Master Services Agreement

WHEREAS, Company is a winery with a valid 02 license in the state of California and purveyor of fine wines, has multiple wine tasting lounges (see “Tasting Room” in Section 1.2 hereto.) in California, a wine club, and offers wines wholesale, direct to consumer and offers private label wine and custom crush services to businesses, wineries, and individuals. MC also offers design, printing, marketing, support, shipping, compliance, and other services to those looking to engage in the wine business as a vintner, business or individual;

WHEREAS, Client desires to engage Company to make private label wines, private label popcorn, provide custom crush services, and /or and provide other services offered by McClain Cellars as described in an applicable WO and/or relevant change order (“CO”);

WHEREAS, the Parties desire to enter into this Agreement to set forth the terms and conditions that will govern Company’s provision of the services to Client; and

NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, upon the general terms and subject to the conditions set forth in this Agreement and intending to be legally bound, the Parties hereto agree as follows:

ARTICLE 1

Definitions and Construction

Section 1.1 Structure. This Agreement may include certain Exhibits and Schedules annexed hereto and are hereby incorporated into this Agreement and made a part hereof by this reference.

Section 1.2 Certain Defined Terms. Unless and except to the extent otherwise defined in the relevant provisions of the Agreement or any WO, for purposes of this Agreement, the following terms shall have the following meanings:

“Account Manager” means the executive, employee or representative designated by the Parties to be the principal points of contact between the Parties for all matters relating to Services provided under a particular WO. Each WO shall contain initial designation of an Account Manager for Client. Company may designate a new Account Manager by written notice to the Client. Any changes in the Account Manager shall be notified to the other Party in advance. Company may, in its sole discretion, designate the same individual as its Account Manager under more than one WO.

“Additional Client Wines” means any additional Client wines selected after Initial Client Wines (defined herein). Any Additional Client Wines are subject to an agreed upon Change Order (defined herein).

“Affiliate” means any corporation, company, partnership or other entity which directly or indirectly, controls, is controlled by or is under common control with either Party hereto. A corporation or other entity shall be regarded as controlling another corporation or other entity if it owns or directly or indirectly controls more than fifty percent (50%) of the voting stock or other ownership interest of the corporation or other entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other entity.

“Agreement” means this Master Services Agreement, including all Exhibits, Work Orders and agreed upon Change Orders.

“Applicable Law” means any and all applicable laws of any jurisdiction which are applicable to the Services in this MSA or any WO that may be in effect from time to time, and shall include all statutes, enactments, acts of legislature, laws, ordinances, rules, regulations, notifications, guidelines, directions, directives and orders of any Regulatory Authority, statutory authority, regulatory agency, tribunal, board, or court or any central or state government or local authority or other governmental entity in such jurisdictions.

“Applicable Taxes” means all applicable federal, state or local use, excise, sales or other taxes, fees, assessments, surcharges or similar governmental charges that may be imposed, levied, collected or assessed by or within the United States of America or any political subdivision thereof in connection with Company’s provision of the Services to Client hereunder, unless otherwise specified in Section 3.5 hereof.

“Artisan Popcorn” means MC’s own gourmet popcorn, which is made by MC in California.  All popcorn is air-popped and seasoned with olive oils, herbs and spices.  MC offers clients the opportunity to include the Artisan Popcorn in a Tasting Room, or retail location for an additional fee as outlined in an applicaple WO.

“Change Order” or “CO” means a mutually agreed written amendment to a Work Order, using the form attached hereto as Exhibit 3, which is executed and dated by the Parties and effective from such date of execution, and as further described in Section 9.2 herein.

“Client Wine Club” means the service offered by MC and subject to a WO wherein MC assists Client in forming a membership-based wine club allowing Client to sell wine through MC directly to consumers in the Client’s brand and ship said wine to the buyer.  MC will manage all aspects of the wine club under the terms outlined in the WO.

“Confidential Information” has the meaning set forth in Section 5.1 hereto.

“Custom Crush Services” has the meaning set forth in Section 5.1 hereto.

“Data Security Breach” means any act or omission that materially compromises either the security, confidentiality, or availability of the Personal Identifying Information of Client or its Affiliate to which MC has access as a result of this Agreement.”

“Deliverables” mean any preliminary, interim or final wines, marketing materials, Documentation, labels, methods, information, analysis, inventions, methods, procedures, technology, ideas, know-how, inventions (whether patentable or not), item, material, report, and system to be provided or developed by MC itself or jointly with others under the terms and conditions of this Agreement.

“Documentation” means the user manuals, specifications, instructions, and policies, as may be updated from time to time, that describe the functionality, features, operation, or use of the Service and that are made available by Company to Client.

“Effective Date” shall have the meaning set forth in the preamble to this Agreement.

“Initial Client Wines” means the initial wines selected by Client and included in an applicable work order and described further in Section 4.1 hereto.

“Intellectual Property Rights” means any and all intellectual property and proprietary rights throughout the world, including any and all patents, patent applications, copyrights, copyright applications, moral rights, trademarks, trade secret rights, rights to know-how, inventions and algorithms, and any and all similar or equivalent rights.

“Personal Identifying Information” means any representation of information that permits the identity of an individual to whom the information applies to be reasonably inferred by either direct or indirect means (i.e. name, address, social security number, telephone number, email address, etc.).”

“Tasting Room” is a service offered by MC wherein MC assists a client in establishing a retail wine tasting facility offering Private Label Wine(s), snacks and/or other wines creating a unique experience combining premier wines, olive oils, popcorn, light snacks and live music in a luxury location, staffed with knowledgeable wine staff.

“Private Label Wine” shall mean the wine(s) Company creates specifically for Client and includes a private label for Client.  These wines may include shiners, bulk wine, or wines made from grape to bottle for he client to use under a brand.

“Service” shall mean those services specifically performed by MC under an applicable WO and may include, but are not limited to, TTB Registration, Wholesale Sales, Distribution, Shipping, Freight, COLA Filings, Artisan Popcorn, wine label design, design and printing of promotional materials in regard the Service, email support solely in regard to the Client’s Private Label Wine(s), website hosting services in regard to promoting any Service, shipping Client’s Private Label Wine, payment processing for purchase of Client’s Private Label Wine(s), storage of Client’s Private Label Wine(s) in each case, as specified in the applicable WO, along with any other services otherwise specified in the applicable WO.

 “Work Order” or “WO” means written work orders which may contain terms including but not limited to requirements and specifications, delivery and performance schedules, fees and expenses, Deliverables, and Parties’ technical points of contact for Services on an ongoing basis. Upon mutual, written acceptance of a change order by Parties, such work or change order will be a “Work Order” or “WO”.

Section 1.3 Interpretation.

(a) The definitions set forth in this Agreement (including the applicable WOs and in any Exhibits and/or Change Orders attached hereto) shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The words “will” and “shall” are used interchangeably throughout this Agreement, and the use of either connotes a mandatory requirement. The use of one or the other will not mean a different degree or right or obligation for either Party. Use of the word “or” means “and/or”.

(b) The headings of the Articles, Sections and Exhibits are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

(c) Unless the context otherwise requires, references to this Agreement shall be deemed to include references to any associated WO and any Exhibit and/or Change Order attached hereto.

ARTICLE II

Structure, Account Management and Staffing

Section 2.1 WOs. All Services to be performed by MC under this Agreement shall be specified in one or more WO(s) substantially in the form set forth in Exhibit 2a- to this Agreement. Each WO will expressly refer to this Agreement, will form a part of this Agreement, and will be subject to the terms and conditions contained herein. An WO may be amended only by written agreement of the Parties pursuant to a valid CO substantially in the form set out in Exhibit 3. Notwithstanding any other provision of this Agreement to the contrary, to the extent there is any inconsistency between the terms of this Agreement and the terms of an WO, the terms of this Agreement shall control, unless such WO contains language expressly modifying the inconsistent term of this Agreement. To the extent there is any material modification to the Services requested by Client, the parties shall execute a CO to address such change including without limitation, any increase in fees or expenses due to MC.

Section 2.2 Account Management. Upon the Effective Date, each Party shall provide the other with the name and contact information of one or more individuals (each, an “Account Manager”) who shall have primary responsibility for managing the relationship between the Parties under this Agreement and any applicable WO. Among other things, the Account Managers shall be responsible for (i) executing, modifying and terminating any WO’s, (ii) periodically conferring with one another to assess the status of individual engagements under an WO, (iii) making any adjustments, modifications or amendments to this Agreement or an WO as may be desired by the Parties, (iv) assisting with the review and resolution of any issues relating to billing or payment under this Agreement or any WO, and (v) addressing all such other matters under this Agreement or an applicable WO as the Parties may determine from time-to-time are necessary and appropriate. Each Party in its sole discretion may change its designated Account Manager upon written notice to the other Party.

Section 2.3 Staffing of WOs. Upon execution of an WO (or such later time as the Parties may agree in writing), MC shall staff the WO with such MC professionals as MC shall deem appropriate to satisfy the mutually agreed upon objectives for the WO. Thereafter, MC shall have the right to add, remove, substitute, limit, change or modify the identity or time-commitment of the MC professionals that are assigned to an WO.

ARTICLE III

FEES, EXPENSES, BILLING AND PAYMENT

Section 3.1 Fees. In consideration of the Services provided under this Agreement, Client shall pay to MC such fees and any applicable expenses (the “Fees”) as shall be specified in each WO under which such Services are rendered.

Section 3.2 Billing. Unless otherwise provided in a WO, Client shall pay any applicable set-up fees and/or deposits in advance and then any recurring fees shall be invoiced on a monthly basis. Fees payable under this Agreement (each such bill, an “Invoice”) shall be paid in full within five (5) days of the invoices being generated. Client shall include credit card information on Exhibit 1 (attached hereto), which may be used to pay for Services under this Agreement that are not paid in full within 5 days of the invoice being generated.

Section 3.3 Payment. Unless set forth otherwise in an applicable WO, Client shall pay to MC the amounts of each Invoice to MC in U.S. dollars via Wire, ACH, Check, or credit card.

Section 3.4 Additional Terms. Unless set forth otherwise in an applicable WO, the following terms if applicable to your WO shall apply:

• Clients will be billed on a monthly basis with terms of Net 0 for storage and delivery fees. There are no refunds on any funds paid for services.
• All payments to be paid via credit card or ACH.
• One SKU# or label per pallet only (No mixed pallets)
• Minimum 24/hr notice mandatory for all orders with 12:00 noon deadline
• Warehouse will be closed the last working day of the month for inventory
• A case represents any “box” that contains bottles regardless of quantity
• A finance charge will be applied to all balances exceeding 30-days at a periodic rate of 1.5% per month

Section 3.6 Taxes. Client will be responsible for the payment of any and all Applicable Taxes for the Services under this Agreement (other than those based upon MC’s net income) including, without limitation, Client’s income, payroll, sales, VAT, use, gross receipts, personal property, withholding or other taxes imposed upon transactions under this Agreement (“Taxes”). If MC has the legal obligation to collect Taxes for which Client is responsible under this Section, the appropriate amount will be invoiced to and paid by Client, unless Client provides MC with a valid tax exemption certificate authorized by the appropriate taxing authority. If any withholding taxes must be paid based on the payments to MC specified in this Agreement, then Client will pay all such taxes and the amounts payable to Client under this Agreement will be increased such that the amounts actually paid to MC will be no less than the amounts that MC would have received notwithstanding such tax.

ARTICLE IV

GENERAL RESPONSIBILITIES

Section 4.1 Client’s Responsibilities. In addition to any specific responsibilities provided in any applicable WO, Client shall be responsible for the following:

Section 4.1.1 Client’s Selection of Wine. Client shall select Initial Client Wines for MC to make for Client and which shall be listed in an applicable WO. If a sampling is required, samples will be available for the Client to approve before final production is started. From time-to-time Client may meet with MC to sample other wines and select Additional Client Wines for MC to make for Client subject to an agreed upon CO.

Section 4.1.2 Client Promotion Responsibility. Client shall actively promote the sale of Private Label Wines and, if applicable pursuant to a WO, shall promote membership in the Client Wine Club as may further be discussed in an applicable WO.

Section 4.1.3 Client’s License Requirements. Client confirms that is has secured or intends to secure prior to MC shipping any wine, a valid liquor license, a copy of which has been provided to MC. In the event that the Client does not have a valid liquor license and does not plan to obtain one, Client understands that no wine may be delivered to the Client without the appropriate label and being charged for appropriate sales tax. The transaction will be considered a retail sale.  If the Client does not have a valid liquor license that allows the Client to offer for sale wine to be delivered to various states, then MC may offer the wines for sale under MC's liquor license directly to a consumer or wholesale customer.  In this regard, MC must receive all funds directly from any Customer on a hosted website or otherwise for the sale of any alcoholic beverage and will pay the Client the proceeds less any revenue share or fees as per the applicable WO. If requested by Client, MC may, under a separate agreement provide the Client with the process required to obtain a liquor license.  If Client intends to engage in a winegrower’s license with MC, then a separate agreement is required.

Section 4.1.4 Insurance Requirements for Services (if applicable). If, under an applicable WO, MC is storing any wines or products for Client, the Client shall be responsible to carry fire, theft, and casualty insurance on all wines or products stored at MC’s storage facility in amounts and from carriers determined by MC in its reasonable discretion and included in an applicable WO. Furthermore, Client shall carry liability insurance (with MC named as additional insured) with respect to the sale of wine at the Client- in amounts and from carriers determined by MC in its reasonable discretion. A Certificate of Insurance is required.  Minimum requirements are outlined in the WO if required. Please send policy and annual renewals to: McClain Family Cellars, Inc., 16 Technology Drive, Suite 111, Irvine, CA 92618 Email: [email protected].

Section 4.1.5 Fictitious Business Name Statement. Client authorizes MC, as the bottling company and producer of wines, to file the necessary fictitious business name with the relevant county clerk, and take all necessary actions to complete and file the fictious business name statement with such clerk.

Section 4.1.6 Tax Trade Bureau Application. Client authorizes MC to make an application to the Tax and Trade Bureau for amendments of McClain Family Cellars, Inc. permit for the addition of the trade name obtained under Section 4.1.5 herein. Additionally, Client shall sign a trade name authorization upon request by MC.

Section 4.2 MC’s Responsibilities. In addition to any specific responsibilities provided in any applicable WO, MC shall be responsible for the following:

Section 4.2.1 MC’s Assistance in Selection of Initial Client Wines. MC shall assist Client in its selection of Initial Client Wines and make samples available for Client’s approval prior to final production.

Section 4.2.2 Labels for Private Label Wine. MC shall affix wine labels of the Initial Client Wines and, if applicable, and Additional Client Wines pursuant to the then existing requirements established by the appropriate governmental agency. The filing of a Certificate of Label Approval (COLA) is required for every designed label.  The fees for such are outlines in the WO.

Section 4.2.3 Basic Services Provided by MC to Client. If outlined in the WO, MC agrees to produce, bottle, brand, and work with the Client to develop a launch plan to enable the Client to introduce its Private Label Wine to consumers. MC will offer a wide range of Services, which may be provided at additional fees and subject to a WO, needed to assist the Client in successfully launching its Private Label Wine.

Section 4.2.4 MC to Include Client’s Name on Marketing Materials. If outlined in the WO and approved by Client and allowed by Applicable Laws, MC agrees to list Client’s Private Label Wines and where and how to purchase such Private Label Wines.

Section 4.2.5 MC Support. As part of the Service, Company will provide Client with Company’s standard support, Documentation, and other online resources to assist Client in its use of the Service.

Section 4.2.6 Protection of Client Data. Company will maintain commercially reasonable administrative, physical, and technical safeguards designed to prevent unauthorized access to or use of client data, email addresses, and etc. provided to MC pursuant to an applicable WO.

Section 4.2.7 MC Use of Subcontractors. Company may use subcontractors to provide any part of the Services. If subcontractors are used, the Company shall conduct due diligence on such subcontractors, and such subcontractors shall be bound in writing to the material terms of this Agreement, including confidentiality and compliance Applicable Laws, and Company remains liable for all acts and omissions of its subcontractors.

Section 4.2.8 MC is to provide payment processing services to the CLIENT during the term of this agreement. If outlined in the WO, MC agrees to offer an affiliate relationship to the CLIENT whereby the client may offer for promote the brand online and to others to encourage the to buy Private Label Wines from a website hosted and managed by MCCLAIN using the Trade Name of the CLIENT. In this regard the CLIENT does not have a valid liquor license. MCCLAIN holds a valid 02 liquor license. MCCLAIN has created a wine under the brand of the CLIENT under this agreement. CLIENT wishes to promote the wine products to the public. Under this agreement, CLIENT understands that he/she/it may encourage others to purchase the wine created by MCCLAIN, but under no circumstances may the CLIENT accept funds for, offer to sell, or represent that the CLIENT is selling the wine produced by MCCLAIN. Any and all sales of the wine must be registered on the website HOSTED AND DEIGNED BY MCCLAIN. There are no refunds on any funds paid for services by the CLIENT to MC. All funds must come directly to MCCLAIN. No cash sales are permitted. Minimum payment must be $250 or more to be paid, or the amounts due will roll over until the minimum is reached. MCCLAIN will pay proceeds, less any fees, cost of goods sold, taxes, shipping fees, or other fees, to the CLIENT on a MONTHLY basis within 15 days from the end of a calendar month via ACH or Check.

PRICE FOR SERVICES: For all sales and transactions processed for the sale of the wine, MCCLAIN will charge CLIENT a 6.49% transaction fee. This fee will be retained by MCCLAIN for providing this service to the CLIENT. ANY AND ALL FEES for bank processing and or services fees charged shall also be passed to the CLIENT.

4.3.1 Compliance with Laws.  Each Party will comply with all Applicable Laws.

4.3.2 Insurance. Each Party shall carry and maintain insurance in the amounts and for the occurrences for which insurance is typically carried by entities in the same or similar business and as otherwise specified in the Section 4.1.4 herein and any applicable WO.

ARTICLE V

CONFIDENTIALITY

Section 5.1 “Confidential Information”, means (a) all information, data (including personal data), agreements, documents, reports, “know-how,” interpretations, plans, studies, forecasts, projections and records (whether in oral or written form, electronically stored or otherwise) containing or otherwise reflecting information concerning the Disclosing Party, any of its Affiliates, their respective businesses or assets and other information not available to the public generally, whether received before or after the date of this Agreement, and (b) all memoranda, notes, analyses, compilations, studies or other documents which were developed based upon or which include any such Confidential Information (whether in written form, electronically stored or otherwise) which is identified as confidential or should otherwise be reasonably deemed confidential or proprietary under the circumstances, whether prepared by the Disclosing Party, the Receiving Party or their respective Representatives or others which contain, reflect or are based on any such Confidential Information. Notwithstanding the foregoing, the Parties understand and agree that the term “Confidential Information” does not include (i) information which was already in the possession of a Receiving Party or its Representatives prior to the date of disclosure and which was not acquired or obtained from a source that was known to the Receiving Party to be bound by a contractual, legal or fiduciary obligation not to disclose the information to the Receiving Party, (ii) information which is obtained by the Receiving Party or its Representatives from a source other than the Disclosing Party or its Representatives unless such source is known to the Receiving Party to be prohibited from transmitting the information to the Receiving Party or its Representatives by a contractual, legal or fiduciary obligation to the Disclosing Party, (iii) information which is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party or its Representatives in violation of the provisions of this Agreement or by disclosure by any other Person in violation of any contractual legal or fiduciary obligation, (iv) information developed independently by the Receiving Party or its Representatives without use of Confidential Information.

Section 5.2 Protection.  The Receiving Party will: (a) use the same degree of care that it uses to protect the confidentiality of its own confidential information of like kind (but in no event less than reasonable care); (b) not use any Confidential Information of the Disclosing Party for any purpose outside the scope of this Agreement; and (c) except as otherwise authorized by the Disclosing Party in writing, limit access to Confidential Information of the Disclosing Party to those of the Receiving Party’s and its Affiliates’ employees, contractors, and agents who need such access for purposes consistent with this Agreement and who are subject to confidentiality obligations at least as restrictive as those herein. The Receiving Party will provide prompt written notice to the Disclosing Party of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information. Upon request of the Disclosing Party during the Term, the Receiving Party will promptly return, or at the Disclosing Party’s option destroy, any or all Confidential Information of the Disclosing Party in the Receiving Party’s possession or under its control.

Section 5.3 Compelled Disclosure.  The Receiving Party may access or disclose Confidential Information of the Disclosing Party if it is compelled by law to do so, provided the Receiving Party gives the Disclosing Party prior notice of such compelled access or disclosure (to the extent legally permitted) and reasonable assistance, at the Disclosing Party's expense, if the Disclosing Party wishes to contest the access or disclosure.

ARTICLE VI

REPRESENTATIONS, WARRANTIES, DISCLAIMERS, AND INDEMNIFICATIONS

Section 6.1 Mutual Representations.  Each Party represents that: (a) it is duly organized, validly existing, and in good standing under its jurisdiction of organization and has the right to enter into this Agreement; and (b) the execution, delivery, and performance of this Agreement are within the corporate powers of such Party and have been duly authorized by all necessary corporate action on the part of such Party, and constitutes a valid and binding agreement of such Party.

Section 6.2 Company Warranties.  Company warrants that: (a) the Service will perform materially in accordance with the applicable Documentation; and (b) Company will perform Professional Services in a professional manner.

Section 6.3 Client Warranty. Client warrants that it has obtained and will maintain all rights, licenses, consents, and permissions necessary for Client to accept the Services pursuant to the terms of this Agreement.

Section 6.4 Disclaimer.  EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT TO THE CONTRARY, SERVICES AND DELIVERABLES ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. MC DOES NOT WARRANT THAT THE SERVICES WILL MEET THE REQUIREMENTS OF CLIENT OR THOSE OF ANY THIRD PARTY AND, IN PARTICULAR, MC DOES NOT, IF APPLICABLE  WARRANT THAT THE EMAIL OR WEB HOSTING SYSTEM WILL BE ERROR FREE OR WILL OPERATE WITHOUT INTERRUPTION. SUPPLIER DOES NOT WARRANT OR MAKE ANY REPRESENTATION REGARDING THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE CONTENTS OF ANY CONTENT OR THE RESULTS TO BE OBTAINED FROM THEIR USE.

 Section 6.5 Company Indemnification.

Company will defend Client and its Affiliates from  Data Security Breach, and against any lawsuit or proceeding brought by a third party to the extent alleging that Client’s use of the Service as permitted hereunder infringes or misappropriates such third party’s intellectual property rights, and Company will indemnify Client and its Affiliates for any Company Data Security Breach, and any damages, including  any reasonable attorneys’ fees finally awarded against them arising from such lawsuit or proceeding; provided, however, that Company will have no liability under this Section to the extent any such lawsuit or proceeding arises from: (a) Third Party Products and Content provided to Company by Client; (b) Client’s or any of its Affiliates’ negligence, misconduct, or breach of this Agreement; or (c) any modification or combination of the Service that is not performed or approved by Company or specifically set out in the Documentation. In the event the Service is enjoined, or in Company’s reasonable opinion it is likely to be enjoined, then Company shall do one of the following at its own discretion: (i) procure for Client the right to continue to use the Service, (ii) modify or replace the Service such that it is non-infringing but functionally equivalent, or (c) terminate the enjoined portion of the Service and provide a pro-rata refund of any prepaid fees for the enjoined Service.

Section 6.6 Client Indemnification. Client will defend Company and its Affiliates from and against any lawsuit or proceeding brought by a third party to the extent alleging that any Client Private Label Wine label, name, mark, and/or etc. infringes, misappropriates, or otherwise violates the rights, including privacy and publicity rights, of any other party, or that Client in violation of applicable law, and Client will indemnify Company and its Affiliates for any damages and any reasonable attorneys’ fees finally awarded against them arising from such lawsuit or proceeding; provided, however, that Client will have no liability under this Section to the extent any such lawsuit or proceeding arises from Company’s or any of its Affiliates’ negligence, misconduct, or breach of this Agreement.

Section 6.7 Procedures.  The indemnified party will provide the indemnifying party with: (a) prompt written notice of any matter that is subject to indemnification hereunder; (b) the right to assume the exclusive defense and control of any such matter (provided that the indemnified party may participate in the defense at its own expense); and (c) cooperation with any reasonable requests assisting the indemnifying party’s defense of such matter. The indemnifying party may not settle any such lawsuit or proceeding without the indemnified party’s prior written consent.

Section 6.8 Exclusive Remedy.  This Section 6 states the indemnifying party’s sole liability, and the indemnified party’s exclusive remedy, for any type of claim described in this Section 6.

ARTICLE VII

LIMITATION OF LIABILITY

Section 7.1 Exclusion of Certain Damages.  IN NO EVENT WILL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY OR TO ANY OTHER PARTY FOR ANY LOST PROFITS OR REVENUES, OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, COVER, OR PUNITIVE DAMAGES, WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING DISCLAIMER WILL NOT APPLY TO THE EXTENT PROHIBITED BY APPLICABLE LAW.

Section 7.2 Liability Cap.  EXCEPT FOR A PARTY’S BREACH OF ITS CONFIDENTIALITY IN NO EVENT WILL EITHER PARTY’S AGGREGATE LIABILITY RELATING TO THIS AGREEMENT EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CLIENT TO COMPANY HEREUNDER IN THE 12 MONTHS PRECEDING THE DATE ON WHICH THE FIRST CLAIM GIVING RISE TO LIABILITY AROSE (THE “GENERAL LIABILITY CAP”). THE GENERAL LIABILITY CAP SHALL NOT APPLY TO CLIENT’S LIABILITY FOR ITS PAYMENT OBLIGATIONS UNDER SECTION 3, CLIENT’S LIABILITY WITH RESPECT TO THE RESTRICTIONS, A PARTY’S LIABILITY FOR ITS INDEMNIFICATION OBLIGATIONS UNDER SECTION 6, OR ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

Section 7.3 Excluded Claims. Notwithstanding Section 7.2, in no event will Company’s aggregate liability for all claims exceed three times (3x) the General Liability Cap.

Section 7.4 Scope.  For the avoidance of doubt, the exclusions and limitations set forth in Section 7.1, Section 7.2, and Section 7.3 will apply with respect to all legal theories of liability, whether in contract, tort, or otherwise.  The Parties agree that the exclusions and limitations set forth in Section 7.1, Section 7.2, and Section 7.3 allocate the risks between the Parties under this Agreement, and that they have relied on these exclusions and limitations in determining whether to enter into this Agreement.

ARTICLE VIII

TERM, TERMINATION, AND SUSPENSION

Section 8.1 Term / Exclusivity.  This Agreement shall remain in effect for 36 months from the date on which both parties have signed this Agreement. The Agreement shall renew automatically at the end of the initial term for an additional 12-month term unless a party elects to cancel in writing at least 90 days prior to the end of the initial term. During the initial term and all renewal terms of this Agreement, Client shall not enter into any other similar agreements to create a Private Label Wine, offer a wine club or any similar Services as outlined in this Agreement with any other wine or spirit maker. Notwithstanding the foregoing, if Services under any one or more WOs are in progress on the date Client gives such notice of termination, then, at Client’s option, termination under this Section 9.1 shall not be effective with respect to any such WO(s) specified by Client until the later of (i) 60 days after the date on which MC receives such notice of termination, or (ii) the date on which the Services to be provided under the WO(s) have been completed.

Section 8.2 Suspension.  Company may, upon prior written notice to Client, suspend Client’s or any or all access to the Service, in whole in part, if: (a) Client is using the Service in violation of this Agreement or any applicable law; (b) suspension of the Service is necessary, in Company’s reasonable discretion, to protect the security of the Service or the infrastructure of Company; (c) suspension is required by applicable law; or (d) any fees owed by Client (excluding amounts disputed in reasonable and good faith) are 30 days or more overdue, provided Company has given Client 10 or more days’ prior notice.

Section 8.3 Termination for Cause.  In the event of any material breach hereunder by either Party, the non-breaching party shall notify the breaching party in writing of the nature of said breach and the breaching party shall have 30 days within which to cure said breach or at least commence a reasonable attempt to sure said default. If such notice of breach is for breach of a WO, such notice shall note the specific WO under which such breach is claimed. Breach of an WO does not necessarily terminate this Agreement. If the breach is not cured within 60 days, then the non-breaching party may elect to terminate this Agreement by written notice to the other party. Said termination shall be effective on receipt of said written notice. This Agreement shall automatically terminate in the event of the (i) voluntary or involuntary bankruptcy of either Party, or the assignment for the benefit of creditors, or (ii) an act of moral turpitude by any officer or director of either Party, or (iii) the commission of a felony by any officer or director of either Party.

Section 8.4 Effect of Termination.  Upon termination of this Agreement or an WO for any reason, (a) any amounts owed to Company prior to such termination and all completed but unpaid fees will be immediately due and payable, and (b) all rights granted to access and use the Service provided pursuant to an WO or this Agreement will immediately cease to exist.  In the event of the termination of this Agreement, MC shall deliver all Client wines it has in storage to Client. Subject to this Section, upon any termination of this Agreement and the Disclosing Party’s request, the Receiving Party will promptly return, or at the Disclosing Party’s option destroy, any or all Confidential Information of the Disclosing Party in the Receiving Party’s possession or under its control.

Section 8.5 Survival.  The sections titled “Fees,” “Confidentiality,” “Indemnification,” “Limitation of Liability,” “Termination for Cause,” “Effect of Termination,” “Survival,” and “General Provisions”, and any other sections which, by their nature would reasonably be considered to survive any termination of this Agreement, will survive any such termination.

Section 8.6 Deemed Acceptance. Upon delivery of any Service, Deliverable, or website for Client review, Client shall have fourteen (14) days to provide written notice of any requested changes or defects. If no written notice is received within this fourteen (14) day period, the Deliverable shall be “Deemed Accepted” by the Client, and Company may automatically proceed with final deployment, “Go-Live”, and the initiation of any recurring billing outlined in the applicable Work Order.

Section 8.7 Project Abandonment. If Client fails to respond to Company communications, fails to provide necessary assets, or otherwise delays the progression of a Work Order for a period of thirty (30) consecutive days, the project shall be considered Abandoned. Upon Abandonment, Company reserves the right to terminate the Work Order, retain all previously paid setup fees and deposits as liquidated damages, and invoice Client for all work completed up to the date of Abandonment.

ARTICLE IX

GENERAL PROVISIONS

Section 9.1 Attribution.  Client agrees that Company may use Client’s name, label, logo and any other deliverables that were provided to the client pursuit to the terms of the AGREEMENT or work order or the like to indicate that Client is a Client of Company for the Service on Company’s website, marketing materials, and in communications with existing or prospective Company Clients. Any such attribution will be consistent with Client’s style guidelines or requirements as communicated to Company by Client.

Section 9.2 Change Orders. Client may at any time, by written CO signed and agreed to by both Parties, make changes or additions to a WO within the general scope hereof. If such changes cause an increase or decrease in the cost of the Services or in the required time for its performance, an equitable adjustment shall be made subject to agreed upon terms.

Section 9.3 Force Majeure.  Except for payment obligations, neither Party will be liable hereunder by reason of any failure or delay in the performance of its obligations due to events beyond the reasonable control of such Party, which may include natural disasters, fires, epidemics, pandemics, riots, war, terrorism, denial of service attacks, internet outages, labor shortages, and judicial or government action (each, a “Force Majeure Event”). If either Party’s nonperformance hereunder due to a Force Majeure Event persists for more than 30 days, either Party may immediately terminate this Agreement without charge or penalty upon notice to the other Party.

Section 9.4 Assignment.  Neither Party may assign any of its rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other Party. Notwithstanding the foregoing, either Party may assign or transfer this Agreement in its entirety, without the consent of the other Party, in connection with a merger or sale of all or substantially all of its assets, so long as the assigning Party provides prior written notice thereof to the other Party. Any purported assignment in violation of this Section will be null and void. This Agreement will bind and inure to the benefit of the Parties, their respective successors, and permitted assigns.

 Section 9.5 Governing Law.  This Agreement shall in all respects (including the formation thereof, all WOs, COs, and performance thereunder), be governed by and construed in accordance with the laws in force in the State of California without giving effect to any choice of law principle or rule that would result in the application of the laws of any State other than the State of California.

Section 9.6 Dispute Resolution / Mandatory Arbitration. The appropriate executives or Account Managers or other designated individuals representing both Parties shall meet and attempt in good faith to settle any dispute, claim or controversy arising out of or relating to the interpretation, performance or breach of this Master Services Agreement (the “Dispute”). In the event that the Parties cannot resolve such a Dispute after a good faith effort to settle such Dispute, then the Parties will settle the same through binding arbitration conducted by an arbitrator to be mutually selected. The parties will share the costs of the binding arbitration equally. Each party will cooperate fully and fairly with the arbitrator. Any dispute will be arbitrated by an arbitrator in accordance with the rules of the American Arbitration Association (AAA). Judgment on the binding arbitration award may be entered in any court that has jurisdiction over the matter. Arbitration to take place in the county of Orange, State of California. Costs of arbitration, including lawyers’ fees will be allocated by the arbitrator.

Section 9.7 Notices.  Any notice to be given under this Agreement must be in writing and delivered either in person, by any method of mail (postage prepaid) requiring return receipt, or by overnight courier, to the party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if mailed, three days after the date of postmark; or (c) if delivered by express courier, the next business day the courier regularly makes deliveries to the addressee’s location.

Section 9.8 Entire Agreement; Amendment. This Agreement, together with all Exhibits, WOs, attached hereto (each of which is incorporated herein by reference), constitutes the final, complete and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes all prior understandings and agreements relating to its subject matter. This Agreement may not be changed, modified, amended or supplemented except by a written instrument signed by an authorized representatives of each of Client and Company. No oral statements, text messages, informal emails, or promises made by any employee, agent, or representative of the Company shall modify the terms of this Agreement, authorize the pausing of billing, or guarantee refunds. Any modification, pause in service, or alteration of billing terms must be executed via a formal, written Change Order (CO) signed by an authorized executive officer of McClain Cellars, Inc.

Section 9.9 Relationship of the Parties; Third Party Beneficiaries.  The Parties are independent contractors and this Agreement does not create a partnership, franchise, joint venture, agency, fiduciary, or employment relationship between the Parties. There are no third-party beneficiaries to this Agreement.

Section 9.10 Miscellaneous.  No failure or delay by either Party in exercising any right under this Agreement will constitute a waiver of that right. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, such provision will be modified by the court and interpreted so as best to accomplish the objectives of the original provision to the fullest extent permitted by law, and the remaining provisions of this Agreement will remain in full force and effect. There are no refunds on any funds paid for services by CLIERNT to MC after funds are paid out for services to be rendered. This Agreement, including all exhibits hereto and all WOs and COs, constitutes the entire agreement between the Parties and supersedes all prior and contemporaneous agreements, proposals, or representations, written or oral, concerning Client’s purchase and use of the Service. No modification, amendment, or waiver of any provision of this Agreement will be effective unless in writing and signed by each of the Parties. To the extent of any conflict or inconsistency between the provisions in the body of this Agreement and any exhibit hereto or any WO, the terms of such WO will prevail. As used herein, the words “include” and “including” shall be deemed to be followed by the words “without limitation.” This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all counterparts together shall constitute a single agreement.

IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this Agreement as of the Effective Date of the agreement or WO.