Bakkt (US:BKKT)2025-08-11 20:41Equity Purchase Agreement Overview This section provides a high-level overview of the Equity Purchase Agreement, identifying the parties involved and the core purpose of the transaction Parties to the Agreement This section identifies the Purchaser, Parent, and the specific Acquired Companies involved in the Equity Purchase Agreement, dated July 23, 2025 - The agreement outlines the sale of all equity interests in the Acquired Companies from the Parent to the Purchaser810 - Key parties involved are: - Purchaser: Project Labrador Holdco, LLC - Parent (Seller): Bakkt Opco Holdings, LLC - Acquired Companies: Bridge2 Solutions, LLC; B2S Resale, LLC; Aspire Loyalty Travel Solutions, LLC; Bridge2 Solutions Canada Ltd28 Article I: Certain Definitions This article defines key financial, legal, and operational terms such as Purchase Price, Escrow Amount, Working Capital, and Material Adverse Effect to ensure clarity throughout the agreement Key Financial Definitions | Term | Definition | Source Chunk | | :--- | :--- | :--- | | Purchase Price | An amount of cash equal to $1.00 | [62] | | Escrow Amount | The sum of the Indemnity Escrow Amount ($1,000,000) and the Adjustment Escrow Amount ($1,500,000), totaling $2,500,000 | [28, 38, 17] | | Adjustment Escrow Amount | $1,500,000, held to secure post-closing working capital and indebtedness adjustments | [17] | | Indemnity Escrow Amount | $1,000,000, held to secure indemnification claims by the Purchaser | [38] | | Target Working Capital | Defined as $0 | [63] | - An "Acquired Companies Material Adverse Effect" is defined as an event having a material adverse effect on the business, results, or financial condition of the Acquired Companies, but excludes a comprehensive list of general economic, market, or political changes, unless they have a disproportionate impact14 Article II: The Transaction This article details the acquisition mechanics, including the purchase and sale of Equity Interests, closing procedures, escrow account establishment, and payment and tax withholding protocols - At the closing, the Purchaser will buy all Equity Interests from the Parent in exchange for the Total Consideration, which is the Purchase Price of $1.00 subject to post-closing adjustments7866 - The Parent is required to deposit the Escrow Amount ($2,500,000) into an Escrow Account at closing, divided into an Indemnity Escrow and an Adjustment Escrow, securing potential indemnification claims and post-closing financial adjustments8083 - At least three business days before closing, the Parent must provide a statement with good faith estimates of Working Capital and Indebtedness to calculate the initial Purchase Price79 - The agreement grants the Purchaser and Acquired Companies the right to withhold taxes from payments as required by law, with a provision to notify the Parent five business days prior to withholding82 Article III: Post-Closing Adjustments This article details the post-closing purchase price adjustment process, including the determination of final Working Capital and Indebtedness, dispute resolution, and subsequent payments to or from the escrow account - Within 60 days after closing, the Purchaser must prepare and deliver a Closing Date Balance Sheet to determine the Final Working Capital and Final Indebtedness85 - The Parent has a 30-day "Working Capital Dispute Period" to review and dispute the Purchaser's calculations, with unresolved disputes settled by an independent "Arbitrating Accountant" (Grant Thornton LLP)888990 - Final adjustments are made based on determined Final Working Capital and Final Indebtedness, resulting in payments from the Adjustment Escrow Amount to the Purchaser for deficits/surpluses or from the Purchaser to the Parent for surpluses/deficits919293 - A TTM (Trailing Twelve Month) Working Capital Report will be prepared one year post-closing to calculate any TTM Working Capital Surplus, which would result in a payment from the Purchaser to the Parent8793 Article IV: Representations and Warranties of the Acquired Companies This article details the Acquired Companies' representations and warranties concerning corporate organization, financial statements, taxes, intellectual property, and compliance, serving as a baseline for due diligence and potential indemnification claims - The Acquired Companies represent that their financial statements are derived from the books of the Public Parent (Bakkt Holdings, Inc.), prepared in accordance with GAAP, and fairly present their financial position as of March 31, 2025103104 - Extensive representations are made regarding tax matters, including timely filing of returns, payment of taxes, absence of audits, and proper classification for tax purposes (e.g., Bridge2 Company and Aspire Company as disregarded entities)110112119 - The article warrants that the Acquired Companies' Intellectual Property, combined with licensed IP and services under the Transition Services Agreement, is sufficient to operate the Business as it was prior to closing173195 - The Acquired Companies disclaim all other warranties not explicitly stated in this article, including any projections or estimates about future performance197 Article V: Representations and Warranties of the Parent This article outlines the Parent's representations and warranties regarding its legal status, authority to execute the agreement, and clear ownership of the equity interests being transferred - The Parent warrants that it is a duly organized and validly existing limited liability company under Delaware law with the full authority to execute the agreement199200 - The Parent represents that it holds 100% of the issued and outstanding Equity Interests of the Acquired Companies and will transfer good and marketable title to the Purchaser, free of any encumbrances203 - The Parent confirms that it has not employed any broker or financial advisor for which the Purchaser or Acquired Entities could become liable for fees205 - Similar to the Acquired Companies, the Parent explicitly disclaims any representations or warranties not set forth in this article208 Article VI: Representations and Warranties of Purchaser This article outlines the Purchaser's representations and warranties concerning its legal standing, authority to complete the transaction, financial capability, and investment intent - The Purchaser represents it is a duly organized Delaware LLC with full power and authority to execute the agreement and consummate the transaction209210 - The Purchaser warrants that at closing, it will have at least $15,000,000 in available financing to support the purchase card credit limit under the Outpayce Agreement, pay the Purchase Price, and fund the business for at least 12 months post-closing215 - The Purchaser confirms it is acquiring the Equity Interests for its own investment purposes and not for distribution or resale217 - The Purchaser acknowledges that it has conducted its own independent investigation and is relying solely on the representations and warranties expressly set forth in Articles IV and V of the agreement219 Article VII: Covenants This article details the binding covenants governing the parties' actions before and after closing, including business conduct, tax matters, employee issues, confidentiality, and non-solicitation of alternative transactions - Conduct of Business: From the agreement date until closing, the Parent must cause the Acquired Entities to operate in the ordinary course of business and not take certain actions (e.g., amend organizational documents, issue equity, make material changes) without the Purchaser's consent248249 - Tax Matters: The article specifies how pre-closing tax returns will be handled, allocates responsibility for transfer taxes (50% Parent, 50% Purchaser), and outlines procedures for tax contests and the allocation of the purchase price for tax purposes235240243 - Employee Matters: Establishes non-solicitation covenants for one year post-closing, where neither party will solicit certain employees from the other, and obligates the Purchaser to make employment offers to specified "Available Employees"228229 - No Solicitation: The Parent agrees not to solicit, negotiate, or entertain any alternative acquisition proposals for the Acquired Entities until the closing or termination of this agreement259 Article VIII: Conditions to the Purchase and Sale This article outlines the specific conditions that must be satisfied or waived by both the Purchaser and Parent before the transaction can be completed, with failure potentially leading to termination - Conditions to Purchaser's Obligation: Key conditions include the accuracy of the Seller's representations and warranties, performance of covenants, execution of the Pre-Closing Assignment, and delivery of various documents like the Escrow and Transition Services Agreements262 - A critical financial condition for the Purchaser is that the Cash on Hand of the Acquired Companies at closing must be no less than $11,000,000, plus adjustments for Estimated Working Capital and Estimated Indebtedness263 - A significant condition for the Purchaser is that at least 80% of a specified group of "Available Employees" must accept their employment offers262263 - Conditions to Parent's Obligation: Key conditions for the Parent include the accuracy of the Purchaser's representations, Purchaser's performance of its covenants, and delivery of executed documents such as the Escrow Agreement, Transition Services Agreement, and the Braintree Note265266 Article IX: Survival; Indemnification This article defines post-closing remedies for breaches, establishing survival periods for representations and warranties, outlining indemnification obligations, procedures for claims, and crucial limitations like deductibles and caps - Survival Periods: General representations and warranties survive for one year post-closing, while "Fundamental Representations" (e.g., organization, capitalization, authority) survive until the statute of limitations expires plus 60 days268 - Indemnification by Parent: The Parent agrees to indemnify the Purchaser for losses arising from breaches of representations/warranties, breaches of covenants, all "Indemnified Taxes," and claims related to Transaction Expenses or pre-closing Indebtedness269 Limitations on Parent's Indemnification for General Representations | Limitation | Amount | Description | | :--- | :--- | :--- | | De Minimis Threshold | $15,000 | A single claim must exceed this amount to be considered | | Aggregate Deductible | $60,000 | The total of all qualifying claims must exceed this amount before any indemnification is paid Once met, payment is from the first dollar | | Indemnification Cap | $1,000,000 | The maximum aggregate amount the Parent will pay for breaches of general representations | - Exclusive Remedy: Except in cases of Fraud or for seeking equitable relief (like specific performance), the indemnification process outlined in this article is the sole and exclusive remedy for any breaches of the agreement after closing285286 Article X: Termination This article specifies the conditions under which the Equity Purchase Agreement can be terminated by either party before closing, outlining the consequences and surviving obligations - The agreement can be terminated by: - Mutual written consent of all parties - Either party if a final, non-appealable court order prohibits the transaction - The Parent if the Purchaser commits a material breach and fails to begin curing it within 20 days - The Purchaser if the Acquired Companies commit a material breach and fails to begin curing it within 20 days288 - If the agreement is terminated, it becomes void with no further liability, except for certain surviving provisions (like confidentiality) and liability for any fraud or willful and material breach that occurred prior to termination289 Article XI: General Provisions This article contains standard legal clauses governing the agreement's interpretation and enforcement, covering notices, governing law, dispute jurisdiction, jury trial waiver, fees, and legal representation - Governing Law and Jurisdiction: The agreement is governed by the laws of the State of Delaware, and the parties submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware for any disputes303304 - Fees and Expenses: Generally, each party pays its own costs, but upon closing or termination (unless due to Purchaser's breach), the Parent agrees to pay the Purchaser's counsel fees up to an aggregate amount of $600,000298 - Waiver of Jury Trial: All parties irrevocably waive their right to a trial by jury for any controversy arising under the agreement305 - Legal Representation: The agreement acknowledges that Wilson Sonsini Goodrich & Rosati, P.C. represented the Parent and Acquired Companies, with the Purchaser waiving conflict of interest and agreeing that attorney-client privilege for pre-closing communications belongs to the Parent311312 Exhibits This section includes ancillary documents such as the Braintree Note, Escrow Agreement, and Transition Services Agreement, which are integral to the overall transaction - Exhibit A - Braintree Note: This is the form of a promissory note from the Issuer (Project Labrador Holdco, LLC) to the Seller (Bakkt Opco Holdings, LLC), related to the Braintree Loan Amount and specifying terms of payment, interest, and subordination to senior debt322324325 - Exhibit B - Escrow Agreement: This agreement details the terms under which Acquiom Clearinghouse LLC will act as the Escrow Agent, holding the Escrow Funds and disbursing them according to joint instructions from the Purchaser and Parent or as otherwise specified340342343 - Exhibit C - Transition Services Agreement (TSA): This agreement outlines the services that the Seller will provide to the Purchaser (and vice-versa) for a transitional period post-closing to ensure business continuity, covering scope, compensation, performance standards, and term (an initial ten months, with a possible three-month extension)368370412