Exhibit 10.4
Execution Version
SPONSOR AGREEMENT
This SPONSOR AGREEMENT (this “Agreement”), dated as of June 13, 2021, is made by and among Seven Oaks Sponsor LLC, a Delaware limited liability company (“Seven Oaks Sponsor”), Jones & Associates, Inc., a Delaware corporation (including any affiliates, “Jones Sponsor” and, together with Seven Oaks Sponsor, “Sponsors”), Seven Oaks Acquisition Corp., a Delaware corporation (“Acquiror”), Giddy Inc., a Delaware corporation (the “Company”) and JonesTrading Institutional Services LLC (solely for purposes of Section 5) (“JonesTrading”). Sponsors, Acquiror and the Company shall be referred to herein from time to time collectively as the “Parties.” Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.
WHEREAS, as of the date hereof, Seven Oaks Sponsor is a holder of record and the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of 5,304,375 shares of Acquiror Common Stock and 5,587,500 Acquiror Warrants (the “Seven Oaks Sponsor Warrants”), all of which are Private Placement Warrants (the “Seven Oaks Sponsor Private Placement Warrants”);
WHEREAS, as of the date hereof, Jones Sponsor is a holder of record and the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of 1,164,375 shares of Acquiror Common Stock;
WHEREAS, Acquiror, the Company and certain other Persons party thereto entered into the Agreement and Plan of Merger, dated as of the date hereof (as it may be amended, restated or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”); and
WHEREAS, the Merger Agreement contemplates that the Parties will enter into this Agreement concurrently therewith, pursuant to which, among other things, each Sponsor will (a) vote in favor of approval of the Merger Agreement and the transactions contemplated thereby and (b) agree to waive any adjustment to the conversion ratio set forth in the Acquiror Organizational Documents with respect to the Acquiror Class B Common Stock related to the issuance of Acquiror Class A Common Stock pursuant to the PIPE Investment.
NOW, THEREFORE, the Parties hereby agree as follows:
1. Binding Effect of Merger Agreement. Each Sponsor hereby acknowledges that it has read the Merger Agreement and this Agreement and has had the opportunity to consult with its tax and legal advisors. Each Sponsor shall be bound by and comply with Sections 8.03 (Exclusivity) and 8.05 (Confidentiality; Publicity) of the Merger Agreement (and any relevant definitions contained in any such Sections) as if such Sponsor was an original signatory to the Merger Agreement with respect to such provisions.
2. Registration Rights Agreement. At the Closing, each Sponsor and the Director Holders (as defined therein) shall deliver to the Company a duly executed copy of that certain Amended and Restated Registration Rights Agreement, by and among the Company, Sponsors, certain of the Company’s stockholders or their respective Affiliates, as applicable, the Director Holders and the Investor Stockholders (as defined therein), in substantially the form attached as Exhibit C to the Merger Agreement.
3. Agreement to Vote. Each Sponsor hereby agrees that from the date hereof until the earlier of (a) the Closing, and (b) the valid termination of the Merger Agreement in accordance with Section 10 thereof or the termination of this Agreement, (i) to vote (or cause to be voted) or execute and deliver a written consent (or cause a written consent to be executed and delivered) at any meeting of the shareholders of Acquiror, however called, or at any adjournment thereof, or in any other circumstance in which the vote, consent or other approval of the shareholders of Acquiror is sought (and appear at any such meeting, in person or by proxy, or otherwise cause all of such holder’s Subject Acquiror Equity Securities to be counted as present thereat for purposes of establishing a quorum), all of such Sponsor’s Acquiror Class B Common Stock (together with any other Equity Securities of Acquiror that such Sponsor holds of record or beneficially as of the date of this Agreement or acquires record or beneficial ownership of after the date hereof, collectively, the “Subject Acquiror Equity Securities”) (A) in favor of the Acquiror Stockholder Matters, (B) against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Acquiror (other than the Merger Agreement and the Transactions), (C) against any proposal in opposition to approval of the Merger Agreement or in competition with or inconsistent with the Merger Agreement or the Transactions, (D) against any change in the business of Acquiror or the Acquiror Board (other than in connection with the Required Transaction Proposals), and (E) against any proposal, action or agreement that would (1) impede, frustrate, prevent or nullify any provision of this Agreement, the Merger Agreement or the Transactions, (2) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of any Acquiror Party under the Merger Agreement, (3) result in any of the conditions set forth in Article 9 of the Merger Agreement not being fulfilled or (4) change in any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, Acquiror, (ii) not to redeem, elect to redeem or tender or submit any of its Subject Acquiror Equity Securities for redemption in connection with the Merger Agreement or the Transactions, (iii) not to commit or agree to take any action inconsistent with the foregoing, (iv) to comply with, and fully perform all of its obligations, covenants and agreements set forth in, that certain Letter Agreement, dated as of December 17, 2020, by and among Acquiror, its officers, its directors and Sponsors (the “Voting Letter Agreement”), including the obligations of such Sponsor pursuant to Section 1 therein not to redeem any shares of Acquiror Common Stock owned by such Sponsor in connection with the Transactions, (v) not to modify or amend any Contract between or among such Sponsor and any Affiliate of such Sponsor (other than Acquiror or any of its Subsidiaries), on the one hand, and Acquiror or any of Acquiror’s Subsidiaries, on the other hand, related to the Transactions, including, for the avoidance of doubt, the Voting Letter Agreement, and (vi) to comply with the transfer restrictions set forth in the Voting Letter Agreement irrespective of any release or waiver thereof, as if such transfer restrictions remain in effect until the valid termination of the Merger Agreement in accordance with Section 10 thereof or the termination of this Agreement (regardless of any earlier termination of such transfer restrictions set forth in the Voting Letter Agreement).
4. Vesting.
(a) Each Sponsor agrees that, as of immediately prior to (but subject to) the Closing, thirty percent (30%) of the shares (the “Unvested Shares”) of Acquiror Class B Common Stock and the shares of Acquiror Class A Common Stock and Acquiror Common Stock issuable upon conversion of such Acquiror Class B Common Stock in connection with the Closing held by each Sponsor (and its Affiliates and Permitted Transferees (as such terms are defined in the Amended and Restated Registration Rights Agreement, dated as of the Closing Date, by and between the Company, Sponsor and the other parties thereto)) as of immediately prior to the Closing (the “Sponsor Shares”) shall be unvested and shall be subject to the vesting and forfeiture provisions set forth in this Section 4.
(b) Seventy percent (70%) of the Sponsor Shares owned by the Sponsors (and their respective Affiliates and Permitted Transferees) as of the Closing shall be fully-vested (and shall not be subject to forfeiture) at the Closing.
(c) Performance Vesting Shares. The Unvested Shares owned by the Sponsors (and their respective Affiliates and Permitted Transferees) at Closing will be subject to the following vesting thresholds:
(i) 50% of the Unvested Shares owned by the Sponsors (or their respective Affiliates and Permitted Transferees) shall vest (and shall not be subject to forfeiture) upon the occurrence of Triggering Event I (the “$12 Sponsor Shares”). If Triggering Event I does not occur on or prior to the fifth (5th) anniversary of the Closing Date, the Sponsor Shares that were eligible to vest pursuant to this Section 4(c)(i) shall not vest, and shall be forfeited as provided in Section 4(c)(iii).
(ii) 50% of the Unvested Shares owned by the Sponsors (or their respective Affiliates and Permitted Transferees) shall vest (and shall not be subject to forfeiture) upon the occurrence of Triggering Event II (the “$14 Sponsor Shares”). If Triggering Event II does not occur on or prior to the fifth (5th) anniversary of the Closing Date, the Sponsor Shares that were eligible to vest pursuant to this Section 4(c)(ii) shall not vest, and shall be forfeited as provided in Section 4(c)(iii).
(iii) Any unvested Sponsor Shares that are forfeited pursuant to Section 4(c)(i) through Section 4(c)(ii) shall be deemed transferred by the forfeiting holder to the Acquiror and shall be cancelled by Acquiror and cease to exist.
(iv) Notwithstanding anything in this Agreement to the contrary, 100% of the $12 Sponsor Shares and $14 Sponsor Shares shall vest (and shall not be subject to forfeiture) upon a Company Sale consummated at a Company Sale Price that is equal to or greater than the redemption price payable to the Acquiror’s stockholders.
(d) In the event that there is a Company Sale after the Closing but on or prior to the fifth (5th) anniversary of the Closing Date that will result in the holders of Acquiror Common Stock receiving a Company Sale Price in excess of the applicable price per share attributable to any Triggering Event, then immediately prior to the consummation of the Company Sale, any such Triggering Event that has not previously occurred shall be and the related vesting conditions shall also be deemed to have occurred and the holders of such Sponsor Shares shall be eligible to participate in such Company Sale. For avoidance of doubt, assuming no prior Triggering Events have occurred, to the extent the consideration in a Company Sale is cash: (i) if the Company Sale Price for acquisition of the Acquiror Common Stock is greater than $12.00 per share of Acquiror Common Stock but is equal to or less than $14.00 per share of Acquiror Common Stock, the $12 Sponsor Shares shall be deemed to have fully vested (and the $14 Sponsor Shares shall be deemed forfeited and shall be cancelled by Acquiror) and (ii) if the Company Sale Price for acquisition of the Acquiror Common Stock is greater than $14.00 per share of Acquiror Common Stock, the $12 Sponsor Shares and the $14 Sponsor Shares shall be deemed to have fully vested; provided, however, that if the Company Sale Price for acquisition of the Acquiror Common Stock is equal to or less than $12.00 per share of Acquiror Common Stock, then neither the $12 Sponsor Shares nor the $14 Sponsor Shares shall be deemed to have vested and all such $12 Sponsor Shares and the $14 Sponsor Shares shall be deemed forfeited and shall be cancelled by Acquiror. Notwithstanding anything to the contrary herein, (x) in the event of any merger, sale, consolidation, recapitalization, equity transfer, restructuring, reorganization or other similar business transaction that does not constitute a Company Sale, any remaining unvested Sponsor Shares shall not be forfeited, shall remain outstanding, and shall remain subject to the remaining applicable vesting triggering events set forth above in Section 4(c), and (y) to the extent the consideration in a Company Sale is publicly traded equity securities of the surviving company or one of its Affiliates, any remaining unvested Sponsor Shares (not otherwise vested pursuant to Section 4(c)) that are converted into such consideration shall remain subject to the remaining applicable vesting triggering events set forth herein.
(e) Subject to the limitations contemplated herein, the Sponsors shall each have all of the rights of a stockholder of the Acquiror with respect to the Sponsor Shares, including the right to receive dividends and/or distributions made to the holders of Acquiror Common Stock and to voting rights generally granted to holders of Acquiror Common Stock; provided, however, that the unvested Sponsor Shares shall not entitle the holder thereof to consideration in connection with any sale or other transaction (other than pursuant to Section 4(d)) and may not otherwise be offered, sold, transferred, redeemed, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) by the Sponsors (other than to a Permitted Transferee), as the case may be, or be subject to execution, attachment or similar process, and shall bear a customary legend with respect to such transfer restrictions. Any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of such unvested Sponsor Shares shall be null and void. Upon the vesting of any Sponsor Shares in accordance with the terms herein, the Company shall promptly cause the removal of any such legend upon request by the holder thereof.
(f) If, and as often as, there are any changes in the Acquiror or the Sponsor Shares by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to Acquiror, Acquiror’s successor or the surviving entity of such transaction and the Acquiror Warrants, each as so changed. The Sponsors will promptly inform the Company of any elections made by each Sponsor under Section 83(b) of the Code in connection with the Closing with respect to Sponsor Shares held by Sponsor.
(g) Notwithstanding the provisions of Section 4(e), each Sponsor or their respective Permitted Transferees may transfer unvested Sponsor Shares to any Permitted Transferee.
(h) For purposes of this Section 4:
(i) “Company Sale” means (which, for the avoidance of doubt, shall not include the Transactions): (x) any transaction or series of related transactions that results in any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) acquiring Equity Securities that represent more than 50% of the total voting power of the then outstanding voting securities of Acquiror (or the equity interests of the surviving Person outstanding immediately after such transaction or transactions) or (y) a sale or disposition of all or substantially all of the assets of Acquiror and its Subsidiaries on a consolidated basis, in each case other than a transaction or series of related transactions which results in at least 50% of the combined voting power of the then outstanding voting securities of Acquiror (or any successor to Acquiror) immediately following the closing of such transaction (or series of related transactions) being beneficially owned, directly or indirectly, by individuals and entities (or Affiliates of such individuals and entities) who were the beneficial owners, respectively, of Equity Securities representing more than 50% of the total voting power of the then outstanding voting securities of Acquiror immediately prior to such transaction (or series of related transactions).
(ii) “Company Sale Price” means the price per share for Acquiror Common Stock in a Company Sale. If and to the extent the price paid per share includes any escrows, holdbacks, deferred purchase price, earnouts or other contingent consideration, the Acquiror Board shall determine the price paid per share of Acquiror Common Stock in such Company Sale in good faith, including the affirmative vote of the Director appointed by Seven Oaks Sponsor pursuant to Section 7.05(a)(i) of the Merger Agreement if he or she is then on the Acquiror Board. If and to the extent the price is payable in whole or in part with consideration other than cash, the price for such non-cash consideration shall be determined as follows: (x) with respect to any securities: (A) the average of the closing prices of the sales of the securities on all securities exchanges on which the securities may at the time be listed averaged over a period of 21 days consisting of the day as of which such value is being determined and the 20 consecutive business days prior to such day or (B) if the information in (A) is not practically available, the value of each such security shall be equal to the fair value thereof as of the date of valuation as determined by an independent, nationally recognized investment banking firm to be appointed with the mutual approval of Seven Oaks Sponsor and the Acquiror Board on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant and (y) with respect to any other non-cash assets, the fair value thereof as of the date of valuation as determined by an independent, nationally recognized investment banking firm to be appointed with the mutual approval of Seven Oaks Sponsor and the Acquiror Board on the basis of an orderly sale to a willing, unaffiliated buyer in an arm’s-length transaction, taking into account all factors determinative of value as the investment banking firm determines relevant.
(iii) “Earn Out Period” means the date that is five (5) years following the Closing Date.
(iv) “Triggering Event I” means the date, prior to the expiration of the Earn Out Period, on which the Acquiror Common Stock’s last sale price on the Nasdaq as reported by Bloomberg is greater than $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any consecutive thirty (30)-trading day period commencing after the Closing Date.
(v) “Triggering Event II” means the date, prior to the expiration of the Earn Out Period, on which the Acquiror Common Stock’s last sale price on the Nasdaq as reported by Bloomberg is greater than $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any consecutive thirty (30)-trading day period commencing after the Closing Date.
(vi) If Triggering Event II occurs, then Triggering Event I shall also be deemed to have occurred.
5. Lockup. Sponsor hereby agrees that, from and after the First Effective Time, Section 7.12 of the Acquiror’s Bylaws (the form of which is attached as Exhibit B to the Merger Agreement) shall apply to the Sponsor Shares mutatis mutandis as though the Sponsor Shares are “Lock-up Shares” thereunder. Notwithstanding the foregoing, from and after the First Effective Time, any waiver, modification, amendment or repeal of Section 7.12 of the Acquiror’s Bylaws shall require the Sponsors’ written consent, solely in their respective capacities as stockholders of Acquiror; provided that such consent shall not be unreasonably withheld, conditioned or delayed; provided, further that Sponsor consent shall not be required for the release of stockholders from the Lock-up (as defined in the Acquiror’s Bylaws) who hold, in the aggregate, less than 1% of Acquiror’s total outstanding shares, with the Sponsor nevertheless receiving written notice of any such lock-up release prior thereto. All parties hereto acknowledge that the provisions set forth in this Section 5 shall supersede any conflict terms, including those set forth in the Voting Letter Agreement. Notwithstanding anything to the contrary set forth in this Agreement, the Sponsor may transfer up to 125,000 shares of Acquiror Class B Common Stock to parties participating in the PIPE Investment.
6. Waiver of Anti-dilution Protection. Each Sponsor hereby (a) irrevocably and unconditionally waives, subject to and conditioned upon, the occurrence of the Closing, to the fullest extent permitted by Law and the Acquiror Organizational Documents and (b) agrees not to assert or perfect any rights to adjustment or other anti-dilution protections with respect to the rate that the Acquiror Class B Common Stock held by it converts into Acquiror Class A Common Stock pursuant to Section 4.3(b) of Acquiror’s Certificate of Incorporation or any other adjustment or anti-dilution protections that arise in connection with the issuance of Acquiror Class A Common Stock pursuant to the PIPE Investment.
7. Additional Covenants of Sponsors.
(a) No Transfer. In addition to the restrictions on transfer set forth in the Voting Letter Agreement, during the period commencing on the date hereof and ending on the earlier to occur of (i) the First Effective Time and (ii) such date and time as the Merger Agreement shall be terminated in accordance with Section 10.01 thereof (the earlier of (i) and (ii), the “Expiration Time”), each Sponsor, other than as may be required by a Governmental Order or other Law, agrees that it shall not, directly or indirectly (including through any entity deemed to be an “affiliate” under the Securities Act of 1933, as amended, or the Exchange Act), (i) sell, offer to sell, contract, or agree to sell, hypothecate, pledge, grant any option to purchase, place a lien on, transfer (including by operation of law), distribute, encumber or otherwise dispose of any of the Sponsor Shares or Seven Oaks Sponsor Warrants or enter into any contract, option or other agreement or undertaking to do any of the foregoing (collectively, a “Transfer”), (ii) engage in any hedging or other transaction which is designed to, or which would (either alone or in connection with one or more events, developments or events (including the satisfaction or waiver of any conditions precedent)), lead to or result in a sale or disposition of the Sponsor Shares or Seven Oaks Sponsor Warrants, (iii) directly or indirectly, file (or participate in the filing of) a registration statement with the SEC (other than the Proxy Statement), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position, within the meaning of Section 16 of the Exchange Act, with respect to any Sponsor Shares or Seven Oaks Sponsor Warrants, (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Sponsor Shares or Seven Oaks Sponsor Warrants, (v) publicly announce any intention to effect any transaction specified in clause (i), (ii), (iii) or (iv), or (vi) take any action that would have the effect of preventing or materially delaying the performance of such Sponsor’s obligations hereunder. Notwithstanding the foregoing, this shall not prohibit (A) the exchange of Private Placement Warrants pursuant to Section 7(c) hereof and (B) a Transfer of Sponsor Shares or Seven Oaks Sponsor Warrants to any partner, member or Affiliate of such Sponsor, provided that such Transfer shall be permitted only if, prior to or in connection with such Transfer, the transferee agrees in writing, reasonably satisfactory in form and substance to Acquiror and the Company, to assume all of the obligations of such Sponsor with respect to such Transferred securities and to be bound by the terms of this Agreement.
(b) New Securities. In the event that, during the period commencing on the date hereof and ending at the Expiration Time, (i) any shares of Acquiror Common Stock, Acquiror Warrants, or other equity securities of Acquiror are issued to a Sponsor after the date of this Agreement pursuant to any stock dividend, stock split, recapitalization, reclassification, combination, or exchange of shares of Acquiror Common Stock or Acquiror Warrants of, on, or affecting the shares of Acquiror Common Stock or Acquiror Warrants owned by such Sponsor or otherwise, (ii) a Sponsor purchases or otherwise acquires beneficial ownership of any shares of Acquiror Common Stock, Acquiror Warrants or other equity securities of Acquiror after the date of this Agreement, or (c) a Sponsor acquires the right to vote or share in the voting of any shares of Acquiror Common Stock or other equity securities of Acquiror after the date of this Agreement (such shares of Acquiror Common Stock, Acquiror Warrants, and other equity securities of Acquiror, collectively the “New Securities”), then such New Securities acquired or purchased by such Sponsor shall be subject to the terms of this Agreement to the same extent as if they constituted the “Sponsor Shares”, “Seven Oaks Sponsor Warrants” or “Seven Oaks Sponsor Private Placement Warrants” owned by Seven Oaks Sponsor as of the date hereof.
(c) Treatment of Warrants. Prior to the Closing, Seven Oaks Sponsor and the Company shall discuss, in good faith, revisions to the terms of the Seven Oaks Sponsor Private Placement Warrants such that the Seven Oaks Sponsor Private Placement Warrants are treated as equity under the rules and guidelines of the SEC at and after the Closing; provided that any such revision of the Seven Oaks Sponsor Private Placement Warrants shall be acceptable to Seven Oaks Sponsor in its sole discretion; provided further that Seven Oaks Sponsor hereby agrees to amend the Seven Oaks Sponsor Private Placement Warrants to make them non-transferable (other than permitted transfers as long as the terms of the warrant do not change upon any such transfer) if such amendment would result in the Seven Oaks Sponsor Private Placement Warrants being treated as equity under the rules and guidelines of the SEC at and after the Closing. For purposes of the prior sentence, “non-transferable” shall mean that the Seven Oaks Sponsor Private Placement Warrants may not be sold, transferred or assigned, and “permitted transfers” shall include transfers to Affiliates or affiliated investment funds.
8. Representations and Warranties. Each Sponsor represents and warrants to Acquiror and the Company as follows:
(a) Such Sponsor is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, formed, organized or constituted, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within such Sponsor’s limited liability company or corporate powers, as applicable, and have been duly authorized by all necessary limited liability company or corporate actions on the part of such Sponsor, as applicable. This Agreement has been duly executed and delivered by such Sponsor and, assuming due authorization, execution and delivery by the other Parties, this Agreement constitutes a legally valid and binding obligation of such Sponsor, enforceable against such Sponsor in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies).
(b) Such Sponsor is the record and beneficial owner (as defined in the Securities Act) of, and has good title to, all of such Sponsor’s shares of Acquiror Common Stock and Acquiror Warrants, and there exist no Liens or any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such shares of Acquiror Common Stock or Acquiror Warrants (other than transfer restrictions under the Securities Act)) affecting any such shares of Acquiror Common Stock or Acquiror Warrants, other than Liens pursuant to (i) this Agreement, (ii) the Acquiror Organizational Documents, (iii) the Merger Agreement, (iv) the Voting Letter Agreement or (v) any applicable securities Laws. Such Sponsor’s shares of Acquiror Common Stock and Acquiror Warrants are the only equity securities in Acquiror owned of record or beneficially by such Sponsor on the date of this Agreement, and none of such Sponsor’s shares of Acquiror Common Stock or Acquiror Warrants are subject to any proxy, voting trust or other agreement or arrangement with respect to the voting of such shares of Acquiror Common Stock or Acquiror Warrants, except as provided hereunder and under the Voting Letter Agreement. Other than the Acquiror Warrants, such Sponsor does not hold or own any rights to acquire (directly or indirectly) any equity securities of Acquiror or any equity securities convertible into, or which can be exchanged for, equity securities of Acquiror.
(c) The execution and delivery of this Agreement by such Sponsor does not, and the performance by such Sponsor of its obligations hereunder will not, (i) conflict with or result in a violation of the organizational documents of such Sponsor, or (ii) require any consent or approval that has not been given or other action that has not been taken by any third party (including under any Contract binding upon such Sponsor or such Sponsor’s Subject Acquiror Equity Securities), in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by such Sponsor of its obligations under this Agreement.
(d) There are no Actions pending against such Sponsor or, to such Sponsor’s knowledge, threatened against such Sponsor, before (or, in the case of threatened Actions, that would be before) any arbitrator or any Governmental Authority, which in any manner challenges or seeks to prevent, enjoin or materially delay the performance by such Sponsor of its obligations under this Agreement.
(e) Except as described on Schedule 5.07 to the Merger Agreement, no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee, underwriting fee, deferred underwriting fee, commission or other similar payment in connection with the Transactions based upon arrangements made by such Sponsor, for which Acquiror or any of its Affiliates may become liable.
(f) Except as set forth in the Acquiror’s final prospectus dated November 24, 2020 filed with the SEC, neither such Sponsor nor, to the knowledge of such Sponsor, any Person in which such Sponsor has a direct or indirect legal, contractual or beneficial ownership of 5% or greater is party to, or has any rights with respect to or arising from, any Contract with Acquiror or its Subsidiaries.
(g) Such Sponsor understands and acknowledges that each of Acquiror and each Company Party is entering into the Merger Agreement in reliance upon such Sponsor’s execution and delivery of this Agreement.
9. Termination. This Agreement shall automatically terminate, without any notice or other action by any Party, and be void ab initio upon the earlier of (a) the First Effective Time and (b) the valid termination of the Merger Agreement in accordance with its terms. Upon termination of this Agreement as provided in the immediately preceding sentence, none of the Parties shall have any further obligations or liabilities under, or with respect to, this Agreement. Notwithstanding the foregoing or anything to the contrary in this Agreement, (i) the termination of this Agreement shall not affect any liability on the part of any Party for a Willful Breach of any covenant or agreement set forth in this Agreement prior to such termination or Fraud, (ii) Sections 4 through 6 shall survive the termination of this Agreement pursuant to clause (a) of this Section 9, (iii) Sections 9 through 11 shall each survive the termination of this Agreement, and (iv) Sections 13 through 20 shall each survive the termination of this Agreement solely to the extent related to any surviving sections. For purposes of this Section 9, (A) “Willful Breach” means a material breach that is a consequence of an act undertaken or a failure to act by the breaching Party with the actual knowledge (as opposed to constructive, imputed or implied knowledge) that the taking of such act or such failure to act will constitute or cause a breach of this Agreement and (B) “Fraud” means an act or omission by a Party, and requires: (I) a false or incorrect representation or warranty expressly set forth in this Agreement, (II) with actual knowledge (as opposed to constructive, imputed or implied knowledge) by the Party making such representation or warranty that such representation or warranty expressly set forth in this Agreement is false or incorrect, (III) an intention to deceive another Party, to induce him, her or it to enter into this Agreement, (IV) another Party’s justifiable or reasonable reliance upon such false or incorrect representation or warranty expressly set forth in this Agreement is the cause of such Party entering into this Agreement, and (V) causing such Party to suffer damage by reason of such reliance. For the avoidance of doubt, “Fraud” does not include any claim for equitable fraud, promissory fraud, unfair dealings fraud or any torts (including a claim for fraud or alleged fraud) based on negligence or recklessness.
10. No Recourse. Each Party agrees that (a) this Agreement may only be enforced against, and any action for breach of this Agreement may only be made against, the Parties, and no claims of any nature whatsoever (whether in tort, contract or otherwise) arising under or relating to this Agreement, the negotiation hereof or its subject matter, or the transactions contemplated hereby shall be asserted against any Company Non-Party Affiliate or any Acquiror Non-Party Affiliate, and (b) none of the Company Non-Party Affiliates or the Acquiror Non-Party Affiliates shall have any liability arising out of or relating to this Agreement, the negotiation hereof or its subject matter, or the transactions contemplated hereby, including with respect to any claim (whether in tort, contract or otherwise) for breach of this Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished in connection with this Agreement, the negotiation hereof or the transactions contemplated hereby. For the purpose of this Section 10, (i) “Acquiror Non-Party Affiliate” means (A) any officer, director, employee, partner, member, manager, direct or indirect equityholder or Affiliate of either Acquiror or Sponsors and (B) each of the former, current or future Affiliates, Representatives, successors or permitted assigns of any of the Persons referred to in the immediately preceding clause (i)(A) (other than, for the avoidance of doubt, Acquiror) and (ii) “Company Non-Party Affiliate” means (A) any officer, director, employee, partner, member, manager, direct or indirect equityholder or Affiliate of the Company or any of its Subsidiaries (other than, for the avoidance of doubt, the Company or any of its Subsidiaries) or any family member of the foregoing Persons and (B) each of the former, current or future Affiliates, Representatives, successors or permitted assigns of any of the Persons in the immediately preceding clause (ii)(A) (other than, for the avoidance of doubt, the Company or any of its Subsidiaries).
11. Fiduciary Duties. Notwithstanding anything in this Agreement to the contrary, (a) each Sponsor makes no agreement or understanding herein in any capacity other than in such Sponsor’s capacity as a record holder and beneficial owner of the Subject Acquiror Equity Securities and (b) nothing herein will be construed to limit or affect any action or inaction expressly permitted under the Merger Agreement by any representative of such Sponsor in such representative’s capacity as a member of the board of directors (or other similar governing body) of any Acquiror Party or as an officer, employee or fiduciary of any Acquiror Party or an Affiliate of Acquiror, in each case, acting in such person’s capacity as a director, officer, employee or fiduciary of such Acquiror Party.
12. Further Assurances. From time to time, at the Company’s request and without further consideration, each Party shall execute and deliver such additional documents and take all such further action as may be reasonably necessary or reasonably requested to effect the actions and consummate the transactions contemplated by this Agreement. Each Sponsor further agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any action or claim, derivative or otherwise, against Acquiror, Acquiror’s Affiliates, the Company or the Company’s Affiliates or any of their respective successors and assigns challenging the transactions contemplated by this Agreement or the Merger Agreement.
13. Third-Party Beneficiaries. This Agreement shall be for the sole benefit of the Parties and their respective successors and permitted assigns and is not intended, nor shall be construed, to give any Person, other than the Parties and their respective successors and assigns, any legal or equitable right, benefit or remedy of any nature whatsoever by reason of this Agreement. Nothing in this Agreement, expressed or implied, is intended to or shall constitute the Parties, partners or participants in a joint venture.
14. Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the Transactions, shall be governed by, and construed in accordance with, the internal substantive Laws of the State of Delaware applicable to contracts entered into and to be performed solely within such state, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
15. Jurisdiction; Waiver of Jury Trial. Any Action based upon, arising out of or related to this Agreement or the Transactions may be brought in federal and state courts located in the State of Delaware, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Agreement or the Transactions in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 15. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
16. Assignment. No Party shall assign this Agreement or any part hereof without the prior written consent of the other Parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns. Any attempted assignment in violation of the terms of this Section 16 shall be null and void, ab initio.
17. Amendment. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by each of the Parties in the same manner as this Agreement and which makes reference to this Agreement.
18. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties.
19. Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (c) when delivered by FedEx or other nationally recognized overnight delivery service or (d) when e-mailed during normal business hours (and otherwise as of the immediately following Business Day), addressed as follows:
If prior to the Closing, to Acquiror or Seven Oaks Sponsor:
Seven Oaks Acquisition Corp.
445 Park Avenue, 17th Floor
New York, NY 10022
Attention: Gary S. Matthews
Telephone: (917) 214-6371
E-mail: gary@sevenoaksacquisition.com
with a copy (which shall not constitute notice) to:
Winston & Strawn LLP
200 Park Avenue
New York, NY 10166
Attention: Dominick DeChiara; Jason D. Osborn; David A. Sakowitz
Facsimile: 212-294-4700
Email: DDeChiara@winston.com; JOsborn@winston.com; DSakowitz@winston.com
If prior to the Closing, to Jones Sponsor or JonesTrading:
Jones & Associates, Inc.
c/o JonesTrading Institutional Services LLC
555 St. Charles Drive, Suite 200
Thousand Oaks, CA 91360
Attention: Burke Cooke, General Counsel
with a copy (which shall not constitute notice) to:
Ellenoff Grossman & Schole LLP
145 Avenue of the Americas
New York, NY 10105
Attention: Stuart Neuhauser
E-mail: sneuhauser@egsllp.com
If to the Company or, following the Closing, Acquiror or Sponsors:
Giddy Inc.
451 Broadway
New York, NY 10013
Attn: General Counsel
E-mail: legal@boxed.com
with a copy (which shall not constitute notice) to:
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Attn: Justin Hamill, Chad Rolston
Email: justin.hamill@lw.com; chad.rolston@lw.com
or to such other address or addresses as the Parties may from time to time designate in writing. Without limiting the foregoing, any Party may give any notice, request, instruction, demand, document or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, ordinary mail or electronic mail), but no such notice, request, instruction, demand, document or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended.
20. Captions; Counterparts. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
21. Entire Agreement. This Agreement constitutes the entire agreement among the Parties relating to the subject matter hereof and supersedes any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective Subsidiaries relating to the subject matter hereof. No representations, warranties, covenants, understandings, agreements, oral or otherwise, relating to the subject matter hereof exist between the Parties except as expressly set forth or referenced herein.
[Signature Pages Follow]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written.
| Name: | Gary S. Matthews |
| Title: | Manager |
| | SEVEN OAKS Acquisition Corp. |
| Name: | Gary S. Matthews |
| Title: | Chief Executive Officer |
Signature Page to Sponsor Agreement
| Name: | Burke Cook |
| Title: | Corporate Secretary and General Counsel |
| | JonesTrading Institutional Services LLC
solely for purposes of Section 5 |
| Name: | Burke Cook |
| Title: | Corporate Secretary and General Counsel |
Signature Page to Sponsor Agreement
| Name: | Chieh Huang |
| Title: | Chief Executive Officer |
Signature Page to Sponsor Agreement
