UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 15, 2021

SANDBRIDGE ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
 
001-39516
 
85-1615012
(State or other jurisdiction
 of incorporation)
 
(Commission
 File Number)
 
(IRS Employer
 Identification No.)

1999 Avenue of the Stars, Suite 2088
 Los Angeles, CA
 (Address of principal executive offices)
90067
 (Zip Code)

Registrant’s telephone number, including area code: (424) 221-5743

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which
registered
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-half of one redeemable warrant
 
SBG.U
 
New York Stock Exchange LLC
Shares of Class A common stock included as part of the units
 
SBG
 
New York Stock Exchange LLC
Redeemable warrants, included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50
 
SBG WS
 
New York Stock Exchange LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



 Item 1.01. Entry into a Material Definitive Agreement.

Business Combination Agreement

On February 15, 2021, Sandbridge Acquisition Corporation, a Delaware corporation (“Sandbridge” or the “Company”), entered into a business combination agreement by and among Sandbridge, Project Olympus Merger Sub, Inc., a wholly owned subsidiary of Sandbridge (“Merger Sub”), and Owlet Baby Care Inc. (“Owlet”) (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). The business combination was unanimously approved by Sandbridge’s board of directors (the “Board”) on February 12, 2021. Owlet’s board of directors unanimously approved the business combination on February 13, 2021.  If the Business Combination Agreement is approved by Sandbridge’s and Owlet’s stockholders, and the transactions contemplated by the Business Combination Agreement are consummated, Merger Sub will merge with and into Owlet, with Owlet surviving the merger as a wholly owned subsidiary of Sandbridge (the “Merger”). In addition, in connection with the consummation of the transactions contemplated by the Business Combination Agreement (the “Closing”), Sandbridge will be renamed “Owlet, Inc.” and is referred to herein as “New Owlet” as of the time following such change of name.

Business Combination Agreement

The Business Combination Agreement provides for, among other things and upon the terms and subject to the conditions thereof, the following (together with the other agreements and transactions contemplated by the Business Combination Agreement, the “Business Combination”): (i) the filing of a certificate of merger with the Secretary of State of the State of Delaware to effect the Merger; (ii) at the effective time of the Merger (the “Effective Time”), the filing of the an amended and restated certificate of incorporation, as approved by the Board and to be adopted by Sandbridge stockholders (the “Proposed Charter”), with the Secretary of State of the State of Delaware, and adoption of the bylaws of New Owlet to be adopted pursuant to the Business Combination Agreement (together with the Proposed Charter, the “Governing Documents”); (iii) as a consequence of the Merger, at the Effective Time, the governing documents of Merger Sub will be the governing documents of the surviving company in the Merger, which will change its name to “Owlet Baby Care, Inc.” following the Merger; and (iv) as a consequence of the Merger, at the Effective Time, the directors and officers identified by Sandbridge and Owlet pursuant to the Business Combination Agreement will be the initial directors and officers of the New Owlet, each to hold office in accordance with the Governing Documents until such director’s or officer’s successor is duly elected or appointed and qualified, or until their earlier of their death, resignation or removal.

Effect of the Business Combination on Existing Sandbridge Equity

As a consequence of the Business Combination, each share of Sandbridge Class B common stock that is issued and outstanding as of immediately prior to the Effective Time will automatically convert into a share of New Owlet Class A common stock (“New Owlet common stock”) on a one-for-one basis in accordance with the terms of Sandbridge’s amended and restated certificate of incorporation, dated September 14, 2020. The Business Combination will have no effect on the Sandbridge Class A common stock that is issued and outstanding as of immediately prior to the Effective Time, which will continue to remain outstanding.

Consideration to Owlet Equityholders in the Business Combination

As a consequence of the Merger, at the Effective Time, (i) each share of Owlet capital stock that is issued and outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive the number of shares of New Owlet common stock equal to the Exchange Ratio (as defined in the Business Combination Agreement), rounded down to the nearest whole share; (ii) each option to purchase shares of Owlet common stock, whether vested or unvested, that is outstanding and unexercised as of immediately prior to the Effective Time will be assumed by New Owlet and will automatically become an option (vested or unvested, as applicable) to purchase a number of shares of New Owlet common stock equal to the number of shares of Owlet common stock subject to such option immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole share, at an exercise price per share equal to the exercise price per share of such option immediately prior to the Effective Time divided by the Exchange Ratio, rounded up to the nearest whole cent, except that, subject to specified limitations, holders of vested options may instead elect to receive a cash payment in lieu of assumption of a portion of their vested options up to an aggregate cap of $10 million; and (iii) each share of Owlet common stock that is subject to a risk of forfeiture or right of repurchase at the original purchase price as of immediately prior to the Effective Time shall be subject to the same risk of forfeiture or right of repurchase (proportionately adjusted to reflect the Exchange Ratio) which risk of forfeiture or right of repurchase shall lapse in accordance with the same vesting schedule as that of the Owlet restricted stock.


Representations and Warranties; Covenants

The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type.

The New Owlet board will consist of up to nine (9) directors, two of whom will be designated by Sandbridge and the remainder of whom will be designated by Owlet.  The current officers of Owlet will be appointed as officers of New Owlet immediately following the Effective Time.

In addition, Sandbridge has agreed to adopt and recommend to their stockholders that they approve the Owlet, Inc. 2021 Employee Stock Purchase Plan and the Owlet, Inc. 2021 Incentive Award Plan, as described in the Business Combination Agreement.

Conditions to Each Party’s Obligations

The obligations of Sandbridge and Owlet to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the approval of Sandbridge’s stockholders, (iii) the approval of Owlet’s stockholders, (iv) Sandbridge’s satisfaction of any applicable continuing listing requirements of the New York Stock Exchange; (v) after giving effect to the Business Combination, Sandbridge having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) remaining immediately after the Effective Time; and (vi) the delivery of the executed Registration Rights Agreement and Stockholders Agreement, as described in the Business Combination Agreement.

In addition, the obligation of Owlet to consummate the Business Combination is subject to the fulfillment of other closing conditions, including, but not limited to, (i) the aggregate cash proceeds available for release from Sandbridge’s trust account (after giving effect to any redemptions of shares of Sandbridge Class A common stock  and deducting deferred underwriting commissions being held in the Trust Account and transaction expenses of Sandbridge) equaling no less than $140,000,000 and (ii) the delivery of the executed Registration Rights Agreement and Stockholders Agreement, as described in the Business Combination Agreement.

Termination

The Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the Closing, including, but not limited to: (i) by the mutual written consent of Sandbridge and Owlet; (ii) by Sandbridge, subject to certain exceptions, if any of the representations or warranties made by Owlet are not true and correct or if Owlet fails to perform any of its respective covenants or agreements under the Business Combination Agreement (including an obligation to consummate the Closing) such that certain conditions to the obligations of Sandbridge could not be satisfied and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (a) thirty (30) days after written notice thereof, and (b) July 31, 2021 (the “Termination Date”); (iii) by Owlet, subject to certain exceptions, if any of the representations or warranties made by Sandbridge or Merger Sub (together, the “Sandbridge Parties”) are not true and correct or if any Sandbridge Party fails to perform any of its covenants or agreements under the Business Combination Agreement (including an obligation to consummate the Closing) such that the condition to the obligations of Owlet could not be satisfied and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (a) thirty (30) days after written notice thereof, and (b) the Termination Date; (iv) by either Sandbridge or Owlet if the transactions contemplated by the Business Combination Agreement have not been consummated on or prior to the Termination Date, unless the breach of any covenants or obligations under the Business Combination Agreement by the party seeking to terminate proximately caused the failure to consummate the transactions contemplated by the Business Combination Agreement; (v) by either Sandbridge or Owlet, if any governmental entity has issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the Business Combination Agreement and such order or other action has become final and nonappealable; (vi) by either Sandbridge or Owlet, if the approval of the required transaction proposals is not obtained at the special meeting of Sandbridge stockholders called to consider matters related to the Business Combination (the “Special Meeting”) (including any adjournment thereof); or (vii) by Sandbridge, if Owlet does not deliver, or cause to be delivered to Sandbridge, a written consent of the Owlet stockholders approving the Business Combination Agreement, the related documents and the transactions contemplated thereby (including the Business Combination), duly executed by the Owlet stockholders required to approve and adopt such matters.


The Business Combination is expected to close in the second quarter of 2021, following the receipt of the required approval by Sandbridge’s stockholders and the fulfillment of other customary closing conditions.

A copy of the Business Combination Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the Business Combination Agreement is qualified in its entirety by reference thereto. The Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Business Combination Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Business Combination Agreement are also modified in part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. Sandbridge does not believe that these schedules contain information that is material to an investment decision.


Subscription Agreements

Concurrently with the execution of the Business Combination Agreement, Sandbridge has entered into subscription agreements, dated as of February 15, 2021 (the “Subscription Agreements”), with certain institutional investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and Sandbridge has agreed to issue and sell to the PIPE Investors, immediately prior to the Closing, an aggregate of 13,000,000 shares of Sandbridge Class A common stock at a price of $10.00 per share (the “PIPE Financing”), for aggregate gross proceeds of $130 million. The shares of Sandbridge Class A common stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Sandbridge will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination.

The foregoing description of the Subscription Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the form of Subscription Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein. The Subscription Agreements contain representations, warranties and covenants that the respective parties made to each other as of the date of the Subscription Agreements or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement.


Amended and Restated Registration Rights Agreement

At the Closing, New Owlet, the initial stockholders of Sandbridge at the time of its initial public offering, including Sandbridge Acquisition Holdings LLC (the “Sponsor”) (the “Sponsor Equityholders”), and certain other holders of Owlet capital stock (the “Owlet Equityholders” and together with the Sponsor Equityholders, the “Holders”) will enter into the Amended and Restated Registration Rights Agreement. Pursuant to the terms of the Amended and Restated Registration Rights Agreement, New Owlet will be obligated to file a registration statement to register the resale of certain securities of the New Owlet held by the Holders. In addition, subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, the Holders may demand at any time or from time to time to sell all or any portion of their registrable securities in an underwritten offering so long as the total offering price is reasonably expected to exceed $50 million. The Amended and Restated Registration Rights Agreement will also provide the Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions.

Stockholders Agreement

In connection with the Closing, New Owlet, Eclipse Ventures Fund I, L.P. and Eclipse Continuity Fund I, L.P. (together, “Eclipse”) will enter into a Stockholders Agreement to provide for certain governance rights and address certain governance matters relating to New Owlet. The Stockholders Agreement provides Eclipse with certain nomination rights until Eclipse beneficially owns less than 10% of the outstanding common stock of New Owlet, and that Lior Susan will serve as Chairperson of the New Owlet Board.

Sponsor Letter Agreement

Concurrent with the execution of the Business Combination Agreement, the Sponsor and certain initial stockholders of Sandbridge at the time of its initial public offering, directors and officers entered into a Sponsor Letter Agreement pursuant to which the Sponsor and each other holder of founder shares has agreed, among other things, (a) to appear at the Special Meeting or otherwise cause its shares to be counted as present for the purpose of establishing quorum; (b) to vote (or execute a written consent), or cause to be voted (or consent to be granted) any Sandbridge common stock and Founder shares owned by it, him or her at such special meeting in person, or by proxy, in favor of the Business Combination and the adoption of the Business Combination Agreement and the transactions contemplated thereby; (c) to vote (or execute a written consent) or cause to be voted (or consent to be granted) any Sandbridge common stock or founder shares owned by it, him or her at such special meeting in person, or by proxy, against any alternative business combination or any action that would reasonably be expected to materially impede, interfere with, delay, postpone or adversely affect the Business Combination or any of the related transactions or result in a breach of any covenant, representation or warranty or other obligation or agreement of Sandbridge under the Business Combination Agreement or the Sponsor under the Sponsor Letter Agreement and (d) not redeem any shares of founder shares owned by it, him or her in connection with the stockholder approval.  Pursuant to the Sponsor Letter Agreement, a percentage of Sandbridge Class A common stock held by the Sponsor shall be subject to certain time and performance-based vesting provisions.

The parties to the Sponsor Letter Agreement have also agreed, subject to certain exceptions, not to transfer any founder shares or private placement warrants (or any shares of common stock issued or issuable upon exercise thereof) until the earlier of (A) 18 months after the Closing or (B)(i) with respect to one-third (1/3) of the founder shares and one-third (1/3) of the private placement warrants (or any shares of common stock issued or issuable upon exercise thereof) if the closing price of the New Owlet common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 240 days following the Closing and (ii) with respect to an additional one-third (1/3) of the founder shares and one-third (1/3) of the private placement warrants (or any shares of common stock issued or issuable upon exercise thereof) if the closing price of the New Owlet common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 240 days following the Closing.

This description of the Sponsor Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Sponsor Letter Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.


Certain Transfer Restrictions

Additionally, Owlet stockholders will be subject to certain restrictions on transfer with respect to the shares of New Owlet common stock issued as part of the merger consideration (the “Lock-Up Shares”) pursuant to the form of bylaws to be adopted by Sandbridge immediately prior to the Closing. Such restrictions begin at Closing and end on the date that is the earlier of (A) 18 months after the Closing and (B)(i) with respect to one-third (1/3) of the Lock-Up Shares if the closing price of the New Owlet common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 240 days following the Closing and (ii) with respect to an additional one-third (1/3) of the Lock-Up Shares if the closing price of the New Owlet common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 240 days following the Closing.

Item 3.02. Unregistered Sales of Equity Securities.

The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the issuance of shares of Sandbridge common stock is incorporated by reference herein. The shares of common stock to be offered and sold to the PIPE Investors will not be registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

Item 7.01. Regulation FD Disclosure.

On February 16, 2021, the Company issued a press release announcing the execution of the Business Combination Agreement. The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Attached as Exhibit 99.2 and Exhibit 99.3 hereto and incorporated by reference herein is the investor presentation dated February 2021 and the related transcript, respectively, which will be used by the Company with respect to the transactions contemplated by the Business Combination Agreement.

The information in this Item 7.01, including Exhibits 99.1, 99.2 and 99.3 is furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information of the information in this Item 7.01, including Exhibits 99.1, 99.2 and 99.3.

Important Information About the Business Combination and Where to Find It

In connection with the proposed Business Combination, the Company intends to file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (the “Registration Statement”), which will include a proxy statement/prospectus which will be both the proxy statement to be distributed to holders of shares of the Company’s common stock in connection with the Company’s solicitation of proxies for the vote by the Company’s stockholders with respect to the proposed Business Combination and other matters as may be described in the Registration Statement, as well as the prospectus relating to the offer and sale of the securities of the Company to be issued in the proposed Business Combination. After the Registration Statement is declared effective, the Company will mail a definitive proxy statement/prospectus and other relevant documents to its stockholders. This document does not contain all the information that should be considered concerning the proposed Business Combination and is not intended to form the basis of any investment decision or any other decision in respect of the Business Combination.  The Company’s and Owlet’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus included in the Registration Statement and the amendments thereto and the definitive proxy statement/prospectus, as well as other documents filed with the SEC in connection with the proposed Business Combination, as these materials will contain important information about the parties to the proposed Business Combination Agreement, the Company and the proposed Business Combination. After the Registration Statement is declared effective, the definitive proxy statement/prospectus and other relevant materials for the proposed Business Combination will be mailed to stockholders of the Company as of a record date to be established for voting on the proposed Business Combination and other matters as may be described in the Registration Statement. Stockholders will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus, and other documents filed with the SEC that will be incorporated by reference therein, without charge, once available, at the SEC’s web site at www.sec.gov, or by directing a request to: Sandbridge Acquisition Corporation, 1999 Avenue of the Stars, Suite 2088, Los Angeles, CA 90067, Attention: Ken Suslow, Chief Executive Officer, (424) 221-5743.


Participants in the Solicitation

The Company and its directors and executive officers may be deemed participants in the solicitation of proxies from the Company’s stockholders with respect to the proposed Business Combination. A list of the names of those directors and executive officers and a description of their interests in the Company is contained in the Company’s prospectus dated September 14, 2020 relating to its initial public offering,, which has been filed and is available free of charge at the SEC’s web site at www.sec.gov, or by directing a request to Sandbridge Acquisition Corporation, 1999 Avenue of the Stars, Suite 2088, Los Angeles, CA 90067, Attention: Ken Suslow, Chief Executive Officer, (424) 221-5743. To the extent such holdings of the Company’s securities may have changed since that time, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such participants will be contained in the Registration Statement when available.

Owlet and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed Business Combination will be contained in the Registration Statement when available.

Forward-Looking Statements

Certain statements, estimates, targets and projections in this Current Report on Form 8-K may be considered forward-looking statements. Forward-looking statements generally relate to future events or Sandbridge’s or Owlet’s future financial or operating performance. For example, statements regarding the satisfaction of closing conditions to the proposed Business Combination and the expected timing of the completion of the proposed Business Combination, the benefits of the proposed Business Combination, the competitive environment in which Owlet operates, and the expected future operating and financial performance and market opportunities of Owlet are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Sandbridge and its management, and Owlet and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of any definitive agreements with respect to the proposed Business Combination; the outcome of any legal proceedings that may be instituted against Sandbridge, Owlet, the combined company or others following the announcement of the proposed Business Combination and any definitive agreements with respect thereto; the inability to complete the proposed Business Combination due to the failure to obtain approval of the stockholders of Sandbridge or to satisfy other conditions to closing, including the satisfaction of the minimum trust account amount following any redemptions; changes to the proposed structure or terms of the Business Combination that may be required or appropriate as a result of applicable laws or regulations or in response to market reaction to the announcement of the transaction; the ability to meet stock exchange listing standards at or following the consummation of the proposed Business Combination; the risk that the proposed Business Combination disrupts current plans and operations of Owlet as a result of the announcement and consummation of the proposed Business Combination, and as a result of the post-transaction company being a publicly listed issuer; the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the regulatory pathway for Owlet products and responses from regulators, including the U.S. Food and Drug Administration and similar regulators outside of the United States, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain Owlet’s management and key employees; costs related to the proposed Business Combination, including costs associated with the post-transaction company being a publicly listed issuer; changes in applicable laws or regulations; the possibility that Owlet or the combined company may be adversely affected by other economic, business, regulatory and/or competitive factors; Owlet’s estimates of expenses and profitability; the evolution of the markets in which Owlet competes; the ability of Owlet to implement its strategic initiatives and continue to innovate its existing products; the ability of Owlet to defend its intellectual property and satisfy regulatory requirements; the impact of the COVID19 pandemic on Owlet’s business; the limited operating history of Owlet; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in Sandbridge’s final prospectus dated September 14, 2020 relating to its initial public offering, and other risks and uncertainties indicated from time to time in the definitive proxy statement/prospectus to be delivered to Sandbridge’s stockholders and the related registration statement on Form S-4, including those set forth under “Risk Factors” therein, and other documents filed to be filed with the SEC by Sandbridge.


Nothing in this Current Report on Form 8-K should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Neither Sandbridge nor Owlet undertakes any duty to update these forward-looking statements.

No Offer or Solicitation

This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number
 
Description
 
Business Combination Agreement, dated as of February 15, 2021, by and among Sandbridge Acquisition Corporation, Project Olympus Merger Sub, Inc. and Owlet Baby Care Inc.
 
Form of Subscription Agreement
 
Sponsor Letter Agreement
 
Press Release, dated February 16, 2021.
 
Investor Presentation, dated February 2021.
 
Investor Presentation Transcript, dated February 2021
     

 
Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
SANDBRIDGE ACQUISITION CORPORATION
     
 
By:
 /s/ Ken Suslow
 
Name:
 Ken Suslow
 
Title:
 Chief Executive Officer
     
Date: February 16, 2021
   


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Exhibit 2.1
BUSINESS COMBINATION AGREEMENT

BY AND AMONG

SANDBRIDGE ACQUISITION CORPORATION,

PROJECT OLYMPUS MERGER SUB, INC.,

AND

OWLET BABY CARE INC.
DATED AS OF FEBRUARY 15, 2021

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EXHIBITS
 
Exhibit A
Form of Owlet Pubco Certificate of Incorporation
Exhibit B
Form of Owlet Pubco Bylaws
Exhibit C
Form of Owlet Pubco Incentive Equity Plan
Exhibit D
Form of Owlet Pubco Employee Stock Purchase Plan
Exhibit E
Form of Registration Rights Agreement
Exhibit F
Form of Subscription Agreement
Exhibit G
Form of Stockholders Agreement
iii

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BUSINESS COMBINATION AGREEMENT
This BUSINESS COMBINATION AGREEMENT (this “Agreement”), dated as of February 15, 2021, is made by and among Sandbridge Acquisition Corporation, a Delaware corporation (“Sandbridge”), Project Olympus Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and Owlet Baby Care Inc., a Delaware corporation (the “Company”). Sandbridge, Merger Sub and the Company shall be referred to herein from time to time collectively as the “Parties”. Capitalized terms used but not otherwise defined herein have the meanings set forth in Section 1.1.
WHEREAS, (a) Sandbridge is a blank check company incorporated as a Delaware corporation on June 23, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, and (b) Merger Sub is, as of the date of this Agreement, a wholly-owned Subsidiary of Sandbridge that was formed for purposes of consummating the transactions contemplated by this Agreement and the Ancillary Documents;
WHEREAS, pursuant to the Governing Documents of Sandbridge, Sandbridge is required to provide an opportunity for its stockholders to have their outstanding Sandbridge Class A Common Stock redeemed on the terms and subject to the conditions set forth therein in connection with obtaining the Sandbridge Stockholder Approval;
WHEREAS, as of the date of this Agreement, Sandbridge Acquisition Holdings LLC, a Delaware limited liability company (the “Sponsor”), and the Other Class B Stockholders collectively own 5,750,000 shares of Sandbridge Class B Common Stock;
WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement, the Sponsor, the Other Class B Stockholders and Sandbridge are entering into the sponsor letter agreement (the “Sponsor Letter Agreement”), pursuant to which, among other things, the Sponsor and each Other Class B Stockholder has agreed to an amendment of the rights of the Founder Shares such that (a) 1,403,750 of such Founder Shares shall vest on the date, if any, that the closing price of shares of Sandbridge Class A Common Stock on NYSE equals or exceeds $12.50 for any 20 trading days within a 30-trading day period within the five-year period beginning on the Closing Date and (b) 1,403,750 shares of such Founder Shares shall vest on the date, if any, that the closing price of shares of Sandbridge Class A Common Stock on NYSE equals or exceeds $15.00 for any 20 trading days within a 30-trading day period within the five-year period beginning on the Closing Date, in each case, on the terms and subject to the conditions set forth in the Sponsor Letter Agreement;
WHEREAS, in connection with the Merger, Sandbridge shall adopt, subject to obtaining Sandbridge Stockholder Approval, an amended and restated certificate of incorporation, substantially in the form attached hereto as Exhibit A (the “Owlet Pubco Certificate of Incorporation”), and amended and restated bylaws, substantially in the form attached hereto as Exhibit B (the “Owlet Pubco Bylaws”);
WHEREAS, on the Closing Date, (a) Merger Sub will merge with and into the Company (the “Merger”), with the Company as the surviving company in the Merger and, after giving effect to the Merger, the Company will be a wholly-owned Subsidiary of Sandbridge, and (b) Sandbridge will change its name to “Owlet, Inc.”;
WHEREAS, prior to the Effective Time (as defined below), all of the Company Warrants (as defined below) will be exercised in full on a cash or cashless basis or terminated with exercise, as applicable, in accordance with their respective terms (the “Company Warrant Settlement”);
WHEREAS, upon the Effective Time and following the Company Warrant Settlement, all issued and outstanding shares of Company Stock will be converted into the right to receive the Aggregate Merger Consideration as set forth in this Agreement;
WHEREAS, at the Closing, Sandbridge and certain Company Stockholders will enter into a stockholders agreement, substantially in the form attached hereto as Exhibit G (the “Stockholders Agreement”) (with such changes as may be agreed in writing by Sandbridge and the Company), which shall be effective as of the Closing;
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WHEREAS, at the Closing, Sandbridge, the Sponsor, and certain Company Stockholders will enter into a registration rights agreement (the “Registration Rights Agreement”) in the form attached hereto as Exhibit E (with such changes as may be agreed in writing by Sandbridge and the Company), which shall be effective as of the Closing;
WHEREAS, on or prior to the date hereof, Sandbridge entered into Subscription Agreements (as defined below) with the PIPE Investors (as defined below) pursuant to which, at the Closing immediately following the Effective Time, such PIPE Investors agreed to purchase from Sandbridge thirteen (13) million shares of Sandbridge Class A Common Stock (the “PIPE Shares”) for an aggregate purchase price equal to the PIPE Investment Amount (the “PIPE Investment”);
WHEREAS, the Sandbridge Board has (a) approved this Agreement, the Ancillary Documents to which Sandbridge is or will be a party and the transactions contemplated hereby and thereby (including the Merger) and (b) recommended, among other things, approval of this Agreement and the transactions contemplated by this Agreement (including the Merger) by the holders of Sandbridge Common Stock entitled to vote thereon;
WHEREAS, the board of directors of Merger Sub has approved this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the transactions contemplated hereby and thereby (including the Merger);
WHEREAS, Sandbridge, as the sole stockholder of Merger Sub, will as promptly as reasonably practicable (and in any event within one Business Day) following the date of this Agreement, approve this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the transactions contemplated hereby and thereby (including the Merger);
WHEREAS, the board of directors of the Company has (a) approved this Agreement, the Ancillary Documents to which the Company is or will be a party and the transactions contemplated hereby and thereby (including the Merger) and (b) recommended, among other things, the approval of this Agreement, the Ancillary Documents to which the Company is or will be a party and the transactions contemplated hereby and thereby (including the Merger) by the Company Stockholders entitled to vote thereon; and
WHEREAS, each of the Parties intends for U.S. federal income tax purposes that (a) this Agreement constitute a “plan of reorganization” within the meaning of Section 368 of the Code and Treasury Regulations promulgated thereunder and (b) the Merger, or, if applicable, the Alternative Transaction Structure, be treated as a transaction that qualifies as a “reorganization” within the meaning of Section 368 of the Code or, if applicable, as a transaction that qualifies under Section 351 of the Code (clauses (a)-(b), the “Intended Tax Treatment”).
NOW, THEREFORE, in consideration of the premises and the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, each intending to be legally bound, hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following terms have the respective meanings set forth below.
A&R Company Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, dated April 19, 2018 (as amended).
Additional Required Financial Statements” has the meaning set forth in Section 5.20(a).
Additional Sandbridge SEC Reports” has the meaning set forth in Section 4.7.
Affiliate” means, with respect to any Person, any other Person who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto.
Aggregate Fully Diluted Company Shares” means, without duplication, (a) the aggregate number of shares of Company Stock that are (i) issued and outstanding immediately prior to the Effective Time or (ii) issuable upon the exercise of Company Options (whether or not then vested or exercisable) or upon settlement of Company restricted stock units or other equity-based awards, minus (b) the Treasury
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Shares outstanding immediately prior to the Effective Time, minus (c) a number of shares equal to (A) the aggregate exercise price of the Company Options described in clause (ii) above divided by (B) the Per Share Merger Consideration; provided, that any Company Option with an exercise price equal to or greater than the Per Share Merger Consideration shall not be counted for purposes of determining the number of Aggregate Fully Diluted Company Shares.
Aggregate Cash Election Consideration” means an amount of cash equal to the lesser of (i) the aggregate number of Cash Elected Company Options multiplied by the Per Share Merger Consideration, less the aggregate exercise price of such Cash Elected Company Options and (ii) the Cash Election Consideration Cap.
Aggregate Merger Consideration” means a number of shares of Sandbridge Common Stock equal to the quotient obtained by dividing (i) the Base Purchase Price, by (ii) $10.00.
Aggregate Share Consideration” means a number of shares (rounded to the nearest whole share) of Sandbridge Common Stock equal to (i) the Aggregate Merger Consideration minus (ii) the Aggregate Cash Election Consideration divided by $10.00.
Agreement” has the meaning set forth in the introductory paragraph to this Agreement.
Alternative Transaction Structure” has the meaning set forth in Section 5.6(a)(i).
Ancillary Documents” means the Stockholders Agreement, the Sponsor Letter Agreement, the Letters of Transmittal, the Registration Rights Agreement and each other agreement, document, instrument and/or certificate contemplated by this Agreement executed or to be executed in connection with the transactions contemplated hereby.
Anti-Corruption Laws” means, collectively, (a) the U.S. Foreign Corrupt Practices Act, (b) the UK Bribery Act 2010 and (c) any other applicable anti-bribery or anti-corruption Laws related to combatting bribery, corruption and money laundering.
Assumed Option” has the meaning set forth in Section 2.3(a).
Available Sandbridge Cash” has the meaning set forth in Section 5.14(a).
Base Purchase Price” means $1,000,000,000.
Business Combination Proposal” has the meaning set forth in Section 5.9.
Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York are open for the general transaction of business, provided that banks shall be deemed to be generally open for the general transaction of business in the event of a “shelter in place” or similar closure of physical branch locations at the direction of any governmental authority if such banks’ electronic funds transfer system (including for wire transfers) are open for use by customers on such day.
Cash Elected Company Option” has the meaning set forth in Section 2.3(b).
Cash Election” has the meaning set forth in Section 2.3(b).
Cash Election Consideration” has the meaning set forth in Section 2.3(b).
Cash Election Consideration Cap” means $10,000,000.
Cash Election Optionholders” has the meaning set forth in Section 2.3(b).
Certificate of Merger” has the meaning set forth in Section 2.1(b)(ii).
Certificates” means the certificates representing Company Stock.
Closing” has the meaning set forth in Section 2.2.
Closing Company Unaudited Financial Statements” has the meaning set forth in Section 3.4(b).
Closing Date” has the meaning set forth in Section 2.2.
Closing Filing” has the meaning set forth in Section 5.5(b).
Closing Press Release” has the meaning set forth in Section 5.5(b).
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COBRA” means Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code and any similar state Law.
Code” means the U.S. Internal Revenue Code of 1986.
Company” has the meaning set forth in the introductory paragraph to this Agreement.
Company Acquisition Proposal” means (a) any transaction or series of related transactions under which any Person(s), directly or indirectly, acquires or otherwise purchases (i) the Company or any of its Subsidiaries or (ii) all or a material portion of assets or businesses of (w) the Company or (x) any of its Subsidiaries holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of the Company and its Subsidiaries (in the case of each of clause (i) and (ii), whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, tender offer or otherwise), or (b) any equity or similar investment in the Company or any of its Subsidiaries that results in the relevant investor(s) acquiring 15% or more of any class of equity or voting securities of (y) the Company or (z) any of its Subsidiaries holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of the Company and its Subsidiaries (other than the issuance of the applicable class of shares of capital stock of the Company upon the exercise or settlement of any Company Options outstanding on the date of this Agreement in accordance with the terms of the Company Equity Plan and the underlying grant, award or similar agreement). Notwithstanding the foregoing or anything to the contrary herein, none of this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby shall constitute a Company Acquisition Proposal.
Company Common Stock” means shares of common stock, par value $0.0001 per share, of the Company, designated as “Common Stock” pursuant to the A&R Company Certificate of Incorporation.
Company D&O Persons” has the meaning set forth in Section 5.18(a).
Company D&O Tail Policy” has the meaning set forth in Section 5.18(c).
Company Disclosure Schedules” means the disclosure schedules to this Agreement delivered to Sandbridge by the Company on the date of this Agreement.
Company Equity Plan” means the Owlet Baby Care Inc. 2014 Equity Incentive Plan.
Company Fundamental Representations” means the representations and warranties set forth in Section 3.1(a) and Section 3.1(b) (Organization and Qualification), Section 3.2(a) and Section 3.2(c) (Capitalization of the Group Companies), Section 3.3 (Authority) and Section 3.17 (Brokers).
Company IT Systems” means all computer systems, Software and hardware, communication systems, servers, network equipment and related documentation and information technology systems and services, in each case used or owned by a Group Company.
Company Licensed Intellectual Property” means Intellectual Property Rights owned by any Person (other than a Group Company) that is licensed to any Group Company.
Company Material Adverse Effect” means any change, event, effect or occurrence that, individually or in the aggregate with any other change, event, effect or occurrence, has had or would reasonably be expected to have a material adverse effect on (a) the business, results of operations or financial condition of the Group Companies, taken as a whole, or (b) the ability of the Company to consummate the Merger in accordance with the terms of this Agreement; provided, however, that, in the case of clause (a), none of the following shall be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably likely to occur: any adverse change, event, effect or occurrence arising from or related to (i) general business or economic conditions in or affecting the United States, or changes therein, or the global economy generally, (ii) any national or international political or social conditions in the United States or any other country, including the engagement by the United States or any other country in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence in any place of any military or terrorist attack, sabotage or cyberterrorism, (iii) changes in conditions of the financial, banking, capital or securities markets generally in the United States or any other country or region in the world, or changes therein, including changes in interest rates in the United States or any other country and changes in exchange rates for the currencies of any countries, (iv) changes in any applicable Laws, (v) any change, event, effect or occurrence that is generally applicable to the industries or markets in which any Group Company operates, (vi) the execution or public
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announcement of this Agreement or the pendency of the consummation of the transactions contemplated by this Agreement, including the impact thereof on the relationships, contractual or otherwise, of any Group Company with employees, customers, investors, contractors, lenders, suppliers, vendors, partners, licensors, licensees, payors or other third parties related thereto (provided that the exception in this clause (vi) shall not apply to the representations and warranties set forth in Section 3.5(b) to the extent that its purpose is to address the consequences resulting from the public announcement or pendency or consummation of the transactions contemplated by this Agreement or the condition set forth in Section 6.2(a) to the extent it relates to such representations and warranties), (vii) any failure by any Group Company to meet, or changes to, any internal or published budgets, projections, forecasts, estimates or predictions (although the underlying facts and circumstances resulting in such failure may be taken into account to the extent not otherwise excluded from this definition pursuant to clauses (i) through (vi) or (viii)), or (viii) any hurricane, tornado, flood, earthquake, tsunami, natural disaster, mudslides, wild fires, epidemics, pandemics (including COVID-19) or quarantines, acts of God or other natural disasters or comparable events in the United States or any other country or region in the world, or any escalation of the foregoing; provided, however, that any change, event, effect or occurrence resulting from a matter described in any of the foregoing clauses (i) through (v) or (viii) may be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably likely to occur to the extent such change, event, effect or occurrence has a disproportionate adverse effect on the Group Companies, taken as a whole, relative to other participants operating in the industries or markets in which the Group Companies operate.
Company Non-Party Affiliates” means, collectively, each Company Related Party and each former, current or future Affiliate, Representative, successor and permitted assign of each Company Related Party.
Company Option” means, as of any determination time, each option to purchase Company Common Stock that is outstanding and unexercised, whether granted under the Company Equity Plan or otherwise.
Company Owned Intellectual Property” means all Intellectual Property Rights that are owned, or purported to be owned, by a Group Company.
Company Preferred Stock” means Company Series A Preferred Stock, Company Series A-1 Preferred Stock, Company Series B Preferred Stock and Company Series B-1 Preferred Stock.
Company Product” means each product and service that is being researched, developed, designed or has been sold or offered for sale, marketed, distributed, developed or manufactured by or on behalf of the Group Companies.
Company Registered Intellectual Property” means all Registered Intellectual Property owned or purported to be owned by, or filed in the name of, any Group Company.
Company Related Party” has the meaning set forth in Section 3.19.
Company Related Party Transactions” has the meaning set forth in Section 3.19.
Company Restricted Stock” has the meaning set forth in Section 2.1(b)(vii).
Company Series A Preferred Stock” means shares of preferred stock, par value $0.0001 per share, of the Company designated as “Series A Preferred Stock” pursuant to the A&R Company Certificate of Incorporation.
Company Series A-1 Preferred Stock” means shares of preferred stock, par value $0.0001 per share, of the Company designated as “Series A-1 Preferred Stock” pursuant to the A&R Company Certificate of Incorporation.
Company Series B Preferred Stock” means shares of preferred stock, par value $0.0001 per share, of the Company designated as “Series B Preferred Stock” pursuant to the A&R Company Certificate of Incorporation.
Company Series B-1 Preferred Stock” means shares of preferred stock, par value $0.0001 per share, of the Company designated as “Series B-1 Preferred Stock” pursuant to the A&R Company Certificate of Incorporation.
Company Stock” means shares of Company Common Stock and Company Preferred Stock.
Company Stockholder Approval” has the meaning set forth in Section 3.3.
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Company Stockholders” means, collectively, the holders of Company Stock as of any determination time prior to the Effective Time.
Company Stockholders Agreements” means, collectively, (i) the Amended and Restated Voting Agreement, dated as of April 20, 2018, by and among the Company and the Company Stockholders party thereto, as amended by that certain Amendment No. 1 dated April 6, 2020 (ii) the Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of April 20, 2018, by and among the Company and the Company Stockholders party thereto and (iii) the Amended and Restated Investors’ Rights Agreement, dated as of April 20, 2018, by and among the Company and the Company Stockholders party thereto, as amended by that certain Amendment No. 1 dated April 6, 2020.
Company Transaction Expenses” has the meaning set forth in Section 2.6(a).
Company Warrants” means warrants to purchase shares of Company Common Stock.
Company Warrant Settlement” has the meaning set forth in the recitals to this Agreement.
Confidentiality Agreement” means that certain Mutual Nondisclosure Agreement, dated as of October 25, 2020, by and between the Company and Sandbridge.
Consent” means any notice, authorization, qualification, registration, filing, notification, waiver, order, consent or approval to be obtained from, filed with or delivered to a Governmental Entity or other Person.
Continental” means Continental Stock Transfer & Trust Company.
Contract” or “Contracts” means any agreement, contract, license, lease, obligation, undertaking or other commitment or arrangement that is legally binding upon a Person or any of his, her or its properties or assets.
Copyrights” has the meaning set forth in the definition of Intellectual Property Rights.
COVID-19” means the illness caused by SARS-CoV-2, and any mutations thereof, or viral illnesses, epidemics, pandemics or disease outbreaks related thereto or associated therewith.
COVID Actions” means any actions that the Company or any of its Affiliates reasonably determines are necessary to take as a result of COVID-19 or the effects thereof, including to mitigate the adverse effects of COVID-19, to protect the health and safety of customers, employees and other business relationships, including in response to any actions taken by, or recommendations or restrictions issued by, Governmental Entities in response to COVID-19.
Creator” has the meaning set forth in Section 3.13(d).
Data Protection Directive” has the meaning set forth in the definition of Privacy Obligations.
DGCL” means General Corporation Law of the State of Delaware.
Dissenting Shares” has the meaning set forth in Section 2.7.
Effective Time” has the meaning set forth in Section 2.1(b)(ii).
Election” has the meaning set forth in Section 2.4(f).
Election Deadline” has the meaning set forth in Section 2.4(f).
Election Period” has the meaning set forth in Section 2.4(h).
Election Record Date” has the meaning set forth in Section 2.4(h).
Employee Benefit Plan” means each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA, whether or not subject to ERISA) and each other plan, program, policy, Contract, agreement or arrangement providing for compensation or employee benefits, including each employment, consulting, independent contractor, bonus, commission or other incentive compensation, stock option, stock purchase or other equity-based award, profit sharing, savings, retirement, disability, life insurance, health or medical benefits, sick leave, vacation or other paid time-off, deferred compensation, severance, termination pay, post-employment or
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retirement benefits, retention, change of control, fringe, welfare or other employee benefit or other compensation or benefit plan, program, policy, Contract, agreement or arrangement, in each case, that any Group Company maintains, sponsors or contributes to or is required to contribute to, or under or with respect to which any Group Company has any Liability.
Environmental Laws” means all Laws and Orders concerning pollution, protection of the environment or human health or safety.
e-Privacy Directive” has the meaning set forth in the definition of Privacy Obligations.
Equity Incentive Plan Proposal” has the meaning set forth in Section 5.9.
Equity Securities” means any share, share capital, capital stock, partnership, membership, joint venture or similar interest in any Person (including any stock appreciation, phantom stock, profit participation or similar rights) and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor.
ERISA” means the Employee Retirement Income Security Act of 1974.
ERISA Affiliate” means any Person that, together with any Group Company, could be deemed a “single employer” within the meaning of Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code at any relevant time.
Exchange Act” means the Securities Exchange Act of 1934.
Exchange Agent” has the meaning set forth in Section 2.4(a).
Exchange Fund” has the meaning set forth in Section 2.4(c).
Exchange Ratio” means the quotient obtained by dividing (a) the number of shares constituting the Aggregate Merger Consideration, by (b) the number of Aggregate Fully Diluted Company Shares.
FDA” means the U.S. Food and Drug Administration, or any successor agency thereto.
FDA Law” means all Laws applicable to the operation of the Company’s business related to the research, investigation, development, production, marketing, distribution, storage, shipping, transport, advertising, labeling, promotion, sale, export, import, use, handling and control, safety, efficacy, reliability or manufacturing of medical devices, including (a) the Federal Food, Drug, and Cosmetic Act of 1938 (21 U.S.C. 301 et. seq.), (b) the rules and regulations promulgated and enforced by FDA thereunder, including, as applicable, those requirements relating to the FDA’s Quality System Regulation contained in 21 C.F.R. Part 820, investigational use, premarket notification and premarket approval and applications to market new medical devices, (c) Laws governing the conduct of non-clinical laboratory studies, including FDA’s Good Laboratory Practices regulations contained in 21 C.F.R. Part 58, (d) Laws governing the development, conduct, performance, monitoring, subject informed consent, auditing, recording, analysis and reporting of clinical trials, including FDA’s Good Clinical Practice regulations contained in 21 C.F.R. Parts 11, 50, 54, 56 and 812, (e) Laws governing data-gathering activities relating to the detection, assessment, and understanding of adverse events (including adverse event and malfunction reporting under 21 C.F.R. Part 803) and (f) all comparable state, federal or foreign Laws relating to any of the foregoing.
Federal Securities Laws” means the Exchange Act, the Securities Act and the other U.S. federal securities laws and the rules and regulations of the SEC promulgated thereunder or otherwise.
Financial Statements” has the meaning set forth in Section 3.4(a).
Form of Election” has the meaning set forth in Section 2.4(h).
Founder Shares” means (i) the shares of Sandbridge Class B Common Stock held by Sponsor and (ii) the shares of Sandbridge Class A Common Stock that will be issued to the Sponsor upon the conversion of such shares of Sandbridge Class B Common Stock at the Closing in accordance with the terms of the amended and restated certificate of incorporation of Sandbridge.
GAAP” means United States generally accepted accounting principles.
GDPR” has the meaning set forth in the definition of Privacy Obligations.
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Governing Document Proposals” has the meaning set forth in Section 5.9.
Governing Documents” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, for example, the certificate of incorporation and bylaws of a U.S. corporation and the certificate of formation and limited liability company agreement of a U.S. limited liability company.
Governmental Entity” means any United States or non-United States (a) federal, state, local, municipal or other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal) or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal (public or private).
Group Company” and “Group Companies” means, collectively, the Company and its Subsidiaries.
Hazardous Substance” means any hazardous, toxic, explosive or radioactive material, substance, waste or other pollutant that is regulated by, or may give rise to Liability pursuant to, any Environmental Law, including any petroleum products or byproducts, asbestos, lead, polychlorinated biphenyls, per- and poly-fluoroakyl substances, or radon.
Holder” has the meaning set forth in Section 2.4(f).
HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder.
Indebtedness” means, as of any time, without duplication, with respect to any Person, the outstanding principal amount of, accrued and unpaid interest on, fees and expenses arising under or in respect of (a) indebtedness for borrowed money, (b) other obligations evidenced by any note, bond, debenture or other debt security, (c) obligations for the deferred purchase price of property or assets, including “earn-outs” and “seller notes” (but excluding any trade payables arising in the ordinary course of business), (d) reimbursement and other obligations with respect to letters of credit, bank guarantees, bankers’ acceptances or other similar instruments, in each case, solely to the extent drawn, (e) leases required to be capitalized under GAAP, (f) derivative, hedging, swap, foreign exchange or similar arrangements, including swaps, caps, collars, hedges or similar arrangements, and (g) any of the obligations of any other Person of the type referred to in clauses (a) through (f) above directly or indirectly guaranteed by such Person or secured by any assets of such Person, whether or not such Indebtedness has been assumed by such Person.
Intellectual Property Rights” means all intellectual property rights of every kind and nature however denominated, throughout the world, including all (a) patents and patent applications, industrial designs and design patent rights, including any continuations, divisionals, continuations-in-part and provisional applications and statutory invention registrations, and any patents issuing on any of the foregoing and any reissues, reexaminations, substitutes, supplementary protection certificates, extensions of any of the foregoing (collectively, “Patents”); (b) trademarks, service marks, trade names, brand names, trade dress rights, logos, Internet domain names, corporate names and other source or business identifiers, together with the goodwill associated with any of the foregoing, and all applications, registrations, extensions and renewals of any of the foregoing (collectively, “Marks”); (c) copyrights and works of authorship, rights of publicity, database and design rights, mask work rights and moral rights, whether or not registered or published, and all registrations, applications, renewals, extensions and reversions of any of any of the foregoing (collectively, “Copyrights”); (d) trade secrets, know-how and confidential and proprietary information, including invention disclosures, inventions and formulae, whether patentable or not; (e) rights in or to Software or other technology; and (f) social media accounts and handles.
Intended Tax Treatment” has the meaning set forth in the recitals to this Agreement.
Investment Company Act” means the Investment Company Act of 1940.
IPO” has the meaning set forth in Section 8.18.
JOBS Act” means the Jumpstart Our Business Startups Act of 2012.
Latest Balance Sheet” has the meaning set forth in Section 3.4(a).
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Law” means any federal, state, local, foreign, national or supranational statute, law (including common law), act, statute, ordinance, treaty, rule, code, regulation or other binding directive or guidance issued, promulgated or enforced by a Governmental Entity having jurisdiction over a given matter.
Leased Real Property” has the meaning set forth in Section 3.18(b).
Letter of Transmittal” means a letter of transmittal in a form to be agreed between the Parties and with such modifications, amendments or supplements as may be requested by the Exchange Agent and mutually agreed to by each of Sandbridge and the Company (in either case, such agreement not to be unreasonably withheld, conditioned or delayed).
Liability” or “liability” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, known or unknown, matured or unmatured or determined or determinable, including those arising under any Law (including any Environmental Law), Proceeding or Order and those arising under any Contract, agreement, arrangement, commitment or undertaking.
Lien” means any mortgage, pledge, security interest, encumbrance, lien, license or sub-license, charge, or other similar encumbrance or interest (including, in the case of any Equity Securities, any voting, transfer or similar restrictions).
Marks” has the meaning set forth in the definition of Intellectual Property Rights.
Material Contracts” has the meaning set forth in Section 3.7(a).
Merger” has the meaning set forth in the recitals to this Agreement.
Merger Sub” has the meaning set forth in the introductory paragraph to this Agreement.
Minimum Available Sandbridge Cash Amount” has the meaning set forth in Section 5.14(a).
Multiemployer Plan” has the meaning set forth in Section (3)37 or Section 4001(a)(3) of ERISA.
Newco” has the meaning set forth in Section 5.6(a)(i).
Non-Party Affiliate” has the meaning set forth in Section 8.13.
NYSE” means the New York Stock Exchange.
Off-the-Shelf Software” means any Software that is made generally available on a commercial basis and is licensed to any of the Group Companies on a non-exclusive basis under standard terms and conditions.
Open Source Software” means any Software that is distributed (a) as “free software” (as defined by the Free Software Foundation), (b) as “open source software” or pursuant to any license identified as an “open source license” or that substantially conforms to the “open source definition” (as those terms are defined by the Open Source Initiative), (c) under any similar licensing or distribution model as (a) or (b), or (d) under a license that requires such Software or derivative works thereof to (i) be disclosed in source code form, (ii) be freely relicensable, or (iii) allow for the creation of derivative works.
Order” means any outstanding writ, order, judgment, injunction, decision, determination, award, ruling, subpoena, verdict or decree entered, issued or rendered by any Governmental Entity.
Other Class B Stockholders” means, collectively, Domenico De Sole, Ramez Toubassy, Tommy Hilfiger and Mike Goss.
Other Sandbridge Stockholder Approval” means the approval of each Other Transaction Proposal by the affirmative vote of the holders of the requisite number of shares of Sandbridge Common Stock entitled to vote thereon, whether in person or by proxy at the Sandbridge Stockholders Meeting (or any adjournment thereof), in accordance with the Governing Documents of Sandbridge and applicable Law.
Other Transaction Proposal” means each Transaction Proposal, other than the Required Transaction Proposals.
Owlet Pubco Bylaws” has the meaning set forth in the Preamble.
Owlet Pubco Certificate of Incorporation” has the meaning set forth in the Preamble.
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Owlet Pubco Employee Stock Purchase Plan” has the meaning set forth in Section 5.21.
Owlet Pubco Incentive Equity Plan” has the meaning set forth in Section 5.21.
Parties” has the meaning set forth in the introductory paragraph to this Agreement.
Patents” has the meaning set forth in the definition of Intellectual Property Rights.
PCAOB” means the Public Company Accounting Oversight Board.
Permits” means any approvals, authorizations, clearances, licenses, registrations, permits or certificates of a Governmental Entity.
Permitted Liens” means (a) mechanic’s, materialmen’s, carriers’, repairers’ and other similar statutory Liens arising or incurred in the ordinary course of business for amounts that are not yet delinquent or are being contested in good faith by appropriate proceedings and for which sufficient reserves have been established in accordance with GAAP, (b) Liens for Taxes, assessments or other governmental charges not yet due and payable as of the Closing Date or which are being contested in good faith by appropriate proceedings, for which sufficient reserves have been established in accordance with GAAP and which are set forth on Section 3.16(g) of the Company Disclosure Schedules, (c) encumbrances and restrictions on real property (including easements, covenants, conditions, rights of way and similar restrictions) that do not prohibit or materially interfere with any of the Group Companies’ use or occupancy of such real property, (d) zoning, building codes and other land use Laws regulating the use or occupancy of real property or the activities conducted thereon which are imposed by any Governmental Entity having jurisdiction over such real property and which are not violated by the use or occupancy of such real property or the operation of the businesses of the Group Company and do not prohibit or materially interfere with any of the Group Companies’ use or occupancy of such real property, (e) cash deposits or cash pledges to secure the payment of workers’ compensation, unemployment insurance, social security benefits or obligations arising under similar Laws or to secure the performance of public or statutory obligations, surety or appeal bonds, and other obligations of a like nature, in each case in the ordinary course of business and which are not yet due and payable, (f) non-exclusive licenses to Intellectual Property Rights that accompany the sale of the Company Products in the ordinary course of business consistent with past practice and (g) other Liens that do not materially and adversely affect the value, use or operation of the asset subject thereto.
Per Share Merger Consideration” means the product obtained by multiplying (i) the Exchange Ratio by (ii) $10.00.
Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or other similar entity, whether or not a legal entity.
Personal Data” means any data or information relating to an identified or identifiable natural person that is regulated by the Privacy Obligations.
PIMCO Private Funds” means the members of the Sponsor that are affiliated with Pacific Investment Management Company LLC.
PIPE Investment” has the meaning set forth in the recitals to this Agreement.
PIPE Investment Amount” means $130,000,000.
PIPE Investors” means those certain investors participating in the PIPE Investment pursuant to the Subscription Agreements.
PIPE Shares” has the meaning set forth in the recitals to this Agreement.
Pre-Closing Sandbridge Holders” means the holders of Sandbridge Common Stock at any time prior to the Effective Time.
Privacy and Data Security Policies” has the meaning set forth in Section 3.20(a).
Privacy Obligations” means Laws, contractual obligations, self-regulatory standards, or written policies or terms of use relating to the Processing, privacy, security or protection of Personal Data which are applicable to the Group Companies including, to the extent applicable, the EU Data Protection Directive 95/46/EC (the “Data Protection Directive”) as implemented under applicable national laws, the UK Data Protection Act 1998,
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the General Data Protection Regulation (EU) 2016/679, (the “GDPR”), the UK Data Protection Act 2018, the EU Privacy and Electronic Communications Directive 2002/58/EC, (the “e-Privacy Directive”), the UK Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2003/2426) and all other applicable laws, regulations and secondary legislation implementing the GDPR and/or the e-Privacy Directive, California Consumer Privacy Act of 2018, Payment Card Industry Data Security Standard, the Health Insurance Portability and Accountability Act of 1996 as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, the Federal Trade Commission Act, the Controlling the Assault of Non-Solicited Pornography And Marketing Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, Children’s Online Privacy Protection Act of 1998, the Computer Fraud and Abuse Act, state data security laws, state unfair or deceptive trade practices laws, state biometric privacy acts, state social security number protection laws, state data breach notification laws, Canada’s Personal Information Protection and Electronic Documents Act, the Payment Card Industry Data Security Standards, the Payment Application Data Security Standards, and any Laws concerning requirements for website and mobile application privacy policies and practices, data or web scraping, cybersecurity disclosures in public filings, call or electronic monitoring or recording or any outbound communications, as the case may be, in each case, as amended, replaced, supplemented or updated from time to time and together with any subordinate or related legislation made under or in connection with any of the foregoing. References to “special categories of personal data”, “data subject” and “personal data breach” shall have the meanings given to those terms in the GDPR.
Proceeding” means any lawsuit, litigation, action, audit, examination, claim, complaint, charge, proceeding, suit or arbitration (in each case, whether civil, criminal or administrative and whether public or private) pending by or before or otherwise involving any Governmental Entity.
Process” (or “Processing” or “Processes”) means any operation or set of operations which is performed on Personal Data or on sets of Personal Data, whether or not by automated means, such as the collection, use, storage, recording, organization, structuring, adaptation or alteration, retrieval, consultation, distribution, transfer, import, export, protection (including through security measures), disposal, disclosure by transmission, dissemination or otherwise making available, alignment, combination, erasure, destruction or other activity regarding data (whether electronically or in any other form or medium).
Processor” means any third parties engaged by any Group Company or Companies to process Personal Data.
Prospectus” has the meaning set forth in Section 8.18.
Public Stockholders” has the meaning set forth in Section 8.18.
Quality System Regulation” means, collectively, Quality System Regulation under 21 C.F.R. Part 820.
Real Property Leases” means all leases, subleases, licenses or other agreements, in each case, pursuant to which any Group Company leases or subleases any real property.
Registered Intellectual Property” means all issued Patents, pending Patent applications, registered Marks, pending applications for registration of Marks, registered Copyrights, pending applications for registration of Copyrights, and Internet domain name registrations.
Registration Rights Agreement” has the meaning set forth in the recitals to this Agreement.
Registration Statement / Proxy Statement” means a registration statement on Form S-4 relating to the transactions contemplated by this Agreement and the Ancillary documents and containing a prospectus and proxy statement of Sandbridge.
Representatives” means with respect to any Person, such Person’s Affiliates and its and such Affiliates’ respective directors, managers, officers, employees, accountants, consultants, advisors, attorneys, agents and other representatives.
Required Sandbridge Stockholder Approval” means the approval of each Required Transaction Proposal by the affirmative vote of the holders of the requisite number shares of Sandbridge Common Stock entitled to vote thereon, whether in person or by proxy at the Sandbridge Stockholders Meeting (or any adjournment thereof), in accordance with the Governing Documents of Sandbridge and applicable Law.
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Required Transaction Proposals” means, collectively, the Business Combination Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, and the Governing Document Proposals.
Requisite Company Stockholders” means the Company Stockholders holding shares sufficient to effect the Company Stockholder Approval, each of which or whom is an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act.
Sanctions and Export Control Laws” means any applicable Law related to (a) import and export controls, including the U.S. Export Administration Regulations, (b) economic sanctions, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the European Union, any European Union Member State, the United Nations, and Her Majesty’s Treasury of the United Kingdom or (c) anti-boycott measures.
Sandbridge” has the meaning set forth in the introductory paragraph to this Agreement.
Sandbridge Acquisition Proposal” means (a) any transaction or series of related transactions under which Sandbridge or any of its controlled Affiliates, directly or indirectly, (i) acquires or otherwise purchases any other Person(s), (ii) engages in a business combination with any other Person(s) or (iii) acquires or otherwise purchases all or a material portion of the assets or businesses of any other Persons(s) (in the case of each of clause (i), (ii) and (iii), whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, tender offer or otherwise) or (b) any equity, debt or similar investment in Sandbridge or any of its controlled Affiliates. Notwithstanding the foregoing or anything to the contrary herein, none of this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby shall constitute a Sandbridge Acquisition Proposal.
Sandbridge Board” has the meaning set forth in the recitals to this Agreement.
Sandbridge Board Recommendation” has the meaning set forth in Section 5.9.
Sandbridge Class A Common Stock” means Sandbridge’s Class A common stock, par value $0.0001.
Sandbridge Class B Common Stock” means Sandbridge’s Class B common stock, par value $0.0001.
Sandbridge Common Stock” means Sandbridge Class A Common Stock and Sandbridge Class B Common Stock.
Sandbridge D&O Persons” has the meaning set forth in Section 5.17(a).
Sandbridge Disclosure Schedules” means the disclosure schedules to this Agreement delivered to the Company by Sandbridge on the date of this Agreement.
Sandbridge Financial Statements” means all of the financial statements of Sandbridge included in the Sandbridge SEC Reports.
Sandbridge Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization and Qualification), Section 4.2 (Authority), Section 4.4 (Brokers) and Section 4.6 (Capitalization of the Sandbridge Parties).
Sandbridge Insider Letter” means that certain letter agreement, dated as of September 14, 2020, by and among Sandbridge, the Sponsor, certain investors in the Sponsor, the other initial stockholders of Sandbridge and each of the directors and officers of Sandbridge.
Sandbridge Material Adverse Effect” means any change, event, effect or occurrence that, individually or in the aggregate with any other change, event, effect or occurrence, has had or would reasonably be expected to have a material adverse effect on the ability of any Sandbridge Party to consummate the Merger in accordance with the terms of this Agreement.
Sandbridge Non-Party Affiliates” means, collectively, each Sandbridge Related Party and each former, current or future Affiliate, Representative, successor and permitted assign of each Sandbridge Related Party.
Sandbridge Parties” means, collectively, Sandbridge and Merger Sub.
Sandbridge Related Party” has the meaning set forth in Section 4.9.
Sandbridge Related Party Transactions” has the meaning set forth in Section 4.9.
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Sandbridge SEC Reports” has the meaning set forth in Section 4.7.
Sandbridge Stockholder Approval” means, collectively, the Required Sandbridge Stockholder Approval and the Other Sandbridge Stockholder Approval.
Sandbridge Stockholder Redemption” means the right of the holders of Sandbridge Class A Common Stock to redeem all or a portion of their Sandbridge Class A Common Stock (in connection with the transactions contemplated by this Agreement or otherwise) as set forth in Governing Documents of Sandbridge.
Sandbridge Stockholders Meeting” has the meaning set forth in Section 5.9.
Sandbridge Transaction Expenses” has the meaning set forth in Section 2.6(b).
Sandbridge Warrants” means each warrant to purchase one share of Sandbridge Class A Common Stock at an exercise price of $11.50 per share, subject to adjustment in accordance with the Warrant Agreement (including, for the avoidance of doubt, each such warrant held by the Sponsor or any Other Class B Stockholder).
Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
Schedules” means, collectively, the Company Disclosure Schedules and the Sandbridge Disclosure Schedules.
SEC” means the U.S. Securities and Exchange Commission.
Securities Act” means the U.S. Securities Act of 1933.
Securities Laws” means Federal Securities Laws and other applicable foreign and domestic securities or similar Laws.
Security Breach” means any (i) unauthorized or unlawful access, acquisition, use, disclosure, loss, sale, rental or other Processing of any Company IT System, Personal Data, confidential information or trade secrets used or held for use by or on behalf of a Group Company; (ii) other act or omission that compromises the security, integrity, or confidentiality of any Company IT System, Personal Data, confidential information or trade secrets used or held for use by or on behalf of a Group Company; or (iii) phishing or other cyberattack that results in a monetary loss to or business disruption affecting a Group Company.
Signing Filing” has the meaning set forth in Section 5.5(b).
Signing Press Release” has the meaning set forth in Section 5.5(b).
Software” shall mean any and all (a) computer programs, including any and all software implementations of algorithms, models, and methodologies, whether in source code or object code; (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (c) descriptions, flowcharts, and other work product used to design, plan, organize, and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons; and (d) all documentation, including user manuals and other training documentation, related to any of the foregoing.
Sponsor” has the meaning set forth in the recitals to this Agreement.
Sponsor Letter Agreement” has the meaning set forth in the recitals to this Agreement.
Stock Issuance Proposal” has the meaning set forth in Section 5.9.
Stockholders Agreement” has the meaning set forth in the recitals to this Agreement.
Subscription Agreements” means the subscription agreements pursuant to which the PIPE Investment will be consummated, each substantially in the form attached hereto as Exhibit F.
Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other legal entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or (b) if a limited liability company, partnership,
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association or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be a, or control any, managing director or general partner of such business entity (other than a corporation). The term “Subsidiary” shall include all Subsidiaries of such Subsidiary.
Supervisory Authority” means any local, national, supranational, state, governmental or quasi-governmental agency, body, department, board, official or entity exercising regulatory or supervisory authority pursuant to any Privacy Obligations including, without limitation, the Information Commissioner in the UK, the U.S. Department of Health and Human Services Office for Civil Rights, the United States Federal Trade Commission, and any state or federal office of attorney general.
Surviving Company” has the meaning set forth in Section 2.1(b)(i).
Tax” means any federal, state, local or non-United States income, gross receipts, franchise, estimated, alternative minimum, sales, use, transfer, value added, excise, stamp, customs, duties, ad valorem, real property, personal property (tangible and intangible), capital stock, social security, unemployment, payroll, wage, employment, severance, occupation, registration, environmental, communication, mortgage, profits, license, lease, service, goods and services, withholding, premium, unclaimed property, escheat, turnover, windfall profits or other taxes or similar charges, levies or assessments of any kind whatever, whether computed on a separate or combined, unitary or consolidated basis or in any other manner, together with any interest, deficiencies, penalties, additions to tax, or additional amounts imposed by any Governmental Entity with respect thereto, whether disputed or not, and including any secondary Liability for any of the aforementioned.
Tax Authority” means any Governmental Entity responsible for the collection or administration of Taxes or Tax Returns.
Tax Return” means returns, information returns, statements, declarations, claims for refund, schedules, attachments and reports relating to Taxes filed or required to be filed with any Governmental Entity.
Termination Date” has the meaning set forth in Section 7.1(d).
Transaction Expenses” has the meaning set forth in Section 2.6(b).
Transaction Litigation” has the meaning set forth in Section 5.2(d).
Transaction Proposals” has the meaning set forth in Section 5.9.
Treasury Shares” has the meaning set forth in Section 2.1(b)(vii).
Trust Account” has the meaning set forth in Section 8.18.
Trust Account Released Claims” has the meaning set forth in Section 8.18.
Trust Agreement” has the meaning set forth in Section 4.8.
Trustee” has the meaning set forth in Section 4.8.
Vested Company Option” means a Company Option, or portion thereof, to the extent such Company Option (or applicable portion thereof) is vested as of immediately prior to the Effective Time.
WARN” means the Worker Adjustment Retraining and Notification Act of 1988, as well as analogous applicable foreign, state or local Laws.
Warrant Agreement” means the Warrant Agreement, dated as of September 14, 2020, by and between Sandbridge and the Trustee.
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 knowledge that the taking of such act or such failure to act would, or would reasonably be expected to, constitute or result in a breach of this Agreement.
Written Consent” has the meaning set forth in Section 5.15.
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ARTICLE 2
MERGER
Section 2.1. Closing Transactions. On the terms and subject to the conditions set forth in this Agreement, the following transactions shall occur in the order set forth in this Section 2.1:
(a) Governing Documents. On the Closing Date prior to the Effective Time, the amended and restated certificate of incorporation of Sandbridge shall be amended and restated to be the Owlet Pubco Certificate of Incorporation and the bylaws of Sandbridge shall be amended and restated to be the Owlet Pubco Bylaws.
(b) The Merger.
(i) On the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, on the Closing Date, the Merger will occur at the Effective Time. Following the Effective Time, the separate existence of Merger Sub shall cease and the Company shall continue as the surviving company of the Merger (the “Surviving Company”).
(ii) At the Closing, the parties hereto shall cause a certificate of merger, in a form reasonably satisfactory to the Company and Sandbridge (the “Certificate of Merger”), to be executed and filed with the Secretary of State of the State of Delaware. The Merger shall become effective on the date and time at which the Certificate of Merger is accepted for filing by the Secretary of State of the State of Delaware or at such later date and/or time as is agreed by Sandbridge and the Company and specified in the Certificate of Merger (the time the Merger becomes effective being referred to herein as the “Effective Time”).
(iii) The Merger shall have the effects set forth in Section 251 of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the assets, properties, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Company and all debts, liabilities, obligations, restrictions, disabilities and duties of each of the Company and Merger Sub shall become the debts, liabilities, obligations and duties of the Surviving Company, in each case, in accordance with the DGCL.
(iv) At the Effective Time, the Governing Documents of Merger Sub shall become the Governing Documents of the Surviving Company, in each case, until thereafter changed or amended as provided therein or by applicable Law.
(v) From and after the Effective Time, the directors and officers of the Surviving Company shall be the individuals listed on Schedule 2.1(b)(v), each to hold office in accordance with the Governing Documents of the Surviving Company until such director’s or officer’s successor is duly elected or appointed and qualified, or until the earlier of their death, resignation or removal.
(vi) At the Effective Time, by virtue of the Merger and without any action on the part of any Party or any other Person, each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically canceled and extinguished and converted into one share of common stock, par value $0.0001, of the Surviving Company.
(vii) At the Effective Time, by virtue of the Merger and without any action on the part of any Party or any other Person, each share of Company Stock issued and outstanding as of immediately prior to the Effective Time (other than (i) any shares of Company Stock subject to Company Options (which shall be respectively subject to Section 2.3 (Treatment of Company Options)), (ii) any shares of Company Stock held by the Company as treasury stock (the “Treasury Shares”) and (iii) any Dissenting Shares), shall be automatically cancelled and converted into the right to receive a number of shares of Sandbridge Class A Common Stock equal to the Exchange Ratio, with fractional shares rounded down to the nearest whole share (after aggregating all fractional shares of Sandbridge Class A Common Stock into which such Person’s Company Stock are converted); provided, that any such shares of Sandbridge Class A Common Stock paid as consideration for the cancellation of shares of Company Common Stock that, as of immediately prior to the Effective Time, were subject to a risk of forfeiture or right of repurchase at the original purchase price as of immediately prior to the Effective
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Time (“Company Restricted Stock”) shall be subject to the same risk of forfeiture or right of repurchase (proportionately adjusted to reflect the Exchange Ratio) which risk of forfeiture or right of repurchase shall lapse in accordance with the same vesting schedule as that of the Company Restricted Stock.
(viii) At the Effective Time, by virtue of the Merger and without any action on the part of any Party or any other Person, each Treasury Share shall be automatically canceled and extinguished, and no consideration shall be paid with respect thereto.
(ix) Notwithstanding anything in this Agreement to the contrary, no fractional shares of Sandbridge Class A Common Stock shall be issued in the Merger.
Section 2.2. Closing of the Transactions Contemplated by this Agreement. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place electronically by exchange of the closing deliverables by the means provided in Section 8.11 (Counterparts; Electronic Signatures) as promptly as reasonably practicable, but in no event later than the third (3rd) Business Day, following the satisfaction (or, to the extent permitted by applicable Law, waiver) of the conditions set forth in Article 6 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions) (the “Closing Date”) or at such other place, date and/or time as Sandbridge and the Company may agree in writing.
Section 2.3. Treatment of Company Options.
(a) At the Effective Time, by virtue of the Merger and without any action of any Party or any other Person (except, in the case of the Company, actions required by Section 2.3(e)), each Company Option that is not a Cash Elected Company Option that is outstanding immediately prior to the Effective Time shall be cancelled and converted into an option to purchase Sandbridge Class A Common Stock upon substantially the same terms and conditions as are in effect with respect to such Company Option immediately prior to the Effective Time, including with respect to vesting, expiration and forfeiture provisions (each, an “Assumed Option”). Each Assumed Option shall (i) cover a number of shares of Sandbridge Class A Common Stock equal to the product of the number of shares of Company Common Stock subject to the applicable Company Option immediately prior to the Effective Time and the Exchange Ratio (rounded down to the nearest whole share) and (ii) have a per share exercise price determined by dividing the per share exercise price of the applicable Company Option immediately prior to the Effective Time by the Exchange Ratio (rounded up to the nearest whole cent); provided that such conversion shall in all events occur in a manner intended to comply with the applicable requirements of Section 409A or Section 424 of the Code.
(b) At the Effective Time, each Vested Company Option with respect to which an election to receive only cash (a “Cash Election”) has been properly made and not revoked pursuant to Section 2.4(j) (a “Cash Elected Company Option”) that is issued and outstanding immediately prior to the Effective Time shall be canceled and converted into the right to receive, subject to Section 2.3(c), an amount in cash equal to, with respect to each share of Company Common Stock subject to such Cash Elected Company Option, (i) the Per Share Merger Consideration, without interest, minus (ii) the exercise price applicable to the share of Company Common Stock underlying such Cash Elected Company Option (the “Cash Election Consideration”). All Cash Election Consideration payable to the holders of Cash Elected Company Options (“Cash Election Optionholders”) will be paid as soon as practicable after the Closing Date through the regular payroll processes of the Company and shall be subject to all applicable Tax and other withholdings.
(c) If the aggregate amount of Cash Election Consideration to be paid in respect of the aggregate number of Cash Elected Company Options would exceed the Cash Election Consideration Cap, a portion of the Vested Company Options that are considered Cash Elected Company Options will be reduced in accordance with this Section 2.3(c) by the minimum amount necessary to provide that the total Cash Election Consideration does not exceed the Cash Election Consideration Cap. Such reduction shall be applied to the Vested Company Options held by each Cash Election Optionholder in an equitable manner as is determined by the Company in its sole discretion such that the Cash Election Consideration to be received by each Cash Election Optionholder is reduced by approximately the same percentage amount. Following any such reduction in the Vested Company Options eligible to receive Cash Election
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Consideration pursuant to the foregoing provisions of this Section 2.3(c), the remaining Company Options held by each Cash Election Optionholder shall not be treated as Cash Elected Company Options for purposes of this Agreement and shall be converted into Assumed Options in accordance with Section 2.3(a).
(d) At the Effective Time, the Company Equity Plan shall terminate, provided that the Assumed Options shall remain subject to the terms of the Company Equity Plan for so long as such Assumed Options remain outstanding. No new awards shall be granted under the Company Equity Plan on or following the Effective Time.
(e) Prior to the Closing, the Company shall have adopted appropriate resolutions and shall take, or cause to be taken, all necessary or appropriate actions under the Company Equity Plans (and the underlying grant, award or similar agreements) or otherwise to give effect to the provisions of this Section 2.3.
Section 2.4. Deliverables; Exchange Agent.
(a) As promptly as reasonably practicable following the date of this Agreement, but in no event later than ten (10) Business Days prior to the Closing Date, Sandbridge shall appoint Continental (or its applicable Affiliate) as an exchange agent (the “Exchange Agent”) and enter into an exchange agent agreement with the Exchange Agent for the purpose of exchanging Certificates representing the Company Stock and any shares of Company Stock held in book-entry form on the stock transfer books of the Company immediately prior to the Effective Time, in either case, for the portion of the Aggregate Share Consideration issuable in respect of such shares of Company Stock on the terms and subject to the other conditions set forth in this Agreement. Notwithstanding the foregoing or anything to the contrary herein, in the event that Continental is unable or unwilling to serve as the Exchange Agent, then Sandbridge and the Company shall, as promptly as reasonably practicable thereafter, but in no event later than the Closing Date, mutually agree upon an exchange agent (in either case, such agreement not to be unreasonably withheld, conditioned or delayed), Sandbridge shall appoint and enter into an exchange agent agreement with such exchange agent, who shall for all purposes under this Agreement constitute the Exchange Agent and each of Sandbridge and the Company shall mutually agree to any changes to the Letter of Transmittal in order to satisfy any requirements of such exchange agent (in either case, such agreement not to be unreasonably withheld, conditioned or delayed).
(b) As promptly as reasonably practicable following the date of this Agreement, Sandbridge shall mail or otherwise deliver, or shall cause the Exchange Agent to mail or otherwise deliver, to the Company Stockholders entitled to receive a portion of the Aggregate Merger Consideration pursuant to Section 2.1(b)(vii) a Letter of Transmittal.
(c) At the Effective Time, Sandbridge shall deposit, or cause to be deposited, with the Exchange Agent, for the benefit of the Company Stockholders and for exchange in accordance with this Section 2.4 through the Exchange Agent, of Sandbridge Class A Common Stock in book-entry form representing the portion of the Aggregate Merger Consideration issuable pursuant to Section 2.1(b)(vii) in exchange for the Company Stock outstanding immediately prior to the Effective Time. All shares of Sandbridge Common Stock comprising the Aggregate Share Consideration issuable in book-entry pursuant to Section 2.1(b)(vii) deposited with the Exchange Agent shall be referred to in this Agreement as the “Exchange Fund”.
(d) Each Company Stockholder whose Company Stock has been converted into the right to receive a portion of the Aggregate Merger Consideration pursuant to Section 2.1(b)(vii) shall be entitled to receive such shares, and Sandbridge shall cause the Exchange Agent to deliver such shares, upon (i) surrender of a Certificate (or affidavit of loss in lieu thereof in the form required by the Letter of Transmittal, together with the posting of a customary bond if required by the Exchange Agent), together with the delivery of a properly completed and duly executed Letter of Transmittal (including, for the avoidance of doubt, any documents or agreements required by the Letter of Transmittal), to the Exchange Agent or (ii) in the case of Company Stock held in book-entry form, a properly completed and duly executed Letter of Transmittal (including, for the avoidance of doubt, any documents or agreements required by the Letter of Transmittal), to the Exchange Agent. Until surrendered as contemplated by this Section 2.4(d), each Certificate entitled to receive a portion of the Aggregate Merger Consideration in accordance with Section 2.1(b)(vii) shall be deemed at all times after the Effective Time to represent only the right to receive upon such surrender the portion of the Aggregate Merger Consideration that such holder is entitled to receive in accordance with the provisions of Section 2.1(b)(vii).
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(e) If the shares of Sandbridge Class A Common Stock are to be issued to a Person other than the Company Stockholder in whose name the surrendered Certificate or the transferred Company Stock in book-entry form is registered, it shall be a condition to the issuance of the applicable shares of Sandbridge Class A Common Stock that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Company Stock in book-entry form shall be properly transferred and (ii) the Person requesting such consideration pay to the Exchange Agent any transfer Taxes required as a result of such consideration being issued to a Person other than the registered holder of such Certificate or Company Stock in book-entry form or establish to the satisfaction of the Exchange Agent that such transfer Taxes have been paid or are not payable.
(f) Each holder of record of Vested Company Options (a “Holder”) shall have the right, subject to the limitations set forth in this Article 2, to submit an Election in accordance with this Section 2.4(f) on or prior to the Election Deadline. The Company shall not waive or change the Election Deadline unless such Election Deadline is waived or changed with respect to all Holders, the new election deadline is disclosed by the Company to all Holders on a date agreed to by Sandbridge, and Sandbridge has otherwise given its prior written consent (not to be unreasonably withheld, conditioned, delayed or denied) to such waiver. “Election Deadline” means 5:00 p.m. (New York time) on the date that is five (5) Business Days prior to the Closing Date. The Parties shall cooperate to inform each Holder of the selected date of the Election Deadline not more than fifteen (15) Business Days, and at least five (5) Business Days, prior to the Election Deadline.
(g) Each Holder shall specify in a request made in accordance with the provisions of this Section 2.4(g) (an “Election”) whether such Holder desires to make a Cash Election with respect to such Holder’s Vested Company Options, and if so, the number of shares with respect to such Election applies; provided, that a Holder shall not be permitted to make an Election in respect of more than 15% of the Vested Company Options held by such Holder as of immediately prior to the Effective Time and any Election in excess of that threshold shall be reduced automatically to 15% of the Vested Company Options held by such Holder as of immediately prior to the Effective Time. If any Holder fails to make an Election or makes an Election only with respect to a portion of such Holder’s Vested Company Options, the portion of such Holder’s Vested Company Options with respect to which such Holder did not make an Election shall not be treated as Cash Elected Company Options for purposes of this Agreement and shall be automatically treated as set forth in Section 2.3(a).
(h) The Company shall prepare a form of election that is reasonably acceptable to Sandbridge (the “Form of Election”), which shall be included with the Letter of Transmittal contemplated by Section 2.4(b) and the Company shall mail the Form of Election to Holders as of the record date as established by the board of directors of the Company (the “Election Record Date”), in consultation with Sandbridge, not less than ten (10) Business Days prior to the anticipated Election Deadline (the period between such mailing and the Election Deadline, the “Election Period”).
(i) Any Election shall have been made properly only if the Exchange Agent shall have received, by the Election Deadline, (i) a Form of Election properly completed and signed in accordance with the instructions therein, and (ii) the properly completed and executed documents required to be delivered by such Holder pursuant to the other provisions of this Section 2.4, as applicable. Any Holder that does not make a valid Election by the Election Deadline shall be deemed to have made no Cash Election, and all of such Holder’s Vested Company Options shall automatically be treated as set forth in Section 2.3(a).
(j) Any Holder may, at any time during the Election Period, revoke his, her or its Election by written notice to the Exchange Agent prior to the Election Deadline, together with a properly completed and signed revised Form of Election. Notwithstanding anything to the contrary in this Agreement, all Elections shall be automatically deemed revoked upon termination of this Agreement in accordance with Article 7. The Company shall have reasonable discretion to determine if any Election is not properly made, changed or revoked with respect to any Vested Company Options (and none of the Company, Sandbridge, Merger Sub or the Exchange Agent shall be under any duty to notify any Holder of any applicable defect). In the event that the Company makes a reasonable determination that an Election was not properly made (including as a result of the Exchange Agent not receiving an Election by the Election Deadline), such Election shall be deemed to be ineffective, and the Vested Company Options covered by such Election shall be automatically treated as set forth in Section 2.3(a).
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(k) No dividends or other distributions declared or made after the Effective Time with respect to the Sandbridge Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Sandbridge Common Stock represented thereby until the holder of such Certificate shall surrender such Certificate in accordance with Section 2.4(d). Subject to the effect of escheat, Tax or other applicable Laws, following surrender of any such Certificate, Sandbridge shall pay or cause to be paid to the holder of the certificates representing shares of Sandbridge Common Stock issued in exchange therefore, without interest, (i) promptly, but in any event within five (5) Business Days of such surrender and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and a payment date occurring after surrender payable with respect to such shares of Sandbridge Common Stock.
(l) No interest will be paid or accrued on the shares of Sandbridge Class A Common Stock (or any portion thereof). From and after the Effective Time, the holders of Certificates representing Company Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Company Stock except as otherwise provided in this Agreement or by Law. On or after the Effective Time, any Certificates presented to the Exchange Agent or Sandbridge for any reason shall be converted into the applicable portion of the Aggregate Merger Consideration in accordance with the provisions of Section 2.1(b)(vii).
(m) At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no transfers of Company Stock that were outstanding immediately prior to the Effective Time.
(n) The Aggregate Merger Consideration payable upon conversion of the Company Stock in accordance with the terms hereof shall be deemed to have been paid and issued in full satisfaction of all rights pertaining to such Company Stock.
(o) The Aggregate Merger Consideration shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like changes with respect to Sandbridge Common Stock occurring on or after the date hereof and prior to the Effective Time.
(p) None of Sandbridge, the Surviving Company or any of their respective Affiliates shall be liable to any Person in respect of any consideration delivered to a public official pursuant to any applicable abandoned property, unclaimed property, escheat, or similar Law. Any portion of the Exchange Fund remaining unclaimed by the Company Stockholders for one year after the Effective Time shall be delivered to Sandbridge, upon demand, and any holders of Company Stock who have not theretofore complied with this Section 2.4 shall thereafter look only to Sandbridge for the Aggregate Merger Consideration, without any interest thereon. Any portion of the Exchange Fund remaining unclaimed by the holders of Company Stock as of a date which is immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Entity shall become, to the extent permitted by applicable Law, the property of Sandbridge free and clear of any claims or interest of any Person previously entitled thereto.
Section 2.5. Withholding. Sandbridge, the Group Companies, the Exchange Agent and any other applicable withholding agent shall be entitled to deduct and withhold (or cause to be deducted and withheld) from any consideration payable pursuant to this Agreement such amounts as are required to be deducted and withheld under applicable Tax Law. Other than with respect to any compensatory payments subject to payroll withholding, the Person intending to withhold shall use commercially reasonable efforts to notify the Person to whom amounts would otherwise be payable of any amounts that it intends to deduct and withhold prior to the payment with respect to which such amounts will be withheld and shall use commercially reasonable efforts to provide the payment recipient with reasonable opportunity to provide any forms or other documentation to avoid or minimize such deduction or withholding. To the extent that amounts are so withheld and timely remitted to the applicable Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Other than with respect to any compensatory payment subject to payroll withholding, the Parties shall cooperate in good faith to eliminate or reduce any such deduction or withholding (including through the request and provision of any statements, forms or other documents to reduce or eliminate any such deduction or withholding).
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Section 2.6. Payment of Expenses.
(a) No sooner than five (5) or later than two (2) Business Days prior to the Closing Date, the Company shall provide to Sandbridge a written report setting forth a list of all of the following fees and expenses incurred by or on behalf of the Company in connection with the preparation negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby (together with written invoices and wire transfer instructions for the payment thereof): (i) the fees and disbursements of outside counsel to the Company incurred in connection with the transactions contemplated by this Agreement (including the PIPE Investment) and the Ancillary Documents and (ii) the fees and expenses of any other agents, advisors, consultants, experts, financial advisors and other service providers engaged by the Company in connection with the transactions contemplated by this Agreement and the Ancillary Documents (collectively, the “Company Transaction Expenses”). On the Closing Date following the Closing, Sandbridge shall pay or cause to be paid by wire transfer of immediately available funds all such Company Transaction Expenses. Company Transaction Expenses shall not include any fees and expenses of the Company’s stockholders.
(b) No sooner than five (5) or later than two (2) Business Days prior to the Closing Date, Sandbridge shall provide to the Company a written report setting forth a list of all fees, expenses and disbursements incurred by or on behalf of Sandbridge or Merger Sub for outside counsel, agents, advisors, consultants, experts, financial advisors and other service providers engaged by or on behalf of Sandbridge or Merger Sub in connection with the transactions contemplated by this Agreement and the Ancillary Documents or otherwise in connection with Sandbridge’s operations (together with written invoices and wire transfer instructions for the payment thereof) (collectively, the “Sandbridge Transaction Expenses” and together with the Company Transaction Expenses, the “Transaction Expenses”). On the Closing Date following the Closing, Sandbridge shall pay or cause to be paid by wire transfer of immediately available funds all such Sandbridge Transaction Expenses. Sandbridge Transaction Expenses shall not include any fees and expenses of Sponsor.
Section 2.7. Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, shares of Company Stock outstanding immediately prior to the Effective Time and owned by a holder who is entitled to demand and has neither voted in favor of the Merger nor consented thereto in writing and who shall have properly demanded appraisal of such shares in accordance with, and who complies in all respects with, Section 262 of the DGCL (such shares, “Dissenting Shares”) shall not be converted into Sandbridge Class A Common Stock, and shall instead represent the right to receive payment of the fair value of such Dissenting Shares in accordance with and to the extent provided by Section 262 of the DGCL. At the Effective Time, (a) all Dissenting Shares shall be canceled, extinguished and cease to exist and (b) the holders of Dissenting Shares shall be entitled only to such rights as may be granted to them under the DGCL. If any such holder fails to perfect or otherwise waives, withdraws or loses such holder’s right to appraisal under Section 262 of the DGCL or other applicable Law, then the right of such holder to be paid the fair value of such Dissenting Shares shall cease and such Dissenting Shares shall be deemed to have been converted, as of the Effective Time, into Sandbridge Class A Common Stock upon the terms and conditions set forth in this Agreement applicable to holders that have not properly demanded appraisal rights. The Company shall give Sandbridge prompt notice (and in any event within two (2) Business Days) of any demands received by the Company for appraisal of shares of Company Stock, attempted withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company relating to rights to be paid the fair value of Dissenting Shares, and Sandbridge shall have the right to participate in and, following the Effective Time, direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, except with the prior written consent of Sandbridge, make any payment with respect to, or settle or compromise or offer to settle or compromise, any such demands or waive any failure to timely deliver a written demand for appraisal or otherwise comply with the provisions under Section 262 of the DGCL, or agree or commit to do any of the foregoing.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP COMPANIES
Subject to the last sentence of Section 8.8 (Annexes, Exhibits and Schedules), except as set forth in the Company Disclosure Schedules, the Company hereby represents and warrants to the Sandbridge Parties as follows:
Section 3.1. Organization and Qualification.
(a) Each Group Company is a corporation, limited liability company or other applicable business entity duly organized or formed, as applicable, validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) under the Laws of its jurisdiction of formation or organization (as applicable). Section 3.1(a) of the Company Disclosure Schedules sets forth the jurisdiction of formation or organization (as applicable) for each Group Company. Each Group Company has the requisite corporate, limited liability company or other applicable business entity power and authority to own, lease and operate its properties and to carry on its businesses as presently conducted, except where the failure to have such power or authority would not have a Company Material Adverse Effect.
(b) True and complete copies of the Governing Documents of each Group Company, including the Company Stockholders Agreements, have been made available to Sandbridge, in each case, as amended and in effect as of the date of this Agreement. Such Governing Documents are in full force and effect, and no Group Company is in breach or violation of any provision set forth in such Governing Documents.
(c) Each Group Company is duly qualified or licensed to transact business and is in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) in each jurisdiction in which the property and assets owned, leased or operated by it, or the nature of the business conducted by it, makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing would not have a Company Material Adverse Effect.
Section 3.2. Capitalization of the Group Companies.
(a) Section 3.2(a) of the Company Disclosure Schedules sets forth a true and complete statement as of the date of this Agreement of (i) the number and class or series (as applicable) of all of the Equity Securities of the Company issued and outstanding, (ii) in the case of each share of Company Preferred Stock, the applicable conversion ratio thereof, (iii) the identity of the Persons that are the record and beneficial owners thereof, (iv) with respect to each Company Warrant, the date of issuance, applicable warrant agreement, applicable exercise terms and expiration date and (v) with respect to each Company Option and each award of Company Restricted Stock, (A) the date of grant, (B) the identity of the holder thereof, (C) the applicable exercise price, (D) the expiration date, (E) any applicable vesting schedule (including any accelerated vesting provisions), (F) whether such Company Option is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code and (G) whether the holder of such Company Restricted Stock has provided the Company a copy of a timely election under Section 83(b) of the Code. All of the Equity Securities of the Company have been duly authorized and validly issued. All of the outstanding shares of Company Stock are validly issued, fully paid and non-assessable. The Equity Securities of the Company (1) were not issued in violation of the Governing Documents of the Company or any other Contract to which the Company is party or bound, (2) were not issued in violation of any preemptive rights, call option, right of first refusal or first offer, subscription rights, transfer restrictions or similar rights of any Person and (3) have been offered, sold and issued in compliance with applicable Law, including Securities Laws. Except for the Company Options, Company Restricted Stock and Company Warrants set forth on Section 3.2(a) of the Company Disclosure Schedules, the Company has no outstanding (x) equity appreciation, phantom equity or profit participation rights or (y) options, restricted stock, phantom stock, warrants, purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require the Company to issue, sell or otherwise cause to become outstanding, or to acquire, repurchase or redeem, any Equity Securities of the Company or securities convertible into or exchangeable for Equity Securities of the Company, or make any payment based on the value of any Equity Securities of the Company. No Company Option has been granted with a per share exercise price that is less than the fair market value of a share of Company Common Stock on the
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date such Company Option was granted as determined in accordance with Section 409A of the Code or Section 422 of the Code, if applicable. Each Company Option was granted in all material respects in accordance with the terms of the Company Equity Plan and applicable Laws. Each Company Option qualifies for the tax and accounting treatment afforded to such Company Option in the Company’s Tax Returns and Financial Statements, respectively.
(b) The Equity Securities of the Company are free and clear of all Liens (other than transfer restrictions under applicable Securities Law or under the Company Stockholders Agreements). Except for the Company Stockholders Agreements, there are no voting trusts, proxies or other Contracts to which the Company is a party with respect to the voting or transfer of the Company’s Equity Securities.
(c) Section 3.2(c) of the Company Disclosure Schedules sets forth a true and complete statement of (i) the number and class or series (as applicable) of all of the Equity Securities of each Subsidiary of the Company issued and outstanding and (ii) the identity of the Persons that are the record and beneficial owners thereof. There are no outstanding (A) equity appreciation, phantom equity, or profit participation rights or (B) options, restricted stock, phantom stock, warrants, purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require any Subsidiary of the Company to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity Securities or securities convertible into or exchangeable for Equity Securities of the Subsidiaries of the Company. There are no voting trusts, proxies or other Contracts with respect to the voting or transfer of any Equity Securities of any Subsidiary of the Company.
(d) None of the Group Companies owns or holds (of record, beneficially, legally or otherwise), directly or indirectly, any Equity Securities in any other Person or the right to acquire any such Equity Security, and none of the Group Companies are a partner or member of any partnership, limited liability company or joint venture.
(e) Section 3.2(e) of the Company Disclosure Schedules sets forth a list of all Indebtedness of the Group Companies as of the date of this Agreement, including the principal amount of such Indebtedness, the outstanding balance as of the date of this Agreement, and the debtor and the creditor thereof.
Section 3.3. Authority. Each Group Company has the requisite corporate power and authority to execute and deliver this Agreement and each of the Ancillary Documents to which it is or will be a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. Subject to the receipt of the Company Stockholder Approval, the execution, delivery and performance of this Agreement, the Ancillary Documents to which a Group Company is or will be a party and the consummation of the transactions contemplated hereby and thereby have been (or, in the case of any Ancillary Document entered into after the date of this Agreement, will be upon execution thereof) duly authorized by all necessary corporate (or other similar) action on the part of the applicable Group Company. This Agreement and each Ancillary Document to which a Group Company is or will be a party has been or will be, upon execution thereof, as applicable, duly and validly executed and delivered by the applicable Group Company and constitutes or will constitute, upon execution and delivery thereof, as applicable, a valid, legal and binding agreement of the applicable Group Company (assuming that this Agreement and the Ancillary Documents to which the applicable Group Company is or will be a party are or will be upon execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto), enforceable against the applicable Group Company in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity). The only vote of holders of any class of Company’s Equity Securities necessary to approve and adopt this Agreement, the Merger and the other transactions contemplated hereby is the approval and adoption of this Agreement and approval of the Merger and such other transactions by the affirmative vote or written consent of the holders of a majority of the outstanding shares of Company Common Stock and Company Preferred Stock (voting on an as converted to Company Common Stock basis) voting together as a single class and the affirmative vote or written consent of the holders of a majority of the outstanding shares of Company Preferred Stock (voting together as a single class on an as converted to Company Common Stock basis) (such approvals, the “Company Stockholder Approval”).
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Section 3.4. Financial Statements; Undisclosed Liabilities.
(a) The Company has made available to Sandbridge a true and complete copy of (i) the audited consolidated balance sheets of the Group Companies as of December 31, 2019 and the related audited consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ deficit and cash flows of the Group Companies for each of the periods then ended and (ii) the unaudited consolidated balance sheets of the Group Companies as of December 31, 2020 (the “Latest Balance Sheet”) and the related unaudited consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ deficit and cash flows of the Group Companies for the twelve-month period then ended (clauses (i) and (ii), collectively, the “Financial Statements”), each of which are attached as Section 3.4(a) of the Company Disclosure Schedules. Each of the Financial Statements (including the notes thereto) (A) was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), (B) fairly presents, in all material respects, the financial position, results of operations and cash flows of the Group Companies as at the date thereof and for the period indicated therein, except as otherwise specifically noted therein, (C) in the case of the Financial Statements described in clause (i) of the preceding sentence, were audited in accordance with the standards of the PCAOB and contain an unqualified report of the Company’s auditors and (D) comply in all material respects with the applicable accounting requirements and, in the case of the Financial Statements described in clause (i) of the preceding sentence, with the Federal Securities Laws.
(b) The unaudited consolidated balance sheets of the Group Companies for any 2021 interim period and corresponding prior year period required to be included in the Registration Statement / Proxy Statement and the related unaudited consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ deficit and cash flows of the Group Companies for each of the applicable periods then ended (the “Closing Company Unaudited Financial Statements”), when delivered following the date of this Agreement in accordance with Section 5.20 (PCAOB Financials), (i) will be prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), (ii) will fairly present, in all material respects, the financial position, results of operations and cash flows of the Group Companies as at the date thereof and for the period indicated therein, except as otherwise specifically noted therein and (iii) will comply in all material respects with the applicable accounting requirements and with the Federal Securities Laws.
(c) Except (i) as set forth on the face of the Latest Balance Sheet, (ii) for Liabilities incurred in the ordinary course of business since the date of the Latest Balance Sheet (none of which is a Liability for breach of contract, breach of warranty, tort, infringement or violation of Law), (iii) for Liabilities incurred in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of their respective covenants or agreements in this Agreement or any Ancillary Document or the consummation of the transactions contemplated hereby or thereby and (iv) for Liabilities that are not and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole, no Group Company, as of the date of this Agreement, has any Liabilities of the type required to be set forth on a balance sheet in accordance with GAAP.
(d) The Group Companies have established and maintain systems of internal accounting controls that are designed to provide, in all material respects, reasonable assurance that (i) all transactions are executed in accordance with management’s authorization and (ii) all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with GAAP and to maintain accountability for the Group Companies’ assets. The Group Companies maintain and, for all periods covered by the Financial Statements, have maintained books and records of the Group Companies in the ordinary course of business that are accurate and complete and reflect the revenues, expenses, assets and liabilities of the Group Companies in all material respects.
(e) Except as set forth in Section 3.4(e) of the Company Disclosure Schedule, since the incorporation of the Company, no Group Company has received any written complaint, allegation, assertion or claim that there is (i) a “significant deficiency” in the internal controls over financial reporting of the Group Companies to the Company’s knowledge, (ii) a “material weakness” in the internal controls over financial reporting of the Group Companies to the Company’s knowledge or (iii) fraud, whether or not material, that involves management or other employees of the Group Companies who have a significant role in the
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internal controls over financial reporting of the Group Companies. The independent auditors of the Company have not withdrawn any audit opinion with respect to any financial statements included in the Financial Statements and there has been no restatement of the Financial Statements.
Section 3.5. Consents and Requisite Governmental Approvals; No Violations.
(a) No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Entity is required on the part of the Company with respect to the Company’s execution, delivery or performance of its obligations under this Agreement or the Ancillary Documents to which the Company is or will be party or the consummation of the transactions contemplated by this Agreement or by the Ancillary Documents, except for (i) compliance with and filings under the HSR Act, (ii) the filing with the SEC of (A) the Registration Statement / Proxy Statement and the declaration of the effectiveness thereof by the SEC and (B) such reports under Section 13(a) or 15(d) of the Exchange Act as may be required in connection with this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby, (iii) filing of the Certificate of Merger or (iv) any other consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not have a Company Material Adverse Effect.
(b) Neither the execution, delivery or performance by the Company of this Agreement nor the Ancillary Documents to which the Company is or will be a party nor the consummation of the transactions contemplated hereby or thereby will, directly or indirectly (with or without due notice or lapse of time or both) (i) result in any breach of any provision of the Company’s Governing Documents, (ii) result in a violation or breach of, or constitute a default or give rise to any right of termination, Consent, cancellation, amendment, modification, suspension, revocation or acceleration under, any of the terms, conditions or provisions of (A) any Contract to which any Group Company is a party or (B) any Permits, (iii) violate, or constitute a breach under, any Order or applicable Law to which any Group Company or any of its properties or assets are bound or (iv) result in the creation of any Lien upon any of the assets or properties (other than any Permitted Liens) or Equity Securities of any Group Company, except, in the case of any of clauses (ii) through (iv) above, as would not have a Company Material Adverse Effect.
Section 3.6. Permits. Each of the Group Companies has all Permits that are required to own, lease or operate its properties and assets and to conduct its business as currently conducted, except where the failure to hold the same would not result in a Company Material Adverse Effect. Except as is not and would not reasonably be expected to be material to the Group Companies, taken as a whole, (i) each Permit is in full force and effect in accordance with its terms and (ii) no written notice of revocation, cancellation or termination of any Permit has been received by the Group Companies.
Section 3.7. Material Contracts.
(a) Section 3.7(a) of the Company Disclosure Schedules sets forth a list of the following Contracts to which a Group Company is, as of the date of this Agreement, a party (each Contract required to be set forth on Section 3.7(a) of the Company Disclosure Schedules, together with each of the Contracts entered into after the date of this Agreement that would be required to be set forth on Section 3.7(a) of the Company Disclosure Schedules if entered into prior to the execution and delivery of this Agreement, collectively, the “Material Contracts”):
(i) any Contract relating to Indebtedness of any Group Company in excess of $1,000,000 or to the placing of a Lien (other than any Permitted Lien) on any material assets or properties of any Group Company;
(ii) any Contract under which any Group Company is lessee of or holds or operates, in each case, any tangible property (other than real property), owned by any other Person, except for any lease or agreement under which the aggregate annual rental payments do not exceed $100,000;
(iii) any Contract under which any Group Company is lessor of or permits any third party to hold or operate, in each case, any tangible property (other than real property), owned or controlled by such Group Company, except for any lease or agreement under which the aggregate annual rental payments do not exceed $100,000;
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(iv) any joint venture, profit-sharing, partnership or collaboration, Contract, in each case, which requires, or would reasonably be expected to require (based on any occurrence, development, activity or event contemplated by such Contract), aggregate payments to or from any Group Company in excess of $1,000,000 over the life of the Contract;
(v) any Contract that (A) limits or purports to limit, in any material respect, the freedom of any Group Company to engage or compete in any line of business or with any Person or in any area, (B) contains any exclusivity, “most favored nation” or similar provisions, obligations or restrictions or (C) contains any other provisions restricting or purporting to restrict, in any material respect, the ability of any Group Company to sell, manufacture, develop, commercialize, test or research products, directly or indirectly through third parties, or to solicit any potential customer;
(vi) any Contract requiring any future capital commitment or capital expenditure (or series of capital expenditures) by any Group Company in an amount in excess of (A) $250,000 annually or (B) $625,000 over the life of the agreement;
(vii) any Contract requiring any Group Company to guarantee the Liabilities of any Person (other than the Company or a Subsidiary) or pursuant to which any Person (other than the Company or a Subsidiary) has guaranteed the Liabilities of a Group Company, in each case in excess of $50,000;
(viii) any Contract under which any Group Company has, directly or indirectly, made or agreed to make any loan, advance, or assignment of payment to any Person or made any capital contribution to, or other investment in, any Person in excess of $100,000;
(ix) any Contract required to be disclosed on Section 3.13(c)(i) or Section 3.19 of the Company Disclosure Schedules;
(x) any collective bargaining agreement or other Contract with any labor union, labor organization, works council, employee delegate, representative or other employee collective group;
(xi) any Contract (A) governing the terms of, or otherwise related to, the employment, engagement or services of any current director, manager, officer, employee, individual independent contractor or other service provider of a Group Company whose annual base salary (or, in the case of an independent contractor, annual base compensation) is in excess of $200,000, or (B) providing for any success, change of control, retention, transaction bonus or other similar payment or amount due or payable to any Person as a result of or in connection with this Agreement or the transactions contemplated hereby;
(xii) any Contract for the disposition of any portion of the assets or business of any Group Company or for the acquisition by any Group Company of the assets or business of any other Person (other than acquisitions or dispositions made in the ordinary course of business), or under which any Group Company has any continuing obligation with respect to an “earn-out”, contingent purchase price or other contingent or deferred payment obligation, involving payments in excess of $100,000 other than Contracts (A) in which the applicable acquisition or disposition has been consummated and there were no material obligations ongoing as of the date of the Latest Balance Sheet, or (B) between the Company and its Subsidiaries and reflected in the Financial Statements;
(xiii) any settlement, conciliation or similar Contract (A) the performance of which would be reasonably likely to involve any payments in excess of $500,000 after the date of this Agreement, (B) with a Governmental Entity or (C) that imposes or is reasonably likely to impose, at any time in the future, any material, non-monetary obligations on any Group Company (or Sandbridge or any of its Affiliates after the Closing); and
(xiv) any other Contract the performance of which requires or would reasonably be expected to result in either (A) annual payments to or from any Group Company in excess of $1,000,000 or (B) aggregate payments to or from any Group Company in excess of $5,000,000 over the life of the agreement and, in each case, that is not terminable by the applicable Group Company without penalty upon less than thirty (30) days’ prior written notice.
(b) (i) Each Material Contract is valid and binding on the applicable Group Company and, to the knowledge of the Company, the counterparty thereto, and is in full force and effect, and subject to obtaining
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any necessary consents disclosed in Section 3.5 of the Company Disclosure Schedules, will continue to be so enforceable and in full force and effect on terms that are substantially the same in all material respects following the consummation of the Merger and (ii) the applicable Group Company and, to the knowledge of the Company, the counterparties thereto are not in material breach or violation of, or default under, any Material Contract. Each Group Company has delivered to Sandbridge accurate and complete copies or, in the case of any oral Contracts, written summaries of, each Material Contract, in each case, as amended or otherwise modified and in effect.
Section 3.8. Absence of Changes. During the period beginning on the date of the Latest Balance Sheet and ending on the date of this Agreement, (a) no Company Material Adverse Effect has occurred and (b) except as expressly contemplated by this Agreement, any Ancillary Document or in connection with the consummation of the transactions contemplated hereby and thereby, (i) the Company has conducted its business in the ordinary course in all material respects and (ii) no Group Company has taken any action that would require the consent of Sandbridge if taken during the period from the date of this Agreement until the Closing pursuant to Section 5.1(b)(i), Section 5.1(b)(ii), Section 5.1(b)(v), Section 5.1(b)(vi), Section 5.1(b)(vii), Section 5.1(b)(viii), Section 5.1(b)(x), Section 5.1(b)(xi), Section 5.1(b)(xii), Section 5.1(b)(xiii) and Section 5.1(b)(xvi) or entered into a Contract to take, or cause to be taken, any of the actions covered in the foregoing Sections.
Section 3.9. Litigation. As of the date of this Agreement, there is (and since December 31, 2018 there has been) no Proceeding pending or, to the Company’s knowledge, threatened in writing against any Group Company that, has been or, if adversely decided or resolved, would reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole. Neither the Group Companies nor any of their respective properties or assets is subject to any material Order. As of the date of this Agreement, there are no material Proceedings by a Group Company pending or threatened in writing against any other Person.
Section 3.10. Compliance with Applicable Law. Each Group Company (a) conducts (and since December 31, 2018 has conducted) its business in accordance with all Laws and Orders applicable to such Group Company and is not in violation of any such Law or Order and (b) has not received any written communications from a Governmental Entity that alleges that such Group Company is not in compliance with any such Law or Order, except in each case of clauses (a) and (b), as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole.
Section 3.11. Employee Plans.
(a) Section 3.11(a) of the Company Disclosure Schedules sets forth a true and complete list of all material Employee Benefit Plan. With respect to each Employee Benefit Plan, the Group Companies have provided Sandbridge with true and complete copies of, to the extent applicable, (i) the documents governing such Employee Benefit Plan, together with all amendments thereto (or, with respect to any unwritten Employee Benefit Plan, a written summary of the material terms thereof), (ii) the most recent annual report on Form 5500; (iii) the most recent determination or opinion letter from the IRS; (iv) any summary plan descriptions, together with any summaries of material modifications; (v) any related trust agreements, insurance policies or other funding mechanisms; and (vi) any material correspondence to or from any Governmental Entity within the past three (3) years.
(b) No Employee Benefit Plan is, and no Group Company or any ERISA Affiliate of any Group Company has previously maintained, sponsored, participated in, contributed to or been required to contribute to, or currently maintains, sponsors, participates in, contributes to or is required to contribute to, or otherwise has any Liability with respect to or under: (i) a Multiemployer Plan; (ii) a “defined benefit plan” (as defined in Section 3(35) of ERISA, whether or not subject to ERISA) or a plan that is or was subject to Title IV of ERISA or Section 412 of the Code; (iii) a “multiple employer plan” within the meaning of Section of 413(c) of the Code or Section 4063 or Section 4064 of ERISA; or (iv) a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA. No Group Company has any obligation to provide, or Liability in respect of, any retiree or post-termination health or life insurance or other welfare-type benefits to any Person other than health continuation coverage pursuant to COBRA or similar Law and for which the recipient pays the full cost of coverage.
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(c) Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or is entitled to rely on an opinion or advisory letter from the Internal Revenue Service and, to the Company’s knowledge, no circumstances exists that could reasonably be expected to adversely affect the qualified status of any such Employee Benefit Plan or otherwise result in material Liability to any Group Company.
(d) As of the date of this Agreement, there are no pending or, to the Company’s knowledge, threatened actions, claims or Proceedings with respect to any Employee Benefit Plan (other than routine claims for benefits). With respect to each Employee Benefit Plan, all material contributions, distributions, reimbursements and premium payments that are due have been timely made.
(e) Each Employee Benefit Plan has been maintained, funded, operated and administered in accordance with its terms and with applicable Law, in each case, in all material respects, and none of Group Companies or, to the Company’s knowledge, any other Person, is in material breach of, or default under, any Employee Benefit Plan.
(f) Except as set forth in Section 3.11(f) of the Company Disclosure Schedules, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will (alone or in combination with any other event) (i) result in any payment or benefit becoming due to or result in the forgiveness of any indebtedness of any current or former director, manager, officer, employee, individual independent contractor or other service provider of any of the Group Companies, (ii) increase the amount of any compensation or benefits payable to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any of the Group Companies, (iii) result in the acceleration of the time of payment or vesting, result in any forgiveness of indebtedness, or trigger any payment or funding of any compensation or benefits to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any of the Group Companies or (iv) impose any restrictions or limitations on any of the Group Companies’ rights to amend or terminate any Employee Benefit Plan.
(g) No amount that has been or could be received (whether in cash or property or the vesting of property) by any “disqualified individual” of any of the Group Companies under any Employee Benefit Plan or otherwise as a result of the consummation of the transactions contemplated by this Agreement could, separately or in the aggregate, be nondeductible under Section 280G of the Code or subjected to an excise tax under Section 4999 of the Code.
(h) No current or former director, manager, officer, employee, individual independent contractor or other service provider of any of the Group Companies is entitled to any “gross-up” or similar payment from any Group Company in respect of any Taxes that may become payable under Section 4999 or 409A of the Code.
Section 3.12. Environmental Matters. Except as would not have a Company Material Adverse Effect:
(a) None of the Group Companies have received any written notice or communication from any Governmental Entity or any other Person regarding any actual, alleged, or potential violation in any respect of, or a failure to comply in any respect with, any Environmental Laws.
(b) There is (and during the past three (3) years there has been) no Proceeding pending or, to the Company’s knowledge, threatened in writing against any Group Company pursuant to Environmental Laws.
(c) To the Company’s knowledge, there has been no manufacture, release, treatment, storage, disposal, arrangement for disposal, transport or handling of, contamination by, or exposure of any Person to, any Hazardous Substances at any Leased Real Property or at any property of any material vendor of the Company.
(d) No Group Company has retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under any Environmental Law.
The Group Companies have made available to Sandbridge copies of all material environmental, health and safety reports and documents that are in any Group Company’s possession or control relating to the current or former operations, properties or facilities of the Group Companies.
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Section 3.13. Intellectual Property.
(a) Section 3.13(a) of the Company Disclosure Schedules sets forth a true and complete list of (i) all currently issued or pending Company Registered Intellectual Property, (ii) all material social media accounts and handles owned by any Group Company, and (iii) material unregistered Marks owned by any Group Company, in each case, as of the date of this Agreement. Section 3.13(a) of the Company Disclosure Schedules lists (as applicable), for each item of Company Registered Intellectual Property as of the date of this Agreement (A) the record owner of such item, (B) the jurisdictions in which such item has been issued or registered or filed, (C) the issuance, registration, or application date for such item, and (D) the issuance, registration, or application number for such item.
(b) As of the date of this Agreement, all necessary fees and filings with respect to any Company Registered Intellectual Property have been timely submitted to the relevant intellectual property office or Governmental Entity and Internet domain name registrars to maintain such Company Registered Intellectual Property in full force and effect except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the knowledge of the Company, as of the date of this Agreement, no issuance or registration obtained and no application filed by the Group Companies for any Intellectual Property Right has been canceled, abandoned, allowed to lapse, or not renewed, except where such Group Company has, in its reasonable business judgment, decided to cancel, abandon, allow to lapse, or not renew such issuance, registration, or application. As of the date of this Agreement there are no Proceedings pending, including litigations, interference, re-examination, inter parties review, reissue, opposition, nullity, or cancellation proceedings pending that relate to any of the Company Registered Intellectual Property, and, to the Company’s knowledge, no such Proceedings are threatened in writing by any Governmental Entity or any other Person, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) A Group Company exclusively owns all right, title and interest in and to all material Company Owned Intellectual Property free and clear of all Liens or obligations to others (other than Permitted Liens). For all Patents owned or purported to be owned by a Group Company, each inventor on the Patent has assigned all of its rights to a Group Company. No Group Company has granted any customer the right to use any material Company Product on anything other than a non-exclusive basis. Section 3.13(c) of the Company Disclosure Schedules sets forth a list of (i) all current Contracts for Company Licensed Intellectual Property, (ii) Contracts to which any Person has been granted any license or covenant not to sue under, or otherwise has received or acquired any right or interest in, any Company Owned Intellectual Property, and (iii) Contracts under which any Group Company is materially limited in its ability to use any material Company Owned Intellectual Property, in each case, other than (A) licenses to Off-the-Shelf Software, (B) licenses to Open Source Software, (C) non-exclusive licenses to Intellectual Property Rights that accompany the sale of Company Products in the ordinary course of business, (D) non-exclusive licenses granted to employees, consultants or contractors of any Group Company for the purpose of providing services to such Group Company, and (E) non-disclosure agreements. The Group Companies own or have sufficient rights to use all Intellectual Property Rights used in connection with the Company’s business, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company Registered Intellectual Property is subsisting and, to the Company’s knowledge, valid and enforceable. To the Company’s knowledge, all of the Group Companies’ rights in and to the unregistered Company Owned Intellectual Property are valid and enforceable.
(d) Each Group Company’s employees and independent contractors who independently or jointly contributed to or otherwise participated in the authorship, invention, creation, improvement, modification or development of any Company Owned Intellectual Property since December 31, 2018 (each such person, a “Creator”) have assigned to such Group Company all Intellectual Property Rights authored, invented, created, improved, modified or developed by such person in the course of such Creator’s employment or other engagement with such Group Company with respect to such Company Owned Intellectual Property, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(e) Each Group Company has taken reasonable steps to safeguard and maintain the secrecy of any trade secrets, know-how, and other confidential information owned by or in the possession of such Group Company. Without limiting the foregoing, no Group Company has disclosed any trade secrets, know-how, or
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confidential information to any employee, contractor, or any other Person unless such disclosure was under a written non-disclosure agreement containing limitations on use and disclosure, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the knowledge of the Company, there has been no violation or unauthorized access to or disclosure or use of any trade secrets, know-how or confidential information of a Group Company, or of any written obligations with respect to such, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(f) None of the Company Owned Intellectual Property is subject to any outstanding Order that restricts in any manner the use, sale, transfer, licensing, or exploitation thereof by the Group Companies or affects the validity, use, or enforceability of any such Company Owned Intellectual Property, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(g) To the knowledge of the Company, neither the conduct of the business of the Group Companies nor any of the Company Products that are currently complete and are offered, marketed, licensed, provided, sold, distributed, or otherwise exploited by the Group Companies infringes, constitutes, or results from an unauthorized use or misappropriation of or otherwise violates or has, since December 31, 2015, infringed, constituted or resulted from an unauthorized use or misappropriation of or otherwise violated any Intellectual Property Rights of any other Person, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(h) There is not currently, and since December 31, 2018, there has been no Proceeding pending nor has any Group Company received any written communications (i) alleging that a Group Company has infringed, misappropriated or otherwise violated any Intellectual Property Rights of any other Person, or (ii) challenging the validity, enforceability, use or exclusive ownership of any Company Owned Intellectual Property, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(i) To the Company’s knowledge, no Person is infringing, misappropriating, misusing, diluting or violating or has, since December 31, 2018, infringed, misappropriated, misused, diluted or violated any Company Owned Intellectual Property. Since December 31, 2018, no Group Company has made any written claim against any Person alleging any infringement, misappropriation or other violation of any Company Owned Intellectual Property, other than ordinary course website takedown notices with respect to third party website content that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(j) The Group Companies have in their possession the source code and related documentation reasonably necessary to sell, provide, license and support Company Products that are currently complete and ready to be commercialized. No Group Company has disclosed or delivered to any escrow agent or any other Person, other than employees or contractors who are subject to confidentiality obligations, any of the source code that embodies Company Owned Intellectual Property or Company Products, and no other Person has the right, contingent or otherwise, to obtain access to or use any such source code. To the knowledge of the Company, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) will, or would reasonably be expected to, result in the delivery, license, or disclosure of any source code that is owned by a Group Company or otherwise embodies Company Owned Intellectual Property or Company Products to any Person who is not, as of the date the event occurs or circumstance or condition comes into existence, a current employee or contractor of a Group Company subject to confidentiality obligations with respect thereto, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(k) No Group Company has used, modified, linked to, created derivative works from or incorporated into any Company Products that are currently complete and ready to be commercialized, or into other Software that embodies Company Owned Intellectual Property any Open Source Software, in each case in a manner that (i) requires any Company Owned Intellectual Property to be licensed, sold, disclosed, distributed, hosted or otherwise made available, including in source code form and/or for the purpose of making derivative works, for any reason, (ii) grants, or requires any Group Company to grant, the right to decompile, disassemble, reverse engineer or otherwise derive the source code or underlying structure of any
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Company Owned Intellectual Property, (iii) limits in any manner the ability to charge license fees or otherwise seek compensation in connection with marketing, licensing or distribution of any Company Owned Intellectual Property or (iv) otherwise imposes any limitation, restriction or condition on the right or ability of any Group Company to use, hold for use, license, host, distribute or otherwise dispose of any Company Owned Intellectual Property, other than compliance with notice and attribution requirements, in each case, except as is not and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole. The Group Companies are in material compliance with their Contracts relating to Open Source Software, including attribution and notice obligations.
(l) Each Group Company has a valid right to use any Company IT Systems owned by a third party that are used by such Group Company. The Company IT Systems are reasonably sufficient for the needs of the Group Companies, including as to capacity, scalability and ability to process current and anticipated peak volumes in a timely manner. To the knowledge of the Company, since December 31, 2018, there has been no failure, substandard performance of or security incident involving any Company IT System that has caused a material disruption to a Group Company, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Group Companies maintain commercially reasonable backup and data recovery, disaster recovery and business continuity plans and procedures, and facilities, and test such plans and procedures on a regular basis. To the knowledge of the Company, the Company IT Systems owned by the Company and Company Products that are currently complete and ready to be commercialized do not contain any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus,” malware or other routines or components intentionally designed to permit unauthorized access to, maliciously disable, encrypt or erase or otherwise harm Software, systems or data, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.14. Labor Matters.
(a) For the past three (3) years, the Group Companies have complied with, and are currently in compliance with, in all material respects, all applicable Laws and Orders with respect to employment and employment practices (including applicable Laws, rules and regulations regarding wage and hour requirements, meals and rest breaks, classification and compensation of independent contractors and employees, immigration status, discrimination in employment, sex-based discrimination, sexual harassment or sexual misconduct, employee health and safety, and collective bargaining). No executive or key employee of any Group Company has been the subject of any sexual harassment, sexual assault, sexual discrimination or other misconduct allegations during his or her tenure at the Company. To the Company’s knowledge, no current executive, key employee or group of employees has given notice of termination of employment or otherwise disclosed plans to terminate employment with the applicable Group Company within the twelve (12) month period following the date hereof.
(b) For the past three (3) years, (i) none of the Group Companies (A) has or has had any material Liability for any arrears of wages or other compensation for services (including salaries, wage premiums, commissions, fees or bonuses), or any penalty or other sums for failure to comply with any of the foregoing, and (B) has or has had any material Liability for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity with respect to unemployment compensation benefits, social security, social insurances or other benefits or obligations for any employees of any Group Company (other than routine payments to be made in the normal course of business and consistent with past practice); and (ii) the Group Companies have withheld all amounts required by applicable Law or by agreement to be withheld from wages, salaries and other payments to employees or independent contractors or other service providers of each Group Company, except as has not and would not reasonably be expected to result in, individually or in the aggregate, material Liability to the Group Companies.
(c) For the past three (3) years, there has been no “mass layoff” or “plant closing” as defined by WARN related to any Group Company, and the Group Companies have not incurred any material Liability under WARN nor will they incur any Liability under WARN as a result of the transactions contemplated by this Agreement.
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(d) No Group Company is a party to or bound by any collective bargaining agreement or other agreement with any labor organization, labor union, works council or other employee representative or any other Contract with a labor union, labor organization, works council, employee delegate, representative or other employee collective group nor, to the Company’s knowledge, is there any duty on the part of any Group Company to bargain with any labor union, labor organization, works council, employee delegate, representative or other employee collective group. Since December 31, 2018, there has been no actual or, to the Company’s knowledge, threatened unfair labor practice charges, material grievances, arbitrations, strikes, lockouts, work stoppages, slowdowns, picketing, hand billing or other material labor disputes against or affecting any Group Company. To the Company’s knowledge, since December 31, 2018, there have been no labor organizing activities with respect to any employees of any Group Company. No notice, consent or consultation obligations with respect to any employees of any Group Company, or any labor union, labor organization, works council, employee delegate, representative or other employee collective group representing such employees, will be a condition precedent to, or triggered by, the execution of this Agreement or the consummation of the transactions contemplated hereby.
(e) No employee layoff, facility closure or shutdown (whether voluntary or by Order), reduction-in-force, furlough, temporary layoff, material work schedule change or reduction in hours, or reduction in salary or wages, or other workforce changes affecting employees of the Group Companies has occurred within the past twelve (12) months or is currently contemplated, planned or announced, including as a result of COVID-19 or any Law, Order, directive, guidelines or recommendations by any Governmental Entity in connection with or in response to COVID-19. The Group Companies have not otherwise experienced any material employment-related liability with respect to or arising out of COVID-19 or any Law, Order, directive, guidelines or recommendations by any Governmental Entity in connection with or in response to COVID-19.
Section 3.15. Insurance. Section 3.15 of the Company Disclosure Schedules sets forth a list of all material policies of fire, liability, workers’ compensation, property, casualty and other forms of insurance owned or held by any Group Company as of the date of this Agreement. All such policies are in full force and effect, all premiums due and payable thereon as of the date of this Agreement have been paid in full as of the date of this Agreement, and true and complete copies of all such policies have been made available to Sandbridge. As of the date of this Agreement, no claim by any Group Company is pending under any such policies as to which coverage has been denied or disputed, or rights reserved to do so, by the underwriters thereof, except as is not and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole.
Section 3.16. Tax Matters.
(a) Each Group Company has prepared and filed all material Tax Returns required to have been filed by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Orders, and each Group Company has paid all material Taxes required to have been paid by it regardless of whether shown on a Tax Return.
(b) Each Group Company has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder or other third-party.
(c) No Group Company is currently the subject of a Tax Proceeding with respect to material Taxes. No Group Company has been informed in writing of the commencement or anticipated commencement of any Tax Proceeding that has not been resolved or completed in each case with respect to material Taxes.
(d) No Group Company has consented to extend or waive the time in which any material Tax may be assessed or collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the ordinary course of business.
(e) No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any Tax Authority with respect to a Group Company which agreement or ruling would be effective after the Closing Date.
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(f) No Group Company is or has been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or non-U.S. income Tax Law).
(g) There are no Liens for material Taxes on any assets of the Group Companies other than Permitted Liens described in clause (b) of the definition thereof.
(h) During the two (2)-year period ending on the date of this Agreement, no Group Company was a distributing corporation or a controlled corporation in a transaction purported or intended to be governed by Section 355 of the Code.
(i) No Group Company (i) has been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was a Group Company or any of its current Affiliates) or (ii) has any material Liability for the Taxes of any Person (other than a Group Company or any of its current Affiliates) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or non-United States Law), as a transferee or successor or by Contract (other than any Contract the principal purpose of which does not relate to Taxes).
(j) No written claims have ever been made by any Tax Authority in a jurisdiction where a Group Company does not file Tax Returns that such Group Company is or may be subject to taxation or to a Tax Return filing requirement by that jurisdiction, which claims have not been resolved or withdrawn.
(k) No Group Company is a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other than one that is included in a Contract entered into in the ordinary course of business that is not primarily related to Taxes) and no Group Company is a party to any joint venture, partnership or other arrangement that is treated as a partnership for U.S. federal income Tax purposes.
(l) Each Group Company is tax resident only in its country of incorporation.
(m) No Group Company has a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise has an office or fixed place of business in a country other than the country in which it is organized.
(n) No Group Company has taken or agreed to take any action not contemplated by this Agreement and/or any Ancillary Document that could reasonably be expected to prevent the Merger from qualifying for the Intended Tax Treatment. To the knowledge of the Company, no facts or circumstances exist, other than any facts or circumstances to the extent that such facts or circumstances exist or arise as a result of or related to any act or omission occurring after the signing date of any Sandbridge Party or any of their respective Affiliates not contemplated by this Agreement and/or any of the Ancillary Documents, that could reasonably be expected to prevent the Merger (or, if applicable, the Alternative Transaction Structure) from qualifying for the Intended Tax Treatment.
Section 3.17. Brokers. Except for fees (including the amounts due and payable assuming the Closing occurs) set forth on Section 3.17 of the Company Disclosure Schedules (which fees shall be the sole responsibility of the Company, except as otherwise provided in Section 8.6 (Fees and Expenses)), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Affiliates for which any of the Group Companies has any obligation.
Section 3.18. Real and Personal Property.
(a) Owned Real Property. No Group Company owns any real property.
(b) Leased Real Property. Section 3.18(b) of the Company Disclosure Schedules sets forth a true and complete list (including street addresses) of all real property leased by any of the Group Companies (the “Leased Real Property”) and all Real Property Leases pursuant to which any Group Company is a tenant or landlord as of the date of this Agreement. True and complete copies of all such Real Property Leases have been made available to Sandbridge. Each Real Property Lease is in full force and effect and is a valid, legal and binding obligation of the applicable Group Company party thereto, enforceable in accordance with its terms against such Group Company and, to the Company’s knowledge, each other party thereto (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting generally the
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enforcement of creditors’ rights and subject to general principles of equity). There is no material breach or default by any Group Company or, to the Company’s knowledge, any third party under any Real Property Lease, and, to the Company’s knowledge, no event has occurred which (with or without notice or lapse of time or both) would constitute a material breach or default or would permit termination of, or a material modification or acceleration thereof by any party to such Real Property Leases.
(c) Personal Property. Each Group Company has good, marketable and indefeasible title to, or a valid leasehold interest in or license or right to use, all of the material assets and properties of the Group Companies reflected in the Financial Statements or thereafter acquired by the Group Companies, except for assets disposed of in the ordinary course of business.
Section 3.19. Transactions with Affiliates. Section 3.19 of the Company Disclosure Schedules sets forth all Contracts between (a) any Group Company, on the one hand, and (b) any officer, director, employee, partner, member, manager, direct or indirect equityholder or Affiliate of any Group Company (other than, for the avoidance of doubt, any other Group Company) or any family member of the foregoing Persons, on the other hand (each Person identified in this clause (b), a “Company Related Party”), other than (i) Contracts with respect to a Company Related Party’s employment with (including benefit plans and other ordinary course compensation from) any of the Group Companies entered into in the ordinary course of business, (ii) Contracts with respect to a Company Stockholder’s or a holder of Company Options’ status as a holder of Equity Securities of the Company and (iii) Contracts entered into after the date of this Agreement that are either permitted pursuant to Section 5.1(b) or entered into in accordance with Section 5.1(b). Except as disclosed on Section 3.19 of the Company Disclosure Schedules, no Company Related Party (A) owns any interest in any material asset used in any Group Company’s business, or (B) owes any material amount to, or is owed any material amount by, any Group Company (other than ordinary course accrued compensation, employee benefits, employee or director expense reimbursement or other transactions entered into after the date of this Agreement that are either permitted pursuant to Section 5.1(b) or entered into in accordance with Section 5.1(b)). All Contracts, arrangements, understandings, interests and other matters that are required to be disclosed pursuant to this Section 3.19 are referred to herein as “Company Related Party Transactions”.
Section 3.20. Data Privacy and Security.
(a) Except as would not reasonably be expected to be material to the Group Companies, taken as a whole, each Group Company has, (i) for the past three (3) years, complied with applicable Privacy Obligations; and (ii) implemented and complied with an appropriate data protection compliance program and appropriate written policies and procedures relating to the Processing of Personal Data as and to the extent necessary in order to comply with all Privacy Obligations (“Privacy and Data Security Policies”). The Group Companies have adopted and published privacy notices and policies that describe their privacy practices to their websites, mobile applications or other electronic platforms and complied with those notices and policies, except where non-compliance would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Group Companies have implemented an information security program that, as of the date of this Agreement and as of the Closing Date, is comprised of commercially reasonable and appropriate physical, technical, organizational and administrative security measures and policies and that complies with all Privacy Obligations and that is reasonably designed to protect and maintain the privacy, security and integrity of any Personal Data, confidential information or trade secrets in their possession or under their control, or otherwise Processed by such Group Companies, including to protect such data from any Security Breaches.
(b) For the past three (3) years, no Group Company has received written notice of any pending Proceedings, nor, to the knowledge of the Company, has there been any Proceedings against any Group Company initiated by: (i) any Person; (ii) the United States Federal Trade Commission, any state attorney general or similar state official; or (iii) any other Governmental Entity, in each case, alleging that any Processing of Personal Data by or on behalf of a Group Company: (A) is in violation of any applicable Privacy Obligations; or (B) is in violation of any Privacy and Data Security Policies.
(c) For the past three (3) years no Group Company has (i) received any written notice, request, correspondence or other communication from any Supervisory Authority, or, to the knowledge of the Company, been subject to any investigation or enforcement action (including any fines or other sanctions),
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in each case relating to a breach or alleged breach of its obligations under any Privacy Obligations; or (ii) received any claim, complaint, correspondence or other communication from a data subject or any other Person claiming a right to compensation under any Privacy Obligations, or alleging any breach of any Privacy Obligations.
(d) To the knowledge of the Company, for the past three (3) years: (i) there has been no unauthorized access, use or disclosure of Personal Data in the possession or control of any Group Company or any Processor; (ii) there have been no unauthorized intrusions or breaches of security into any Group Company or Processor systems, or (iii) any other personal data breaches or Security Breaches suffered by any Group Company or any Processor leading to the accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, any Personal Data and no claims have been made by any third party alleging the same, except with respect to (i), (ii), and (iii) as would not reasonably be expected to be material to the Group Companies, taken as a whole. To the knowledge of the Company, no Group Company has been notified in writing, or been required by applicable Law, Governmental Entity, or Contract to notify in writing, any Person of any Security Breach.
(e) For the past three (3) years, each Group Company has complied with all applicable requirements under all applicable Privacy Obligations relating to the disclosure or transfer of Personal Data outside the European Economic Area, except where noncompliance would not reasonably be expected to be material to the Group Companies, taken as a whole.
(f) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby complies with the Group Companies’ applicable privacy notices and policies and with all other Privacy Obligations, except where any such non-compliance would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.21. Compliance with International Trade & Anti-Corruption Laws.
(a) Neither the Group Companies nor, to the Company’s knowledge, any of their Representatives, or any other Persons acting for or on behalf of any of the foregoing, is or has been, since December 31, 2018, (i) a Person named on any Sanctions and Export Control Laws-related list of designated Persons maintained by a Governmental Entity; (ii) located, organized or resident in a country or territory which is itself the subject of or target of any Sanctions and Export Control Laws; (iii) an entity owned, directly or indirectly, by one or more Persons described in clause (i) or (ii); or (iv) otherwise engaging in dealings with or for the benefit of any Person described in clauses (i) through (iii) or any country or territory which is or has, since the incorporation of the Company, been the subject of or target of any Sanctions and Export Control Laws (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).
(b) Neither the Group Companies nor, to the Company’s knowledge, any of their Representatives, or any other Persons acting for or on behalf of any of the foregoing has (i) made, offered, promised, paid or received any unlawful bribes, kickbacks or other similar payments to or from any Person, (ii) made or paid any contributions, directly or indirectly, to a domestic or foreign political party or candidate or (iii) otherwise made, offered, received, authorized, promised or paid any improper payment under any Anti-Corruption Laws.
Section 3.22. Information Supplied. None of the information supplied or to be supplied by or on behalf of the Group Companies expressly for inclusion or incorporation by reference prior to the Closing in the Registration Statement / Proxy Statement will, when the Registration Statement / Proxy Statement is declared effective or mailed to the Pre-Closing Sandbridge Holders or at the time of the Sandbridge Stockholders Meeting, and in the case of any amendment thereto, at the time of such amendment, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
Section 3.23. Regulatory Compliance.
(a) Except as set forth on Section 3.23(a) of the Company Disclosure Schedules, since January 1, 2018, all products developed, tested, investigated, produced, manufactured, labeled, stored, promoted, marketed, imported, exported, distributed, or sold by or on behalf of the Group Companies have been, and are being, developed, tested, investigated, produced, manufactured, labeled, distributed, stored, promoted, marketed, imported, exported, distributed and sold in compliance in all material respects with applicable
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FDA Laws, including, as applicable, those relating to non-clinical research, clinical research, establishment registration, device listing, premarket notification, Quality System Regulation, labeling, advertising, record-keeping, device importation and exportation, adverse event and malfunction reporting and reporting of corrections and removals.
(b) Except as set forth on Section 3.23(b) of the Company Disclosure Schedules, the Company holds all material Permits, including 510(k) clearances or premarket approvals required by applicable FDA Laws. The Company is, and since January 1, 2018 has been, in compliance in all material respects with all such Permits. Except as set forth on Section 3.23(b) of the Company Disclosure Schedules, to the Company’s knowledge, no Governmental Entity is considering limiting, suspending or revoking any product’s Permits or changing the marketing classification or labeling of any of the Company Products in any material respect.
(c) There are no Proceedings pending or, to the Company’s knowledge, threatened in writing by or on behalf of the FDA or any other Governmental Entity that has jurisdiction over the operations of any Group Company alleging material noncompliance with applicable Laws. Since January 1, 2018, the Group Companies have not received any written notice or communication from any Governmental Entity or third party alleging or asserting material noncompliance with any applicable FDA Law, any warning or untitled letter, notice of violation, notice of inspectional observations, notice of import or export prohibition, import detention or refusal, unresolved Form FDA-483, or similar written letter or notice alleging noncompliance.
(d) Except as set forth on Section 3.23(d) of the Company Disclosure Schedules, since January 1, 2018, no product distributed or sold by or on behalf of the Group Companies has been seized, detained, withdrawn, voluntarily or involuntarily recalled or subject to a suspension of manufacturing, and, to the Company’s knowledge, there are no facts or circumstances reasonably likely to cause (i) a withdrawal, recall, field notification, field correction, safety alert, termination, seizure, denial, detention, or suspension of the manufacturing, marketing or distribution, of any such product, (ii) a change in the labeling of any such product or (iii) a termination, seizure, or suspension of the marketing or distribution (including for commercial, investigational or any other use) of any such product, except, in each case, that would not reasonably be expected to be material to the Group Companies taken as a whole.
(e) Any studies, tests and preclinical and clinical trials conducted by or on behalf of the Group Companies were and, if ongoing, are being conducted in accordance with applicable Laws, including, as applicable, FDA Laws. The Group Companies have not received any written notices or correspondence from the FDA, other Governmental Entity, or any institutional review board or other ethics committee exercising comparable authority threatening to initiate or require the termination, suspension or material modification of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Group Companies.
(f) To the knowledge of the Company, all filings, notifications, reports, and submissions to the FDA and any similar Governmental Entity made by or on behalf of the Group Companies were true, accurate and complete in all material respects as of the date made, and, to the extent required to be updated, have been updated to be true, accurate and complete in all material respects as of the date of such update.
(g) None of the Group Companies, any of its officers, employees, nor to the knowledge of the Company, any of its agents or distributors have (i) made any materially false statement on, or material omission from, any notifications, applications, approvals, reports and other submissions to any Governmental Entity or in any material legal proceeding; or (ii) committed an act, made a statement, or failed to make a statement that would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for any other Governmental Entity to invoke any similar policy.
Section 3.24. Product Warranties; Product Liability.
(a) There are currently no claims or other Proceedings that have been submitted or asserted and are ongoing relating to breach of any guarantee, warranty or indemnity relating to any products designed, sold, manufactured, distributed or delivered by, or services provided by, the Group Companies, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the Company’s knowledge there is no design or manufacturing defect, nor any failure to warn, nor any
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non-conformity with applicable product warranties, with respect to any products now or previously designed, tested, sold, manufactured, distributed or delivered by, or services now or previously provided by, the Group Companies, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) There are no claims or other Proceedings pending or threatened in writing alleging that the Group Companies have any Liability (whether in negligence, breach of warranty, strict liability, failure to warn, or otherwise) arising out of or relating to any claimed injury or damage to individuals or property as a result of the claimed ownership, possession or use of any products allegedly designed, tested, sold, manufactured, distributed or delivered by the Group Companies, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.25. Investigation; No Other Representations.
(a) The Company, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that (i) it has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets and liabilities of the Sandbridge Parties and (ii) it has been furnished with or given access to such documents and information about the Sandbridge Parties and their respective businesses as it and its Representatives have deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby.
(b) In entering into this Agreement and the Ancillary Documents to which it is or will be a party, the Company has relied solely on its own investigation and analysis and the representations and warranties expressly set forth in Article 4 and in the Ancillary Documents to which it is or will be a party and no other representations or warranties of any Sandbridge Party, any Sandbridge Non-Party Affiliate or any other Person, either express or implied, and the Company, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that, except for the representations and warranties expressly set forth in Article 4 and in the Ancillary Documents to which it is or will be a party, none of the Sandbridge Parties, any Sandbridge Non-Party Affiliate or any other Person makes or has made any representation or warranty, either express or implied, in connection with or related to this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby.
Section 3.26. EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO ANY SANDBRIDGE PARTY OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA), EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE 3 OR THE ANCILLARY DOCUMENTS, NONE OF THE COMPANY, ANY COMPANY NON-PARTY AFFILIATE OR ANY OTHER PERSON MAKES, AND THE COMPANY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING AS TO THE MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF THE GROUP COMPANIES THAT HAVE BEEN MADE AVAILABLE TO ANY SANDBRIDGE PARTY OR ANY OF THEIR REPRESENTATIVES OR IN ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF THE GROUP COMPANIES BY THE MANAGEMENT OF THE COMPANY OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY DOCUMENTS, AND NO STATEMENT CONTAINED IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED TO BE RELIED UPON BY ANY SANDBRIDGE PARTY OR ANY SANDBRIDGE NON-PARTY AFFILIATE IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE 3 OR THE ANCILLARY DOCUMENTS, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF THE COMPANY, ANY COMPANY NON-PARTY AFFILIATE OR ANY OTHER PERSON, AND ARE NOT AND SHALL NOT BE
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DEEMED TO BE RELIED UPON BY ANY SANDBRIDGE PARTY OR ANY SANDBRIDGE NON-PARTY AFFILIATE IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES RELATING TO THE SANDBRIDGE PARTIES
(a) Subject to the last sentence of Section 8.8 (Annexes, Exhibits and Schedules), except as set forth on the Sandbridge Disclosure Schedules, or (b) except as set forth in any Sandbridge SEC Reports (excluding (i) any disclosures in any “risk factors” section that do not constitute statements of fact, disclosures in any forward-looking statements disclaimers and other disclosures that are generally cautionary, predictive or forward-looking in nature and (ii) any exhibits or other documents appended thereto) (it being acknowledged that nothing disclosed in such Sandbridge SEC Reports will be deemed to modify or qualify the representations and warranties set forth in Section 4.1 (Organization and Qualification), Section 4.2 (Authority), Section 4.6 (Capitalization of the Sandbridge Parties) and Section 4.8 (Trust Account)), each Sandbridge Party hereby represents and warrants to the Company as follows:
Section 4.1. Organization and Qualification. Each Sandbridge Party is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware and has the requisite corporate power and authority to own, lease or operate all of its properties and assets and to conduct its business as it now being conducted. The copies of each Sandbridge Party’s Governing Documents, as amended to the date of this Agreement, previously filed with the SEC or delivered by Sandbridge to the Company, are true, correct and complete. Merger Sub has no assets or operations other than those required to effect the transactions contemplated hereby. All of the equity interests of Merger Sub are held directly by Sandbridge. Each Sandbridge Party is duly licensed or qualified and in good standing as a foreign corporation or company in all jurisdictions in which its ownership of its property or the character of its activities is such as to require it to be so licensed or qualified, except where failure to be so licensed or qualified would not have a Sandbridge Material Adverse Effect.
Section 4.2. Authority. Each Sandbridge Party has the requisite corporate power and authority to execute and deliver this Agreement and each of the Ancillary Documents to which it is or will be a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. Subject to the receipt of the Sandbridge Stockholder Approval and the approvals and consents to be obtained by Merger Sub pursuant to Section 5.10 (Merger Sub Shareholder Approval), the execution and delivery of this Agreement, the Ancillary Documents to which a Sandbridge Party is or will be a party and the consummation of the transactions contemplated hereby and thereby have been (or, in the case of any Ancillary Document entered into after the date of this Agreement, will be upon execution thereof) duly authorized by all necessary corporate action on the part of such Sandbridge Party and this Agreement and the transactions contemplated hereby have been determined by the Sandbridge Board as advisable to Sandbridge and the Sandbridge stockholders and recommended for approval by the Sandbridge stockholders. The foregoing votes and the consent of the PIMCO Private Funds, which has been obtained, are the only votes of any of Sandbridge’s stockholders necessary in connection with entry into this Agreement by Sandbridge and Merger Sub and the consummation of the transactions contemplated hereby, including the Closing. No other company proceeding on the part of Sandbridge or Merger Sub is necessary to authorize this Agreement and the documents contemplated hereby (other than the Sandbridge Stockholder Approval). This Agreement has been and each Ancillary Document to which a Sandbridge Party is or will be a party will be, upon execution thereof, duly and validly executed and delivered by such Sandbridge Party and constitutes or will constitute, upon execution thereof, as applicable, a valid, legal and binding agreement of such Sandbridge Party (assuming this Agreement has been and the Ancillary Documents to which such Sandbridge Party is or will be a party are or will be, upon execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party hereto or thereto, as applicable), enforceable against such Sandbridge Party in accordance with their terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity).
Section 4.3. Consents and Requisite Governmental Approvals; No Violations.
(a) No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Entity is required on the part of a Sandbridge Party with respect to such Sandbridge Party’s execution, delivery or performance of its obligations under this Agreement or the Ancillary Documents to
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which it is or will be party or the consummation of the transactions contemplated by this Agreement or by the Ancillary Documents, except for (i) compliance with and filings under the HSR Act, (ii) the filing with the SEC of (A) the Registration Statement / Proxy Statement and the declaration of effectiveness thereof by the SEC and (B) such reports under Section 13(a) or 15(d) of the Exchange Act as may be required in connection with this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby, (iii) such filings with and approvals of the NYSE to permit the Sandbridge Common Stock to be issued to non-accredited investors in connection with the transactions contemplated by this Agreement and the other Ancillary Documents to be listed on the NYSE, (iv) filing of the Certificate of Merger, (v) the approvals and consents to be obtained by Merger Sub pursuant to Section 5.10 (Merger Sub Shareholder Approval), (vi) the Sandbridge Stockholder Approval and (vii) any other consents, approvals, authorizations, designations, declarations, waivers or filings, the absence of which would not have a Sandbridge Material Adverse Effect.
(b) Neither the execution, delivery or performance by a Sandbridge Party of this Agreement nor the Ancillary Documents to which a Sandbridge Party is or will be a party nor the consummation by a Sandbridge Party of the transactions contemplated hereby or thereby will, directly or indirectly (with or without due notice or lapse of time or both) (i) result in any breach of any provision of the Governing Documents of a Sandbridge Party, (ii) result in a violation or breach of, or constitute a default or give rise to any right of termination, cancellation, amendment, modification, suspension, revocation or acceleration under, any of the terms, conditions or provisions of any Contract to which a Sandbridge Party is a party, (iii) violate, or constitute a breach under, any Order or applicable Law to which any such Sandbridge Party or any of its properties or assets are bound or (iv) result in the creation of any Lien upon any of the assets or properties (other than any Permitted Liens) of a Sandbridge Party, except in the case of clauses (ii) through (iv) above, as would not have a Sandbridge Material Adverse Effect.
Section 4.4. Brokers. Except for fees (including the amounts due and payable assuming the Closing occurs) set forth on Section 4.4 of the Sandbridge Disclosure Schedules (which fees shall be the sole responsibility of the Sandbridge, except as otherwise provided in Section 8.6 (Fees and Expenses)), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Sandbridge for which Sandbridge has any obligation.
Section 4.5. Information Supplied. None of the information supplied or to be supplied by or on behalf of either Sandbridge Party expressly for inclusion or incorporation by reference prior to the Closing in the Registration Statement / Proxy Statement will, when the Registration Statement / Proxy Statement is declared effective or is mailed to the Pre-Closing Sandbridge Holders or at the time of the Sandbridge Stockholders Meeting, and in the case of any amendment thereto, at the time of such amendment, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
Section 4.6. Capitalization of the Sandbridge Parties.
(a) Section 4.6(a) of the Sandbridge Disclosure Schedules, inclusive of the notes thereto, sets forth a true and complete statement of the number and class or series (as applicable) of the issued and outstanding Sandbridge Common Stock and the Sandbridge Warrants as of the date hereof and as of the Closing Date. All outstanding Equity Securities of Sandbridge (except to the extent such concepts are not applicable under the applicable Law of the State of Delaware or other applicable Law) (i) have been duly authorized and validly issued and are fully paid and non-assessable and (ii) have been offered, sold and issued in compliance with applicable Law, including Securities Laws. Such Equity Securities (i) were not issued in violation of the Governing Documents of Sandbridge and (ii) are not subject to any preemptive rights, call option, right of first refusal, subscription rights, transfer restrictions or similar rights of any Person (other than transfer restrictions under applicable Securities Laws or under the Governing Documents of Sandbridge) and were not issued in violation of any preemptive rights, call option, right of first refusal, subscription rights, transfer restrictions or similar rights of any Person. Except for the Sandbridge Common Stock and Sandbridge Warrants set forth on Section 4.6(a) of the Sandbridge Disclosure Schedules, immediately prior to Closing, there shall be no other outstanding Equity Securities of Sandbridge.
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(b) Except as expressly contemplated by this Agreement, the Sandbridge SEC Reports, the Ancillary Documents, the PIPE Investment or the transactions contemplated hereby or thereby or as otherwise mutually agreed to by the Company and Sandbridge, there are no outstanding (A) equity appreciation, phantom equity or profit participation rights or (B) options, restricted stock, phantom stock, warrants, purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other Contracts that could require Sandbridge, and, except as expressly contemplated by this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby or as otherwise mutually agreed in writing by the Company and Sandbridge, there is no obligation of Sandbridge, to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem any Equity Securities or securities convertible into or exchangeable for Equity Securities of Sandbridge.
(c) The Equity Securities of Merger Sub outstanding as of the date of this Agreement (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law, and (iii) were not issued in breach or violation of any preemptive rights or Contract to which Merger Sub is a party or bound. All of the outstanding Equity Securities of Merger Sub are owned directly by Sandbridge free and clear of all Liens (other than transfer restrictions under applicable Securities Law). As of the date of this Agreement, Sandbridge has no Subsidiaries other than Merger Sub and does not own, directly or indirectly, any Equity Securities in any Person other than Merger Sub and has never owned any equity interest in another Person other than Merger Sub.
Section 4.7. SEC Filings. Sandbridge has timely filed or furnished all statements, forms, reports and documents required to be filed or furnished by it prior to the date of this Agreement with the SEC pursuant to Federal Securities Laws since its initial public offering (collectively, and together with any exhibits and schedules thereto and other information incorporated therein, and as they have been supplemented, modified or amended since the time of filing, the “Sandbridge SEC Reports”), and, as of the Closing, will have filed or furnished all other statements, forms, reports and other documents required to be filed or furnished by it subsequent to the date of this Agreement with the SEC pursuant to Federal Securities Laws through the Closing (collectively, and together with any exhibits and schedules thereto and other information incorporated therein, and as they have been supplemented, modified or amended since the time of filing, but excluding the Registration Statement / Proxy Statement, the “Additional Sandbridge SEC Reports”). Each of the Sandbridge SEC Reports, as of their respective dates of filing, and as of the date of any amendment or filing that superseded the initial filing, complied and each of the Additional Sandbridge SEC Reports, as of their respective dates of filing, and as of the date of any amendment or filing that superseded the initial filing, will comply, in all material respects with the applicable requirements of the Federal Securities Laws (including, as applicable, the Sarbanes-Oxley Act and any rules and regulations promulgated thereunder) applicable to the Sandbridge SEC Reports or the Additional Sandbridge SEC Reports (for purposes of the Additional Sandbridge SEC Reports, assuming that the representation and warranty set forth in Section 3.22 (Information Supplied) is true and correct in all respects with respect to all information supplied by or on behalf of Group Companies expressly for inclusion or incorporation by reference therein). As of their respective dates of filing, the Sandbridge SEC Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made or will be made, as applicable, not misleading (for purposes of the Additional Sandbridge SEC Reports, assuming that the representation and warranty set forth in Section 3.22 (Information Supplied) is true and correct in all respects with respect to all information supplied by or on behalf of Group Companies expressly for inclusion or incorporation by reference therein). As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Sandbridge SEC Reports. To the knowledge of Sandbridge, none of the Sandbridge SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
Section 4.8. Trust Account. As of the date of this Agreement, Sandbridge has an amount in cash in the Trust Account equal to at least $230,000,000. The funds held in the Trust Account are (a) invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations and (b) held in trust pursuant to that certain Investment Management Trust Agreement, dated as of September 14, 2020 (the Trust Agreement”), between Sandbridge and Continental, as trustee (the “Trustee”). There are no separate agreements, side letters or other agreements or understandings (whether written or unwritten, express or implied)
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that would cause the description of the Trust Agreement in the Sandbridge SEC Reports to be inaccurate in any material respect or, to Sandbridge’s knowledge, that would entitle any Person to any portion of the funds in the Trust Account (other than (i) in respect of deferred underwriting commissions or Taxes, (ii) the Pre-Closing Sandbridge Holders who shall have elected to redeem their Sandbridge Class A Common Stock pursuant to the Governing Documents of Sandbridge or (iii) if Sandbridge fails to complete a business combination within the allotted time period set forth in the Governing Documents of Sandbridge and liquidates the Trust Account, subject to the terms of the Trust Agreement, Sandbridge (in limited amounts to permit Sandbridge to pay the expenses of the Trust Account’s liquidation, dissolution and winding up of Sandbridge) and then the Pre-Closing Sandbridge Holders). Prior to the Closing, none of the funds held in the Trust Account are permitted to be released, except in the circumstances described in the Governing Documents of Sandbridge and the Trust Agreement. Sandbridge has performed all material obligations required to be performed by it to date under, and is not in material default or delinquent in performance or any other respect (claimed or actual) in connection with the Trust Agreement, and, to the knowledge of Sandbridge, no event has occurred which, with due notice or lapse of time or both, would constitute such a material default thereunder. As of the date of this Agreement, there are no claims or proceedings pending or, to the knowledge of Sandbridge, threatened in writing with respect to the Trust Account. Sandbridge has not released any money from the Trust Account (other than interest income earned on the funds held in the Trust Account as permitted by the Trust Agreement). Upon the consummation of the transactions contemplated hereby, including the distribution of assets from the Trust Account (A) in respect of deferred underwriting commissions or Taxes or (B) to the Pre-Closing Sandbridge Holders who have elected to redeem their Sandbridge Class A Common Stock pursuant to the Governing Documents of Sandbridge, each in accordance with the terms of and as set forth in the Trust Agreement, Sandbridge shall have no further obligation under either the Trust Agreement or the Governing Documents of Sandbridge to liquidate or distribute any assets held in the Trust Account, and the Trust Agreement shall terminate in accordance with its terms. As of the date hereof, assuming the accuracy of the representations and warranties of the Company contained herein and the compliance by the Company with its obligations hereunder, neither Sandbridge nor Merger Sub has any reason to believe that any of the conditions to the release and use of funds held in the Trust Account will not be satisfied if and when the Closing occurs pursuant to the terms of this Agreement.
Section 4.9. Transactions with Affiliates. Section 4.9 of the Sandbridge Disclosure Schedules sets forth all Contracts between (a) Sandbridge, on the one hand, and (b) any officer, director, employee, partner, member, manager, direct or indirect equityholder (including the Sponsor) or Affiliate of either Sandbridge or the Sponsor, on the other hand (each Person identified in this clause (b), a “Sandbridge Related Party”), other than (i) Contracts with respect to a Sandbridge Related Party’s employment with, or the provision of services to, Sandbridge entered into in the ordinary course of business (including employment agreements, benefit plans, indemnification arrangements and other ordinary course compensation), (ii) Contracts with respect to a Pre-Closing Sandbridge Holder’s or a holder of Sandbridge Warrants’ status as a holder of Sandbridge Common Stock or Sandbridge Warrants, as applicable, and (iii) Contracts entered into after the date of this Agreement that are either permitted pursuant to Section 5.12 (Conduct of Business of Sandbridge) or entered into in accordance with Section 5.12 (Conduct of Business of Sandbridge). No Sandbridge Related Party (A) owns any interest in any material asset used in the business of Sandbridge, (B) possesses, directly or indirectly, any material financial interest in, or is a director or executive officer of, any Person which is a material client, supplier, customer, lessor or lessee of Sandbridge or (C) owes any material amount to, or is owed material any amount by, Sandbridge. All Contracts, arrangements, understandings, interests and other matters that are required to be disclosed pursuant to this Section 4.9 are referred to herein as “Sandbridge Related Party Transactions”.
Section 4.10. Litigation. As of the date of this Agreement, there is (and since its organization, incorporation or formation, as applicable, there has been) no Proceeding pending or, to Sandbridge’s knowledge, threatened against or involving any Sandbridge Party, their respective properties or assets, or, to the knowledge of Sandbridge, any of their respective directors, managers, officers or employees (in their capacity as such) that, if adversely decided or resolved, would be material to the Sandbridge Parties, taken as a whole. None of the Sandbridge Parties nor any of their respective properties or assets is subject to any material Order. As of the date of this Agreement, there are no material Proceedings by any Sandbridge Party pending or threatened against any other Person.
Section 4.11. Compliance with Applicable Law. Each Sandbridge Party is (and since its organization, incorporation or formation, as applicable, has been) in compliance with all applicable Laws, except as would not
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have a Sandbridge Material Adverse Effect. Since the date of its respective incorporation, neither Sandbridge Party has received any written notice of or been charged with the violation of any Laws, except where such violation has not been, individually or in the aggregate, material to Sandbridge.
Section 4.12. Business Activities.
(a) Since its incorporation, Sandbridge has not conducted any business activities other than activities (i) in connection with or incident or related to its incorporation or continuing corporate (or similar) existence, (ii) directed toward the accomplishment of a business combination, including those incident or related to or incurred in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the transactions contemplated hereby or thereby or (iii) those that are administrative, ministerial or otherwise immaterial in nature. Except as set forth in Sandbridge’s Governing Documents, there is no Contract binding upon any Sandbridge Party or to which any Sandbridge Party is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of it or its Subsidiaries, any acquisition of property by it or its Subsidiaries or the conduct of business by it or its Subsidiaries (including, in each case, following the Closing).
(b) Merger Sub was organized solely for the purpose of entering into this Agreement, the Ancillary Documents and consummating the transactions contemplated hereby and thereby and has not engaged in any activities or business, other than those incident or related to or incurred in connection with its organization, incorporation or formation, as applicable, or continuing corporate (or similar) existence or the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the transactions contemplated hereby or thereby.
(c) As of the date hereof and except for this Agreement, the Ancillary Documents and the other documents and transactions contemplated hereby and thereby (including with respect to expenses and fees incurred in connection therewith), neither Sandbridge Party are party to any Contract with any other Person that would require payments by Sandbridge or any of its Subsidiaries after the date hereof in excess of $1,000,000 in the aggregate with respect to any individual Contract.
Section 4.13. Investment Company Act; JOBS Act. Sandbridge is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act. Sandbridge constitutes an “emerging growth company” within the meaning of the JOBS Act.
Section 4.14. Internal Controls; Listing; Financial Statements.
(a) Except as is not required in reliance on exemptions from various reporting requirements by virtue of Sandbridge’s status as an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, or “smaller reporting company” within the meaning of the Exchange Act, since its initial public offering, (i) Sandbridge has established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of Sandbridge’s financial reporting and the preparation of Sandbridge’s financial statements for external purposes in accordance with GAAP and (ii) Sandbridge has established and maintained disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) designed to ensure that material information relating to Sandbridge is made known to Sandbridge’s principal executive officer and principal financial officer by others within Sandbridge.
(b) Sandbridge has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(c) Since its initial public offering, Sandbridge has complied in all material respects with all applicable listing and corporate governance rules and regulations of the NYSE. The classes of securities representing issued and outstanding Sandbridge Class A Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE. There is no Proceeding pending or, to the knowledge of Sandbridge, threatened against Sandbridge by the NYSE or the SEC with respect to any intention by such entity to deregister Sandbridge Class A Common Stock or prohibit or terminate the listing of Sandbridge Class A Common Stock on the NYSE. Sandbridge has not taken any action that is designed to terminate the registration of Sandbridge Class A Common Stock under the Exchange Act.
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(d) The Sandbridge SEC Reports contain true and complete copies of the applicable Sandbridge Financial Statements. The Sandbridge Financial Statements (i) fairly present in all material respects the financial position of Sandbridge as at the respective dates thereof, and the results of its operations, stockholders’ equity and cash flows for the respective periods then ended (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments (none of which is material) and the absence of footnotes), (ii) were prepared in conformity with GAAP applied on a consistent basis during the periods involved (except, in the case of any audited financial statements, as may be indicated in the notes thereto and subject, in the case of any unaudited financial statements, to normal year-end audit adjustments (none of which is material) and the absence of footnotes), (iii) in the case of the audited Sandbridge Financial Statements, were audited in accordance with the standards of the PCAOB and (iv) comply in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act in effect as of the respective dates thereof (including Regulation S-X or Regulation S-K, as applicable).
(e) Sandbridge has established and maintains systems of internal accounting controls that are designed to provide, in all material respects, reasonable assurance that (i) all transactions are executed in accordance with management’s authorization and (ii) all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with GAAP. Sandbridge maintains and, for all periods covered by the Sandbridge Financial Statements, has maintained books and records of Sandbridge in the ordinary course of business that are accurate and complete in all material respects and reflect the revenues, expenses, assets and liabilities of Sandbridge in all material respects.
(f) Since its incorporation, Sandbridge has not received any written complaint, allegation, assertion or claim that there is (i) a “significant deficiency” in the internal controls over financial reporting of Sandbridge to Sandbridge’s knowledge, (ii) a “material weakness” in the internal controls over financial reporting of Sandbridge to Sandbridge’s knowledge or (iii) fraud, whether or not material, that involves management or other employees of Sandbridge who have a significant role in the internal controls over financial reporting of Sandbridge.
(g) Except as disclosed in filings with the SEC, neither Sandbridge nor Merger Sub have any material Indebtedness.
(h) There are no outstanding loans or other extensions of credit made by Sandbridge to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of Sandbridge.
(i) The books and records of Sandbridge have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements.
Section 4.15. Absence of Changes. Since November 13, 2020, there has not been any event or occurrence that has had, or would not reasonably be expected to have, a Sandbridge Material Adverse Effect.
Section 4.16. No Undisclosed Liabilities. Except for the Liabilities (a) set forth in Section 4.16 of the Sandbridge Disclosure Schedules, (b) incurred in connection with the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the transactions contemplated hereby or thereby, (c) that are incurred in connection with or incident or related to a Sandbridge Party’s organization, incorporation or formation, as applicable, or continuing corporate (or similar) existence, in each case, which are immaterial in nature, (d) that are incurred in connection with activities that are administrative or ministerial, in each case, which are immaterial in nature, (e) that are either permitted pursuant to Section 5.12 (Conduct of Business of Sandbridge) or incurred in accordance with Section 5.12 (Conduct of Business of Sandbridge) (for the avoidance of doubt, in each case, with the written consent of the Company) or (f) set forth or disclosed in the Sandbridge Financial Statements included in the Sandbridge SEC Reports, none of the Sandbridge Parties has any Liabilities of the type required to be set forth on a balance sheet in accordance with GAAP.
Section 4.17. Tax Matters.
(a) Sandbridge has prepared and filed all material Tax Returns required to have been filed by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Orders, and Sandbridge has paid all material Taxes required to have been paid or deposited by it regardless of whether shown on a Tax Return.
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(b) Sandbridge has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder or other third-party.
(c) Sandbridge is not currently the subject of a Tax Proceeding with respect to material taxes. Sandbridge has not been informed in writing of the commencement or anticipated commencement of any Tax Proceeding that has not been resolved or completed, in each case with respect to material Taxes.
(d) Sandbridge has not consented to extend or waive the time in which any material Tax may be assessed or collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the ordinary course of business, in each case with respect to material Taxes.
(e) No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any Tax Authority with respect to Sandbridge which agreement or ruling would be effective after the Closing Date.
(f) Sandbridge is not and has not been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or non-U.S. income Tax Law).
(g) There are no Liens for material Taxes on any asset of Sandbridge other than Permitted Liens described in clause (b) of the definition thereof.
(h) Sandbridge is not a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other than one that is included in a Contract (i) entered into in the ordinary course of business or (ii) that is not primarily related to Taxes).
(i) Sandbridge is tax resident only in its country of incorporation.
(j) Sandbridge Parties has not taken or agreed to take any action not contemplated by this Agreement and/or any Ancillary Documents that could reasonably be expected to prevent the Merger from qualifying for the Intended Tax Treatment. To the knowledge of Sandbridge, no facts or circumstances exist, other than any facts or circumstances to the extent that such facts or circumstances exist or arise as a result of or related to any act or omission occurring after the signing date by a Group Company or a Company Stockholder or any of their respective Affiliates in each case not contemplated by this Agreement and/or any of the Ancillary Documents, that could reasonably be expected to prevent the Merger (or, if applicable, the Alternative Transaction Structure) from qualifying for the Intended Tax Treatment.
Section 4.18. No General Solicitation. In issuing the Sandbridge Class A Common Stock pursuant to this Agreement, neither Sandbridge nor, to Sandbridge’s knowledge, anyone acting on its behalf has offered to sell Sandbridge Class A Common Stock by any form of general solicitation or advertising.
Section 4.19. Compliance with International Trade & Anti-Corruption Laws.
(a) Since Sandbridge’s incorporation, neither Sandbridge nor, to Sandbridge’s knowledge, any of their Representatives, or any other Persons acting for or on behalf of any of the foregoing, is or has been, (i) a Person named on any Sanctions and Export Control Laws-related list of designated Persons maintained by a Governmental Entity; (ii) located, organized or resident in a country or territory which is itself the subject of or target of any Sanctions and Export Control Laws; (iii) an entity owned, directly or indirectly, by one or more Persons described in clause (i) or (ii); or (iv) otherwise engaging in dealings with or for the benefit of any Person described in clauses (i) through (iii) or any country or territory which is or has, since Sandbridge’s incorporation, been the subject of or target of any Sanctions and Export Control Laws (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).
(b) Since Sandbridge’s incorporation, neither Sandbridge nor, to Sandbridge’s knowledge, any of their Representatives, or any other Persons acting for or on behalf of any of the foregoing has (i) made, offered,
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promised, paid or received any unlawful bribes, kickbacks or other similar payments to or from any Person, (ii) made or paid any contributions, directly or indirectly, to a domestic or foreign political party or candidate or (iii) otherwise made, offered, received, authorized, promised or paid any improper payment under any Anti-Corruption Laws.
Section 4.20. PIPE Investment Amount; Subscription Agreements. Sandbridge has provided true and correct copies of each of the Subscription Agreements to the Company on or prior to the date of this Agreement. Such Subscription Agreements are in full force and effect with respect to, and binding on, Sandbridge and, to the knowledge of Sandbridge, on each PIPE Investor party thereto, in accordance with their terms.
Section 4.21. Investigation; No Other Representations.
(a) Each Sandbridge Party, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that (i) it has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the business, assets, liabilities, condition, operations and prospects, of the Group Companies and (ii) it has been furnished with or given access to such documents and information about the Group Companies and their respective businesses and operations as it and its Representatives have deemed necessary to enable it to make an informed decision with respect to the execution, delivery and performance of this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby.
(b) In entering into this Agreement and the Ancillary Documents to which it is or will be a party, each Sandbridge Party has relied solely on its own investigation and analysis and the representations and warranties expressly set forth in Article 3 and in the Ancillary Documents to which it is or will be a party and no other representations or warranties of the Company, any Company Non-Party Affiliate or any other Person, either express or implied, and each Sandbridge Party, on its own behalf and on behalf of its Representatives, acknowledges, represents, warrants and agrees that, except for the representations and warranties expressly set forth in Article 3 and in the Ancillary Documents to which it is or will be a party, none of the Company, any Company Non-Party Affiliate or any other Person makes or has made any representation or warranty, either express or implied, in connection with or related to this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby.
Section 4.22. EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO ANY GROUP COMPANY OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE 4 OR THE ANCILLARY DOCUMENTS, NO SANDBRIDGE PARTY OR ANY SANDBRIDGE NON-PARTY AFFILIATE OR ANY OTHER PERSON MAKES, AND SANDBRIDGE EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING AS TO THE BUSINESS AND AFFAIRS OF THE SANDBRIDGE PARTIES THAT HAVE BEEN MADE AVAILABLE TO ANY GROUP COMPANY OR ANY OF THEIR REPRESENTATIVES OR IN ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF SANDBRIDGE BY THE MANAGEMENT OF SANDBRIDGE OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY DOCUMENTS, AND NO STATEMENT CONTAINED IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED TO BE RELIED UPON BY ANY GROUP COMPANY OR ANY COMPANY NON-PARTY AFFILIATE IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE 4 OR THE ANCILLARY DOCUMENTS, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF THE SANDBRIDGE PARTIES, ANY SANDBRIDGE NON-PARTY AFFILIATE OR ANY OTHER PERSON, AND ARE NOT AND SHALL NOT BE DEEMED TO
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BE RELIED UPON BY ANY GROUP COMPANY OR ANY COMPANY NON-PARTY AFFILIATE IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Article 5
COVENANTS
Section 5.1. Conduct of Business of the Company.
(a) From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement (including in connection with the PIPE Investment) or any Ancillary Document, as required by applicable Law, as set forth on Section 5.1(a) of the Company Disclosure Schedules, or as consented to in writing by Sandbridge (it being agreed that any request for a consent shall not be unreasonably withheld, conditioned or delayed), use commercially reasonable efforts to (i) operate the business of the Group Companies in the ordinary course in all material respects and (ii) maintain and preserve intact in all material respects the business organization, assets, properties and material business relations of the Group Companies, taken as a whole.
(b) Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement (including in connection with the PIPE Investment), the Ancillary Documents, as required by applicable Law, as set forth on Section 5.1(b) of the Company Disclosure Schedules or as consented to in writing by Sandbridge (such consent, not to be unreasonably withheld, conditioned or delayed) not do any of the following:
(i) declare, set aside, make or pay a dividend on, or make any other distribution or payment in respect of, any Equity Securities of any Group Company or repurchase any outstanding Equity Securities of any Group Company, other than dividends or distributions, declared, set aside or paid by any of the Company’s Subsidiaries to the Company or any Subsidiary that is, directly or indirectly, wholly owned by the Company;
(ii) (A) merge, consolidate, combine or amalgamate any Group Company with any Person or (B) purchase or otherwise acquire (whether by merging or consolidating with, purchasing any Equity Security in or a substantial portion of the assets of, or by any other manner) any corporation, partnership, association or other business entity or organization or division thereof;
(iii) adopt any amendments, supplements, restatements or modifications to any Group Company’s Governing Documents or the Company Stockholders Agreements;
(iv) transfer, issue, sell, grant or otherwise directly or indirectly dispose of, or subject to a Lien, (A) any Equity Securities of any Group Company or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any Equity Securities of any Group Company, other than the issuance of shares of Company Common Stock upon the exercise or settlement of any Company Options outstanding on the date of this Agreement in accordance with the terms of the applicable Company Equity Plan and the underlying grant, award or similar agreement as in effect on the date of this Agreement;
(v) enter into, renew, modify or revise any Company Related Party Transaction (or any Contract or agreement that if entered into prior to the execution and delivery of this Agreement would be a Company Related Party Transaction);
(vi) incur, create or assume any Indebtedness, other than ordinary course trade payables;
(vii) make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any Person, other than (A) intercompany loans or capital contributions between the Company and any of its wholly owned Subsidiaries and (B) the reimbursement of expenses of employees in the ordinary course of business;
(viii) except (x) as required under the terms of any Employee Benefit Plan as in effect on the date of this Agreement and that is set forth on the Section 3.11(a) of the Company Disclosure
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Schedules or (y) in order to comply with applicable Law, (A) materially amend or modify, or adopt, establish, enter into or terminate any Employee Benefit Plan or any benefit or compensation plan, policy, program, Contract or arrangement that would be an Employee Benefit Plan if in effect as of the date of this Agreement, (B) grant to any director, manager, officer, employee, individual independent contractor or other service provider of any Group Company any bonus, incentive, severance, termination pay, or similar payment or increase the compensation or benefits payable to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, other than increases in base compensation for non-officer employees with an annual base cash compensation of less than $200,000 (after giving effect to any such increase) in the ordinary course of business consistent with past practice, (C) take any action to accelerate any payment, right to payment, or benefit, or the funding of any payment, right to payment or benefit, payable or to become payable to any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (D) hire, engage or terminate the employment or engagement of any director, manager, officer, employee, individual independent contractor or other service provider, other than any non-officer employee with an annual base cash compensation of less than $200,000 in the ordinary course of business consistent with past practice and other than terminations for cause, (E) waive or release any noncompetition, non-solicitation, no-hire, nondisclosure or other restrictive covenant obligation of any current or former director, manager, officer, employee, individual independent contractor or other service provider of any Group Company, (F) promise, commit or agree to do any of the foregoing, or make any communications or commitments regarding any compensation or benefits following the Effective Time;
(ix) negotiate, enter into, amend or extend any Contract with any labor union, labor organization, works council, employee delegate, representative or other employee collective group;
(x) make, change or revoke any material election concerning Taxes, enter into any material Tax closing agreement, settle any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to or relating to any material Tax claim or assessment, other than any such extension or waiver that is obtained in the ordinary course of business;
(xi) enter into any settlement, conciliation or similar Contract the performance of which would involve the payment by the Group Companies in excess of $500,000, in the aggregate, or that imposes, or by its terms will impose at any point in the future, any material, non-monetary obligations on any Group Company (or Sandbridge or any of its Affiliates after the Closing);
(xii) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, reorganization or similar transaction involving any Group Company;
(xiii) change any Group Company’s methods of accounting in any material respect, other than changes that are made in accordance with PCAOB standards;
(xiv) enter into any Contract with any broker, finder, investment banker or other Person under which such Person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement;
(xv) (A) amend, modify or terminate any Material Contract of the type described in Section 3.7(a)(iv), Section 3.7(a)(v), Section 3.7(a)(ix), Section 3.7(a)(xi)(B) or Section 3.7(a)(xiii) (excluding, for the avoidance of doubt, any expiration or extension or renewal of any such Material Contract pursuant to its terms, on its existing terms), (B) waive any material benefit or right under any Material Contract of the type described in Section 3.7(a)(iv), Section 3.7(a)(v), Section 3.7(a)(ix), Section 3.7(a)(xi)(B) or Section 3.7(a)(xiii) or (C) enter into any Contract that would constitute a Material Contract of the type described in Section 3.7(a)(iv), Section 3.7(a)(v), Section 3.7(a)(ix), Section 3.7(a)(xi)(B) or Section 3.7(a)(xiii);
(xvi) (A) exclusively license, sell, assign, transfer, abandon, allow to lapse or otherwise dispose of any Intellectual Property Rights material to the operation of the Group Companies’ business; (B) amend, modify, terminate, or waive any material benefit or right under, any Contract of the type required to be disclosed in Section 3.13(c)(i) of the Company Disclosure Schedules that is material to
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the operation of the Group Companies’ business (excluding, for the avoidance of doubt, any expiration or extension or automatic renewal of any such Contract pursuant to its terms or in the ordinary course of business); or (C) enter into any Contract under which any Group Company is limited in any material respect in its ability to use or enforce any material Company Owned Intellectual Property, excluding non-exclusive licenses granted in the ordinary course of business; or
(xvii) enter into any Contract to take, or cause to be taken, any of the actions set forth in this Section 5.1.
Notwithstanding anything to the contrary in this Agreement, the Company will be permitted to take any COVID Actions without the prior written consent of Sandbridge; provided, that the Company will consult in good faith with Sandbridge with respect to the taking of any such COVID Actions a reasonable time prior to doing so, to the extent practicable.
Section 5.2. Efforts to Consummate; Litigation.
(a) Subject to the terms and conditions herein provided, each of the Parties shall use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary or advisable to consummate and make effective as promptly as reasonably practicable the transactions contemplated by this Agreement including (i) the satisfaction, but not waiver, of the closing conditions set forth in Article 6 and, in the case of any Ancillary Document to which such Party will be a party after the date of this Agreement, to execute and delivery such Ancillary Document when required pursuant to this Agreement and (ii) the Company taking, or causing to be taken, all actions necessary or advisable to cause the agreements set forth on Section 5.2(a) of the Company Disclosure Schedules to be terminated without any further obligations or liabilities to the Company or any of its Affiliates (including the other Group Companies and, from and after the Effective Time, Sandbridge). Without limiting the generality of the foregoing, each of the Parties shall use reasonable best efforts to obtain, file with or deliver to, as applicable, any Consents of any Governmental Entities or other Persons necessary, proper or advisable to consummate the transactions contemplated by this Agreement or the Ancillary Documents. Each Party shall pay fifty percent (50%) of the costs associated with obtaining such Consents, including the HSR Act filing fee; provided, however, that each Party shall bear its out of pocket costs and expenses in connection with the preparation of such Consents. Sandbridge shall pay the SEC filing fee in connection with its filing of the Registration Statement / Proxy Statement. Each Party shall (i) make any appropriate filings pursuant to the HSR Act with respect to the transactions contemplated by this Agreement promptly (and in any event within five (5) Business Days) after the date of this Agreement and (ii) respond as promptly as reasonably practicable to any requests by any Governmental Entity for additional information and documentary material that may be requested pursuant to the HSR Act. Sandbridge shall promptly inform the Company of any communication between any Sandbridge Party, on the one hand, and any Governmental Entity, on the other hand, and the Company shall promptly inform Sandbridge of any communication between the Company, on the one hand, and any Governmental Entity, on the other hand, in either case, regarding any of the transactions contemplated by this Agreement or any Ancillary Document. Without limiting the foregoing, (a) the Parties agree to request early termination of the applicable waiting period under the HSR Act, and (b) no Party or any of its respective Affiliates shall extend any waiting period, review period or comparable period under the HSR Act or enter into any agreement with any Governmental Entity not to consummate the transactions contemplated hereby or by the Ancillary Documents, except with the prior written consent of Sandbridge and the Company. Nothing in this Section 5.2 obligates any Party or any of its Affiliates to (i) sell, license or otherwise dispose of, or hold separate and agree to sell, license or otherwise dispose of, any entities, assets or facilities of any Group Company or any entity, facility or asset of such Party or any of its Affiliates, (ii) terminate, amend or assign existing relationships and contractual rights or obligations, (iii) amend, assign or terminate existing licenses or other agreements, (iv) enter into new licenses or other agreements or (v) take or commit to any action that limits in any respect its freedom of action with respect to, or its ability to retain, any business, products, rights, services, licenses, assets or properties. No Party shall agree to any of the foregoing measures with respect to any other Party, except with Sandbridge’s and the Company’s prior written consent.
(b) From and after the date of this Agreement until the earlier of the Closing or termination of this Agreement in accordance with its terms, the Sandbridge Parties, on the one hand, and the Company, on the other hand, shall give counsel for the Company (in the case of any Sandbridge Party) or Sandbridge (in the
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case of the Company), a reasonable opportunity to review in advance, and consider in good faith the views of the other in connection with, any proposed written communication to any Governmental Entity relating to the transactions contemplated by this Agreement or the Ancillary Documents. Each of the Parties agrees not to participate in any substantive meeting or discussion, either in person or by telephone with any Governmental Entity in connection with the transactions contemplated by this Agreement unless it consults with, in the case of any Sandbridge Party, the Company, or, in the case of the Company, Sandbridge in advance and, to the extent not prohibited by such Governmental Entity, gives, in the case of any Sandbridge Party, the Company, or, in the case of the Company, Sandbridge, the opportunity to attend and participate in such meeting or discussion.
(c) Notwithstanding anything to the contrary in the Agreement, in the event that this Section 5.2 conflicts with any other covenant or agreement in this Article 5 that is intended to specifically address any subject matter, then such other covenant or agreement shall govern and control solely to the extent of such conflict.
(d) From and after the date of this Agreement until the earlier of the Closing or termination of this Agreement in accordance with its terms, Sandbridge, on the one hand, and the Company, on the other hand, shall each notify the other in writing promptly after learning of any shareholder demands or other shareholder Proceedings (including derivative claims) relating to this Agreement, any Ancillary Document or any matters relating thereto (collectively, the “Transaction Litigation”) commenced against, in the case of Sandbridge, any of the Sandbridge Parties or any of their respective Representatives (in their capacity as a representative of a Sandbridge Party) or, in the case of the Company, any Group Company or any of their respective Representatives (in their capacity as a representative of a Sandbridge Party). Sandbridge and the Company shall each (i) keep the other reasonably informed regarding any Transaction Litigation, (ii) give the other the opportunity to, at its own cost and expense, participate in the defense, settlement and compromise of any such Transaction Litigation and reasonably cooperate with the other in connection with the defense, settlement and compromise of any such Transaction Litigation, (iii) consider in good faith the other’s advice with respect to any such Transaction Litigation and (iv) not settle any such Transaction Litigation without the prior written consent of the other party, such consent not to be unreasonably withheld, conditions or delayed.
Section 5.3. Confidentiality and Access to Information.
(a) From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, except as necessary to complete the Registration Statement / Proxy Statement and in connection with other filings to be made by Sandbridge with the SEC and Sandbridge’s efforts to pursue closing of the transactions contemplated by this Agreement, the Company, on the one hand, and Sandbridge, on the other hand, shall hold and shall cause their respective Representatives to hold in strict confidence, unless compelled to disclose by judicial or administrative process or by other requirements of Law, all documents and information concerning the other Party or its respective business or operations furnished to it by such other Party or its Representatives in connection with the transactions contemplated by this Agreement (except to the extent that such information can be shown to have been (a) previously known by the Party to which it was furnished, (b) in the public domain through no fault of such Party or (c) later lawfully acquired from other sources, which source is not the agent of the other Party, by the Party to which it was furnished), and each party shall not use such information, except in connection with the transactions contemplated by this Agreement, or release or disclose such information to any other person, except its Representatives in connection with this Agreement. In the event that any Party believes that it is required to disclose any such confidential information pursuant to applicable Laws, such Party shall give timely written notice to the other Parties so that such Parties may have an opportunity to obtain a protective order or other appropriate relief. Each Party shall be deemed to have satisfied its obligations to hold confidential information concerning or supplied by the other Parties if it exercises the same care as it takes to preserve confidentiality for its own similar information, but in no event with less than a commercially reasonable degree of care. The Parties acknowledge that some previously confidential information will be required to be disclosed in the Registration Statement / Proxy Statement. Notwithstanding the foregoing or anything to the contrary in this Agreement, in the event that this
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Section 5.3(a) conflicts with any other covenant or agreement contained herein or any Ancillary Document that contemplates the disclosure, use or provision of information or otherwise, then such other covenant or agreement contained herein shall govern and control to the extent of such conflict.
(b) From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, upon reasonable advance written notice, the Company shall provide, or cause to be provided, to Sandbridge and its Representatives during normal business hours reasonable access to the directors, officers, books and records of the Group Companies (in a manner so as to not interfere with the normal business operations of the Group Companies). Notwithstanding the foregoing, none of the Group Companies shall be required to provide to Sandbridge or any of its Representatives any information (i) if and to the extent doing so would (A) violate any Law to which any Group Company is subject, including any Privacy Obligation, (B) result in the disclosure of any trade secrets of third parties in breach of any Contract with such third party, (C) violate any legally binding obligation of any Group Company with respect to confidentiality, non-disclosure or privacy or (D) jeopardize protections afforded to any Group Company under the attorney-client privilege or the attorney work product doctrine (provided that, in case of each of clauses (A) through (D), the Company shall, and shall cause the other Group Companies to, use commercially reasonable efforts to (x) provide such access as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) without violating such privilege, doctrine, obligation or Law and (y) provide such information in a manner without violating such privilege, doctrine, obligation or Law), or (ii) if any Group Company, on the one hand, and any Sandbridge Party, any Sandbridge Non-Party Affiliate or any of their respective Representatives, on the other hand, are adverse parties in a litigation and such information is reasonably pertinent thereto; provided that the Company shall, in the case of clause (i) or (ii), provide prompt written notice of the withholding of access or information on any such basis.
Section 5.4. Notice of Developments. From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall promptly (and in any event prior to the Closing) notify the Sandbridge Parties in writing, and Sandbridge shall promptly (and in any event prior to the Closing) notify the Company in writing, upon any of the Group Companies or the Sandbridge Parties, as applicable, becoming aware: (i) of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which has caused or may reasonably be expected to cause any condition to the obligations of any Party to effect the Merger not to be satisfied, (ii) of any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the Merger, (iii) of any notice or other communication from any Governmental Entity relating to the ability of the Parties to consummate the Merger or the timing thereof, or (iv) of the commencement or initiation or threat of commencement or initiation of any Proceeding regarding the Merger. The delivery of any notice pursuant to this Section 5.4 shall not cure any breach of any representation or warranty requiring disclosure of such matter or any breach of any covenant, condition or agreement contained in this Agreement or any Ancillary Document or otherwise limit or affect the rights of, or the remedies available to, the Sandbridge Parties or the Company, as applicable.
Section 5.5. Public Announcements.
(a) Subject to Section 5.5(b), Section 5.8 (Preparation of Registration Statement / Proxy Statement) and Section 5.9 (Sandbridge Stockholder Approval), none of the Parties or any of their respective Representatives shall issue any press releases or make any public announcements with respect to this Agreement or the transactions contemplated hereby without the prior written consent of, prior to the Closing, the Company and Sandbridge or, after the Closing, Sandbridge; provided, however, that each Party may make any such announcement or other communication (i) if such announcement or other communication is required by applicable Law, in which case the disclosing Party and its Representatives shall use reasonable best efforts to consult with the Company, if the disclosing party is any Sandbridge Party, or Sandbridge, if the disclosing party is the Company, to review such announcement or communication and the opportunity to comment thereon and the disclosing Party shall consider such comments in good faith, (ii) to the extent such announcements or other communications contain only
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information previously disclosed in a public statement, press release or other communication previously approved in accordance with this Section 5.4 and (iii) to Governmental Entities in connection with any Consents required to be made under this Agreement, the Ancillary Documents or in connection with the transactions contemplated hereby or thereby.
(b) The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release in the form agreed by the Company and Sandbridge prior to the execution of this Agreement and such initial press release (the “Signing Press Release”) shall be released as promptly as reasonably practicable after the execution of this Agreement on the day thereof. Promptly after the execution of this Agreement, Sandbridge shall file a current report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by, and in compliance with, the Securities Laws, which the Company shall have the opportunity to review and comment upon prior to filing and Sandbridge shall consider such comments in good faith. The Company, on the one hand, and Sandbridge, on the other hand, shall mutually agree upon (such agreement not to be unreasonably withheld, conditioned or delayed by either the Company or Sandbridge, as applicable) a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”) prior to the Closing, and, on the Closing Date, the Parties shall cause the Closing Press Release to be released. Promptly after the Closing (but in any event within four (4) Business Days after the Closing), Sandbridge shall file a current report on Form 8-K (the “Closing Filing”) with the Closing Press Release and disclosures required by Securities Laws. In connection with the preparation of each of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing, each Party shall, upon written request by any other Party, furnish such other Party with all information concerning itself, its directors, officers and equityholders, and such other matters as may be reasonably necessary for such press release or filing.
Section 5.6. Tax Matters.
(a) Tax Treatment.
(i) To the extent applicable, the Parties intend that the transactions shall be treated as a transaction that qualifies under Section 351 of the Code or that the Merger shall be treated as a transaction that qualifies as a “reorganization” within the meaning of Section 368 of the Code, and each Party shall, and shall cause its respective Affiliates to, use reasonable best efforts to so qualify. The Parties shall file all Tax Returns consistent with, and take no position inconsistent with (whether in audits, Tax Returns or otherwise), the treatment described in this Section 5.6(a)(i) unless required to do so pursuant to a “determination” that is final within the meaning of Section 1313(a) of the Code. Notwithstanding anything to the contrary herein, if, after the date hereof but prior to the time at which the Required Sandbridge Stockholder Approval has been obtained Sandbridge and the Company mutually determine in good faith that the transactions are not expected to qualify as a transaction under Section 351 of the Code and that the Merger is not reasonably expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, the Parties shall use commercially reasonable efforts to restructure the transactions contemplated hereby (such restructured transactions, the “Alternative Transaction Structure”) in a manner that is reasonably expected to cause the Alternative Transaction Structure to so qualify, including by adding a second merger to take place immediately after the Merger whereby the surviving company in the Merger would merge with and into a new limited liability company that is a wholly-owned Subsidiary of Sandbridge (“Newco”), with Newco being the surviving company in such merger.
(ii) Sandbridge and the Company hereby adopt this Agreement as a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a). From the date hereof through the Closing, and following the Closing, the Parties shall not, and shall not permit or cause their respective Affiliates to, take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede the Merger qualifying for the Intended Tax Treatment.
(b) Tax Matters Cooperation. Each of the Parties shall (and shall cause their respective Affiliates to) cooperate fully, as and to the extent reasonably requested by another Party, in connection with the filing of relevant Tax Returns, and any Tax Proceeding.
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(c) Transfer Taxes. The Surviving Company shall be responsible for any sale, use, real property transfer, stamp or other similar transfer Taxes imposed in connection with the Merger or the other transactions contemplated by this Agreement.
Section 5.7. Exclusive Dealing.
(a) From the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall not, and shall cause the other Group Companies and its and their respective Representatives not to, directly or indirectly: (i) solicit, initiate, encourage (including by means of furnishing or disclosing information), facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to a Company Acquisition Proposal; (ii) furnish or disclose any non-public information to any Person in connection with, or that could reasonably be expected to lead to, a Company Acquisition Proposal; (iii) enter into any Contract or other arrangement or understanding regarding a Company Acquisition Proposal; (iv) prepare or take any steps in connection with a public offering of any Equity Securities of any Group Company (or any Affiliate or successor of any Group Company); or (v) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing. The Company agrees to (A) notify Sandbridge promptly upon receipt of any Company Acquisition Proposal by any Group Company, and to describe the material terms and conditions of any such Company Acquisition Proposal in reasonable detail (including the identity of the Persons making such Company Acquisition Proposal) and (B) keep Sandbridge reasonably informed on a current basis of any modifications to such offer or information.
(b) From the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Sandbridge Parties shall not, and each of them shall cause their Representatives not to, directly or indirectly: (i) solicit, initiate, encourage (including by means of furnishing or disclosing information), facilitate, discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to a Sandbridge Acquisition Proposal; (ii) furnish or disclose any non-public information to any Person in connection with, or that could reasonably be expected to lead to, a Sandbridge Acquisition Proposal; (iii) enter into any Contract or other arrangement or understanding regarding a Sandbridge Acquisition Proposal; (iv) prepare or take any steps in connection with an offering of any securities of any Sandbridge Party (or any Affiliate or successor of any Sandbridge Party); or (v) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing. Sandbridge agrees to (A) notify the Company promptly upon receipt of any Sandbridge Acquisition Proposal by any Sandbridge Party, and to describe the material terms and conditions of any such Sandbridge Acquisition Proposal in reasonable detail (including the identity of any person or entity making such Sandbridge Acquisition Proposal) and (B) keep the Company reasonably informed on a current basis of any modifications to such offer or information.
Section 5.8. Preparation of Registration Statement / Proxy Statement. As promptly as reasonably practicable following the date of this Agreement, Sandbridge and the Company shall prepare and mutually agree upon (such agreement not to be unreasonably withheld, conditioned or delayed by either Sandbridge or the Company, as applicable), and Sandbridge shall file with the SEC, the Registration Statement / Proxy Statement (it being understood that the Registration Statement / Proxy Statement shall include a prospectus of Sandbridge which will be included therein as a prospectus and which will be used for the Sandbridge Stockholders Meeting to adopt and approve the Transaction Proposals and other matters reasonably related to the Transaction Proposals, all in accordance with and as required by Sandbridge’s Governing Documents, applicable Law, and any applicable rules and regulations of the SEC and the NYSE). Each of Sandbridge and the Company shall use its reasonable best efforts to (a) cause the Registration Statement / Proxy Statement to comply in all material respects with the applicable rules and regulations promulgated by the SEC (including, with respect to the Group Companies, the provision of financial statements of, and any other information with respect to, the Group Companies for all periods, and in the form, required to be included in the Registration Statement / Proxy Statement under Securities Laws (after giving effect to any waivers received) or in response to any comments from the SEC); (b) promptly notify the others of, reasonably cooperate with each other with respect to and respond promptly to any comments of the SEC or its staff; (c) have the Registration Statement / Proxy Statement declared effective under the Securities Act as promptly as reasonably practicable after it is filed with the SEC; and (d) keep the Registration Statement / Proxy Statement effective through the Closing in order to permit the
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consummation of the transactions contemplated by this Agreement. Prior to the effective date of the Registration Statement / Proxy Statement, Sandbridge shall take any and all actions required under any applicable federal or state securities laws in connection with the issuance of shares of Sandbridge Common Stock, in each case to be issued or issuable to the Company Stockholders pursuant to this Agreement, and as promptly as practicable after finalization of the Registration Statement / Proxy Statement, each of the Company and Sandbridge shall mail the Registration Statement / Proxy Statement to their respective stockholders. Sandbridge, on the one hand, and the Company, on the other hand, shall promptly furnish, or cause to be furnished, to the other all information concerning such Party, its Non-Party Affiliates and their respective Representatives that may be required or reasonably requested in connection with any action contemplated by this Section 5.8 or for including in any other statement, filing, notice or application made by or on behalf of Sandbridge to the SEC or the NYSE in connection with the transactions contemplated by this Agreement or the Ancillary Documents, including, delivering customary tax representation letters to counsel to enable such counsel to deliver any tax opinions requested or required by the SEC to be submitted in connection therewith. If any Party becomes aware of any information that should be disclosed in an amendment or supplement to the Registration Statement / Proxy Statement, then (i) such Party shall promptly inform, in the case of any Sandbridge Party, the Company, or, in the case of the Company, Sandbridge, thereof; (ii) such Party shall prepare and mutually agree upon with, in the case of Sandbridge, the Company, or, in the case of the Company, Sandbridge (in either case, such agreement not to be unreasonably withheld, conditioned or delayed), an amendment or supplement to the Registration Statement / Proxy Statement; (iii) Sandbridge shall file such mutually agreed upon amendment or supplement with the SEC; and (iv) the Parties shall reasonably cooperate, if appropriate, in mailing such amendment or supplement to the Pre-Closing Sandbridge Holders. No filing of, or amendment or supplement to the Registration Statement / Proxy Statement will be made by Sandbridge without providing the Company a reasonable opportunity to review and comment on the Registration Statement / Proxy Statement and any amendment or supplement thereto. Sandbridge shall consider in good faith the comments of the Company in respect of such filing, amendment or supplement, and shall cooperate in good faith with the Company with respect to the incorporation of such comments. Sandbridge shall as promptly as reasonably practicable advise the Company of the time of effectiveness of the Registration Statement / Proxy Statement or the time at which any supplement or amendment has been filed, the issuance of any stop order relating thereto or the suspension of the qualification of shares of Sandbridge Common Stock for offering or sale in any jurisdiction (and Sandbridge and the Company shall each use its reasonable best efforts to have any such stop order or suspension lifted, reversed or otherwise terminated), or of any request by the SEC for amendment of the Registration Statement / Proxy Statement or comments thereon and responses thereto or requests from the SEC for additional information. Each of the Parties shall ensure that none of the information related to it or any of its Non-Party Affiliates or its or their respective Representatives supplied by or on his, her or its behalf for inclusion or incorporation by reference in the Registration Statement / Proxy Statement will, at the time the Registration Statement / Proxy Statement is initially filed with the SEC, at any time at which it is amended, or at the time it becomes effective under the Securities Act contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Sandbridge shall consult with the Company in good faith in connection with any response to comments of the SEC or its staff with respect to the Registration Statement / Proxy Statement and any amendment to the Registration Statement / Proxy Statement filed in response thereto, shall consider in good faith the comments of the Company in respect thereof and shall cooperate in good faith with the Company with respect to the incorporation of any such comments.
Section 5.9. Sandbridge Stockholder Approval. As promptly as reasonably practicable following the time at which the Registration Statement / Proxy Statement is declared effective under the Securities Act, Sandbridge shall (a) duly give notice of and (b) use reasonable best efforts to duly convene and hold a meeting of its stockholders (the “Sandbridge Stockholders Meeting”) in accordance with the Governing Documents of Sandbridge, for the purposes of obtaining the Sandbridge Stockholder Approval and, if applicable, any approvals related thereto and providing its shareholders with the opportunity to elect to effect a Sandbridge Stockholder Redemption. Sandbridge shall, through unanimous approval of its board of directors, recommend to its stockholders (the “Sandbridge Board Recommendation”), (i) the adoption and approval of this Agreement and the transactions contemplated hereby (including the Merger) (the “Business Combination Proposal”); (ii) the adoption and approval of the issuance of the Sandbridge Common Stock in connection with the transactions contemplated by this Agreement as required by the NYSE listing requirements (the “Stock Issuance Proposal”); (iii) the adoption and approval of the amendments to the Governing Documents of Sandbridge contemplated by
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the Owlet Pubco Certificate of Incorporation and the Owlet Pubco Bylaws (the “Governing Document Proposals”); (iv) the adoption and approval of the Owlet Pubco Incentive Equity Plan (the “Equity Incentive Plan Proposal”); (v) the adoption and approval of the Owlet Pubco Employee Stock Purchase Plan; (vi) the adoption and approval of any other proposals as the SEC (or staff member thereof) may indicate are necessary in its comments to the Registration Statement / Proxy Statement or correspondence related thereto, (vii) the adoption and approval of any other proposal the parties reasonably deem necessary to effectuate the transactions contemplated by this Agreement, and (viii) adjournment of the Sandbridge Stockholders Meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing (such proposals in clauses (i) through (viii) together, the “Transaction Proposals”); provided, that Sandbridge may adjourn the Sandbridge Stockholders Meeting, but only to (w) to solicit additional proxies for the purpose of obtaining the Sandbridge Stockholder Approval, (x) for the absence of a quorum, (y) to allow reasonable additional time for the filing or mailing of any supplemental or amended disclosure that Sandbridge has determined in good faith after consultation with outside legal counsel is required under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by the Pre-Closing Sandbridge Holders prior to the Sandbridge Stockholders Meeting, (z) to solicit additional proxies for the purpose of obtaining the Sandbridge Stockholder Approval in the event that the holders of Sandbridge Class A Common Stock have elected to redeem a number of shares of Sandbridge Class A Common Stock as of such time that would reasonably be expected to result in the condition set forth in Section 6.3(c) not being satisfied or (aa) upon receipt of a Company Adjournment Request; provided, further, that the Sandbridge Stockholders Meeting shall not be adjourned to a date that is more than fifteen (15) days after the date for which the Sandbridge Stockholders Meeting was originally scheduled (in addition to any adjournments required by applicable law) and shall not be held later than three (3) Business Days prior to the Termination Date. By written notice, the Company may request that Sandbridge adjourn the Sandbridge Stockholders Meeting (“Company Adjournment Request”) until the earlier of (A) 15 days after the date for which the Sandbridge Stockholders Meeting was then scheduled or (B) the date that is the third Business Day prior to the Termination Date, if the Company believes in good faith that such adjournment is necessary in order to solicit additional proxies for the purpose of obtaining the Sandbridge Stockholder Approval or for the absence of a quorum of the Sandbridge stockholders. Upon receipt of the Company Adjournment Request, Sandbridge shall adjourn the Sandbridge Stockholders Meeting for the period of time specified in the Company Adjournment Request; provided, that the Company may not issue more than on Company Adjournment Request. The board of directors of Sandbridge shall not withdraw, amend, qualify or modify the Sandbridge Board Recommendation. To the fullest extent permitted by applicable Law, (i) Sandbridge agrees to establish a record date for, duly call, give notice to, convene and hold the Sandbridge Stockholders Meeting, and (ii) Sandbridge agrees that if the Sandbridge Stockholder Approval shall not have been obtained at any such Sandbridge Stockholders Meeting, then Sandbridge shall promptly continue to take all necessary actions, including actions required by this Section 5.9, and hold additional Sandbridge Stockholders Meetings in order to obtain the Sandbridge Stockholders Approval.
Section 5.10. Merger Sub Shareholder Approval. As promptly as reasonably practicable (and in any event within one Business Day) following the date of this Agreement, Sandbridge, as the sole stockholder of Merger Sub, will approve and adopt this Agreement, the Ancillary Documents to which Merger Sub is or will be a party and the transactions contemplated hereby and thereby (including the Merger).
Section 5.11. Insider Letter. Sandbridge shall not waive the obligations of any Person under Section 2 of the Sandbridge Insider Letter to vote Sandbridge Common Stock held by them in favor of the Merger.
Section 5.12. Conduct of Business of Sandbridge.
(a) From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, Sandbridge shall, and shall cause its Subsidiaries (including Merger Sub) to, except as expressly contemplated by this Agreement (including as contemplated by the PIPE Investment) or any Ancillary Document, as required by applicable Law, as set forth on Section 5.12(a) of the Sandbridge Disclosure Schedules, or as consented to in writing by the Company (it being agreed that any request for a consent shall not be unreasonably withheld, conditioned or delayed), use commercially reasonable efforts to operate the business of Sandbridge and its Subsidiaries (including Merger Sub) in the ordinary course consistent with past practice.
(b) Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, Sandbridge
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shall not, and shall cause its Subsidiaries (including Merger Sub) not to, as applicable, except as expressly contemplated by this Agreement or any Ancillary Document (including, for the avoidance of doubt in connection with the PIPE Investment), as required by applicable Law, as set forth on Section 5.12(b) of the Sandbridge Disclosure Schedules or as consented to in writing by the Company, not to be unreasonably withheld, do any of the following:
(i) adopt any amendments, supplements, restatements or modifications to the Trust Agreement, Warrant Agreement or the Governing Documents of any Sandbridge Party or any of its Subsidiaries;
(ii) declare, set aside, make or pay a dividend on, or make any other distribution or payment in respect of, any Equity Securities of Sandbridge or any of its Subsidiaries, or repurchase, redeem (other than in connection with any Sandbridge Stockholder Redemptions) or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any outstanding Equity Securities of Sandbridge or any of its Subsidiaries, as applicable;
(iii) split, combine or reclassify any of its capital stock or other Equity Securities or issue any other security in respect of, in lieu of or in substitution for shares of its capital stock;
(iv) incur, create or assume any Indebtedness;
(v) make any loans or advances to, or capital contributions in, any other Person, other than to, or in, Sandbridge or any of its Subsidiaries;
(vi) issue any Equity Securities of Sandbridge or any of its Subsidiaries or grant any additional options, warrants or stock appreciation rights with respect to Equity Securities of the foregoing of Sandbridge or any of its Subsidiaries;
(vii) enter into, modify or revise any Sandbridge Related Party Transaction (or any Contract or agreement that if entered into prior to the execution and delivery of this Agreement would be a Sandbridge Related Party Transaction);
(viii) engage in any activities or business, other than activities or business (i) in connection with or incident or related to such Person’s organization, incorporation or formation, as applicable, or continuing corporate (or similar) existence, (ii) contemplated by, or incident or related to, this Agreement, any Ancillary Document, the performance of covenants or agreements hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or (iii) those that are administrative or ministerial, in each case, which are immaterial in nature;
(ix) make, change or revoke any material election concerning Taxes, enter into any material Tax closing agreement, settle any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to or relating to any material Tax claim or assessment, other than any such extension or waiver that is obtained in the ordinary course of business;
(x) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution;
(xi) enter into any Contract with any broker, finder, investment banker or other Person under which such Person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by this Agreement; or
(xii) enter into any Contract to take, or cause to be taken, any of the actions set forth in this Section 5.12.
Notwithstanding anything in this Section 5.12 or this Agreement to the contrary, nothing set forth in this Agreement shall prohibit any Sandbridge Party from using, or otherwise restrict the ability of any Sandbridge Party to use, the funds held by Sandbridge outside the Trust Account to pay its fees and expenses and other Liabilities, or from otherwise distributing or paying over any funds held by Sandbridge outside the Trust Account to the Sponsor or any of its Affiliates, in each case, prior to the Closing.
Section 5.13. NYSE Listing. Sandbridge shall use its reasonable best efforts to cause Sandbridge to satisfy all applicable continuing listing requirements of the NYSE.
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Section 5.14. Trust Account.
(a) If the amount of cash available in the Trust Account following the Sandbridge Stockholders Meeting, after deducting (x) the amounts payable, if any, to the Public Stockholders pursuant to the Sandbridge Stockholder Redemption, (y) any deferred underwriting commissions being held in the Trust Account, and (z) any Sandbridge Transaction Expenses, (the resulting amount, the “Available Sandbridge Cash”), is equal to or greater than $140,000,000 (the “Minimum Available Sandbridge Cash Amount”), then the condition set forth in Section 6.3(c) shall be satisfied.
(b) Upon satisfaction or, to the extent permitted by applicable Law, waiver of the conditions set forth in Article 6 and provision of notice thereof to the Trustee, at the Closing, Sandbridge shall (i) cause the documents, certificates and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered, and (ii) make all appropriate arrangements to cause the Trustee to (A) pay as and when due all amounts, if any, payable to the Public Stockholders pursuant to the Sandbridge Stockholder Redemption, (B) pay the amounts due to the underwriters of Sandbridge’s initial public offering for their deferred underwriting commissions as set forth in the Trust Agreement and (C) immediately thereafter, pay all remaining amounts then available in the Trust Account to Sandbridge in accordance with the Trust Agreement.
Section 5.15. Company Stockholder Approval. Upon the terms set forth in this Agreement, the Company shall use its reasonable best efforts to obtain promptly after the execution of this Agreement, and in any event no later than 5:00pm Eastern Time on the day next succeeding the date of this Agreement, an irrevocable written consent from the Requisite Company Stockholders, pursuant to which such Requisite Company Stockholders will approve and adopt the matters required for the Company Stockholder Approval (the “Written Consent”). The Written Consent shall be irrevocable with respect to all shares of Company Stock owned beneficially or of record by the Requisite Company Stockholders or as to which such Requisite Company Stockholders have, directly or indirectly, the right to vote or direct the voting thereof.
Section 5.16. PIPE Subscriptions. Unless otherwise approved in writing by the Company, Sandbridge shall not permit any amendment or modification to be made to, any waiver (in whole or in part) of, or provide consent to modify (including consent to termination) any provision or remedy under, or any replacements of, any of the Subscription Agreements; provided, that any modification or waiver that is solely ministerial in nature or otherwise immaterial shall not require the prior written consent of the Company. Subject to the immediately preceding sentence, Sandbridge shall take, or cause to be taken, all actions required, necessary or that it otherwise deems proper or advisable to consummate the transactions contemplated by the Subscription Agreements in all material respects on the terms described therein, including to enforce its rights under the Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) Sandbridge the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms. In the event that any PIPE Investor terminates, attempts to terminate or provides written notice to Sandbridge of its intent to terminate such PIPE Investor’s obligations under its Subscription Agreement, then, notwithstanding the restrictions on replacements in the foregoing, Sandbridge shall be entitled to arrange for the purchase by third Persons of the subject shares of Sandbridge Class A Common Stock in connection with the transactions contemplated by this Agreement on the same terms and conditions as the other PIPE Investors have agreed pursuant to their respective Subscription Agreements; provided that such third Persons shall be reasonably acceptable to the Company as confirmed in writing by the Company prior to Sandbridge’s entry into a Subscription Agreement with such third Persons.
Section 5.17. Sandbridge Indemnification; Directors’ and Officers’ Insurance.
(a) Each Party agrees that (i) all rights to indemnification or exculpation now existing in favor of the directors and officers of each Sandbridge Party, as provided in the applicable Sandbridge Party’s Governing Documents or otherwise in effect as of immediately prior to the Effective Time, in either case, solely with respect to any matters occurring on or prior to the Effective Time shall survive the transactions contemplated by this Agreement and shall continue in full force and effect from and after the Effective Time for a period of six (6) years and (ii) Sandbridge will perform and discharge, or cause to be performed and discharged, all obligations to provide such indemnity and exculpation during such six (6)-year period. To the maximum extent permitted by applicable Law, during such six (6)-year period, Sandbridge shall advance, or caused to be advanced, expenses in connection with such indemnification as provided in the applicable
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Sandbridge Party’s Governing Documents or other applicable agreements as in effect immediately prior to the Effective Time. The indemnification and liability limitation or exculpation provisions of the Sandbridge Parties’ Governing Documents shall not, during such six (6)-year period, be amended, repealed or otherwise modified after the Effective Time in any manner that would materially and adversely affect the rights thereunder of individuals who, as of immediately prior to the Effective Time, or at any time prior to such time, were directors or officers of any Sandbridge Party (the “Sandbridge D&O Persons”) entitled to be so indemnified, have their liability limited or be exculpated with respect to any matters occurring on or prior to the Effective Time and relating to the fact that such Sandbridge D&O Person was a director or officer of any Sandbridge Party immediately prior to the Effective Time, unless such amendment, repeal or other modification is required by applicable Law.
(b) Sandbridge shall not have any obligation under this Section 5.17 to any Sandbridge D&O Person when and if a court of competent jurisdiction shall ultimately determine (and such determination shall have become final and non-appealable) that the indemnification of such Sandbridge D&O Person in the manner contemplated hereby is prohibited by applicable Law.
(c) For a period of six (6) years after the Effective Time, Sandbridge shall maintain, without any lapses in coverage, directors’ and officers’ liability insurance for the benefit of those Persons who are currently covered by any comparable insurance policies of the Sandbridge Parties as of the date of this Agreement with respect to matters occurring on or prior to the Effective Time. Such insurance policies shall provide coverage on terms (with respect to coverage and amount) that are substantially the same as (and no less favorable in the aggregate to the insured than) the coverage provided under Sandbridge’s directors’ and officers’ liability insurance policies as of the date of this Agreement; provided that Sandbridge shall not be obligated to pay annual premiums in excess of three hundred percent (300%) of the most recent annual premium paid by Sandbridge prior to the date of this Agreement and, in such event, Sandbridge shall purchase the maximum coverage available for three hundred percent (300%) of the most recent annual premium paid by Sandbridge prior to the date of this Agreement.
(d) If Sandbridge or any of its successors or assigns (i) shall merge or consolidate with or merge into any other corporation or entity and shall not be the surviving or continuing corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of their respective properties and assets as an entity in one or a series of related transactions to any Person, then in each such case, proper provisions shall be made so that the successors or assigns of Sandbridge shall assume all of the obligations set forth in this Section 5.17.
(e) The Sandbridge D&O Persons entitled to the indemnification, liability limitation, exculpation and insurance set forth in this Section 5.17 are intended to be third-party beneficiaries of this Section 5.17. This Section 5.17 shall survive the consummation of the transactions contemplated by this Agreement and shall be binding on all successors and assigns of Sandbridge.
Section 5.18. Company Indemnification; Directors’ and Officers’ Insurance.
(a) Each Party agrees that (i) all rights to indemnification or exculpation now existing in favor of the directors and officers of the Group Companies, as provided in the Group Companies’ Governing Documents or otherwise in effect as of immediately prior to the Effective Time, in either case, solely with respect to any matters occurring on or prior to the Effective Time, shall survive the transactions contemplated by this Agreement and shall continue in full force and effect from and after the Effective Time for a period of six (6) years and (ii) Sandbridge will cause the applicable Group Companies to perform and discharge all obligations to provide such indemnity and exculpation during such six (6)-year period. To the maximum extent permitted by applicable Law, during such six (6)-year period, Sandbridge shall cause the applicable Group Companies to advance expenses in connection with such indemnification as provided in the Group Companies’ Governing Documents or other applicable agreements in effect as of immediately prior to the Effective Time. The indemnification and liability limitation or exculpation provisions of the Group Companies’ Governing Documents shall not, during such six (6)-year period, be amended, repealed or otherwise modified after the Effective Time in any manner that would materially and adversely affect the rights thereunder of individuals who, as of the Effective Time or at any time prior to the Effective Time, were directors or officers of the Group Companies (the “Company D&O Persons”) entitled to be so
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indemnified, have their liability limited or be exculpated with respect to any matters occurring prior to Closing and relating to the fact that such Company D&O Person was a director or officer of any Group Company prior to the Effective Time, unless such amendment, repeal or other modification is required by applicable Law.
(b) None of Sandbridge or the Group Companies shall have any obligation under this Section 5.17(e) to any Company D&O Person when and if a court of competent jurisdiction shall ultimately determine (and such determination shall have become final and non-appealable) that the indemnification of such Company D&O Person in the manner contemplated hereby is prohibited by applicable Law.
(c) The Company shall purchase, at or prior to the Closing, and Sandbridge shall maintain, or cause to be maintained, in effect for a period of six (6) years after the Effective Time, without lapses in coverage, a “tail” policy providing directors’ and officers’ liability insurance coverage for the benefit of those Persons who are currently covered by any comparable insurance policies of the Group Companies as of the date of this Agreement with respect to matters occurring on or prior to the Effective Time (the “Company D&O Tail Policy”). Such “tail” policy shall provide coverage on terms (with respect to coverage and amount) that are substantially the same as (and no less favorable in the aggregate to the insured than) the coverage provided under the Group Companies’ directors’ and officers’ liability insurance policies as of the date of this Agreement; provided that none of the Company, Sandbridge or any of their respective Affiliates shall pay a premium for such “tail” policy in excess of three hundred percent (300%) of the most recent annual premium paid by the Group Companies prior to the date of this Agreement and, in such event, the Company, Sandbridge or one of their respective Affiliates shall purchase the maximum coverage available for three hundred percent (300%) of the most recent annual premium paid by the Group Companies prior to the date of this Agreement.
(d) If Sandbridge or any of its successors or assigns (i) shall merge or consolidate with or merge into any other corporation or entity and shall not be the surviving or continuing corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of their respective properties and assets as an entity in one or a series of related transactions to any Person, then in each such case, proper provisions shall be made so that the successors or assigns of Sandbridge shall assume all of the obligations set forth in this Section 5.17(e).
(e) The Company D&O Persons entitled to the indemnification, liability limitation, exculpation and insurance set forth in this Section 5.17(e) are intended to be third-party beneficiaries of this Section 5.17(e). This Section 5.17(e) shall survive the consummation of the transactions contemplated by this Agreement and shall be binding on all successors and assigns of Sandbridge.
Section 5.19. Post-Closing Directors and Officers.
(a) Sandbridge shall take all such action within its power as may be necessary or appropriate such that effective immediately after the Effective Time the Sandbridge Board shall initially consist of up to nine (9) directors.
(b) Sandbridge shall designate the two (2) individuals identified on Section 5.19(b) of the Sandbridge Disclosure Schedules to serve as directors on the Sandbridge Board, in the classes indicated, effective as of the Effective Time, at least one of whom shall be an “independent” director for purposes of NYSE.
(c) The Company shall designate up to seven (7) individuals identified on Section 5.19(c) of the Company Disclosure Schedules to serve as directors on the Sandbridge Board, in the classes indicated, effective as of the Effective Time.
(d) Effective as of the Effective Time, the individuals identified on Section 5.19(d) of the Company Disclosure Schedules shall serve on the committee(s) of the Sandbridge Board as set forth opposite his or her name.
(e) Effective as of the Effective Time, the individuals identified on Section 5.19(e) of the Company Disclosure Schedules shall be the officers of Sandbridge, with each such individual holding the title set forth opposite his or her name.
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Section 5.20. PCAOB Financials.
(a) As promptly as reasonably practicable, and in any event not later than the later of (1) March 31, 2021 and (2) 45 days after the end of the applicable fiscal period, the Company shall deliver to Sandbridge (i) the audited consolidated balance sheets of the Group Companies as of December 31, 2020 and the related audited consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ deficit and cash flows of the Group Companies for the period then ended, and (ii) any other audited or unaudited consolidated balance sheets and the related audited or unaudited consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ deficit and cash flows of the Group Companies as of and for a year-to-date period ended as of the end of any other different fiscal quarter (and as of and for the same period from the previous fiscal year) or fiscal year (and as of and for the prior fiscal quarter), as applicable, that is required to be included in the Registration Statement / Proxy Statement ((i) and (ii) together, the “Additional Required Financial Statements”) provided, that upon delivery of such Additional Required Financial Statements, such financial statements shall (x) be deemed “Financial Statements” for the purposes of the representation and warranties set forth in Section 3.4 and (y) in the case of audited Additional Required Financial Statements, be deemed to be incorporated in clause (i) of Section 3.4(a), in the case of each of clause (x) and (y), with the same force and effect as if made as of the date of this Agreement. The Additional Required Financial Statements, together with any audited or unaudited consolidated balance sheet and the related audited or unaudited consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ deficit and cash flows of the Group Companies as of and for a year-to-date period ended as of the end of a different fiscal quarter (and as of and for the same period from the previous fiscal year) or fiscal year (and as of and for the prior fiscal quarter) that are required to be included in the Registration Statement / Proxy Statement (A) will fairly present in all material respects the financial position of the Group Companies as at the date thereof, and the results of its operations, stockholders’ equity and cash flows for the respective periods then ended, (B) will be prepared in conformity with GAAP applied on a consistent basis during the periods involved, (C) in the case of any audited financial statements, will be audited in accordance with the standards of the PCAOB and contain an unqualified report of the Company’s auditor and (D) will comply in all material respects with the applicable accounting requirements and with the Federal Securities Laws.
(b) The Company and Sandbridge shall work in good faith with one another and use their reasonable best efforts (i) to assist, upon advance written notice, during normal business hours and in a manner such as to not unreasonably interfere with the normal operation of any party, such other party in causing to be prepared in a timely manner all other financial information or statements (including customary pro forma financial statements) and related disclosure (including Management’s Discussion & Analysis disclosures) that are required to be included in the Registration Statement / Proxy Statement and any other filings to be made by Sandbridge and/or the Company with the SEC in connection with the transactions contemplated by this Agreement or any Ancillary Document and (ii) to obtain the consents of their respective auditors with respect thereto as may be required by applicable Law or requested by the SEC.
Section 5.21. Owlet Pubco Incentive Equity Plan; Owlet Pubco Employee Stock Purchase Plan. Prior to the filing with the SEC of the definitive Registration Statement / Proxy Statement, the Sandbridge Board shall approve and adopt an equity incentive plan, in substantially the form attached hereto as Exhibit C, and with any changes or modifications thereto as the Company and Sandbridge may mutually agree (the “Owlet Pubco Incentive Equity Plan”), in the manner prescribed under applicable Laws, effective as of one day prior to the Closing Date. Prior to the filing with the SEC of the definitive Registration Statement / Proxy Statement, the Sandbridge Board shall approve and adopt an employee stock purchase plan, in substantially the form attached hereto as Exhibit D, with any changes or modifications thereto as the Company and Sandbridge may mutually agree (the “Owlet Pubco Employee Stock Purchase Plan”), in the manner prescribed under Section 423 of the Code and other applicable Laws, effective as of one day prior to the Closing Date.
Section 5.22. FIRPTA Certificates. At or prior to the Closing, the Company shall deliver, or cause to be delivered, to Sandbridge a certificate, duly executed by the Company, complying with Treasury Regulations Section 1.1445-2(c)(3), together with evidence that the Company has provided notice to the Internal Revenue Service in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2), in each case, in a form and substance reasonably acceptable to Sandbridge.
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Article 6
CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
Section 6.1. Conditions to the Obligations of the Parties. The obligations of the Parties to consummate the transactions contemplated by this Agreement are subject to the satisfaction or, if permitted by applicable Law, waiver by the Party for whose benefit such condition exists of the following conditions:
(a) the applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated;
(b) no Order or Law issued by any court of competent jurisdiction or other Governmental Entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement shall be in effect;
(c) the Company Stockholder Approval shall have been obtained;
(d) the Required Sandbridge Stockholder Approval shall have been obtained;
(e) immediately following the Effective Time, Sandbridge shall satisfy any applicable continuing listing requirements of the NYSE, and Sandbridge shall not have received any notice of non-compliance therewith that has not been cured or would not be cured at or immediately following the Effective Time;
(f) The Registration Statement / Proxy Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement / Proxy Statement shall have been issued and no proceeding for such purpose shall have been initiated or threatened by the SEC and not withdrawn; and
(g) after giving effect to the transactions contemplated hereby (including the PIPE Investment), Sandbridge shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately after the Effective Time.
Section 6.2. Other Conditions to the Obligations of the Sandbridge Parties. The obligations of the Sandbridge Parties to consummate the transactions contemplated by this Agreement are subject to the satisfaction or, if permitted by applicable Law, waiver by Sandbridge (on behalf of itself and the other Sandbridge Parties) of the following further conditions:
(a) (i) the Company Fundamental Representations shall be true and correct in all material respects (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth herein) as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date), and (ii) the representations and warranties of the of the Company set forth in Article 3 (other than the Company Fundamental Representations) shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” or any similar limitation set forth herein) in all respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all respects as of such earlier date), except where the failure of such representations and warranties to be true and correct, taken as a whole, does not cause a Company Material Adverse Effect;
(b) the Company shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by the Company under this Agreement at or prior to the Closing;
(c) since the date of this Agreement, no Company Material Adverse Effect has occurred that is continuing; and
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(d) at or prior to the Closing, the Company shall have delivered, or caused to be delivered, to Sandbridge the following documents:
(i) a certificate duly executed by an authorized officer of the Company, dated as of the Closing Date, to the effect that the conditions specified in Section 6.2(a), Section 6.2(b) and Section 6.2(c) are satisfied, in a form and substance reasonably satisfactory to Sandbridge;
(ii) the Registration Rights Agreement, duly executed by the Company Stockholders party thereto; and
(iii) the Stockholders Agreement, duly executed by the Company Stockholders party thereto.
Section 6.3. Other Conditions to the Obligations of the Company. The obligations of the Company to consummate the transactions contemplated by this Agreement are subject to the satisfaction or, if permitted by applicable Law, waiver by the Company of the following further conditions:
(a) (i) the Sandbridge Fundamental Representations and the representations and warranties of the Sandbridge Parties set forth in Section 4.17(j) shall be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date), and (ii) the representations and warranties of the Sandbridge Parties (other than the Sandbridge Fundamental Representations and the representations and warranties of the Sandbridge Parties set forth in Section 4.17(j)) contained in Article 4 of this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Sandbridge Material Adverse Effect” or any similar limitation set forth herein) in all respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties to be true and correct, taken as a whole, does not cause a Sandbridge Material Adverse Effect;
(b) the Sandbridge Parties shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by them under this Agreement at or prior to the Closing;
(c) the Available Sandbridge Cash shall be equal to or greater than the Minimum Available Sandbridge Cash Amount; and
(d) at or prior to the Closing, Sandbridge shall have delivered, or caused to be delivered, the following documents to the Company:
(i) a certificate duly executed by an authorized officer of Sandbridge, dated as of the Closing Date, to the effect that the conditions specified in Section 6.3(a) and Section 6.3(b) are satisfied, in a form and substance reasonably satisfactory to the Company;
(ii) the Registration Rights Agreement, duly executed by the authorized representatives of Sandbridge and the Sponsor; and
(iii) the Stockholders Agreement, duly executed by the authorized representatives of Sandbridge.
Section 6.4. Frustration of Closing Conditions. Neither the Company nor any Sandbridge Party may rely on the failure of any condition set forth in Article 6 to be satisfied, as applicable, if such failure was caused by such party’s failure to perform any of its material obligations under this Agreement.
Article 7
TERMINATION
Section 7.1. Termination. This Agreement may be terminated and the transactions contemplated by this Agreement may be abandoned at any time prior to the Closing:
(a) by mutual written consent of Sandbridge and the Company;
(b) by Sandbridge, upon written notice to the Company, if any of the representations or warranties set forth in Article 3 would not then be true and correct or if the Company has failed to perform any covenant or agreement on the part of the Company set forth in this Agreement (including an obligation to
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consummate the Closing) such that the condition to Closing set forth in either Section 6.2(a) or Section 6.2(b) would not then be satisfied and the inaccuracy causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, is (or are) not cured or cannot be cured within the earlier of (i) thirty (30) days after written notice thereof is delivered to the Company by Sandbridge, and (ii) the Termination Date; provided, however, that none of the Sandbridge Parties is then in breach of this Agreement so as to prevent the condition to Closing set forth in either Section 6.3(a) or Section 6.3(b) from being satisfied;
(c) by the Company, upon written notice to Sandbridge, if any of the representations or warranties set forth in Article 4 would not then be true and correct or if any Sandbridge Party has failed to perform any covenant or agreement on the part of such applicable Sandbridge Party set forth in this Agreement (including an obligation to consummate the Closing) such that the condition to Closing set forth in either Section 6.3(a) or Section 6.3(b) would not then be satisfied and the inaccuracy causing such representations or warranties not to be true and correct, or the failures to perform any covenant or agreement, as applicable, is (or are) not cured or cannot be cured within the earlier of (i) thirty (30) days after written notice thereof is delivered to Sandbridge by the Company and (ii) the Termination Date; provided, however, the Company is not then in breach of this Agreement so as to prevent the condition to Closing set forth in Section 6.2(a) or Section 6.2(b) from being satisfied;
(d) by either Sandbridge or the Company, if the transactions contemplated by this Agreement shall not have been consummated on or prior to July 31, 2021 (the “Termination Date”); provided, that (i) the right to terminate this Agreement pursuant to this Section 7.1(d) shall not be available to Sandbridge if any Sandbridge Party’s breach of any of its covenants or obligations under this Agreement shall have proximately caused the failure to consummate the transactions contemplated by this Agreement on or before the Termination Date, and (ii) the right to terminate this Agreement pursuant to this Section 7.1(d) shall not be available to the Company if the Company’s breach of its covenants or obligations under this Agreement shall have proximately caused the failure to consummate the transactions contemplated by this Agreement on or before the Termination Date;
(e) by either Sandbridge or the Company, if any Governmental Entity shall have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement and such Order or other action shall have become final and nonappealable; or
(f) by either Sandbridge or the Company if the Sandbridge Stockholders Meeting has been held (including any adjournment thereof), has concluded, Sandbridge’s stockholders have duly voted and the Required Sandbridge Stockholder Approval was not obtained; or
(g) by Sandbridge, if the Company does not deliver, or cause to be delivered, to Sandbridge the Written Consent in accordance with Section 5.15 (Company Stockholder Approval).
Section 7.2. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 7.1, this entire Agreement shall forthwith become void (and there shall be no Liability or obligation on the part of the Parties and their respective Non-Party Affiliates) with the exception of Section 5.3(a), Section 5.5(a), this Section 7.2, Article 8 and Article 1 (to the extent the definitions included in Article 1 relate to the foregoing Sections), each of which shall survive such termination and remain valid and binding obligations of the Parties. Notwithstanding the foregoing or anything to the contrary herein, the termination of this Agreement pursuant to Section 7.1 shall not affect (i) any Liability on the part of any Party for any Willful Breach of any covenant or agreement set forth in this Agreement prior to such termination or fraud or (ii) any Person’s Liability under any Subscription Agreement and the Confidentiality Agreement to the extent arising from a claim against such Person by another Person party to such agreement on the terms and subject to the conditions thereof.
Article 8
MISCELLANEOUS
Section 8.1. Non-Survival. Each of the representations and warranties, and each of the agreements and covenants (to the extent such agreement or covenant contemplates or requires performance at or prior to the Effective Time), of the Parties set forth in this Agreement, shall terminate at the Effective Time, such that no claim for breach of any such representation, warranty, agreement or covenant, detrimental reliance or other right
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or remedy (whether in contract, in tort, at law, in equity or otherwise) may be brought with respect thereto after the Effective Time against any Party, any Company Non-Party Affiliate or any Sandbridge Non-Party Affiliate. Each covenant and agreement contained herein that, by its terms, expressly contemplates performance after the Effective Time shall so survive the Effective Time in accordance with its terms, and each covenant and agreement contained in any Ancillary Document that, by its terms, expressly contemplates performance after the Effective Time shall so survive the Effective Time in accordance with its terms and any other provision in any Ancillary Document that expressly survives the Effective Time shall so survive the Effective Time in accordance with the terms of such Ancillary Document.
Section 8.2. Entire Agreement; Assignment. This Agreement (together with the Confidentiality Agreement and the Ancillary Documents) constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof. This Agreement may not be assigned by any Party (whether by operation of law or otherwise) without the prior written consent of Sandbridge and the Company prior to Closing. Any attempted assignment of this Agreement not in accordance with the terms of this Section 8.2 shall be void.
Section 8.3. Amendment. This Agreement may be amended or modified only by a written agreement executed and delivered by Sandbridge and the Company. Any purported amendment by any Party or Parties effected in a manner which does not comply with this Section 8.3 shall be void, ab initio.
Section 8.4. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by e-mail, or by registered or certified mail (postage prepaid, return receipt requested) to the other Parties as follows:
 
(a)
If to any Sandbridge Party, to:
 
 
 
 
 
 
c/o Sandbridge Acquisition Corporation
1999 Avenue of the Stars, Suite 2088
Los Angeles, CA
 
 
Attention:
Ken Suslow
 
 
 
Richard Henry
 
 
E-mail:
ksuslow@sandbridgecap.com
rhenry@sandbridgecap.com
 
 
 
 
 
 
with a copy (which shall not constitute notice) to:
 
 
 
 
 
 
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
 
 
Attention:
Emily Oldshue
 
 
 
Christopher Comeau
 
 
E-mail:
emily.oldshue@ropesgray.com
christopher.comeau@ropesgray.com
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(b)
If to the Company, to:
 
 
 
 
 
 
Owlet Baby Care Inc.
2500 Executive Parkway, Suite 500
Lehi, Utah 84043
 
 
Attention:
Mike Abbott
 
 
 
Jake Briem
 
 
Email:
mabbott@owletcare.com
jbriem@owletcare.com
 
 
 
 
 
 
with copies (which shall not constitute notice) to:
 
 
 
 
 
 
Eclipse Continuity Fund I, L.P.
Eclipse Ventures II, LP
514 High Street, Suite 4
Palo Alto, California 94301
 
 
Attention:
Lior Susan
 
 
Email:
lior@eclipse.vc
 
 
 
 
 
 
and
 
 
 
 
 
 
Latham & Watkins LLP
811 Main Street
Suite 3700
Houston, TX 77002
 
 
Attention:
Ryan J. Maierson
 
 
 
Benjamin A. Potter
 
 
E-mail:
ryan.maierson@lw.com
benjamin.potter@lw.com
or to such other address as the Party to whom notice is given may have previously furnished to the others in writing in the manner set forth above.
Section 8.5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware.
Section 8.6. Fees and Expenses. Except as otherwise set forth in this Agreement, all fees and expenses incurred in connection with this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby, including the fees and disbursements of counsel, financial advisors and accountants, shall be paid by the Party incurring such fees or expenses; provided that if the Closing occurs, then Sandbridge shall pay, or cause to be paid, the Company Transaction Expenses in accordance with Section 2.6 (Payment of Expenses). For the avoidance of doubt, any payments to be made (or caused to be made) by Sandbridge pursuant to this Section 8.6 shall be paid upon consummation of the Merger and release of proceeds from the Trust Account.
Section 8.7. Construction; Interpretation. The term “this Agreement” means this Business Combination Agreement together with the Schedules and Exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof. The headings set forth in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. No Party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions hereof, and all provisions of this Agreement shall be construed according to their fair meaning and not strictly for or against any Party. Unless otherwise indicated to the contrary herein by the context or use thereof: (a) the words, “herein,” “hereto,” “hereof” and words of similar import refer to this Agreement as a whole, including the Schedules and Exhibits, and not to any particular section, subsection, paragraph, subparagraph or clause set forth in this Agreement; (b) masculine gender shall also include the feminine and
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neutral genders, and vice versa; (c) words importing the singular shall also include the plural, and vice versa; (d) the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”; (e) references to “$” or “dollar” or “US$” shall be references to United States dollars; (f) the word “or” is disjunctive but not necessarily exclusive; (g) the words “writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (h) the word “day” means calendar day unless Business Day is expressly specified; (i) the word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; (j) all references to Articles, Sections, Exhibits or Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement; (k) the words “provided” or “made available” or words of similar import (regardless of whether capitalized or not) shall mean, when used with reference to documents or other materials required to be provided or made available to Sandbridge, any documents or other materials posted to the electronic data room located at intralinks.com under the project name “Project Olympus” as of 5:00 p.m., Eastern Time, at least one (1) day prior to the date of this Agreement; (l) all references to any Law will be to such Law as amended, supplemented or otherwise modified or re-enacted from time to time; and (m) all references to any Contract are to that Contract as amended or modified from time to time in accordance with the terms thereof (subject to any restrictions on amendments or modifications set forth in this Agreement). If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter.
Section 8.8. Annexes, Exhibits and Schedules. All annexes and exhibits to this agreement and the Schedules are hereby incorporated into this Agreement and are hereby made a part hereof as if set out in full in this Agreement. The Schedules shall be arranged in sections and subsections corresponding to the numbered and lettered Sections and subsections set forth in this Agreement. Any item disclosed in the Company Disclosure Schedules or in the Sandbridge Disclosure Schedules corresponding to any Section or subsection of Article 3 (in the case of the Company Disclosure Schedules) or Article 4 (in the case of the Sandbridge Disclosure Schedules) shall be deemed to have been disclosed with respect to every other section and subsection of Article 3 (in the case of the Company Disclosure Schedules) or Article 4 (in the case of the Sandbridge Disclosure Schedules), as applicable, where the relevance of such disclosure to such other Section or subsection is reasonably apparent on the face of the disclosure. The information and disclosures set forth in the Schedules that correspond to the section or subsections of Article 3 or Article 4 may include matters not required to be disclosed in the Schedules, and any such additional information or disclosure is for informational purposes only and does not necessarily include other matters of a similar nature.
Section 8.9. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party and its successors and permitted assigns and, except as provided in Section 5.17 (Sandbridge Indemnification; Directors’ and Officers’ Insurance), Section 5.17(e) (Company Indemnification; Directors’ and Officers’ Insurance) and the subsequent sentence of this Section 8.9, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. Each of the Non-Party Affiliates shall be an express third-party beneficiary of Section 8.13 (No Recourse) and this Section 8.9 (Parties in Interest) (to the extent related to the foregoing).
Section 8.10. Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable Law, but if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable under applicable Law, all other provisions of this Agreement shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision of this Agreement is invalid, illegal or unenforceable under applicable Law, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 8.11. Counterparts; Electronic Signatures. This Agreement and each Ancillary Document (including any of the closing deliverables contemplated hereby) may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Electronic execution or delivery of an executed counterpart of a signature page to this Agreement or any
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Ancillary Document (including any of the closing deliverables contemplated hereby), including delivery of such electronic signatures or scanned pages by e-mail, shall be effective as delivery of a manually executed counterpart to this Agreement and any such Ancillary Document.
Section 8.12. Knowledge of Company; Knowledge of Sandbridge. For all purposes of this Agreement, the phrase “to the Company’s knowledge” and “known by the Company” and any derivations thereof shall mean as of the applicable date, the actual knowledge of the individuals set forth on Section 8.12(a) of the Company Disclosure Schedules, assuming reasonable due inquiry and investigation of his or her direct reports. For all purposes of this Agreement, the phrase “to Sandbridge’s knowledge” and “to the knowledge of Sandbridge” and any derivations thereof shall mean as of the applicable date, the actual knowledge of the individuals set forth on Section 8.12(b) of the Sandbridge Disclosure Schedules, assuming reasonable due inquiry and investigation of his or her direct reports. For the avoidance of doubt, none of the individuals set forth on Section 8.12(a) of the Company Disclosure Schedules or Section 8.12(b) of the Sandbridge Disclosure Schedules shall have any personal Liability or obligations regarding such knowledge.
Section 8.13. No Recourse. Each Party agrees on behalf of itself and on behalf of Company Non-Party Affiliates, in the case of the Company, and Sandbridge Non-Party Affiliates, in the case of Sandbridge, 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 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 Sandbridge Non-Party Affiliate (each, a “Non-Party Affiliate”), and (b) none of the 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 by the Company, Sandbridge or any Non-Party Affiliate concerning any Group Company, any Sandbridge Party, this Agreement or the transactions contemplated hereby.
Section 8.14. Extension; Waiver. The Company prior to the Closing and the Company after the Closing may (a) extend the time for the performance of any of the obligations or other acts of the Sandbridge Parties set forth herein, (b) waive any inaccuracies in the representations and warranties of the Sandbridge Parties set forth herein or (c) waive compliance by the Sandbridge Parties with any of the agreements or conditions set forth herein. Sandbridge may (i) extend the time for the performance of any of the obligations or other acts of the Company, set forth herein, (ii) waive any inaccuracies in the representations and warranties of the Company set forth herein or (iii) waive compliance by the Company with any of the agreements or conditions set forth herein. Any agreement on the part of any such Party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such Party. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of such rights.
Section 8.15. Waiver of Jury Trial. THE PARTIES EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY DOCUMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY ANCILLARY DOCUMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
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HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 8.15.
Section 8.16. Submission to Jurisdiction. Each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware for the purposes of any Proceeding, claim, demand, action or cause of action (a) arising under this Agreement or under any Ancillary Document or (b) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any Ancillary Document or any of the transactions contemplated hereby or any of the transactions contemplated thereby, and irrevocably and unconditionally waives any objection to the laying of venue of any such Proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding has been brought in an inconvenient forum. Each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Proceeding claim, demand, action or cause of action against such Party (i) arising under this Agreement or under any Ancillary Document or (ii) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any Ancillary Document or any of the transactions contemplated hereby or any of the transactions contemplated thereby, (A) any claim that such Party is not personally subject to the jurisdiction of the courts as described in this Section 8.16 for any reason, (B) that such Party or such Party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Proceeding, claim, demand, action or cause of action in any such court is brought against such Party in an inconvenient forum, (y) the venue of such Proceeding, claim, demand, action or cause of action against such Party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such Party in or by such courts. Each Party agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 8.4 shall be effective service of process for any such Proceeding, claim, demand, action or cause of action.
Section 8.17. Remedies. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their respective obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement) in accordance with their specific terms or otherwise breach such provisions. It is accordingly agreed that the Parties shall be entitled to seek an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, without posting a bond or undertaking and without proof of damages and this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms of this Agreement on the basis that the other parties have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity.
Section 8.18. Trust Account Waiver. Reference is made to the final prospectus of Sandbridge, filed with the SEC (File No. 333-248320) on September 16, 2020 (the “Prospectus”). The Company acknowledges and agrees and understands that Sandbridge has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of Sandbridge’s public stockholders (including overallotment shares acquired by Sandbridge’s underwriters, the “Public Stockholders”), and Sandbridge may disburse monies from the Trust Account only in the express circumstances described in the Prospectus. For and in consideration of Sandbridge entering into this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company hereby agrees on behalf of itself and its Representatives that, notwithstanding the foregoing or anything to the contrary in this
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Agreement, none of the Company nor any of it Representatives does now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Agreement or any proposed or actual business relationship between Sandbridge or any of its Representatives, on the one hand, and, the Company or any of its Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Trust Account Released Claims”). The Company, on its own behalf and on behalf of its Representatives, hereby irrevocably waives any Trust Account Released Claims that it or any of its Representatives may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations or Contracts with Sandbridge or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of any agreement with Sandbridge or its Affiliates).
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IN WITNESS WHEREOF, each of the Parties has caused this Business Combination Agreement to be duly executed on its behalf as of the day and year first above written.
 
SANDBRIDGE ACQUISITION CORPORATION
 
 
 
 
By:
/s/ Ken Suslow
 
Name:
Ken Suslow
 
Title:
Chief Executive Officer
 
 
 
 
PROJECT OLYMPUS MERGER SUB, INC.
 
 
 
 
By:
/s/ Ken Suslow
 
Name:
Ken Suslow
 
Title:
Chief Executive Officer
 
 
 
 
OWLET BABY CARE INC.
 
 
 
 
By:
/s/ Kurt Workman
 
Name:
Kurt Workman
 
Title:
Chief Executive Officer
[Signature Page to Business Combination Agreement]
68

EXHIBIT A

Form of Owlet Pubco Certificate of Incorporation

[See attached.]

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SANDBRIDGE ACQUISITION CORPORATION

Sandbridge Acquisition Corporation (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows:

1.          The name of the Corporation is Sandbridge Acquisition Corporation. The Corporation was incorporated under the name Sandbridge Acquisition Corporation by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware on June 23, 2020 (the “Original Certificate”).

2.          An Amended and Restated Certificate of Incorporation, which amended and restated the Original Certificate in its entirety, was filed with the Secretary of State of the State of Delaware on September 14, 2020 (as amended from time to time, the “Existing Certificate”).

3.          This Second Amended and Restated Certificate of Incorporation (the “Second Amended and Restated Certificate”), which amends and restates the Existing Certificate in its entirety, has been approved by the Board of Directors of the Corporation (the “Board of Directors”) in accordance with Sections 242 and 245 of the DGCL and has been adopted by the stockholders of the Corporation at a meeting of the stockholders of the Corporation in accordance with the provisions of Section 211 of the DGCL.

4.          The text of the Existing Certificate is hereby amended and restated by this Second Amended and Restated Certificate to read in its entirety as set forth in EXHIBIT A attached hereto.

5.          This Second Amended and Restated Certificate shall become effective on the date of filing with the Secretary of State of the State of Delaware.

IN WITNESS WHEREOF, Sandbridge Acquisition Corporation has caused this Second Amended and Restated Certificate to be signed by a duly authorized officer of the Corporation, on _____________, 2021.

 
SANDBRIDGE ACQUISITION CORPORATION
 
By:
 
 
Name:
 
 
Title:
 

[Signature Page to Second Amended and Restated Certificate of Incorporation]

EXHIBIT A
ARTICLE I
NAME

The name of the corporation is Owlet, Inc. (the “Corporation”).

ARTICLE II
REGISTERED OFFICE AND AGENT

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801, and the name of its registered agent at such address is The Corporation Trust Company.

ARTICLE III
PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”) as it now exists or may hereafter be amended and supplemented.

ARTICLE IV
CAPITAL STOCK

The Corporation is authorized to issue two classes of stock to be designated, respectively, “Class A Common Stock” and “Preferred Stock.” The total number of shares of capital stock which the Corporation shall have authority to issue is 1,100,000,000. The total number of shares of Class A Common Stock that the Corporation is authorized to issue is 1,000,000,000, having a par value of $0.0001 per share, and the total number of shares of Preferred Stock that the Corporation is authorized to issue is 100,000,000, having a par value of $0.0001 per share.

The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation are as follows:

A.
CLASS A COMMON STOCK.

1.          General. The voting, dividend, liquidation, and other rights and powers of the Class A Common Stock are subject to and qualified by the rights, powers and preferences of any series of Preferred Stock as may be designated by the Board of Directors of the Corporation (the “Board of Directors”) and outstanding from time to time.

2.          Voting. Except as otherwise provided herein or expressly required by law, each holder of Class A Common Stock, as such, shall be entitled to vote on each matter submitted to a vote of stockholders and shall be entitled to one (1) vote for each share of Class A Common Stock held of record by such holder as of the record date for determining stockholders entitled to vote on such matter. Except as otherwise required by law, holders of Class A Common Stock, as such, shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate (including any Certificate of Designation (as defined below)) that relates solely to the rights, powers, preferences (or the qualifications, limitations or restrictions thereof) or other terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second Amended and Restated Certificate (including any Certificate of Designation) or pursuant to the DGCL.

Subject to the rights of any holders of any outstanding series of Preferred Stock, the number of authorized shares of Class A Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

3.          Dividends. Subject to applicable law and the rights and preferences of any holders of any outstanding series of Preferred Stock, the holders of Class A Common Stock, as such, shall be entitled to the payment of dividends on the Class A Common Stock when, as and if declared by the Board of Directors in accordance with applicable law.

4.          Liquidation. Subject to the rights and preferences of any holders of any shares of any outstanding series of Preferred Stock, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the funds and assets of the Corporation that may be legally distributed to the Corporation’s stockholders shall be distributed among the holders of the then outstanding Class A Common Stock pro rata in accordance with the number of shares of Class A Common Stock held by each such holder.

B.
PREFERRED STOCK

Shares of Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the creation and issuance of such series adopted by the Board of Directors as hereinafter provided.

Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designation relating thereto in accordance with the DGCL (a “Certificate of Designation”), to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, and to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series as shall be stated and expressed in such resolutions, all to the fullest extent now or hereafter permitted by the DGCL. Without limiting the generality of the foregoing, the resolution or resolutions providing for the creation and issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law and this Second Amended and Restated Certificate (including any Certificate of Designation). Except as otherwise required by law, holders of any series of Preferred Stock shall be entitled only to such voting rights, if any, as shall expressly be granted thereto by this Second Amended and Restated Certificate (including any Certificate of Designation).

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

ARTICLE V
BOARD OF DIRECTORS

For the management of the business and for the conduct of the affairs of the Corporation it is further provided that:

A. Subject to that certain Stockholders Agreement, dated as of [ ], by and among the Corporation and certain stockholders of the Corporation (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Stockholders Agreement”) and the special rights of the holders of one or more outstanding series of Preferred Stock to elect directors, the directors of the Corporation shall be classified with respect to the time for which they severally hold office into three classes, designated as Class I, Class II and Class III. The initial Class I directors shall serve for a term expiring at the first annual meeting of the stockholders following the date of this Second Amended and Restated Certificate; the initial Class II directors shall serve for a term expiring at the second annual meeting of the stockholders following the date of this Second Amended and Restated Certificate; and the initial Class III directors shall serve for a term expiring at the third annual meeting following the date of this Second Amended and Restated Certificate. At each annual meeting of the stockholders of the Corporation beginning with the first annual meeting of the stockholders following the date of this Second Amended and Restated Certificate, subject to the Stockholders Agreement and the special rights of the holders of one or more outstanding series of Preferred Stock to elect directors, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of the stockholders held in the third year following the year of their election. Each director shall hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation, disqualification or removal. No decrease in the number of directors shall shorten the term of any incumbent director. Subject to the Stockholders Agreement, the Board of Directors is authorized to assign members of the Board of Directors already in office to Class I, Class II and Class III.

B. Except as otherwise expressly provided by the DGCL or this Second Amended and Restated Certificate, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors.

C. Subject to the Stockholders Agreement and the special rights of the holders of one or more outstanding series of Preferred Stock to elect directors, the Board of Directors or any individual director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least two-thirds (66 and 2/3%) of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote at an election of directors.

D. Subject to the Stockholders Agreement and the special rights of the holders of one or more outstanding series of Preferred Stock to elect directors, except as otherwise provided by law, any vacancies on the Board of Directors resulting from death, resignation, disqualification, retirement, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall be filled exclusively by the affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director (other than any directors elected by the separate vote of one or more outstanding series of Preferred Stock), and shall not be filled by the stockholders. Subject to the Stockholders Agreement, any director appointed in accordance with the preceding sentence shall hold office until the expiration of the term of the class to which such director shall have been appointed or until his or her earlier death, resignation, retirement, disqualification, or removal.

E. Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of this Second Amended and Restated Certificate (including any Certificate of Designation). Notwithstanding anything to the contrary in this Article V, the number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to paragraph B of this Article V, and the total number of directors constituting the whole Board of Directors shall be automatically adjusted accordingly. Except as otherwise provided in the Certificate of Designation(s) in respect of one or more series of Preferred Stock, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such Certificate of Designation(s), the terms of office of all such additional directors elected by the holders of such series of Preferred Stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.

F. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal the Amended and Restated Bylaws of the Corporation (as amended and/or restated from time to time, the “Bylaws”). In addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Second Amended and Restated Certificate (including any Certificate of Designation in respect of one or more series of Preferred Stock) or the Bylaws of the Corporation, the adoption, amendment or repeal of the Bylaws of the Corporation by the stockholders of the Corporation shall require the affirmative vote of the holders of at least two-thirds (66 and 2/3%) of the voting power of all of the then outstanding shares of voting stock of the Corporation entitled to vote generally in an election of directors.

G. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.

ARTICLE VI
STOCKHOLDERS

A. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders of the Corporation, and shall not be taken by written consent in lieu of a meeting. Notwithstanding the foregoing, any action required or permitted to be taken by the holders of any series of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable Certificate of Designation relating to such series of Preferred Stock, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares of the relevant series of Preferred Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with the applicable provisions of the DGCL.

B. Subject to the special rights of the holders of one or more series of Preferred Stock, special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, at any time only by or at the direction of the Board of Directors, the Chairperson of the Board of Directors, the Chief Executive Officer or the President, and shall not be called by any other person or persons.

C. Advance notice of stockholder nominations for the election of directors and of other business proposed to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

ARTICLE VII
LIABILITY

No director of the Corporation shall have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or hereafter may be amended. Any amendment, repeal or modification of this Article VII, or the adoption of any provision of the Second Amended and Restated Certificate inconsistent with this Article VII, shall not adversely affect any right or protection of a director of the Corporation with respect to any act or omission occurring prior to such amendment, repeal, modification or adoption. If the DGCL is amended after approval by the stockholders of this Article VII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

ARTICLE VIII
INDEMNIFICATION

The Corporation shall have the power to provide rights to indemnification and advancement of expenses to its current and former officers, directors, employees and agents and to any person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

ARTICLE IX
AMENDMENTS

A. Notwithstanding anything contained in this Second Amended and Restated Certificate to the contrary, in addition to any vote required by applicable law, the following provisions in this Second Amended and Restated Certificate may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least two-thirds (66 and 2/3%) of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereo