, time and location of the closing of the Transfer, which shall not be less than 60 days from the date of the Offering Stockholder Notice..

 

(ii)           The ROFR Offering Shareholder Notice shall constitute the ROFR Offering Shareholder’s offer to Transfer the ROFR Offered Shares to the other Shareholders, which offer shall be irrevocable for a period of 30 Business Days.

 

(iii)          By delivering the ROFR Offering Stockholder Notice, the ROFR Offering Stockholder represents and warrants to the Company and each other Shareholder that:  (x) the ROFR Offering Stockholder has full right, title and interest in and to the ROFR Offered Shares; (y) the ROFR Offering Stockholder has all the necessary power and authority and has taken all necessary action to sell such ROFR Offered Shares as contemplated by this Section 5.1; and (z) the ROFR Offered Shares are free and clear of any and all Liens other than those arising as a result of or under the terms of this Agreement.

 

(b)           Exercise of Right of First Refusal.

 

(i)            Upon receipt of the ROFR Offering Shareholder Notice, each Shareholder shall have 10 Business Days to elect to purchase all (but not less than all) of its Pro Rata Portion of the ROFR Offered Shares by delivering a written notice (a “ROFR Election Notice”) to the ROFR Offering Shareholder and the Company stating that it elects to purchase such ROFR Offered Shares on the terms specified in the ROFO Offering Shareholder Notice.  Any ROFR Election Notice so delivered shall be binding upon delivery and irrevocable by the applicable Shareholder.  If one or more Shareholders fail to deliver a ROFR Election Notice (the “Non-Electing Shareholders”) and therefore do not offer to purchase their Pro Rata Portion of the ROFR Offered Shares (the “Remaining ROFR Shares”), the remaining Shareholders shall have the opportunity to elect to purchase their Pro Rata Portion of the Remaining ROFR Offered Shares by delivering a second written notice (a “Second ROFR Election Notice”) to the ROFR Offering Shareholder and the Company stating that it elects to purchase such Remaining ROFR Offered Shares on the terms specified in the ROFR Offering Shareholder Notice.  Any Second ROFR Election Notice so delivered shall be binding upon delivery and irrevocable by the applicable Shareholder.

 

(ii)           Each Shareholder that does not deliver a ROFR Election Notice during the ROFR Notice Period shall be deemed to have waived all of such Stockholder’s rights to purchase the ROFR Offered Shares under this Section 5.1, and the ROFR Offering Stockholder shall thereafter, subject to the rights of any ROFR Purchasing Stockholder, be free to sell the ROFR Offered Shares to the Independent Third Party specified in the ROFR Offer Notice without any further obligation to such Shareholder pursuant to this Section 5.1.

 

(c)           Consummation of Sale.  If no Shareholder delivers a ROFR Offer Notice in accordance with Section 5.1(b), the ROFR Offering Shareholder may, during the 60 day period following the expiration of the ROFR Notice Period (which period may be extended

 

10

 

for a reasonable time not to exceed 90 days to the extent reasonably necessary to obtain any required Government Approvals (the “Waived ROFR Transfer Period”), Transfer all of the ROFR Offered Shares to an Independent Third Party on terms and conditions no more favorable to the Independent Third Party than those set forth in the ROFR Offering Shareholder Notice.  If the ROFR Offering Shareholder does not Transfer the ROFR Offered Shares within such period or, if such Transfer is not consummated within the Waived ROFR Transfer Period, the rights provided hereunder shall be deemed to be revived and the ROFR Offered Shares shall not be offered to any Person unless first re-offered to the Shareholders in accordance with this Section 5.1.

 

(d)           Cooperation.  Each Shareholder shall take all actions as may be reasonably necessary to consummate the sale contemplated by this Section 5.1 including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

 

(e)           Closing.  At the closing of any sale and purchase pursuant to this Section 5.1, the ROFR Offering Stockholder shall deliver to the Purchasing Stockholder(s) certificate or certificates representing the ROFR Offered Shares to be sold (if any), accompanied by stock powers with signatures guaranteed and all necessary stock transfer taxes paid and stamps affixed, if necessary, against receipt of the purchase price therefore from such ROFR Purchasing Stockholder(s) by certified or official bank check or by wire transfer of immediately available funds.

 

5.2          Closing of Offered Securities.  If any Purchasing Shareholder has elected to purchase Offered Securities, the Transfer of such Offered Securities shall be consummated as soon as reasonably practical following the delivery of the election notices (the “ROFR Closing”).  The purchaser of such Offered Securities shall pay for the Offered Securities on the same terms and conditions set forth in the ROFR Offering Shareholders Notice.  Any Offered Securities transferred pursuant to this Article 5 shall be transferred free and clear of all liens and encumbrances (other than those imposed by this Agreement or applicable law), and the purchasers of any Offered Securities pursuant to this Article 5 shall be entitled to receive customary representations and warranties as to ownership, title, authority to sell and the like from the sellers regarding such sale and to receive such other evidence, including applicable inheritance and estate tax waivers, as may be reasonably necessary (in such purchaser’s judgment) to effect the purchase of the Offered Securities.

 

5.3          Effect of Securities in Hands of the Transferee.  Securities that are Transferred pursuant to this Article 5 to a Person shall thereafter continue to be subject to all restrictions on Transfer and shall be entitled to all rights that are contained in this Agreement.  Without limiting the generality of the foregoing, any such transferee must comply with the provisions of this Article 5 if such transferee shall propose to Transfer any such Securities.

 

ARTICLE 6
 LIQUIDITY EVENTS

 

6.1          Approved Sale.  Until the third anniversary of the Effective Date, no Person may effect a Sale of the Company, or otherwise liquidate, dissolve or wind-up the business and affairs

 

11

 

of the Company, effect any merger or consolidation, or consent to any of the foregoing, at any time without the prior written consent of each of the Major Investors.  Any Sale of the Company conducted or proposed to be consummated in accordance with this Section 6.1 shall be referred to herein as an “Approved Sale.”

 

6.2          Qualified IPO.  In the event the Company effects an IPO that constitutes a Deemed Liquidation Event as defined in the Charter, at the closing of such IPO, the Series B Shareholders shall receive the Series B Bullet Payment, as defined in the Charter, that would otherwise be payable at such date.  Each Major Investor may elect to participate in such an IPO pursuant to this Section 6.2 by delivering written notice to the Company within fifteen (15) days following delivery of the IPO Notice, and any Major Investor that makes such election shall be entitled to sell, at the same price and on the same terms and conditions as the other Shareholders, a number of shares of the Securities being sold in such IPO equal to the product of (i) the quotient determined by dividing (A) the number of Shares (treating Series A Stock and Series B Stock as a single Security regardless of the class thereof) owned by such Shareholder, determined on a Fully-Diluted Basis, by (B) the aggregate number of Shares held by (B) the aggregate number of Shares held by all Shareholders, determined on a Fully-Diluted Basis, and (ii) the aggregate number of Shares to be sold in such IPO.  Any Sale of the Company conducted or proposed to be consummated in accordance with this Section 6.2 shall be referred to herein as a “Qualified IPO.”

 

6.3          Major Investor Sale Right.

 

(a)           At any time after the sixth anniversary hereof and upon written notice to the Company and the other Shareholders by any Major Investor, the Board will, and will cause the Company (subject to all applicable laws) to, (i) engage a nationally recognized investment bank to represent the Company in connection with a Sale of the Company and (ii) use best efforts to pursue, negotiate and consummate the Sale of the Company within one year of delivery of such Major Investor’s sale notice.  Each other Shareholder shall vote in favor of, consent to and raise no objections to such Sale of the Company, in accordance with clauses (i) through (vii) of Section 6.4(a) and to the extent required by Section 6.4(b).  Such Sale of the Company shall be conducted in accordance with, and the Company and the Shareholders shall have the same obligations and shall timely take all actions set forth in, Section 6.4 (except as set forth in the immediately preceding sentence).  Any Sale of the Company consummated pursuant to this Section 6.3 shall be subject to Sections 6.6 and 6.7 below.

 

6.4          Drag Along Rights.

 

(a)           Actions to be Taken.  To the extent permitted pursuant to Section 6.4(b), and subject to Section 6.1, Section 6.4(c), and Section 9.11, in the event that (i) the Company and (ii) the holders of at least seventy-five percent (75%) of the outstanding shares of Stock, voting together as a single class (collectively, the “Selling Shareholders”), approve a Sale of the Company in writing, specifying that this Section 6.4 shall apply to such transaction, then each Shareholder and the Company hereby agree:

 

(i)            if such transaction requires Shareholder approval, with respect to all Shares that such Shareholder owns or over which such Shareholder otherwise

 

12

 

exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Shares in favor of, and adopt, such Approved Sale (together with any related amendment to the Charter required in order to implement such Approved Sale) and to vote in opposition to any and all other proposals that could be expected to delay or impair the ability of the Company to consummate such Approved Sale;

 

(ii)           if such transaction is a Stock Sale, to sell the same proportion of shares of capital stock of the Company beneficially held by such Shareholder as is being proposed to be sold by the Selling Shareholders, and, except as permitted in Section 6.4(b) below, on the same terms and conditions as the Selling Shareholders;

 

(iii)          to execute and deliver all related documentation and take such other action in support of the Approved Sale as shall reasonably be requested by the Company or the Selling Shareholders in order to carry out the terms and provision of this Section 6.4, including, without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances) and any similar or related documents;

 

(iv)          not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares of the Company owned by such party or Affiliate in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the acquirer in connection with the Approved Sale;

 

(v)           to irrevocably waive and refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Approved Sale;

 

(vi)          if the consideration to be paid in exchange for the Shares pursuant to this Section 6.4 includes any securities and due receipt thereof by any Shareholder would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (y) the provision to any Shareholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Shareholder in lieu thereof, against surrender of the Shares which would have otherwise been sold by such Shareholder, an amount in cash equal to the fair value (as determined in good faith by the Company) of the securities which such Shareholder would otherwise receive as of the date of the issuance of such securities in exchange for the Shares; and

 

13

 

(vii)         in the event that the Selling Shareholders, in connection with such Approved Sale, appoint a Shareholder representative (the “Shareholder Representative”) with respect to matters affecting the Shareholders under the applicable definitive transaction agreements following consummation of such Approved Sale, (A) to consent to (I) the appointment of such Shareholder Representative, (II) the establishment of any applicable escrow, expense or similar fund in connection with any indemnification or similar obligations, and (III) the payment of such Shareholder’s pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such Shareholder Representative in connection with such Shareholder Representative’s services and duties in connection with such Approved Sale and its related service as the representative of the Shareholders, and (B) not to assert any claim or commence any suit against the Shareholder Representative or any other Shareholder with respect to any action or inaction taken or failed to be taken by the Shareholder Representative in connection with its service as the Shareholder Representative, absent fraud or willful misconduct.

 

(b)           Exceptions.  A Shareholder will not be required to comply with Section 6.4(a) above in connection with any proposed Approved Sale unless upon the consummation of the Approved Sale, (i) each holder of each class or series of the Company’s stock will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock, and (ii) the aggregate consideration receivable by all holders of Equity Securities shall be allocated among the holders of Series A Stock and Series B Stock giving effect to the relative liquidation preferences to which the holders of Series A Stock and the holders of Series B Stock are entitled in a Deemed Liquidation Event (assuming for this purpose that the Approved Sale is a Deemed Liquidation Event and the assets of the Company available for distribution in such Deemed Liquidation Event are equal to such aggregate consideration) in accordance with the Company’s Charter in effect immediately prior to the Approved Sale.

 

(c)           Irrevocable Proxy.  The Selling Shareholders shall be subject to an irrevocable proxy and power of attorney as set forth in Section 14.2(b).

 

6.5          Tag Along Rights.

 

(a)           If any Shareholder (the “Transferring Shareholder”) proposes at any time to sell or otherwise Transfer (in accordance with the terms of this Agreement and subject to Article 4 and Article 5) to a purchaser or related group of purchasers in one or more related transactions, excepting a Permitted Transfer, Securities representing at least ten percent (10%) of the outstanding Shares on a Fully-Diluted Basis, other than pursuant to a Sale of the Company pursuant to Section 6.4 above, (a “Participation Sale”), the Transferring Shareholder shall deliver written notice of such Participation Sale to each of the remaining Shareholders at least fifteen (15) days prior to such proposed Transfer (the “Participation Sale Notice”), and the provisions of this Section 6.5 shall apply.  The Participation Sale Notice shall make reference to the participation rights hereunder and shall describe in reasonable detail the classes or series and aggregate number of Shares the

 

14

 

Transferring Shareholder proposes to transfer, the identity of the prospective transferee(s), and the purchase price per share for the Shares and the other material terms and conditions of the Participation Sale.  The Transferring Shareholder may not avoid the provisions of this Section 6.5 by transferring Securities to an Affiliate and selling equity in such Affiliate, and any Affiliate receiving Securities shall be subject to the terms of this Agreement.

 

(b)           Each Shareholder may elect to participate in a Participation Sale pursuant to this Section 6.5 by delivering written notice to the Transferring Shareholder (together with an unconditional commitment to participate on the terms specified in the Participation Sale Notice) within fifteen (15) days following delivery of the Participation Sale Notice, and any Shareholder that makes such election shall be entitled to sell, at the same price and on the same terms and conditions as the Transferring Shareholder, a number of shares of the Securities being sold in such Participation Sale equal to the product of (i) the quotient determined by dividing (A) the number of Shares (treating Series A Stock and Series B Stock as a single Security regardless of the class thereof) owned by such Shareholder, determined on a Fully-Diluted Basis, by (B) the aggregate number of Shares held by all Shareholders, determined on a Fully-Diluted Basis, and (ii) the aggregate number of shares of such Securities to be sold in such transaction.  Any Shareholder who fails to deliver such notice of election shall be deemed to have waived all rights under this Section 6.5 with respect to such Participation Sale.

 

(c)           If the purchaser of any of the Securities to be sold in a Participation Sale refuses to buy Securities that any Shareholder has elected to include in the Participation Sale pursuant to Section 6.5(b) at a price per share equal to at least that to which such participating Shareholder would be entitled in a Sale of the Company if proceeds were allocated as if the Participation Sale were a Deemed Liquidation Event, assuming for this purpose that the Participation Sale is a Deemed Liquidation Event and the assets of the Company available for distribution in such Deemed Liquidation Event with respect to the participating shares are equal to such proceeds of the Participation Sale (such price, the “Preference Adjusted Price”), then the Transferring Shareholder and their Affiliates may not sell any Securities to such purchaser pursuant to such Participation Sale unless the Transferring Shareholder purchases from each such participating Shareholder the Securities that such participating Shareholder would have been entitled to sell under Section 6.5(b), at a price per share equal to the greater of (i) the price received by the Transferring Shareholder and (ii) the Preference Adjusted Price, as and on substantially similar terms and conditions as the Transferring Shareholder or such Affiliates are selling in such Participation Sale; provided, that any participating Shareholder may elect not to sell such Securities pursuant to this Section 6.5(c) following a determination of the purchase price for such Securities under this Section 6.5(c).  The Transferring Shareholder may not sell any Securities in an Approved Sale unless the purchaser purchases from each selling Shareholder the maximum amount of Securities that such selling Shareholder could have been obligated to sell under Section 6.5(a) above.

 

6.6          Share of Costs.  Each Shareholder participating in any transaction pursuant to Sections 6.1, 6.3, 6.4 or 6.5 shall bear its pro rata share (based upon the number of Shares sold by such Shareholder out of the total number of Shares sold by all Persons in such transaction, including option holders on an as-exercised basis) of the costs of any sale of Securities pursuant

 

15

 

to Sections 6.1, 6.3, 6.4 or 6.5 to the extent such costs are not otherwise paid by the Company or the acquiring party; provided, however, that no Shareholder shall responsible for costs relating to breaches of representations personal to another Shareholder (e.g., re title to the other shareholder’s shares) and no Shareholder shall, in any event, be responsible for costs in excess of the proceeds received in such a transaction in excess of the proceeds received in such transaction by such Shareholder.  Costs incurred by a participating Shareholder on its own behalf shall not be considered costs of the transaction hereunder.

 

6.7          Indemnification and Other Agreements.  As a condition to the effective exercise of the rights in Sections 6.1, 6.3, 6.4 or 6.5, each participating Shareholder shall join in and agree to be bound by all provisions of the documents pursuant to which the transferee is to acquire securities (provided all participating Shareholders are treated in the same manner).  Without limiting the foregoing, any Shareholder participating in a transaction pursuant to this Article 6 shall be required to make such representations, warranties and covenants, and grant such indemnification, as may be required by the purchaser of the securities and have been made by the Transferring Shareholders or their Affiliates.  Each Shareholder participating in a transaction pursuant to this Article 6 shall bear a portion of any obligations with respect to representations, warranties, covenants, escrows, holdbacks and indemnities equal to its percentage of the total consideration received by all Shareholders participating in such transaction unless otherwise consented to by such Shareholder.

 

ARTICLE 7
 PREEMPTIVE RIGHTS

 

7.1          Grant of Preemptive Rights.  Except as otherwise set forth in this Article 7 or the issuance of Equity Securities, Stock Equivalents or debt securities:  (a) to any Person who is not an Affiliate of either the Company or TGAM in connection with an Acquisition Transaction; (b) pursuant to a Qualified IPO; (c) to the current or future officers, employees or directors of, or consultants to, the Company or any of its Subsidiaries (or to any entity controlled by any of such officers, employees or directors) pursuant to an option plan or other equity incentive plan approved by the Board; (d) pursuant to the exercise of (but not, except as provided in the foregoing clause (c), in connection with the issuance of) any Stock Equivalent; or (e) in connection with the conversion of that certain Promissory Note issued by the Company in favor of the Leslie G. Rudd Living Trust, dated January 2, 2018, as amended, in the principal amount of $9,000,000 or that certain Promissory Note issued by the Company in favor of Pat Roney, dated January 2, 2018, as amended, in the principal amount of $1,000,000 into Equity Securities or other debt securities of the Company; if the Company authorizes, from time to time in one or more offerings, the issuance and sale of any Equity Securities, any Stock Equivalents or any debt securities (collectively, the “Preemptive Right Securities”), then, in accordance with the procedures set forth in this Article 7, the Company shall offer to sell such Preemptive Right Securities to each of the Major Investors.  For purposes of this Article 7, each such Major Investor shall be deemed a “Preemptive Right Holder” and collectively, the “Preemptive Right Holders”.

 

7.2          Preemptive Rights Notice.  The Company shall give a written notice (the “Preemptive Rights Notice”) to the Preemptive Right Holders, stating in reasonable detail (a) its bona fide intention to offer such Preemptive Right Securities, (b) the number of such Preemptive Right Securities to be offered, (c) the purchase price and payment terms, if any, upon which it proposes to offer such Preemptive Right Securities, (d) the twenty-five (25) day period from the

 

16

 

delivery of such Preemptive Rights Notice in which such Preemptive Right Holder’s preemptive right may be exercised hereunder, and the procedures for the exercise of preemptive rights consistent with the procedures set forth herein, and (e) each Preemptive Right Holder’s Percentage Interest.

 

7.3          Exercise of Rights.

 

(a)           Each Preemptive Right Holder who is an accredited investor may exercise its preemptive rights hereunder by delivering a written notice (an “Exercise Notice”) to the Company and the other Preemptive Right Holders within twenty-five (25) days following delivery of the Preemptive Rights Notice, which Exercise Notice shall set forth the aggregate number or amount of Preemptive Right Securities that such Preemptive Right Holder desires to purchase.

 

(b)           If more than one Preemptive Rights Holder delivers an Exercise Notice, each such Preemptive Right Holder shall be entitled to purchase that number or amount of Preemptive Right Securities, determined by allocating all Preemptive Right Securities among the participating Preemptive Right Holders pro rata in accordance with their Percentage Interests until either (i) each Preemptive Right Holder has been allocated a number of Preemptive Right Securities equal to the number of Preemptive Right Securities set forth in such Preemptive Right Holder’s Exercise Notice or (ii) no additional Preemptive Right Securities are available for allocation.

 

(c)           If a Preemptive Right Holder exercises preemptive rights pursuant to this Article 7, such Preemptive Right Holder shall execute all documentation (including, without limitation, an accredited investor questionnaire), and take all actions, as may be reasonably requested by the Company in connection therewith.  Each Preemptive Right Holder exercising its preemptive rights pursuant to this Article 7, shall, as a condition to such exercise, also be required to purchase the same proportionate amount of any other securities that the purchasers of such Preemptive Right Securities purchase in connection with the issuance of the securities subject to the preemptive rights.

 

(d)           Upon issuance of Equity Securities or Stock Equivalents to a Preemptive Right Holder pursuant to this Article 7, all such Preemptive Right Securities shall be entitled to all rights and subject to all obligations applicable to the Securities held by such Preemptive Right Holder under this Agreement.

 

(e)           Each Preemptive Right Holder who fails for any reason to deliver an Exercise Notice in accordance with this Section 7.3 shall be deemed to have waived any and all of his, her or its rights under this Article 7 with respect to the then-contemplated sale of any Preemptive Right Securities.

 

(f)            The closing of any sale pursuant to this this Section 7.3 shall occur within the later of ninety (90) days of the date that the Preemptive Rights Notice is given and the date of initial sale of Preemptive Right Securities pursuant to Section 7.4.

 

7.4          Issuance Subsequent to Expiration of Offering Period.  Upon the expiration of the offering period described above, the Company shall be entitled to sell such Preemptive Right

 

17

 

Securities as the Preemptive Right Holders have not elected to purchase during the one hundred twenty (120)-day period following such expiration, on terms and conditions no more favorable to the purchasers thereof than those offered to the Preemptive Right Holders.  If the Company does not enter into a definitive agreement for the sale of the Preemptive Right Securities within such one hundred twenty (120)-day period, or if such agreement is not consummated within thirty (30) days of the execution thereof, any Preemptive Right Securities proposed to be offered or sold by the Company shall be reoffered to the Preemptive Right Holders pursuant to the terms of this Article 7.

 

ARTICLE 8
 PUT OPTION

 

8.1          Grant of Put Option

 

(a)           Right to Sell.  Subject to the terms and conditions of this Agreement, at any time on or after the date that is the seventh anniversary of the Effective Date (the “Put Commencement Date”), each Major Investor (the “Exercising Shareholder”) shall have the right (the “Put Right”), but not the obligation, to cause the Company to purchase all but not less than all of its Shares (the “Put Shares”) at the Put Purchase Price (as defined in Section 8.1(e)).

 

(b)           Procedures

 

(i)            If any Exercising Shareholder desires to sell the Put Shares pursuant to Section 8.1(a), such Exercising Shareholder shall deliver to the Company a written, unconditional and irrevocable notice (the “Put Exercise Notice”) exercising the Put Right.

 

(ii)           Within two (2) business days of receiving a Put Exercise Notice, the Company shall give notice of such receipt to each Major Investor other than the initial Exercising Shareholder, and each such Shareholder shall be deemed to have elected to participate in the Put Right (and become an Exercising Shareholder) unless a written notice of such Major Investor’s election not to so participate or be an Exercising Shareholder shall be received by the Company within thirty (30) business days of the Company’s notice.

 

(iii)          By delivering the Put Exercise Notice or failing to elect not to participate in the Put Right, each Exercising Shareholder represents and warrants to the Company that (A) the Exercising Shareholder has full right, title and interest in and to the Shares, (B) the Exercising Shareholder has all the necessary power and authority and has taken all necessary action to sell such Shares as contemplated by this Section 8.1, and (C) the Shares are free and clear of any and all mortgages, pledges, security interests, options, rights of first offer, encumbrances or other restrictions or limitations of any nature whatsoever other than those arising as a result of or under the terms of this Agreement.

 

(iv)          Subject to Section 8.1(c) below, the closing of any sale of Shares pursuant to this Section 8.1 shall take place no later than 90 days following receipt

 

18

 

by the Company of the Put Exercise Notice.  The Company shall give the Exercising Shareholder at least 10 days’ written notice of the date of closing (the “Put Right Closing Date”).

 

(c)           Consummation of sale.  The Company will, to the extent permitted under the Company’s credit agreement with its senior bank lender, pay the Put Purchase Price for the Shares by certified or official bank check or by wire transfer of immediately available funds on the Put Right Closing Date and/or, to the extent permitted by, and in compliance with, Section 8.1(f) below, one or more promissory notes.

 

(d)           Cooperation.  The Company and the Exercising Shareholder each shall take all actions as may be reasonably necessary to consummate the sale contemplated by this Section 8.1, including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

 

(e)           Put Purchase Price.

 

(i)            In the event one or more Exercising Shareholders exercises the Put Right hereunder, the purchase price per share at which the Company shall be required to purchase the Put Shares (the “Put Purchase Price”) shall be, for Series A Shares, equal to the Fair Market Value of such Put Shares as of the date of the Put Exercise Notice, and, for Series B Shares, equal to the Fair Market Value of such Put Shares as of the date of the Put Exercise Notice plus all preference payments to which the Series B Stockholders would be entitled as if a Deemed Liquidation Event had occurred on the Put Right Closing Date.

 

(ii)           For purposes of this Article 8, (i) the term “Fair Market Value” shall mean, as of any particular date, (A) fair market value per share as determined jointly by the Board and Exercising Shareholders; provided, that if the Board and the Exercising Shareholders are unable to agree on the fair market value per share of the Put Shares within a reasonable period of time (not to exceed 15 Business Days from the Company’s receipt of the Put Exercise Notice), each Exercising Shareholder and the Company shall first specify in writing to the other party a proposed value for the Series A Shares and the Fair Market Value for such Put Shares shall be the value per Series A Share specified by the Exercising Shareholder, or the Company, whichever is closest to the value subsequently determined by an independent, nationally recognized investment banking, accounting or valuation firm (the “Valuation Firm”) jointly selected by the Board and the Exercising Shareholders (without discount for illiquidity, being a non-controlling interest or any other discounts that were not taken into account in the September 2016 valuation of the Company).  The Fair Market Value of each share of Series B Stock shall be equal to the Fair Market Value of a shares of Series A Stock plus the Series B Bullet Payment, as defined in the Charter.  The Company shall provide the Valuation Finn with all reasonably necessary Company financial and other records as the Valuation Firm may request.  The Valuation Firm shall deliver its written determination of the fair market value per share of the Put Shares within sixty (60) days of its engagement to the Exercising Shareholder and the

 

19

 

Company and such determination of the fair market value per share of Put Shares shall be final, conclusive, and binding on the parties.  The fees and expenses of the Valuation Firm shall be borne by the Company.  In determining the Fair Market Value of the Put Shares, an orderly sale transaction between a willing buyer and a willing seller shall be assumed, using valuation techniques then prevailing in the securities industry without regard to the lack of liquidity of the Put Shares due to any restrictions (contractual or otherwise) applicable thereto or any discount for minority interests and assuming full disclosure of all relevant information and a reasonable period of time for effectuating such sale and assuming the sale of all of the issued and outstanding shares of Series A Stock and Series B Stock (including fractional interests) calculated on a fully diluted basis to include the conversion or exchange of all securities then outstanding that are convertible into or exchangeable for Series A Stock or Series B Stock and the exercise of all rights and warrants then outstanding and exercisable to purchase Shares or securities convertible into or exchangeable for shares of Series A Stock or Series B Stock; provided, that such assumption shall not include those securities, rights and warrants (i) owned or held by or for the account of the Company or any of its subsidiaries, or (ii) convertible or exchangeable into Series A Stock or Series B Stock where the conversion, exchange or exercise price per share is greater than the Fair Market Value.

 

(f)            Payment.  In the event, and to the extent, that it is reasonably determined that the Company does not have available to it cash or available borrowing capacity (permitted to be used for such purchase) under existing debt facilities sufficient to purchase the Put Shares, payment for the portion of the aggregate Put Purchase Price may, subject to consent by any senior bank lender, be by a subordinated promissory note, in a form acceptable to Exercising Shareholder, bearing interest at the LIBOR Swap rate plus 700 basis points, with a term of two years and principal and interest being paid quarterly.

 

ARTICLE 9
 GOVERNANCE

 

9.1          Size of the Board.  Each Shareholder agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that the size of the Board shall be set and remain at five (5) directors.

 

9.2          Board Composition.  Except as set forth in Section 9.2(b), each Shareholder agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at each annual or special meeting of Shareholders at which an election of directors is held or pursuant to any written consent of the Shareholders, the following persons shall be elected to the Board:

 

(a)           One (1) person designated by TGAM (a “TGAM Director”), who shall initially be Ejnar Knudsen; and

 

20

 

(b)           Four (4) persons designated by the Series A Shareholders pursuant to the process specified in Schedule II hereto; who shall initially be:  Pat Roney, Leslie Rudd, Darrell Swank and James Lintott.

 

9.3          Failure to Designate a Board Member.  If the Person or the holders of at least a majority of the Shares entitled under Section 9.2 to designate a director fail to elect a sufficient number of directors to fill all directorships pursuant to Section 9.2, then any directorship so vacant shall remain vacant until such time as the Person or the applicable holders elect a person to fill such directorship by vote or written consent in lieu of a meeting in accordance with Section 9.2.

 

9.4          Removal of Board Members.  Each Shareholder also agrees to vote, or cause to be voted, all Shares owned by such Shareholder, or over which such Shareholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that:

 

(a)           no director elected pursuant to Sections 9.2 or 9.3 of this Agreement may be removed from office unless such removal is directed or approved by the affirmative vote of the Person, or of the holders of at least a majority of the Shares, entitled under Section 9.2 to designate such director;

 

(b)           any vacancies created by the resignation, removal or death of a director elected pursuant to Sections 9.2 or 9.3 shall be filled pursuant to the provisions of this Article 9, it being understood that such directorship shall remain vacant until such time as such vacancy has been filled pursuant to the provisions of this Article 9; and

 

(c)           upon the request of any party entitled to designate a director as provided in Section 9.2 to remove such director, such director shall be removed.

 

9.5          Agreement to Perform.  All Shareholders agree to execute any written consents required to perform the obligations of this Agreement, and the Company agrees at the request of any party entitled to designate directors to call a special meeting of Shareholders for the purpose of electing directors.

 

9.6          No Liability for Election of Recommended Directors.  No Shareholder, nor any Affiliate of any Shareholder, shall have any liability as a result of designating a person for election as a director for any act or omission by such designated person in his or her capacity as a director of the Company, nor shall any Shareholder have any liability as a result of voting for any such designee in accordance with the provisions of this Agreement.

 

9.7          Meetings.  The Board shall meet on a regular basis in accordance with the Company’s bylaws.  Meetings of the Board may be held either in person or by means of telephone or video conference or other communications device that permits all directors participating in the meeting to hear each other, at the offices of the Company or such other place (either within or outside the State of California) as may be determined from time to time by the Board.  Written notice of each meeting of the Board shall be given to each member of the Board:  (a) if the meeting is to be in person, at least four days prior to each such meeting, and (b) if the meeting is to be held remotely, at least forty-eight (48) hours prior to each such meeting.  At all meetings of the Board, a majority of the total number of directors, including the TGAM Director (whether in person or by proxy), shall constitute a quorum for the transaction of business; provided, however, that if two

 

21

 

consecutive meetings are properly called at which a quorum fails to be present, (i) in the case of a meeting called by the TGAM Director, solely as a result of the Unexcused Absence (as defined below) of any of the other directors, or (ii) in the case of a meeting called by any person other than the TGAM Director, solely as a result of the Unexcused Absence of the TGAM Director, quorum for the purposes of a third consecutive properly-called meeting shall be deemed to be the directors in attendance at such third meeting.  An “Unexcused Absence” shall be deemed to occur, with respect to any director, by the failure to respond to a proper meeting notice with a reasonable, good faith justification for why such director is unable to attend such meeting and the failure to provide in good faith a commercially reasonable date on which such director will be available to attend such meeting.  If such reasonable, good faith justification is provided in a response and a commercially reasonable alternative date is proposed in good faith, such meeting shall not be counted for the purposes of determining whether quorum shall be adjusted upon the call of a third meeting at which a quorum fails to be present.

 

9.8          Insurance.  The Company shall maintain, from and after the Effective Date, from financially sound and reputable insurers, Directors and Officers liability insurance, each in an amount and on terms and conditions satisfactory to the Board.

 

9.9          Observer Rights.  Following the Effective Date, the Company shall invite, in addition to the TGAM Director(s), a representative of TGAM to attend all meetings of the Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided, however, that such representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided.

 

9.10        TGAM Protective Rights.  Without the prior written consent of TGAM, in its capacity as a Shareholder, the Company shall not undertake to do any of the following:

 

(a)           Amend the Charter, except as permitted by the Charter as in effect on the Effective Date;

 

(b)           Convert the Company to a partnership, limited liability company or any other form of entity other than in connection with the Sale of the Company;

 

(c)           Make any announcement or public release of information about TGAM’s ownership of Shares, or other involvement, in the Company; or

 

(d)           Authorize or enter into (or amend or modify) any agreement, contract or commitment to do any of the foregoing, or authorize, take or agree to take (or fail to take) any action with respect to the foregoing.

 

9.11        Major Investor Protective Rights.  Without the prior written consent of each Major Investor, in its capacity as a Shareholder, the Company shall not undertake to do any of the following:

 

22

 

(a)           Undertake a Sale of the Company or any other Deemed Liquidation Event (as defined in the Charter) (i) prior to the date that is three (3) years from the Effective Date;

 

(b)           Incur any indebtedness that implies a minimum fixed charge coverage ratio maintenance covenant that is less than that established by the Company’s senior lender as of the Effective Date;

 

(c)           Amend the Charter, including without limitation authorizing any additional shares or new classes of shares or amending the corporate purpose of the Company;

 

(d)           Increase or decrease the size of the Board;

 

(e)           Engage in any related-party transaction, other than pursuant standard agreements with Rudd relating to real estate leasebacks, on terms substantially the same as those for such transactions in place as of the Effective Date;

 

(f)            Make any amendment the Company’s incentive equity plan that is materially different from its historical equity incentive plans; or

 

(g)           Authorize or enter into (or amend or modify) any agreement, contract or commitment to do any of the foregoing, or authorize, take or agree to take (or fail to take) any action with respect to the foregoing.

 

ARTICLE 10
 INFORMATION RIGHTS

 

10.1        Delivery of Financial Statements.  The Company shall deliver to each Major Investor:

 

(a)           as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, (A) a balance sheet as of the end of such year, and (B) statements of income and of cash flows for such year, and (iii) a statement of shareholders’ equity as of the end of such year, all such financial statements prepared in accordance with GAAP and audited by independent public accountants of regionally recognized standing selected by the Company;

 

(b)           as soon as practicable, but in any event within forty (40) days of the end of each fiscal month of the Company, an unaudited income statement for such month, a statement of cash flows and an unaudited balance sheet as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (A) be subject to normal year-end audit adjustments and (B) not contain all notes thereto that may be required in accordance with GAAP);

 

(c)           prior to November 15 of the year preceding each fiscal year, the Company budget for such fiscal year, including (i) monthly consolidated unaudited balance sheets and monthly statements of income and retained earnings and cash flows for the Company, (ii) key customer and product sales forecasts, and (iii) detailed projections of increases or

 

23

 

decreases in (A) workforce, (B) personnel costs, (C) capital expenditures and (D) working capital; and

 

(d)           prompt written notice of the occurrence of any of the following:  (i) the commencement of any material litigation against the Company, (ii) a material loss, and (iii) the existence of any fact or occurrence, including, without limitation, receipt of any written communication from any government agency, that could reasonably be expected to result in a product recall for any of the Company’s products.

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to this Section 10.1 shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

10.2        Termination of Information Rights.  The covenants set forth in this Article 10 shall terminate and be of no further force or effect (a) immediately before the consummation of a Qualified IPO, (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (c) with respect to each Major Investor, at such time as such shareholder ceases to be a Major Investor, whichever event occurs first.

 

ARTICLE 11
 CONFIDENTIALITY; NON-DISPARAGEMENT

 

11.1        Confidentiality.  Each Shareholder agrees that such Shareholder will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of-this Article 10 by such Shareholder), (b) is or has been independently developed or conceived by the Shareholder without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Shareholder by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that a Shareholder may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Securities from such Shareholder, if such prospective purchaser agrees to be bound by the provisions of this Article 10; (iii) to any Affiliate, partner, member, Shareholder, or wholly owned subsidiary of such Shareholder (including, in the case of TGAM, its limited partners and prospective limited partners) in the ordinary course of business, provided that such Shareholder informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Shareholder promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

11.2        Non-Disparagement.  Each of the Shareholders and the Company agrees to (and the Company shall cause its executive officers and directors to) refrain from Disparaging the other parties hereto (including each of such other parties’ respective Affiliates, including officers, board

 

24

 

members and partners).  Nothing in this Section 11.2 shall preclude any party from making truthful statements that are reasonably necessary to comply with applicable law, regulation or legal process, or to defend or enforce a party’s rights under this Agreement.  “Disparaging” means, personally or through an agent, making remarks, comments or statements, whether written or oral, that impugn the character, integrity, reputation, abilities or business interest of the person being disparaged.

 

ARTICLE 12
 COVENANTS REGARDING EMPLOYEES; NONDISCLOSURE

 

12.1        Employee Stock.

 

(a)           Unless otherwise approved by the Board, all future employees and consultants of the Company who purchase, receive Stock Equivalents to purchase, or receive awards of Shares after the Effective Date shall be required to execute restricted stock or option agreements, as applicable, and any Securities issued to such Person upon the exercise of such Stock Equivalents shall be subject to any repurchase or call rights set forth in such restricted stock or option agreement.  In addition, unless otherwise approved by the Board, (a) vesting of all Stock Equivalents shall cease, and (b) any unvested Shares shall be cancelled without additional consideration upon termination of employment of a holder of Restricted Stock.

 

(b)           As a condition to the issuance of any Shares and exercise of any Stock Equivalent, the recipient employee or consultant shall be required to execute a Joinder Agreement.

 

ARTICLE 13
 LEGEND ON CERTIFICATES

 

13.1        Legend on Certificates.

 

(a)           All stock certificates representing Shares and any other securities issues in respect of the Shares upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall bear the following legend:

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR A VALID EXEMPTION FROM REGISTRATION THEREUNDER.  THE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN A SHAREHOLDERS’ AGREEMENT DATED AS OF APRIL 4, 2018 BY AND AMONG THE SHAREHOLDERS OF VINTAGE WINE ESTATES, INC.  (THE “COMPANY”) AND CERTAIN OTHER PERSONS FROM TIME TO TIME, THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF THIS SECURITY UNTIL THE

 

25

 

CONDITIONS THEREIN HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER.  A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”

 

(b)           Upon termination of this Agreement, certificates for Shares may be surrendered to the Company in exchange for new certificates without the foregoing legends.

 

ARTICLE 14
 REMEDIES

 

14.1        Dispute Resolution.

 

(a)           In the event of any claim, dispute or controversy arising out of, relating to or in connection with this Agreement (including any schedule or exhibit hereto) or the breach, termination or validity thereof or the negotiation, execution or performance thereof (including, without limitation, any claims alleging intentional misrepresentation, fraud or willful misconduct) (a “Claim”), the parties shall first attempt to settle such Claim in the first instance by mutual discussions between representatives of each Shareholder and the Company.  Within ten (10) Business Days of the receipt by a party or parties of a notice from another party or parties of the existence of a Claim (the “Arbitration Notice”), the receiving party or parties shall submit a written response to the other party or parties (the “Response”).  Both the Arbitration Notice and the Response shall include a statement of each disputing party’s position with regard to the Claim and a summary of arguments supporting that position.  Within ten (10) Business Days of receipt of the Response, the executives of the respective parties shall meet and attempt to resolve the Claim.  All negotiations pursuant to this clause shall be confidential and shall be treated as compromise and settlement negotiations, and no oral or documentary representations made by the parties during such negotiations shall be admissible for any purpose in any subsequent proceeding.  If any Claim is not resolved within ten (10) Business Days of receipt of the Arbitration Notice (or within such longer period as to which the parties have agreed in writing), then the Claim shall be submitted to arbitration in accordance with Section 14.1(b).

 

(b)           Any Claim not timely resolved in accordance with Section 14.1(a), shall be finally and exclusively resolved by arbitration in accordance with the then prevailing American Arbitration Association (“AAA”) Rules and Procedures, (except as modified herein, the “Rules”).  There shall be a single arbitrator.  The parties shall have five (5) Business Days from commencement of the arbitration in accordance with the Rules to agree on a single arbitrator.  Failing timely agreement, the arbitrator shall be selected by AAA.  All arbitration pursuant to Section 14.1(c) shall be confidential and shall be treated as compromise and settlement negotiations, and no oral or documentary representations made by the parties during such arbitration shall be admissible for any purpose in any subsequent proceedings.  The place of arbitration shall be New York, New York.  Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration

 

26

 

Act, 9 U.S.C. § 1 et seq.  The award shall be final and binding upon the parties and shall be the sole and exclusive remedy between the parties regarding any claims, counterclaims, issues or accounting presented to the arbitral tribunal.  Judgment upon any award may be entered in any court having jurisdiction.

 

(c)           By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and the enforcement of any award.  Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.  The parties hereby submit to the exclusive jurisdiction of the state or federal courts located in the county of New York, New York (the “Designated Courts”) for the purpose of an order to compel arbitration, for preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrator(s), and to the non-exclusive jurisdiction of the Designated Courts for the enforcement of any award issued hereunder.

 

(d)           By executing and delivering this Agreement and subject in all cases to Sections 14.1(a) through (c), the parties, irrevocably (i) accept generally and unconditionally the jurisdiction and venue of the Designated Courts for such purpose; (ii) waive any objections which such party may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings brought in the Designated Courts and hereby further irrevocably waive and agree not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum; (iii) agree that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to such party at their respective addresses provided in accordance with Section 15.5; and (iv) agree that service as provided in clause (iii) above is sufficient to confer personal jurisdiction over such party in any such proceeding in any such court, and otherwise constitutes effective and binding service in every respect.

 

14.2        Remedies.

 

(a)           Covenants of the Company.  The Company agrees to use its commercially reasonable efforts, within the requirements of applicable law, to ensure that the rights given to the Shareholders hereunder are effective and that the Shareholders enjoy the benefits thereof.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be performed hereunder by the Company, but will at all times in good faith use its commercially reasonable efforts to assist in the carrying out of all of the provisions of this Agreement and in the taking of all such actions as may be necessary, appropriate or reasonably requested by the holders of a majority of the outstanding securities held by the Shareholders, assuming exercise and conversion of all outstanding Securities, in order to protect the rights of the parties hereunder against impairment and to assist the Shareholders in the exercise of their rights and the performance of their obligations hereunder.

 

27

 

(b)           Irrevocable Proxy and Power of Attorney.  Each of the Shareholders hereby constitutes and appoints as the proxies of such Shareholder and hereby grants a power of attorney to the Board, with full power of substitution, with respect to (i) the election of persons as members of the Board in accordance with Article 8 hereto, and (ii) votes regarding any Sale of the Company pursuant to Article 5 hereof, but excluding any consent or voting rights specifically set forth herein in favor of any party hereto pursuant to Article 5 or Article 8, which shall not be subject to the proxy, and hereby authorizes such person to represent and to vote all of such Shareholder’s Shares in favor of the election of persons as members of the Board determined pursuant to and in accordance with the terms and provisions of Article 8 or in favor of any Sale of the Company pursuant to and in accordance with the terms and provisions of Article 5, in each case if and only if the party fails to vote or attempts to vote (whether by proxy, in person or by written consent) in a manner which is inconsistent with the terms of this Agreement.  Each of the proxy and power of attorney granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the Company and the parties in connection with the transactions contemplated by this Agreement and, as such, each is coupled with an interest and shall be irrevocable unless and until this Agreement terminates.  Each party hereto hereby revokes any and all previous proxies or powers of attorney with respect to the Shares and shall not hereafter, unless and until this Agreement terminates, (i) purport to grant any other proxy or power of attorney with respect to any of the Shares, (ii) deposit any of the Shares into a voting trust or enter into any agreement (other than this Agreement), (iii) enter into any other arrangement or understanding with any person, directly or indirectly, to vote, or (iv) grant any proxy or give instructions with respect to the voting of any of the Shares, in each case, with respect to any of the matters set forth herein.

 

(c)           Specific Enforcement.  Each party acknowledges and agrees that each party hereto will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the parties in accordance with their specific terms or are otherwise breached.  Accordingly, it is agreed that the Company and each of the Shareholders shall be entitled to an injunction to prevent breaches of this Agreement, and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction.

 

(d)           Remedies Cumulative.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

ARTICLE 15
 MISCELLANEOUS

 

15.1        Other Business Activities.  The parties hereto, including the Company, expressly acknowledge and agree that:  (a) each Shareholder and their respective Affiliates are permitted to have, and may presently or in the future have, investments or other business or strategic relationships, ventures, agreements or other arrangements with entities other than the Company that are engaged in the business of the Company, or that are or may be competitive with the Company (any such other investment or relationship, an “Other Business”); (b) none of the Shareholders or their Affiliates will be prohibited by virtue of such Shareholder’s investments in

 

28

 

the Company from pursuing and engaging in any Other Business; (c) none of the Shareholders or their respective Affiliates will be obligated to inform the Company or any other Shareholder of any opportunity, relationship or investment in any Other Business (a “Company Opportunity”) or to present any Company Opportunity to the Company, and the Company hereby renounces any interest in any Company Opportunity and any expectancy that a Company Opportunity will be offered to it; (d) nothing contained herein shall limit, prohibit or restrict any member of the Board from serving on the board of directors or other governing body or committee of any Other Business; and (e) no other Shareholder will acquire, be provided with an option or opportunity to shall not be deemed to limit the range of possibilities to those ier Business as a result of the participation therein of any of the Shareholders or their respective Affiliates.  The parties hereto expressly authorize and consent to the involvement of each of the Shareholders and/or their respective Affiliates in any Other Business; provided, that any transactions between the Company and/or a Subsidiary of the Company and any Other Business will be on terms no less favorable to the Company and/or the Subsidiaries of the Company than would be obtainable in a comparable arm’s-length transaction.  The parties hereto expressly waive, to the fullest extent permitted by applicable law, any rights to assert any claim that such involvement breaches any fiduciary or other duty or obligation owed to the Company by each Shareholder or to assert that such involvement constitutes a conflict of interest by such Shareholder with respect to the Company or any other Shareholder.

 

15.2        Termination of Agreement.  This Agreement shall be terminated:  (a) upon the mutual agreement of (i) the holders of at least fifty percent (50%) of the issued and outstanding Series A Stock then held by the Series A Shareholders, and (ii) the holders of at least fifty percent (50%) of the issued and outstanding Series B Stock then held by the Series B Shareholders, including the affirmative vote of TGAM (for so long as TGAM is a Shareholder), or (b) upon the consummation of a Sale of the Company; provided, however, that the representations and warranties of the parties hereto contained in this Agreement shall survive the termination of this Agreement.  The rights and obligations of the parties shall survive termination of this Agreement to the extent that any performance is required after such termination.

 

15.3        Amendment of Agreement.  This Agreement may be amended by the Company with the written consent of (i) the holders of at least fifty percent (50%) of the issued and outstanding Series A Stock then held by the Series A Shareholders and (ii) the holders of at least fifty percent (50%) of the issued and outstanding Series B Stock then held by the Series B Shareholders, including the affirmative vote of TGAM (for so long as TGAM is a Shareholder); provided that in no event shall any such amendment materially and adversely affect the rights or obligations of any one Shareholder disproportionately vis-à-vis the other Shareholders without the prior written consent of such Shareholder unless such amendment materially and adversely affects, proportionately, the same rights and obligations of all Shareholders holding the same class and type of Securities;

 

15.4        Termination of Status as Shareholder.  From and after the date that a Shareholder ceases to own any Securities, such Shareholder shall no longer be deemed to be a Shareholder for purposes of this Agreement, and all rights such Shareholder may have hereunder (including the right to exercise any right herein granted) shall terminate.

 

29

 

15.5        Notices.  Any notice provided for in this Agreement must be in writing and must be delivered personally or by first class mail (postage prepaid and return receipt requested), electronic mail, confirmed facsimile (provided, however, that notices delivered by facsimile shall only be effective if such notice is also delivered by hand, or mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier (charges prepaid), on or before two (2) Business Days after its delivery by facsimile) or reputable overnight courier service (charges prepaid) to the recipient at the address indicated on the signature pages hereto.

 

15.6        Construction.  The use of the singular or plural or masculine or neuter gender shall not be given an exclusionary meaning and, where applicable, shall be intended to include the appropriate number or gender, as the case may be.

 

15.7        Counterparts; Electronic Signatures.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.  An electronic copy of this agreement (or any counterpart hereof) shall be deemed to be an original.  The exchange of copies of this Agreement and of signature pages by electronic or facsimile transmission shall constitute effective execution and delivery of this Agreement, and such copies, electronically transmitted pages or facsimile pages may be used in lieu of the original Agreement for all purposes.  Signatures of the parties transmitted electronically or by facsimile shall be deemed to be original signatures for all purposes.

 

15.8        Descriptive Headings.  Title headings are for reference purposes only and shall have no interpretative effect.

 

15.9        Entire Agreement.  This Agreement, and the Prior Agreement, constitute the entire agreement between the parties with respect to the subject matter hereof.

 

15.10      Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, representatives, successors and permitted assigns including, without limitation, Permitted Transferees to the extent provided for in this Agreement.

 

15.11      Applicable Law.  This Agreement shall be governed and controlled as to validity, enforcement, interpretation, construction, effect and in all other respects by the internal laws of the State of California applicable to contracts made in that State.

 

15.12      Severability.  The invalidity of any provision of this Agreement or portion of a provision shall not affect the validity of any other provision of this Agreement or the remaining portion of the applicable provision.

 

15.13      Headings.  The headings contained in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.

 

15.14      No Strict Construction.  The parties hereto jointly participated in the negotiation and drafting of this Agreement.  The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their collective mutual intent.  This Agreement shall be construed as if drafted jointly by the parties hereto, and no rule of strict construction shall be applied against any person.

 

30

 

15.15      Interpretation.  Whenever the term “include” or “including” is used in this Agreement, it shall mean “including, without limitation,” (whether or not such language is specifically set forth) and shall not be deemed to limit the range of possibilities to those items specifically enumerated.  The words “hereof”, “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision.  Terms defined in the singular have a comparable meaning when used in the plural and vice versa.

 

15.16      Spousal Consent.  If any individual Shareholder is married or does marry and is or becomes a resident of a community property state, such Shareholder’s spouse shall promptly execute and deliver to the Company a Spousal Consent.  Notwithstanding the execution and delivery thereof, such consent shall not be deemed to confer or convey to the spouse any rights in such Shareholder’s Shares that do not otherwise exist by operation of law or the agreement of the parties.

 

15.17      Amendment of Prior Agreement.  Pursuant to Section 6.6 of the Prior Agreement, the Prior Shareholders, representing the Prior Agreement Requisite Shareholders, hereby approve and adopt the amendment and restatement of the Prior Agreement in the form attached hereto as Exhibit C on behalf of all Prior Shareholders party to the Prior Agreement.  The Company and all other Shareholders acknowledge the Prior Agreement, as so amended and restated, and agree that the Prior Agreement, as so amended and restated, shall continue in full force and effect following the execution of this Agreement.

 

[Signature Page Follows]

 

31

 

IN WITNESS WHEREOF, the Parties have caused this Shareholders’ Agreement to be duly executed, as of the date first above written.

 

	
COMPANY:
    	
 
    
	
 
    	
 
    
	
 
    	
VINTAGE WINE   ESTATES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pat   Roney
    
	
 
    	
Name:
    	
Pat Roney
    
	
 
    	
Title:
    	
CEO,   President and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
205   Concourse Blvd
    
	
 
    	
Santa   Rosa, CA 95403
    
	
 
    	
 
    

 

SIGNATURE PAGE TO THE SHAREHOLDERS’ AGREEMENT

 

 

IN WITNESS WHEREOF, the Parties have caused this Shareholders’ Agreement to be duly executed, as of the date first above written.

 

	
SHAREHOLDERS:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TGAM:
    
	
 
    	
 
    
	
 
    	
TGAM AGRIBUSINESS   FUND HOLDINGS LP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: TGAM   AGRIBUSINESS FUND GP LLC, its General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
AGR   PARTNERS, LLC
    
	
 
    	
 
    	
 
    	
Its Sole   Member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Dan   Masters
    
	
 
    	
 
    	
 
    	
Name:
    	
Dan   Masters
    
	
 
    	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Address   for Notices:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TGAM   Agribusiness Fund LP
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Facsimile:
    	
 
    
	
 
    	
Attention:
    	
 
    
									

 

SIGNATURE PAGE TO THE SHAREHOLDERS’ AGREEMENT

 

 

IN WITNESS WHEREOF, the Parties have caused this Shareholders’ Agreement to be duly executed, as of the date first above written.

 

	
SHAREHOLDERS:
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Darrell   Swank
    
	
 
    	
LESLIE G. RUDD   LIVING TRUST
   U/A/D MARCH 31, 1999 — By Darrell
   Swank as Attorney-in-Fact pursuant to
   POA dated 1/19/2017
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
2416 E.   37 St. N
    
	
 
    	
Wichita,   KS 67235
    
	
 
    	
 
    
	
 
    	
/s/   Steven Kay
    
	
 
    	
SLR 2012 GIFT TRUST   — STEVEN
   KAY, TRUSTEE
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
2416 E 37   St. N
    
	
 
    	
Wichita,   KS 67235
    
	
 
    	
 
    
	
 
    	
/s/ Pat   Roney, Trustee       /s/ Laura Roney, Trustee
    
	
 
    	
PATRICK AND LAURA   RONEY TRUST
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
532   Jenifer Ct
    
	
 
    	
Santa   Rosa, CA 95404
    

 

 

	
 
    	
/s/ Pat   Roney, Trustee
    
	
 
    	
PATRICK RONEY 2016   GRANTOR TRUST
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
532   Jenifer Ct
    
	
 
    	
Santa   Rosa, CA 95404
    
	
 
    	
 
    
	
 
    	
/s/ Laura   Roney, Trustee
    
	
 
    	
LAURA RONEY 2016   GRANTOR TRUST
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
532   Jenifer Ct
    
	
 
    	
Santa   Rosa, CA 95404
    
	
 
    	
 
    
	
 
    	
/s/ Sean   Roney
    
	
 
    	
SEAN RONEY
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
8027   Macaw Ct
    
	
 
    	
Rohnert   Park, CA 94928
    
	
 
    	
 
    
	
 
    	
/s/ Anne   H. Stewart
    
	
 
    	
ANNE H. STEWART
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
2929   Westheimer Road, Apt 220
    
	
 
    	
Houston,   Texas 77098
    

 

 

	
 
    	
/s/ Chuck   Sweeney
    
	
 
    	
CHUCK SWEENEY
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
1520   Railroad Avenue
    
	
 
    	
St.   Helena, CA 94574
    
	
 
    	
 
    
	
 
    	
/s/ Marco   A. Digiulio
    
	
 
    	
MARCO A. DIGIULIO
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
1245   Firview Drive
    
	
 
    	
Calistoga,   CA 94515
    
	
 
    	
 
    
	
 
    	
/s/ Vicki   Daigneault
    
	
 
    	
VICKI DAIGNEAULT
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
905 North   Harbor Drive #8
    
	
 
    	
Portland   OR 97217
    
	
 
    	
 
    
	
 
    	
/s/ Linda   Butler
    
	
 
    	
LINDA BUTLER
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
1107 Mt   George Avenue
    
	
 
    	
Napa, CA   94588
    

 

 

	
 
    	
/s/ Ron Coleman
    
	
 
    	
RON COLEMAN
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
371 1st Avenue S.
    
	
 
    	
Walla   Walla, WA 99362
    
	
 
    	
 
    
	
 
    	
/s/   Michell Ruggirello
    
	
 
    	
MICHELL RUGGIRELLO
    
	
 
    	
 
    
	
 
    	
Address   for Notices:
    
	
 
    	
 
    
	
 
    	
207   Partridge Ct
    
	
 
    	
Windsor,   CA 95492
    

 

 

SCHEDULE I-A

 

SCHEDULE OF SERIES A HOLDERS

 

Series A Holders

Leslie G. Rudd Living Trust

Patrick Roney and Laura Roney Trust

Laura G. Roney 2016 GRAT

Patrick A. Roney 2016 GRAT

SLR 2012 Gift Trust

Sean Roney

Charles Sweeney

Anne Halliburton Stewart

Marco DiGiulio

Vicki Daigneault

Linda Butler

Ron Coleman

Michell Ruggirello

 

 

SCHEDULE I-B

 

SCHEDULE OF SERIES B HOLDERS

 

Series B Holders

TGAM Agribusiness Fund Holdings LP

 

 

SCHEDULE II

 

APPOINTMENT OF DIRECTORS BY SERIES A HOLDERS

 

For so long as the below-named Series A Shareholders own any Series A Stock, the four (4) directors to be nominated by Series A Shareholders for whom all Shareholders agree to vote pursuant to Section 9.2 of the Agreement shall be determined by Rudd and Roney in accordance with Section 1 of the Prior Agreement.

 

 

EXHIBIT A

 

JOINDER AGREEMENT

 

This Joinder Agreement (this “Joinder Agreement”), is executed by the undersigned (the “Transferee”), pursuant to the terms of that certain Shareholders’ Agreement (the “Agreement”) by and among Vintage Wine Estates, Inc., a California corporation (the “Company”) and the Shareholders party thereto.  By the execution of this Joinder Agreement, Transferee agrees as follows:

 

1.             Acknowledgment.  Transferee acknowledges that Transferee is acquiring certain shares of the capital stock of the Company (the “Stock”), which shares are subject to the terms and conditions of the Agreement.  Transferee acknowledges receipt of a copy of the Agreement (as amended through the Effective Date).

 

2.             Agreement.  As partial consideration for such transfer, Transferee hereby (i) agrees that the Stock acquired by Transferee shall be bound by and subject to the terms of the Agreement, to the same extent and with the same rights and obligations as the person from whom such Stock is received and (ii) agrees to become a party to the Agreement with the same force and effect as if Transferee were originally a party thereto.

 

3.             Notice.  Any notice required or permitted by the Agreement shall be given to Transferee at the address listed beside Transferee’s signature below.

 

4.             Spouse.  The spouse of the undersigned Transferee, if applicable, executes this Agreement to acknowledge its fairness and that it is in such spouse’s best interests and to bind to the terms of the Agreement such spouse’s community interest, if any, in the Stock.

 

5.             Governing Law.  In all respects, including all matters of construction, validity and performance, this Joinder Agreement and the obligations of each party arising hereunder shall be governed by, construed and enforced in accordance with, the internal laws of the State of California, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California.

 

6.             Counterparts; Facsimile or PDF Signatures.  This Joinder Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  This Joinder Agreement shall be considered signed when the signature of a party is delivered by facsimile transmission or PDF e-mail, which facsimile or PDF e-mail signature shall be treated in all respects as having the same effect as an original signature.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the undersigned have executed this Joinder Agreement effective as of the date set forth below.

 

	
 
    	
TRANSFEREE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print Name of Transferee)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Name of Signatory, if Transferee is an entity)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Title of Signatory, if Transferee is an entity)
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Fax/Email:
    	
 
    
	
 
    	
 
    
	
 
    	
TRANSFEREE’s SPOUSE (if applicable):
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature)
    

 

Acknowledged and accepted on                             by:

 

	
VINTAGE WINE   ESTATES, INC.,
    	
 
    
	
a   California corporation
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

SIGNATURE PAGE TO JOINDER AGREEMENT TO THE SHAREHOLDERS’ AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00324-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00324-of-00352.parquet"}]]