UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-U
Current Report Pursuant to Regulation A
Date of Report: December 31, 2020
(Date of earliest event reported)
ELEGANCE BRANDS, INC.
(Exact name of issuer as specified in its charter)
| Delaware | 82-3305170 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
9100 Wilshire Blvd., Suite 362W
Beverly Hills, California 90212
(Full mailing address of principal executive offices)
(424) 313-7471
(Issuer’s telephone number, including area code)
Title of each class of securities issued pursuant to Regulation A: Class A Common Stock, par value $0.0001 per share
This Current Report on Form 1-U is issued in accordance with Rule 257(b)(4) of Regulation A, and is neither an offer to sell any securities, nor a solicitation of an offer to buy, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
ITEM 9. OTHER EVENTS.
The BevMart Agreement
On December 31, 2020, Elegance Brands, Inc., a Delaware corporation (“Elegance” or the “Company”), entered into a management, supply and license agreement (the “BevMart Agreement”) with Australian Boutique Spirits Pty. Ltd., an Australian alcoholic beverage company owned by our CEO and Chairman (“ABS”), concerning the management and licensing of Bevmart.com.au (“BevMart”), an online beverage retailer owned by Elegance. The BevMart Agreement provides that ABS will have the sole and exclusive right to manage the BevMart business and the BevMart website through which BevMart will sell certain ABS and Elegance-branded and/or licensed alcoholic drinks into the Australian market (for the Virginia Black American whiskey and Mod Section champagne online) and worldwide market (for all other Elegance and ABS brands sold by BevMart). In addition, under the terms of the BevMart Agreement, Elegance granted to ABS a non-exclusive and perpetual right and license to use all of the Elegance intellectual property in exchange for Elegance receiving a royalty of 2.5% of the net retail sales price of each of the BevMart Brands that are sold to customers from the BevMart website. In addition, should Elegance experience a fundamental change in tits business, such as a change of control or being rendered insolvent, ABS has a right of first refusal to purchase the Bevmart.com.au website and the BevMart business. The initial term of the BevMart Agreement is for 36 months, subject to automatic renewal for 24 month terms, unless terminated earlier by the parties.
The above description of the BevMart Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the BevMart Agreement which is attached hereto as Exhibit 6.1 and is incorporated herein by reference.
Termination of the ABS Share Purchase Agreement
As previously reported, on April 8, 2020, as subsequently amended, the Company had entered into a share purchase agreement (the “ABS Share Purchase Agreement”) with ABS and Amit Raj Beri, the 100% shareholder of ABS and our chairman and CEO, to acquire ABS. Under the terms of the ABS Share Purchase Agreement, as amended, Elegance had paid a deposit of $1,712,600 (the “Deposit”) against the purchase price of ABS’s shares. On March 10, 2021, the parties entered into an agreement to terminate the ABS Share Purchase Agreement (the “Termination Agreement”). Under the Termination Agreement, the parties agreed that the Deposit would be treated as an advance and prepayment on the Company’s purchase of certain designated alcohol and spirits (the “Covered Products”) manufactured by ABS for the Company pursuant to the terms of a separate manufacturing, supply and license agreement, dated July 31, 2020 (the “ABS Manufacturing Agreement”), between the Company and ABS. As the Company places purchase orders for Covered Products under the ABS Manufacturing Agreement, 25% of the purchase price of such Covered Products would be deducted from the invoice as an earned credit (the “Earned Credit”) until such Deposit has been used in full. As such, the Deposit will be treated as a prepayment and an Earned Credit against the Company’s future purchases from ABS. In the event Elegance does not purchase from ABS and pay for (subject to the 25% Earned Credit) an aggregate of $8,562,200 of invoiced Covered Products by the close of business on December 31, 2021, Mr. Beri agreed to immediately pay to the Company by wire transfer any remaining amount of the Deposit.
The above description of the Termination Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Termination Agreement, which is attached hereto as Exhibit 6.2 and is incorporated herein by reference.
Amendment to the ABS Manufacturing, Supply and License Agreement
On March 10, 2021, as a result of entry into the Termination Agreement, the Company and ABS entered into an amendment to the ABS Manufacturing Agreement (the “Amended ABS Agreement”), which was also consented to by Mr. Beri, as owner of ABS. Under the Amended ABS Agreement, the parties agreed to modify pricing and payment terms to accounted for the Earned Credit discussed above, such that 25% of each purchase order placed by the Company with ABS would be paid for through the Earned Credit, with the remaining 75% of each purchase order to be paid in cash in advance. Further, in the event the Earned Credit had not been used in full through payment of purchase orders by the close of business on December 31, 2021, Mr. Beri would immediately pay to the Company by wire transfer any funds remaining under the Deposit. The initial term of the Amended ABS Agreement is 36 months, subject to automatic renewal for successive 24 month terms, unless earlier terminated in accordance with the terms of the agreement.
The above description of the Amended ABS Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the fully text of the Amended ABS Agreement, which is attached hereto as Exhibit 6.3 and is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Elegance Brands Inc. | ||
| a Delaware corporation | ||
| by: | /s/ Amit Raj Beri | |
| Name: | Amit Raj Beri | |
| Its: | Chief Executive Officer | |
| Date: | March 29, 2021 | |
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Exhibits to Form 1-U
Index to Exhibits
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Exhibit 6.1
Management, Supply and License Agreement
This Management, Supply and License Agreement, dated as of December 31, 2020 (the “Agreement”), is entered into by and among:
| A. | Australian Boutique Spirits Pty Ltd., an Australian private company, no. 625 701 420 (“ABS”) having its principal place of business located at 1 Doris Hirst Place, West Pennant Hills, Sydney, Australia 2125; and | |
| B. | Elegance Brands, Inc., a Delaware corporation (the “Elegance”) having its principal place of business located at 9100 Wilshire Blvd, Suite 362W, Los Angeles, California 90212. |
ABS and Elegance are hereinafter sometimes collectively referred to as the “Parties”, and each, a “Party”.
W I T N E S S E T H:
WHEREAS, Elegance has created a website known as BevMart.com.au which is intended to be the first direct to consumer online only retail store for alcoholic beverages in Australia;
WHEREAS, Elegance owns the Formulations (hereinafter defined) for the “Covered Products” (as defined below), including Virginia Black American whiskey and Mod selection champagne; both of which are partly owned and promoted by the music artist “Drake;
WHEREAS, ABS is in the business of manufacturing and selling certain of the “Covered Products” (as defined below) and;
WHEREAS, during the “Term” (as defined below) of this Agreement, ABS shall have the sole an exclusive right to manage the BevMart Business (as defined below);
WHEREAS, ABS and Elegance have entered into the Manufacturing Agreement (defined below) pursuant to which ABS manufactures and sells the Covered Products to Elegance; and
NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions. In addition to other terms defined in this Agreement, the following capitalized terms have the meanings set forth or referred to in this Section 1.
“ABS” has the meaning set forth in the preamble to this Agreement.
“ABS Contracts” means all contracts or agreements to which ABS is a party or to which any of its material assets are bound, including, without limitation, the Manufacturing Agreement, this Agreement and the Share Purchase Agreement.
“ABS Parties” means ABS, its Affiliates, customers (other than Elegance), subcontractors and successors and assigns, and each of their respective Representatives.
“ABS’s Intellectual Property” means all Intellectual Property Rights owned by or licensed to ABS, used in the design, formulation, production, and manufacturing of the Covered Products.
ABS Shareholder” shall mean Amit Raj Beri.
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Anniversary Year” shall mean, during the Term of this Agreement, each of the twelve (12) consecutive months, commencing January 1 and ending December 31.
“BevMart Brands” means the individual brands and line extensions of the following alcoholic product brands developed by Elegance for sale on Elegance’s BevMart Website: (a) Cheeky Vodka and flavor variants. (b) Coventry Estate Gin and flavor variants, (c) Geo Liqueurs in multiple variants, (d) Cheeky Espresso Martini in multiple variants. (e) Twisted Shaker Cocktails in multiple variants, (f) Elegance Vodka, (g) Virginia Black American whiskey, (h) Mod selection champagne, and all future brands developed by Elegance which ABS determines to offer for sale on the BevMart Website.
“BevMart Business” shall mean the business of owning and operating the BevMart Website and selling direct to customers online all and not less than all of the BevMart Brands.
“BevMart Website” shall mean BevMart.com.au and any other internet website established by the Elegance to enable BevMart to market online the BevMart Brands and Australian Bitters Company in Australia.
“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Sydney, Australia are authorized or required by Law to be closed for business.
“Control” (and with correlative meanings, the terms “Controlled by” and “under common Control with”) means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of another Person, whether through the ownership or voting securities, by contract, or otherwise.
“Covered Products” means the individual and collective reference to (a) the alcoholic drinks and Formulations sold as (i) each of the BevMart Brands, (ii) Bitter Tales, (iii) Cocktail Bitters, (iv) VOCO and (v) Australian Bitters Company, and as otherwise identified on Schedule 1 to the Manufacturing Agreement.
“Effective Date” means the date first set forth above.
“Elegance” has the meaning set forth in the preamble to this Agreement.
“Elegance Contracts” means the collective reference to this Agreement, the Manufacturing Agreement, the BevMart Contract, the Power Brands Contract and all other contracts or agreements to which Elegance is a party with respect to the purchase, sale and distribution of alcohol and related drinks, including Covered Products.
“Elegance Parties” means Elegance, its Affiliates, customers, subcontractors and successors and assigns, and each of their respective Representatives.
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“Elegance Intellectual Property Rights” means any and all of the Intellectual Property Rights now or hereafter owned and used by or licensed to Elegance pursuant to the that are developed with respect to, or for incorporation into the design, formulation, production, and manufacturing of the Covered Products, whether developed by Elegance alone, by Elegance and ABS jointly or by ABS alone as requested by Elegance in connection with the Manufacturing Agreement.
“Elegance Royalty” shall mean a royalty payable to Elegance of __% of the net retail sales price of each of the BevMart Brands, including the Exclusive BevMart Brands, that are sold to customers from the BevMart Website.
“Exclusive BevMart Brands” shall mean the collective reference to Virginia Black American whiskey and Mod selection champagne
“Initial Term” has the meaning set forth in Section 4.1.
“Intellectual Property Rights” shall have the meaning as that term is defined in the Manufacturing Agreement.
“Manufacturing Agreement” shall mean the manufacturing supply and license agreement, dated as of July 31, 2020, between ABS, as “Seller” of Covered Products and Elegance as “Buyer” of Covered Products, as the same may be amended or restated from time to time.
“Party” has the meaning set forth in the preamble to this Agreement.
“Person” means any individual, partnership, corporation, trust, limited liability entity, unincorporated organization, association, Governmental Authority or any other entity.
“Prices” shall have the meaning as that term is defined in the Manufacturing Agreement.
“Renewal Term” has the meaning set forth in Section 6.2.
“Share Purchase Agreement” means the share purchase agreement among ABS and Elegance and Amit Raj Beri, as the sole shareholder of ABS (the “ABS Shareholder”), dated December 3, 2019, as amended and restated in its entirety on April 8, 2020 and as amended on May 19, 2020 as further amended on July 27, 2020 and as further amended on December 11, 2020, pursuant to which, subject to the conditions set forth therein, ABS Shareholder agreed to sell and Elegance has agreed to purchase, 100% of the share capital of ABS.
“Share Purchase Termination Agreement” shall mean the termination agreement dated as of December 31, 2020, pursuant to which ABS, Elegance and the ABS Shareholder have agreed to terminate the Share Purchase Agreement and all of the transactions contemplated thereby.
“Term” has the meaning set forth in Section 4. 1/Section 4.2.
2. Manufacturing Agreement.
2.1 The Manufacturing Agreement is hereby amended so that the definition of “BevMart Brands” as set forth in the Manufacturing Agreement is hereby deleted and is replaced by the definition of BevMart Brands set forth in this Agreement.
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2.2 Unless otherwise separately defined in this Agreement, all capitalized terms when used herein, shall have the same meaning as they are defined in the Manufacturing Agreement.
2.3 All of the terms and conditions of the Manufacturing Agreement, as amended pursuant to Section 2.1 above are hereby deemed to be incorporated into this Agreement by this reference as though more fully set forth at length herein.
3. Management of BevMart; Production and Sale of BevMart Brands.
3.1 Management. Subject to the terms and conditions of this Agreement, during the Term, ABS shall have the sole authority to manage all aspects of the BevMart Business and the BevMart Website.
3.2 Production of BevMart Brands. All of the BevMart Brands shall be manufactured by ABS under the Manufacturing Agreement; provided, that, irrespective of the Prices specified in the Manufacturing Agreement ABS shall establish and fully control and determine from time to time the pricing of all of the BevMart Brands sold to customers from the BevMart Website and the relative profit margins payable to ABS.
3.3 Fulfillment, Shipment and Delivery. ABS shall lease and establish a fulfilment center to warehouse BevMart Brands and shall manage the shipment of BevMart Brands that are purchased and paid for by BevMart customers to such addresses as shall be specified on the online purchase order filled out by such customers.
3.4 Exclusive BevMart Brands. During the Term of this Agreement, the Exclusive BevMart Brands shall only be sold in Australia via the BevMart Website.
3.5 Other BevMart Brands. All other BevMart Brands shall be sold on a non-exclusive basis via the BevMart Website throughout the world.
3.6 Insurance. ABS shall name BevMart as an additional insured on all of ABS’s insurance policies covering shipment and delivery of BevMart Brands and, to the extent that any BevMart Brands are lost or damaged in shipment or are deemed to be Defective Covered Products, ABS shall cause its insurance company to make payment directly to BevMart to the extent of the purchase Price previously paid by a customer for such BevMart Brands.
3.7 Packaging and Labeling. ABS will be responsible for all packaging and labeling of BevMart Brands.
4. Term; Termination.
4.1 Initial Term. Subject at all times to the provisions of Section 4.3 and other terms of this Agreement, the term of this Agreement commences on the Effective Date and continues for a period of thirty-six (36) consecutive months, unless it is earlier terminated pursuant to the terms of this Agreement or applicable Law (the “Initial Term”).
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4.2 Renewal Term. Upon expiration of the Initial Term, the term of this Agreement will automatically renew for up to twenty-four (24) additional successive months unless either ABS or Elegance provides written Notice of non-renewal at least 60 days prior to the end of the then-current term (each, a “Renewal Term” and together with the Initial Term, the “Term”), unless any Renewal Term is earlier terminated pursuant to the terms of this Agreement or applicable Law. If the Initial Term or any Renewal Term is renewed for any Renewal Term(s) pursuant to this Section 4.2, the terms and conditions of this Agreement during each such Renewal Term will be the same as the terms in effect immediately prior to such renewal. In the event either Party provides timely Notice of its intent not to renew this Agreement, then, unless earlier terminated in accordance with its terms, this Agreement terminates on the expiration of the Initial Term or then-current Renewal Term, as applicable.
5. Elegance License and ROFR.
5.1 Elegance License. On the Effective Date of this Agreement, in consideration for the payment of the Elegance Royalty, Elegance hereby grants to ABS and BevMart, the non-exclusive and perpetual right and license to use all of the Elegance Intellectual Property Rights and Formulations to manufacture, use and sell all BevMart Brands direct to customers in Australia and in other locations from the BevMart Website.
5.2 ROFR. In the event that Elegance shall (a) elect to sell or be required to sell the BevMart Website or the BevMart Business, (b) change the fundamental nature of its business, (c) consummate a sale of control, or (d) be rendered insolvent or otherwise cease doing business (each, an “Elegance Fundamental Change”), ABS shall be granted a right of first refusal (the “ROFR”) to purchase the BevMart Website and the BevMart Business, and receive a royalty free paid up non-exclusive right and license to use all of the Elegance Brands Intellectual Property to enable ABS to sell and market BevMart Brands (including Exclusive BevMart Brands) from the BevMart Website (collectively, the “BevMart Assets”). Elegance shall advise ABS if an Elegance Fundamental Change has occurred within five Business Days of such occurrence (the “Notice”). ABS shall advise Elegance in writing, within not more than 90 days of the date of delivery of the Notice of its intent to purchase the BevMart Assets; failure to timely affirmatively accept the ROFR shall be deemed to be a rejection thereof. If Seller timely accepts the ROFR, the Parties agree to negotiate in good faith the final purchase price for the BevMart Assets; provided, that, in the view of the common control by the ABS Shareholder of Elegance and ABS, such purchase price shall be the greater of (a) the purchase price, determined by an independent business appraisal firm taking into account the historical revenues and projected sales revenues of BevMart Brands sold on the BevMart Website over the three succeeding years following the date of the Termination Note, or (b) the purchase price offered to Elegance by any financially qualified third party that is not an Affiliate of any of the Parties to this Agreement or the ABS Shareholder.
6. Miscellaneous.
6.1 Further Assurances. Upon a Party’s reasonable request, the other Party shall, at its sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, necessary to give full effect to this Agreement.
6.2 Relationship of the Parties. The relationship between ABS, BevMart and Elegance is solely that of vendor and vendee and they are independent contracting parties. Nothing in this Agreement creates any agency, joint venture, partnership or other form of joint enterprise, employment or fiduciary relationship between the Parties. No Party has any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any third party.
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6.3 Entire Agreement. This Agreement and the Manufacturing Agreement, including and together with any related exhibits, schedules and the applicable terms of any Purchase Orders, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
6.4 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties of the Parties contained herein will survive the expiration or earlier termination of this Agreement; as well as any other provision that, in order to give proper effect to its intent, should survive such expiration or termination, will survive the expiration or earlier termination of this Agreement.
6.5 Notices. All notices, requests, consents, claims, demands, waivers and other communications under this Agreement (each, a “Notice”) must be in writing and addressed to the other Party at its address set forth below (or to such other address that the receiving Party may designate from time to time in accordance with this section). All Notices must be delivered by personal delivery, nationally recognized overnight courier or certified or registered mail (in each case, return receipt requested, postage prepaid). Notwithstanding the foregoing, notice by facsimile or email (with confirmation of transmission) will satisfy the requirements of this Section 6.5. Except as otherwise provided in this Agreement, a Notice is effective only (a) on receipt by the receiving Party, and (b) if the Party giving the Notice has complied with the requirements of this Section.
| Notice to ABS: | Australian Boutique Spirits Pty Ltd. 29 Anvil Rd, Seven Hills, NSW 2147, Australia Attn: Sahil Beri, Director Email: sahil@australianboutiquespirits.com |
| Notice to Elegance: | |
Elegance Brands, Inc. 9100 Wilshire Blvd, Suite 362W Los Angeles, California 90212 Telephone (424) 313-7471 Attn: Raj Beri, Chief Executive Officer Email: raj@elegance-brands.com |
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective Date first above written.
Elegance Brands, Inc. | ||
| By: | /s/ Raj Beri | |
| Name: | Raj Beri | |
| Title: | Chief Executive Officer | |
| ||
| Australian Boutique Spirits Pty Ltd | ||
| By: | /s/ Sahil Beri | |
| Name: | Sahil Beri | |
| Title: | Director | |
| Address: 1 Doris Hirst Pl, West Pennant Hills, Sydney, Australia 2125 | ||
Exhibit 6.2
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (“Agreement”), dated March 10, 2021, and to be effective as of December 31, 2020 (the “Effective Date”) is made and entered into by and among (i) Elegance Brands, Inc., a Delaware corporation (the “Elegance”), (ii) Australian Boutique Spirits Pty Ltd., an Australian private company, no. 625 701 420 (the “Company” or ‘ABS”) and (iii) Amit Raj Beri, an individual (the “Seller”) Elegance, the Company and the Seller are hereinafter sometimes individually referred to as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, the Seller is the sole shareholder of the Company, owning 600 ordinary shares of the Company representing 100% of the issued and outstanding equity interests in the Company (the “Company Shares”);
WHEREAS, the Parties entered into a share purchase agreement dated as of December 3, 2019, as amended and restated on April 8, 2020, and as further amended by Amendment No. 1 dated May 19, 2020, as further amended by Amendment No. 2 dated July 27, 2020 and as further amended by Amendment No. 3 dated December 10, 2020 (collectively, the “Prior Share Purchase Agreements”);
WHEREAS, as of July 31, 2020, the Company has entered into a manufacturing supply and license agreement Elegance (the “Manufacturing Agreement”), pursuant to which, inter alia, the Company has agreed to supply to Elegance its requirements of alcohol products and spirits defined as “Covered Products” in the Manufacturing Agreement for sale and distribution by Elegance throughout the world, subject to certain limited exceptions;
WHEREAS, as of December 31, 2020, the Company and Elegance entered into a management, supply and license agreement (the “BevMart Agreement”) pursuant to which, inter alia, ABS is managing for Elegance the production, sale and distribution of online sales in Australia on the “BevMart.au” website of certain beverages defined as the “BevMart Brands”;
WHEREAS, pursuant to the Prior Share Purchase Agreements, Elegance paid to the Seller a deposit of $1,712,500 against the purchase price for the Company Shares (the “Deposit”);
WHEREAS, in view of the current business arrangements between Elegance and ABS, as reflected in the Manufacturing Agreement and the BevMart Agreement, , the Board of Directors of Elegance has determined that it would not be in the best interests of Elegance to purchase the Company Shares and have elected pursuant to this Agreement to terminate all of the transactions contemplated by the Prior Share Purchase Agreements.
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
SECTION 1
TERMINATION OF PRIOR SHARE PURCHASE AGREEMENT
By their execution of this Agreement, as of the Effective Date, each of the Parties do hereby agree to terminate in all respects the Prior Share Purchase Agreements, which Prior Share Purchase Agreements shall be deemed to be terminated and null and void, ab initio, as at the Effective Date of this Agreement.
SECTION 2
TREATMENT OF DEPOSIT
The Parties hereto acknowledge that the Prior Share Purchase Agreements contemplated that in the event that for any reason the acquisition of ABS contemplated by the Prior Share Purchase Agreements was not consummated, the Seller would be obligated to refund to Elegance the full amount of the Deposit. In furtherance of the foregoing, the Parties hereto do hereby agree as follows:
2.1 Elegance hereby agrees to treat the amount of the Deposit as a $1,712,500 advance and prepayment by Elegance on anticipated Purchase Orders it will provide to ABS in connection with Elegance’s purchases of Covered Products in 2021. As Purchase Orders are issued to ABS by Elegance under this Agreement, twenty-five percent (25%) of the applicable Prices for the Covered Products as set forth in each Elegance Purchase Order and ABS invoice shall be deemed to be a credit granted to Elegance in respect of such purchases of Covered Products (the “Earned Credit”) and shall reduce by a corresponding amount the prepayment reflected by the Deposit. By its execution of this Agreement, ABS and the ABS Shareholder each agree to treat the Deposit paid to the ABS Shareholder under the Prior Share Purchase Agreement as a prepayment and Earned Credit against Elegance’s purchases of Covered Products in 2021. For example, if Elegance purchases from ABS $800,000 of Covered Products, the original $1,712,500 prepayment by Elegance reflected in the Deposit shall be deemed to have been reduced by $200,000, which shall be the Earned Credit applicable to such invoice. At such time as an aggregate of $8,562,500 of invoiced Covered Products are purchased by Elegance (subject to the 25% discount), the entire amount of the Elegance prepayment reflected by the Deposit and the full $1,712,500 Earned Credit shall be deemed to have been credited to Elegance and future invoices (or portions of existing invoices then outstanding) by ABS to Elegance shall be at 100% of the invoice price in accordance with the terms of the Manufacturing Agreement.
2.2 Notwithstanding anything to the contrary express or implied, contained in the Prior Share Purchase Agreement and in Section 2.1 above, in the event that Elegance shall not purchase from ABS and pay for (subject to the 25% Earned Credits) an aggregate of $8,562,500 of invoiced Covered Products by the close of business (Pacific time) on December 31, 2021, the Seller shall immediately pay to Elegance in cash by wire transfer of immediately available funds, the difference between (a) $1,712,500, and (b) the total amount of Earned Credits received by Elegance in 2021. To evidence such obligation, the Seller shall issue his unconditional promissory note to Elegance in the form of Exhibit A annexed hereto.
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SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND COMPANY
In connection with this, the Seller and the Company jointly and severally represent and warrant to Elegance as follows:
3.1 Authorization. The Seller and Company have all necessary power and authority to execute, deliver and perform their respective obligations under this Agreement and any and all agreements, instruments and documents contemplated hereby, and this Agreement constitutes a valid and binding obligation of the Seller and Company.
3.2 No Conflict. The execution and delivery of this Agreement will not result in a violation or breach by the Seller or the Company of, or constitute a default by the Seller or the Company under, any agreement, instrument, law, decree, judgment or order to which the Seller or the Company is a party or by which the Seller or Company may be bound.
3.3 Manufacturing Agreement and BevMart Agreement. Each of the Manufacturing Agreement and BevMart Agreement remain in full force and effect and no default or event that, with the passage of time or the giving of notice would constitute a default has occurred.
3.4 No Consents. No governmental, administrative or other third-party consents or approvals are required by or with respect to Seller or Company in connection with the execution and delivery of this Agreement.
3.5 No Legal Proceedings/ Compliance with Law. There are no actions, suits, claims, investigations or other legal proceedings pending or, to the knowledge of the Seller or Company, threatened against or by the Company that challenge or seek to prevent, enjoin or otherwise delay the execution and delivery of this Agreement. The Company is in compliance with all regulations or applicable law relating to the Company Shares and Company has not received any notice to the effect that, or otherwise been advised that, it is not in compliance with any such regulations or applicable law.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE BUYER
4.1 Good Standing. Elegance is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
4.2 Authorization. Elegance has all necessary power and authority to execute, deliver and perform its obligations under this Agreement and any and all agreements, instruments and documents contemplated hereby and to sell and deliver the Company Shares being sold hereunder, and this Agreement constitutes a valid and binding obligation of Elegance.
4.3 No Conflict. Except for the Rescission offer and as disclosed in the Rescission Offer Registration Statement, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in a violation or breach by Elegance of, or constitute a default by Elegance under, any agreement, instrument, law, decree, judgment or order to which Elegance is a party or by which Elegance may be bound.
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4.4 No Legal Proceedings. Except for the Rescission offer and as disclosed in the Rescission Offer Registration Statement, there are no actions, suits, claims, investigations or other legal proceedings pending or, to the knowledge of Elegance, threatened against or by Elegance that challenge or seek to prevent, enjoin or otherwise delay the execution and delivery of this Agreement.
SECTION 5
SUCCESSORS AND ASSIGNS
Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties (including transferees of any of the Company Shares). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
SECTION 6
GOVERNING LAW; JURISDICTION; JURY TRIAL WAIVER
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any applicable choice-of-law provisions. Each party consents, and waives any objection to, the jurisdiction of and venue in any state or federal court in the State of Delaware. To the extent permitted by law, each party irrevocably and unconditionally waives its right to (a) a jury trial in any court action arising under or otherwise related to this Agreement and (b) proceed, and/or to seek to transfer or remove any claim, dispute, action or proceeding to any other jurisdiction or venue or to be otherwise resolved. Each party certifies that it (a) has considered and understands the implications of this waiver and (b) makes this waiver voluntarily.
SECTION 7
ENTIRE AGREEMENT
This Agreement contains the entire understanding of the Parties, and there are no further or other agreements or understandings, written or oral, in effect between the Parties relating to the subject matter hereof, except as expressly referred to herein.
SECTION 8
AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Elegance, the Company and the Seller.
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SECTION 9
SURVIVAL
The representations and warranties and herein shall survive the execution and delivery of this Agreement and the Closing hereunder.
SECTION 10
SEVERABILITY
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
SECTION 11
NOTICES
All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile, if sent during normal business hours of the recipient or, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective Parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 12).
SECTION 12
COUNTERPARTS
This Agreement may be executed and delivered by facsimile and PDF signature and in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the Parties has executed this Termination Agreement as of the Effective Date.
| ELEGANCE: | ||
| Elegance Brands, Inc. | ||
| ||
| By: | /s/ Datesh Kshatriya | |
| Name: | Datesh Kshatriya | |
| Title: | Chief Financial Officer | |
| Address: | ||
| SELLER: | ||
| /s/ Amit Raj Beri | ||
| Amit Raj Beri | ||
Address: 809 Huntley Drive West Hollywood, CA 90069 | ||
| COMPANY: | ||
| Australian Boutique Spirits Pty Ltd | ||
| /s/ Sahil Veri | ||
| Name: | Sahil Beri | |
| Title: | Director | |
| Address: | 1 Doris Hirst Pl, West Pennant Hills, Sydney, Australia 2125 | |
Exhibit 6.3
AMENDMENT AGREEMENT
This Amendment Agreement dated March 10th, 2021 (the “Amendment”), amends certain of the provisions of that certain Manufacturing Supply and License Agreement dated as of July 31, 2020 (the “Manufacturing Agreement”), that was entered into by and between Australian Boutique Spirits Pty Ltd., an Australian private company, no. 625 701 420 (“ABS” or “Seller”) having its principal place of business located at 1 Doris Hirst Place, West Pennant Hills, Sydney, Australia 2125, and Elegance Brands, Inc., a Delaware corporation (the “Buyer” or “Elegance”) having its principal place of business located at 9100 Wilshire Blvd, Suite 362W, Los Angeles, California 90212. The Seller and Buyer are hereinafter sometimes collectively referred to as the “Parties”, and each, a “Party”.
W I T N E S S E T H:
WHEREAS, Seller is in the business of manufacturing and selling certain of the “Covered Products” (as defined below) and;
WHEREAS, during the “Term” (as defined below) of this Agreement, the Buyer wishes to purchase the Covered Products from Seller and Seller desires to manufacture and sell the Covered Products to Buyer;
WHEREAS, the Parties and Amit Raj Beri, as the sole owner of ABS (the “ABS Shareholder”), entered into a share purchase agreement dated as of December 3, 2019, as amended and restated on April 8, 2020, and as further amended by Amendment No. 1 dated May 19, 2020, as further amended by Amendment No. 2 dated July 27, 2020 and as further amended by Amendment No. 3 dated December 10, 2020 (collectively, the “Prior Share Purchase Agreements”); and
WHEREAS, pursuant to a termination agreement among the parties to the Prior Share Purchase Agreements, dated as of December 31, 2020 (the “Termination Agreement”), all of the transactions contemplated by the Prior Share Purchase Agreement were terminated by the parties thereto; and
WHEREAS, as a result of the termination of the Prior Share Purchase Agreement, the Parties desire to amend certain of the provisions of the Manufacturing Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions. Unless otherwise defined in this Amendment, all capitalized terms when used herein shall have the same meaning as they are defined in the Manufacturing Agreement.
(a) The definition of BevMart Brands set forth in the Manufacturing Agreement is hereby deleted and replace with the following:
“BevMart Brands” means the individual brands and line extensions of the following alcoholic product brands developed by Elegance for sale on Elegance’s BevMart Website: (a) Cheeky Vodka and flavor variants. (b) Coventry Estate Gin and flavor variants, (c) Geo Liqueurs in multiple variants, (d) Cheeky Espresso Martini in multiple variants. (e) Twisted Shaker Cocktails in multiple variants, (f) Elegance Vodka, (g) Virginia Black American whiskey, (h) Mod selection champagne, and all future brands developed by Elegance which ABS determines to offer for sale on the BevMart Website.
(b) There shall be added the following definitions to the Manufacturing Agreement:
“BevMart Agreement” shall mean the Management, Supply and License Agreement dated as of December 31, 2020, among the Parties pursuant to which inter alia, ABS shall manage the BevMart Business.
“BevMart Business” shall mean the business of owning and operating the BevMart Website and selling direct to customers online all and not less than all of the BevMart Brands.
“BevMart Website” shall mean BevMart.com.au and any other internet website established by the Elegance to enable BevMart to market online the BevMart Brands and Australian Bitters Company in Australia.
(c) The definition of Seller’s Territory set forth in the Manufacturing Agreement is hereby deleted and replace with the following:
“Seller’s Territory” means with respect to the Australian Bitters Company, Virginia Black American whiskey, and Mod selection champagne Covered Products anywhere in the world, other than the USA, and its territories and possessions.
2. Section 5 of the Manufacturing Agreement (Prices and Payment) is deleted in its entirety and replaced with the following Section 5.
“5. Prices and Payment.
5.1 Prices. Subject to Section 5.2 and Section 5.4, Buyer shall purchase the Covered Products from Seller at the Prices set forth on in this Agreement. Except for shipping costs from Australia to the USA or other Delivery Location (which shall be borne by Buyer), all Prices include, and Seller is solely responsible for, all costs and expenses relating to packing, crating, boxing, transporting, loading and unloading, customs, Taxes, tariffs and duties, insurance and any other similar financial contributions or obligations relating to the production, manufacture, sale, and delivery of the Covered Products. Subject only to the provisions of Section 5.4 below, the Buyer shall pay to the Seller in advance and prior to manufacture and shipment of any Covered Products, 100% of the Price of all Covered Products set forth in the applicable Purchase Order, Statement of Work or Invoice, subject at all times to the 25% Earned Credit referred to in Section 5.3 (the “Payment Terms”). All Prices are firm and are not subject to increase for any reason, including changes in market conditions, increases in raw material, component, labor or overhead costs or because of labor disruptions or fluctuations in production volumes.
5.2 Price Adjustments. Seller will guarantee the Prices as set forth in each respective Purchase Order Acceptance or Statement of Work for a period of sixty (60) days from the execution date of such Purchase Order Acceptance or Statement of Work. If a Price adjustment is warranted (a) for Covered Products, other than Cocktail Bitter, as a result of Seller’s increased Manufacturing Costs, or (b) for Cocktail Bitters, as a result of Seller’s increased pricing to Coca-Cola Amatil, the Seller shall provide the Buyer with evidence, reasonably acceptable to Buyer, of such increased Manufacturing Costs or increases prices charged to Coca-Cola Amatil, as applicable. Applicable Price adjustments shall become effective immediately for all Purchase Orders not yet accepted by Seller.
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5.3 Earned Credits. The Parties hereto acknowledge that the Prior Purchase Agreements contemplated that in the event that for any reason the acquisition of ABS contemplated by the Prior Purchase Agreements was not consummated, the ABS Shareholder would be obligated to refund to Elegance the full amount of the (USD) $1,712,500 Deposit paid to the ABS Shareholder by Elegance under the Prior Purchase Agreements. In furtherance of the foregoing, the Parties hereto and the ABS Shareholder do hereby agree as follows:
(a) Elegance hereby agrees to treat the amount of the Deposit as a $1,712,500 advance and prepayment by Elegance on anticipated Purchase Orders it will provide to ABS in connection with Elegance’s purchases of Covered Products in 2021. As Purchase Orders are issued to ABS by Elegance under this Agreement, twenty-five percent (25%) of the applicable Prices for the Covered Products as set forth in each Elegance Purchase Order and ABS invoice shall be deemed to be a credit granted to Elegance in respect of such purchases of Covered Products (the “Earned Credit”) and shall reduce by a corresponding amount the prepayment reflected by the Deposit. By its execution of this Agreement, ABS and the ABS Shareholder each agree to treat the Deposit paid to the ABS Shareholder under the Prior Share Purchase Agreement as a prepayment and Earned Credit against Elegance’s purchases of Covered Products in 2021. For example, if Elegance purchases from ABS $800,000 of Covered Products, the original $1,712,500 prepayment by Elegance reflected in the Deposit shall be deemed to have been reduced by $200,000, which shall be the Earned Credit applicable to such invoice. At such time as an aggregate of $8,562,500 of invoiced Covered Products are purchased by Elegance (subject to the 25% discount), the entire amount of the Elegance prepayment reflected by the Deposit and the full $1,712,500 Earned Credit shall be deemed to have been credited to Elegance and future invoices (or portions of existing invoices then outstanding) by ABS to Elegance shall be at 100% of the invoice price in accordance with the terms of the Manufacturing Agreement.
(b) Notwithstanding anything to the contrary express or implied, contained in the purchase from ABS and pay for (subject to the 25% Earned Credits) an aggregate of $8,562,500 of invoiced Covered Products by the close of business (Pacific time) on December 31, 2021, the ABS Shareholder shall immediately pay to Elegance in cash by wire transfer of immediately available funds, the difference between (a) $1,712,500, and (b) the total amount of Earned Credits received by Elegance in 2021. To evidence such obligation, pursuant to the Termination Agreement, the ABS Shareholder has issued his unconditional promissory note to Elegance in the form of Exhibit A annexed hereto
5.4 Favored Nations Price Adjustment. ABS and the ABS Shareholder represents and warrants that the Prices set forth in this Agreement and Payment Terms is at least as low as the prices charged and the Payment Terms imposed by ABS to other buyers for similar quantities of Covered Products on similar Delivery Dates and Delivery Terms. If at any time during the Term, either (a) Buyer demonstrates to ABS that Buyer is able to purchase from one or more unaffiliated third party sources similar quantities of Covered Products on similar Delivery Dates and Delivery Terms, either at lower prices or on more favorable payment terms than those set forth in Section 5.1, or (b) ABS charges any other buyer of similar quantities of Covered Products on similar Delivery Date and Delivery Terms, a lower price, or agrees to Payment Terms that are more favorable to such buyer than those set forth in Section 5.1 of this Agreement for the same Covered Products, ABS shall adjust its Price and apply that lower price and more favorable Payment Terms to all same or similar Covered Products covered by this Agreement and under applicable Purchase Orders, Statements of Work or Invoices (the “Favored Nations Price Adjustment”). The Buyer shall be entitled to a Favored Nations Price Adjustment on one occasion only in each Anniversary Year and it shall apply only to sales and purchases of Covered Products in the next succeeding Anniversary Year. If Seller fails to provide Buyer with a Favored Nations Price Adjustment to which it may be entitled, Buyer may, at its option, in addition to all of its other rights under this Agreement or at Law, terminate this Agreement without liability to ABS.
5.5 Invoices. Seller shall issue periodic invoices on a monthly basis to Buyer for all Covered Products ordered in the previous month. Each invoice for Covered Products must set forth in reasonable detail the total amounts payable by Buyer under this Agreement and contain the following information, as applicable: a reference to this Agreement; Purchase Order number, amendment number and line-item number; Seller’s name; Seller’s identification number; carrier name; ship-to address; weight of shipment; quantity of Covered Products shipped; number of cartons or containers in shipment; bill of lading number; country of origin; and any other information necessary for identification and control of the Covered Products. Buyer reserves the right to return and withhold payment due to any invoices or related documents that are inaccurate or incorrectly submitted to Buyer. The Parties shall seek to resolve any invoice disputes expeditiously and in good faith in accordance with the dispute resolution provisions set forth in Section 17.16. Any payment by Buyer of an invoice is not an acceptance of any Nonconforming Covered Products or terms on such invoice or the related Covered Products.
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5.6 Payment. Any payment by Buyer for Covered Products will not be deemed acceptance of the Covered Products or waive Buyer’s right to inspect. Buyer will be entitled to any discounts allowable by Seller for prompt payment even though Buyer is unable to make payment within the time limits set by Seller if such failure is due to Seller’s actions or other circumstances or events beyond Buyer’s reasonable control. Buyer shall make all payments in USA dollars based on the then applicable exchange rate for Australian dollars, by check, wire transfer or automated clearing house in accordance with the wiring instructions provided by Seller.”
3. Section 6 of the Manufacturing Agreement (Term; Termination) is deleted in its entirety and replaced with the following Section 6:
“6. Term; Termination.
6.1 Initial Term. Subject at all times to the provisions of Section 6.3 and other terms of this Agreement, the term of this Agreement commences on the Effective Date and continues for a period of thirty-six (36) consecutive months, unless it is earlier terminated pursuant to the terms of this Agreement or applicable Law (the “Initial Term”).
6.2 Renewal Term. Upon expiration of the Initial Term, the term of this Agreement will automatically renew for up to twenty-four (24) additional successive months unless either Party provides written Notice of non-renewal at least 60 days prior to the end of the then-current term (each, a “Renewal Term” and together with the Initial Term, the “Term”), unless any Renewal Term is earlier terminated pursuant to the terms of this Agreement or applicable Law. If the Initial Term or any Renewal Term is renewed for any Renewal Term(s) pursuant to this Section 6.2, the terms and conditions of this Agreement during each such Renewal Term will be the same as the terms in effect immediately prior to such renewal. In the event either Party provides timely Notice of its intent not to renew this Agreement, then, unless earlier terminated in accordance with its terms, this Agreement terminates on the expiration of the Initial Term or then-current Renewal Term, as applicable.
6.3 Elegance’s Right to Terminate for Cause. Elegance may terminate this Agreement, by providing written Notice to ABS
(a) if ABS repudiates or threatens to repudiate, any of its obligations under this Agreement;
(b) except as otherwise specifically provided under this Section 6.3, if ABS is in material] breach of, or threatens to breach, any material representation, warranty or covenant of ABS under this Agreement and either the breach cannot be cured or, if the breach can be cured, it is not cured by ABS within a commercially reasonable period of time under the circumstances, in no case exceeding sixty (60) days following ABS’s receipt of written Notice of such breach;
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(c) notwithstanding the generality of Section 6.3 (b), if ABS repeatedly fails to, or threatens not to, timely deliver Covered Products conforming to the requirements of, and otherwise in accordance with, the terms and conditions of this Agreement;
(d) if ABS (i) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due, (ii) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, (iii) makes or seeks to make a general assignment for the benefit of its creditors, or (iv) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business;
(e) if ABS fails to provide Elegance, within a commercially reasonable time after Elegance’s request (but in no case exceeding 30 days after such request) with adequate and reasonable assurance of ABS’s financial and operational capability to perform timely any of ABS’s obligations under this Agreement;
(f) if, as a result of any repeated and material breach by ABS of any of its obligations under this Agreement, Elegance’s customer requires that Elegance obtain another supplier of Covered Products;
(g) if ABS takes any action, or fails to take any action, required under this Agreement or any other agreement between Elegance and ABS, or as reasonably requested by Elegance, the result of which is an imminent interruption or delay, or the threat of an imminent interruption or delay, in any production at any of Elegance’s or its customer’s manufacturing facilities;
(h) if, without obtaining Elegance’s prior written consent, (i) ABS sells, leases or exchanges a material portion of ABS’s assets, (ii) ABS merges or consolidates with or into another Person, other than the Elegance, or (iii) a change in Control of ABS occurs; or
(i) upon the occurrence of any other event constituting grounds for termination set forth in any other sections of this Agreement (including Section 6.3 and Section 17.21).
Any termination under this Section 6.3 will be effective on ABS’s receipt of Elegance’s written Notice of termination or such later date (if any) set forth in such termination Notice. Upon the occurrence of any of the events described under this Section 6.3, Elegance may, in addition to any of its other rights to suspend performance under this Agreement or applicable Law, immediately suspend its performance under all or any part of this Agreement, without any liability of Elegance to ABS, and, notwithstanding anything to the contrary contained in this Agreement (including the limitations set forth in Section 11) Elegance may, at its election, recover any and all direct and indirect actual and incidental damages (but not including consequential damages) and costs (including attorneys’ and other professionals’ fees and costs), expenses and losses incurred by Elegance as a result of any event described under this Section 6.4 or any breach of this Agreement by ABS.
6.4 ABS’s Right to Terminate for Cause. ABS may terminate this Agreement, by providing written Notice to Elegance:
(a) if Elegance is in material breach of any material representation, warranty or covenant of Elegance under this Agreement, and either the breach cannot be cured or, if the breach can be cured, it is not cured by Elegance within a commercially reasonable period of time, in no case exceeding sixty (60) days, after Elegance’s receipt of written Notice of such breach; or
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(b) if Elegance (i) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due, (ii) files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, (iii) makes or seeks to make a general assignment for the benefit of its creditors, or (iv) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
Any termination under this Section 6.4 will be effective on Elegance’s receipt of ABS’s written Notice of termination or such later date (if any) set forth in such Notice.
6.5 Effect of Expiration or Termination.
(a) Immediately upon the effectiveness of a Notice of termination delivered by Elegance to ABS hereunder (as stated in such Notice), ABS shall, unless otherwise directed by Elegance, and subject to ABS’s obligation provide resourcing cooperation under Section 6.7:
(b) promptly (i) terminate all performance under this Agreement and under any outstanding Purchase Orders; (ii) transfer title and deliver to Elegance all Covered Products produced and paid for pursuant to this Agreement prior to effectiveness of the Notice of termination; and (iii) return to Elegance all Bailed Property and any other property furnished by or belonging to Elegance or any of Elegance’s customers, or dispose of such Bailed Property or other property in accordance with Elegance’s instructions (provided that Elegance will reimburse ABS for the actual, reasonable costs associated with such disposal);
(c) The expiration or termination of the Term will not affect any rights or obligations of the Parties that: (i) come into effect upon or after termination or expiration of this Agreement; or (ii) otherwise survive the expiration or earlier termination of this Agreement pursuant to Section 17.4 and were incurred by the Parties prior to such expiration or earlier termination.
(d) Upon the expiration or earlier termination of this Agreement, each Party shall: (i) return to the other Party all documents and tangible materials (and any copies) containing, reflecting, incorporating or based on the other Party’s Confidential Information, and not retain any copies thereof; (ii) permanently erase all of the other Party’s Confidential Information from its computer systems, except for copies that are maintained as archive copies on its disaster recovery and/or information technology backup systems. Each Party shall destroy any such copies upon the normal expiration of its backup files; and (iii) upon the other Party’s written request, certify in writing to such other Party that it has complied with the requirements of this Section 6.6(c).
(e) termination of this Agreement will not constitute a waiver of any of the terminating Party’s rights or remedies/either Party’s rights, remedies or defenses under this Agreement, at law, in equity or otherwise.
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6.6 Resourcing Cooperation. Upon the expiration or earlier termination of this Agreement for any reason, other than a termination for cause pursuant to Section 6.4, to the extent requested by Elegance in writing, ABS will take the following actions and such other actions as may be reasonably required by Elegance to transition production of Covered Products from ABS to an alternative ABS without production disruptions:
(a) manufacture, deliver and sell to Elegance a sufficient inventory bank of Covered Products to ensure that the transition will proceed smoothly and without interruption or delay to Elegance’s or Elegance’s customers’ production of products incorporating the Covered Products, with pricing equivalent to the Prices set forth in this Agreement;
(b) sell to Elegance, at ABS’s actual cost, any or all work-in-process and any raw-materials inventory relating to this Agreement and any outstanding Purchase Orders; and
(c) sell to Elegance any or all finished Covered Products.”
4. Enforcement of Related Party Agreements. The enforcement of the rights of Elegance pursuant to the terms of the Manufacturing Agreement, this Amendment, the BevMart Agreement and the Termination Agreement (collectively, the “Related Party Agreements”) shall be exclusively vested in either the independent members of the board of directors of Elegance or any trustee, receiver or other individual who may hereafter be appointed to manage the business of Elegance, excluding Amit Raj Beri, Sahil Beri or any other member of the family of or person sharing the household of the ABS Shareholder.
5. Incorporation by Reference. Except as expressly amended pursuant to the terms of this Amendment, all of the terms and conditions of the Manufacturing Agreement shall remain in full force and effect and are incorporated herein by this reference.
Balance of page intentionally left blank – signature page follows
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IN WITNESS WHEREOF, the Parties have duly executed this Amendment to the Manufacturing Agreement as of the date first above written.
| BUYER: | |||
| Elegance Brands, Inc. | |||
| By: | /s/ Gary Herman | ||
| Name: | Gary Herman | ||
| Title: | Director | ||
| SELLER: | |||
Australian Boutique Spirits Pty Ltd | |||
| /s/ Sahil Beri | |||
| Name: | Sahil Beri | ||
| Title: | Director | ||
| Address: 1 Doris Hirst Pl, West Pennant Hills, Sydney, Australia 2125 | |||
| ACCEPTED AND AGREED TO: | |||
| /s/ Amit Raj Beri | |||
Amit Raj Beri |
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