System1, Inc 8-K, filed Aug 30, 2022
System1, Inc. (SST)
8-K
2022-08-30
For: 2022-08-30
View Original
Added on
April 10, 2026
About this 8-K
System1, Inc filed this 8-K on August 30, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 9.01: Financial statements and exhibits
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): August 30, 2022
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
(
(Registrant's telephone number, including area code)
N/A
(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 | Name of each exchange on which registered | ||||||||||||
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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 | ||||
Conditional Consent, Waiver and Acknowledgement to Business Combination Agreement
On August 30, 2022, System1, Inc., a Delaware corporation (“System1” or the “Company”), Protected.net Group Limited (“Protected UK”) and Just Develop It Limited (“JDI”) entered into a Conditional Consent, Waiver and Acknowledgement (the “Waiver”) pursuant to which JDI agreed to waive its right to the Year 3 Stock Bonus Pool (as such term is defined in the BCA, as defined below), consisting of $50,000,000 worth of System1 Class A Common Stock, par value $0.0001 (“System1 Class A Stock”) payable in January 2024 and as set forth in Section 12.11(a) of the Business Combination Agreement dated June 28, 2021 (as amended), by and among S1 Holdco, LLC, a Delaware limited liability company (“S1 Holdco”), System1 SS Protect Holdings, Inc., a Delaware corporation (“Protected”) and the other parties signatory thereto (collectively, the “BCA”) in exchange for $40,000,000 in cash payable in four (4) quarterly installments of $10,000,000 each, commencing on August 30, 2022 and on each three (3) month anniversary thereafter.
This summary is qualified in its entirety by reference to the full text of the Waiver, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Lockup Agreements
On August 30, 2022 and in connection with entering into the Waiver, System1 entered into one (1) year contractual lockup agreements with each of Christopher Phillips, a member of the Board of Directors of the Company and the controlling shareholder of JDI (on behalf of himself and JDI) (the “JDI Lockup”) and Nicholas Baker (on behalf of himself and entities that are controlled by Nicholas Baker) (the “Baker Lockup” and, together with the JDI Lockup, the “Bonus Waiver Lockups”), pursuant to which the parties to the Bonus Waiver Lockups have agreed not to sell their shares of System1 Class A Stock for one year from September 1, 2022 through August 30, 2023 (the “Lockup Period”); provided that Mr. Phillips/JDI may sell System1 Class A Stock, among other exceptions, at any time during the Lockup Period at prices equal to or in excess of $11.00 per share.
This summary is qualified in its entirety by reference to the full text of the Bonus Waiver Lockups, which are filed as Exhibits 10.2 and 10.3 hereto and is incorporated herein by reference.
Item 9.01 - Financial Statements and Exhibits
(d): Exhibits.
| Exhibit No. | Description | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
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SIGNATURE
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.
| System1, Inc. | ||||||||
| Date: August 30, 2022 | By: | /s/ Daniel J. Weinrot | ||||||
Name: | Daniel J. Weinrot | |||||||
Title: | General Counsel & Corporate Secretary | |||||||
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Execution Version
CONDITIONAL CONSENT, WAIVER AND ACKNOWLEDGEMENT
August 30, 2022
Reference is hereby made to that certain:
(a) Business Combination Agreement, dated as of June 28, 2021, by and among System1 Inc., a Delaware corporation (formerly known as Trebia Acquisition Corp., a Cayman Islands exempted company, “System1”), S1 Holdco, LLC, a Delaware limited liability company, System1 Midco, LLC, a Delaware limited liability company, System1 S1, LLC, a Delaware limited liability company, OpenMail LLC, a Delaware limited liability company, Orchid Merger Sub I, Inc., a Delaware corporation and direct, wholly owned subsidiary of System1, Orchid Merger Sub II, LLC, a Delaware limited liability company, Orchid Finco, LLC, a Delaware limited liability company, CSC III System1 Blocker Inc., a Delaware corporation, CSC (Offshore) III System1 Blocker, Inc., a Delaware corporation, CSC III-A System1 Blocker, Inc., a Delaware corporation, Court Square Capital Partners III, L.P., a Delaware limited partnership, Court Square Capital Partners (Offshore) III, L.P., a Cayman Islands limited partnership, Court Square Capital Partners IIIA, L.P., a Delaware limited partnership, Court Square Capital GP III, LLC, a Delaware limited liability company, Court Square Capital Partners (Executive) III, L.P., a Delaware limited partnership, System1 SS Protect Holdings, Inc., a Delaware corporation, the Persons listed on Exhibit L to the BCA, Trasimene Trebia, LP, BGPT Trebia LP and the Persons listed on Exhibit J to the BCA (collectively, as amended pursuant to the terms of the BCA, the “BCA Parties”), as amended by (i) Amendment No. 1 thereto, dated November 30, 2021, by and among the BCA Parties, (ii) Amendment No. 2 thereto, dated January 10, 2022, by and among the BCA Parties, and (iii) Amendment No. 3 thereto, dated January 25, 2022, by and among the BCA Parties (such Business Combination Agreement, as amended and together with any and all exhibits and schedules thereto, the “BCA”); and
(b) a bonus allocation letter dated August 29, 2022 signed by Christopher Phillips and delivered to System1 in accordance with the provisions of Section 12.11(a) of the BCA, attached hereto as Exhibit A (the “Year 3 Bonus Allocation Letter”).
Capitalized terms used but not otherwise defined in this conditional consent, waiver and acknowledgement (“Conditional Consent, Waiver and Acknowledgement”) will have the meanings ascribed to such terms in the BCA.
Pursuant to Section 12.11(a) of the BCA, if, on or prior to December 31, 2023, Protected LTM Cash EBITDA (the “2023 Earnout Threshold”) has equaled or exceeded $55,000,000, as reasonably determined by the board of directors of System1 (the “System1 Board”), acting in good faith, System1 is required to make available, promptly following December 31, 2023, a bonus pool of a number of shares (the “Year 3 Stock Bonus Pool”) of class A common stock, par value $0.0001 per share, of System1 (“System1 Class A Common Stock”) equal to $50,000,000 divided by the volume weighted average trading price of System1 Class A Common Stock (as reported by Bloomberg L.P. or, if not reported therein, another authoritative source chosen by System1) for the 20 consecutive Trading Days ending on (and including) the Trading Day that is 5 Trading Days prior to the due date for payment of the Year 3 Stock Bonus Pool, which shall be paid to Year 3 Eligible Recipients, in fully-vested shares of System1 Class A Common Stock, subject to applicable tax withholding, no later than thirty (30)
days following December 31, 2023, and shall be allocated among Year 3 Eligible Recipients as determined by Christopher Phillips in his sole discretion (or, if Christopher Phillips is not an employee, consultant, independent contractor or director of System1 and its Subsidiaries (a “System1 Service Provider”) as of December 31, 2023 (other than as a result of a non-Cause termination by System1 or its Subsidiaries), by the System1 Board). The parties hereto agree that the Persons listed on Exhibit B attached hereto (the “Year 3 Bonus Recipients”) are, as of (i) the delivery of the Year 3 Bonus Allocation Letter to System1 and (ii) the execution of this Conditional Consent, Waiver and Acknowledgment, each entitled to their respective share of the Year 3 Stock Bonus Pool, as set forth on Exhibit A to the Year 3 Bonus Allocation Letter. Christopher Phillips and Protected UK hereby agree that each of the Year 3 Bonus Recipients shall be deemed to be the “Year 3 Eligible Recipients,” as such term is used in the BCA, and no other Persons shall be deemed to be Year 3 Eligible Recipients or eligible for any payments pursuant to Section 12.11(a) of the BCA. In accordance with Section 15.01(a) of the BCA, the undersigned Year 3 Bonus Recipients, Protected UK and Christopher Phillips hereby waive System1’s obligations under Section 12.11(a) of the BCA to pay each Year 3 Eligible Recipient their respective share of the Year 3 Stock Bonus Pool, pursuant to the terms thereof, subject to the satisfaction of the following conditions, which each of the parties hereto acknowledges shall be satisfied:
1.Protected UK shall make a cash bonus payment to each of the undersigned Year 3 Bonus Recipients (the aggregate amount of such cash bonus payments to be paid to all Year 3 Bonus Recipients, the “Initial Bonus Pool”) on the date hereof, which shall be allocated to Year 3 Bonus Recipients in the amounts set forth on Exhibit C attached hereto, subject to applicable tax withholding (if any) and Section 3.08 of the BCA, provided that the Initial Bonus Pool shall not exceed $10,000,000;
2.Protected UK shall make a cash bonus payment to each of the undersigned Year 3 Bonus Recipients on each of the (a) three-month anniversary of the date hereof (the “Second Bonus Date,” and the aggregate amount of such cash bonus payments to be paid to all Year 3 Bonus Recipients on the Second Bonus Date, the “Second Bonus Pool”), (b) six-month anniversary of the date hereof (the “Third Bonus Date,” and the aggregate amount of such cash bonus payments to be paid to all Year 3 Bonus Recipients on the Third Bonus Date, the “Third Bonus Pool”), and (c) nine-month anniversary of the date hereof (the “Fourth Bonus Date,” and the aggregate amount of such cash bonus payments to be paid to all Year 3 Bonus Recipients on the Fourth Bonus Date, the “Fourth Bonus Pool” and, together with Initial Bonus Pool, Second Bonus Pool and Third Bonus Pool, collectively, the “Bonus Pool”), which payments, on each of the Second Bonus Date, the Third Bonus Date and the Fourth Bonus Date (collectively, the “Subsequent Bonus Dates”), shall be allocated to Year 3 Bonus Recipients in the amounts set forth on Exhibit C attached hereto, subject to applicable tax withholding (if any) and Section 3.08 of the BCA; provided that (x) none of the Second Bonus Pool, the Third Bonus Pool, or the Fourth Bonus Pool shall exceed $10,000,000, (y) the Bonus Pool shall not exceed $40,000,000, and (z) Protected UK will not be required to make any payments pursuant to this Conditional Consent, Waiver and Acknowledgement on the Second Bonus Date, the Third Bonus Date or the Fourth Bonus Date, as applicable, if Christopher
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Phillips has, as of such Subsequent Bonus Date, voluntarily resigned as a System1 Service Provider or been terminated as a System1 Service Provider for Cause. For the avoidance of doubt, if Christopher Phillips voluntarily resigns as a System1 Service Provider or is terminated as a System1 Service Provider for Cause, none of System1, Protected UK or any of their Affiliates will have any obligations to make any bonus payments pursuant to Section 12.11(a) of the BCA.
3.Each of Christopher Phillips and Nicholas Baker have executed a lock-up agreement, the forms of which are attached hereto as Exhibit D-1 and Exhibit D-2, respectively, and which shall be effective as of the date hereof.
4.Each of JDI and System1 have executed the Indemnity Side Letter attached hereto as Exhibit E (the “Indemnity Side Letter”), which shall be effective as of the date hereof.
5.JDI shall have obtained an enforceable contractual right, in form and substance reasonably satisfactory to System1, against each Person to whom JDI transfers any part of the Bonus Pool other than the Initial Bonus Pool (each a “Secondary Payee”), documentation of which shall have been provided to System1, duly executed by each Secondary Payee (collectively, the “Clawback Agreements”), prior to any transfer to such Secondary Payee, which requires such Secondary Payee to transfer to JDI, and entitles JDI to, upon its written demand, obtain immediately from such Secondary Payee, his, her, their or its pro rata portion (calculated based on such Secondary Payee’s share of any cash bonus payments received by such Secondary Payee as of JDI’s demand for payment pursuant to the applicable Clawback Agreement) of any amounts demanded by System1 pursuant to the Indemnity Side Letter.
6.Each of the parties hereto (a) acknowledges that the performance of the obligations contemplated by this Conditional Consent, Waiver and Acknowledgement shall not be deemed to breach the terms of any representation and warranty, covenant or term of the BCA, and (b) hereby waives any breach of any representation and warranty, covenant or term of the BCA, with respect to the matters set forth in this Conditional Consent, Waiver and Acknowledgement.
7.Each of the parties hereto acknowledges and agrees that any rights pursuant to the Year 3 Bonus Allocation Letter are waived in connection with this Conditional Consent, Waiver and Acknowledgment, and any obligations pursuant to the Year 3 Bonus Allocation Letter are terminated by this Conditional Consent, Waiver and Acknowledgment.
8.Each of the parties hereto acknowledges and agrees that neither the Bonus Pool nor any portion thereof shall be included in the calculation of Protected LTM Cash EBITDA for purposes of determining the 2024 Earnout Threshold pursuant to Section 12.11(b) of the BCA.
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This Conditional Consent, Waiver and Acknowledgment is limited to the matters expressly mentioned above, and except as expressly acknowledged and waived herein, all provisions of the BCA remain in full force and effect. This Conditional Consent, Waiver and Acknowledgement shall not be construed as a waiver or consent to any other action by the parties hereto, except as expressly provided for herein. This Conditional Consent, Waiver and Acknowledgment shall be subject to the terms of Section 1.02 and Article XV of the BCA, which are incorporated herein by reference, in each case, mutatis mutandis and this Conditional Consent, Waiver and Acknowledgment and the terms hereof are confidential and shall not be disclosed by any party hereto, except as required by applicable law, rule or regulation.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned have executed this Conditional Consent, Waiver and Acknowledgement as of the date first written above.
SYSTEM1, INC.
By:/s/ Daniel Weinrot
Name: Daniel Weinrot
Title: General Counsel
[Signature Page to Conditional Consent, Waiver and Acknowledgement]
PROTECTED.NET GROUP LIMITED
By:
Name:
Title:
Name:
Title:
[Signature Page to Conditional Consent, Waiver and Acknowledgement]
YEAR 3 ELIGIBLE RECIPIENTS
JUST DEVELOP IT LIMITED
By:
Name:
Title:
Name:
Title:
[Signature Page to Conditional Consent, Waiver and Acknowledgement]
Exhibit A
Year 3 Bonus Allocation Letter
Exhibit B
Year 3 Bonus Recipients
Just Develop It Limited
Exhibit C
Allocation of each of Initial Bonus Pool, Second Bonus Pool, Third Bonus Pool and Fourth Bonus Pool to Year 3 Bonus Recipients
| Year 3 Bonus Recipient | Share of Bonus Pool (%) | Share of Bonus Pool ($) | ||||||
| Just Develop It Limited | 100% | $40,000,000 | ||||||
Exhibit D-1
Form of Lock-Up Agreement (Christopher Phillips)
Exhibit D-2
Form of Lock-Up Agreement (Nicholas Baker)
[Signature Page to Conditional Consent, Waiver and Acknowledgement]
Exhibit E
Indemnity Side Letter
[Signature Page to Conditional Consent, Waiver and Acknowledgement]
LOCK-UP AGREEMENT
August 30, 2022
System1, Inc.
4235 Redwood Avenue
Marina Del Rey, California 90066
To the addressees set forth above:
This lock-up agreement (this “Lock-Up Agreement”) is made and entered into by and between System1, Inc., a Delaware corporation (the “Company”) (formerly known as Trebia Acquisition Corp., a Cayman Islands exempted company limited by shares prior to its domestication as a Delaware corporation) and the undersigned signatory.
The Company entered into a Business Combination Agreement (as the same may be amended from time to time, the “Business Combination Agreement”) with S1 Holdco, LLC, a Delaware limited liability company (“S1 Holdco”), System1 SS Protect Holdings, Inc., a Delaware corporation (“Protected”), and the other parties signatory thereto, dated as of June 28, 2021, as amended on November 30, 2021, January 10, 2022 and January 25, 2022, pursuant to which, among other things, (i) System1, LLC, a Delaware limited liability company and the principal operating subsidiary of S1 Holdco, and (ii) Protected.net Group Limited, a private limited company organized under the laws of England and Wales and the current operating subsidiary of Protected (“Protected UK”), became subsidiaries of Trebia Acquisition Corp. Following consummation of the transactions contemplated by the Business Combination Agreement, the undersigned became the beneficial owner of shares of Class A Common Stock of the Company. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement.
1.The undersigned hereby irrevocably agrees that, subject to the exceptions set forth herein, without the prior written consent of Company, the undersigned will not, during the period commencing on the date hereof and ending on the date that is one year following the date hereof (the “Restricted Period”):
(a)sell, assign, transfer (including by operation of law), place a lien on, pledge, hypothecate, grant an option to purchase, distribute, dispose of or otherwise encumber, any shares of Class A Common Stock of the Company beneficially owned by the undersigned (together with any other equity securities of the Company that the undersigned holds of record or beneficially, as of the date of this Lock-Up Agreement; all such shares collectively, the “Undersigned’s Shares”) or otherwise enter into any contract, option or other arrangement or undertaking to do any of the foregoing (each, a “Transfer”);
(b)deposit any of the Undersigned’s Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect to any of the Undersigned’s Shares that conflicts with any of the covenants or agreements set forth in this Lock-Up Agreement;
(c)enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s Shares; or
(d)make any demand for or exercise any right with respect to the registration of any shares of Class A Common Stock of the Company or any security convertible into or exercisable or exchangeable for Class A Common Stock of the Company.
2.In furtherance of the foregoing, the Company hereby agrees to (i) place a revocable stop order on all of the Undersigned’s Shares subject to Section 1, including those which may be covered by a registration statement, and (ii) notify the Company’s transfer agent in writing of such stop order and the restrictions on such of the Undersigned’s Shares under Section 1 and direct the Company’s transfer agent not to process any attempts by the undersigned to Transfer any of the Undersigned’s Shares except in compliance with Section 1; provided, that for the avoidance of doubt, the obligations of the Company under this Section 2 shall be deemed to be satisfied by the existence of any similar stop order and restrictions currently existing on the Undersigned’s Shares.
3.The restrictions and obligations contemplated by this Lock-Up Agreement shall not apply to:
(e)transfers of the Undersigned’s Shares:
(i)by will, other testamentary document or intestacy;
(ii)as a bona fide gift or gifts, including to charitable organizations or for bona fide estate planning purposes;
(iii)to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, or if the undersigned is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust;
(iv)to a partnership, limited liability company or other entity of which such undersigned and the immediate family of the undersigned are the legal and beneficial owner of all of the outstanding equity securities or similar interests;
(v)if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) of the undersigned, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the undersigned or affiliates of the undersigned (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), or (B) as part of a distribution to members or shareholders of the undersigned;
(vi)to a nominee or custodian of any person or entity to whom a transfer would be permissible under clauses (i) through (v) above;
(vii)in the case of an individual, by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree, separation agreement or related court order;
(viii)from an employee or a director of, or a service provider to, the Company or any of its subsidiaries upon the death, disability or termination of employment, in each case, of such person;
(ix)pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the board of directors and made to all holders of shares of the Company’s capital stock involving a Change of Control (as defined in the Company’s bylaws) (including negotiating and entering into an agreement providing for any such transaction), provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the Undersigned’s Shares shall remain subject to the Lock-Up Agreement;
(x)to the Company in connection with the exercise of any equity awards issued by the Company (including by way of “net” or “cashless” exercise) which would expire if not exercised during the Restricted Period, including for the payment of the related exercise price and for the purpose of satisfying any withholding taxes (including estimated taxes) due as a result of such exercise;
(xi)pursuant to a transaction approved by the board of directors of the Company;
(xii)if such Transfer is at a price per Share equal to or greater than $11.00 (as equitably adjusted for any stock split, reverse stock split, stock dividend, reclassification or other similar change affecting the Class A Common Stock of the Company which may be made after the date of this Agreement);
(xiii)those Shares (not in excess of one million, two hundred and ninety-six thousand and two hundred Shares) required to be transferred by Just Develop It Limited, a private limited company registered in England and Wales (“JDI”), to Revnuu Limited, a private limited
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company registered in England and Wales (“RL”), and William Thomas pursuant to that certain Consultancy Agreement, dated November 16, 2017, by and between JDI and RL; or
(xiv)a bona fide gift of 10,000 shares to Chad Buckmaster;
provided, that (x) in the case of any transfer or distribution pursuant to this clause (a)(i) through (vii), (1) such transfer is not for value; (2) the Undersigned’s Shares shall continue to remain subject to this Lock-Up Agreement; (3) any required public report or filing (including filings under Section 16(a) of the Exchange Act of 1934, as amended (the “Exchange Act”)), shall disclose the nature of such transfer and that the Undersigned’s Shares continue to remain subject to this Lock-Up Agreement; and (4) there shall be no voluntary public disclosure or other announcement of such transfer; and (y) the undersigned may enter into a trading plan established in accordance with Rule 10b5-1 under the Exchange Act during the Restricted Period so long as no Transfers are effected under such trading plan prior to the expiration of the Restricted Period.
4.Any attempted transfer in violation of this Lock-Up Agreement will be of no effect and null and void, regardless of whether the purported transferee has any actual or constructive knowledge of the transfer restrictions set forth in this Lock-Up Agreement, and will not be recorded on the share register of the Company. In furtherance of the foregoing, the undersigned agrees that the Company and any duly appointed transfer agent for the registration or transfer of the securities described herein are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Agreement. The Company may cause the legend set forth below, or a legend substantially equivalent thereto, to be placed upon any certificate(s) or other documents, ledgers or instruments evidencing the undersigned’s ownership of Class A Common Stock of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY ONLY BE TRANSFERRED IN COMPLIANCE WITH A LOCK-UP AGREEMENT, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
5.The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
6.Any and all remedies herein expressly conferred upon the Company will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity, and the exercise by the Company of any one remedy will not preclude the exercise of any other remedy. The undersigned agrees that irreparable damage would occur to the Company in the event that any provision of this Lock-Up Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions to prevent breaches of this Lock-Up Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which the Company is entitled at law or in equity, and the undersigned waives any bond, surety or other security that might be required of the Company with respect thereto.
7.This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
8.This Lock-Up Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The exchange of a fully executed Lock-Up Agreement (in counterparts or otherwise) by the Company and the undersigned by electronic transmission in .pdf format or digital/e-signature (i.e. DocuSign or Adobe Sign) shall be sufficient to bind such parties to the terms and conditions of this Lock-Up Agreement.
(Signature Page Follows)
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Very truly yours,
Christopher Phillips
Print Name of Stockholder:
Signature (for individuals):
Christopher Phillips
Print Name of Stockholder:
Signature (for individuals):
Accepted and Agreed by
System1, Inc.:
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Lock-up Agreement]
LOCK-UP AGREEMENT
August 30, 2022
System1, Inc.
4235 Redwood Avenue
Marina Del Rey, California 90066
To the addressees set forth above:
This lock-up agreement (this “Lock-Up Agreement”) is made and entered into by and between System1, Inc., a Delaware corporation (the “Company”) (formerly known as Trebia Acquisition Corp., a Cayman Islands exempted company limited by shares prior to its domestication as a Delaware corporation) and the undersigned signatory.
The Company entered into a Business Combination Agreement (as the same may be amended from time to time, the “Business Combination Agreement”) with S1 Holdco, LLC, a Delaware limited liability company (“S1 Holdco”), System1 SS Protect Holdings, Inc., a Delaware corporation (“Protected”), and the other parties signatory thereto, dated as of June 28, 2021, as amended on November 30, 2021, January 10, 2022 and January 25, 2022, pursuant to which, among other things, (i) System1, LLC, a Delaware limited liability company and the principal operating subsidiary of S1 Holdco, and (ii) Protected.net Group Limited, a private limited company organized under the laws of England and Wales and the current operating subsidiary of Protected (“Protected UK”), became subsidiaries of Trebia Acquisition Corp. Following consummation of the transactions contemplated by the Business Combination Agreement, the undersigned became the beneficial owner of shares of Class A Common Stock of the Company. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement.
1.The undersigned hereby irrevocably agrees that, subject to the exceptions set forth herein, without the prior written consent of Company, the undersigned will not, during the period commencing on the date hereof and ending on the date that is one year following the date hereof (the “Restricted Period”):
(a)sell, assign, transfer (including by operation of law), place a lien on, pledge, hypothecate, grant an option to purchase, distribute, dispose of or otherwise encumber, any shares of Class A Common Stock of the Company beneficially owned by the undersigned (together with any other equity securities of the Company that the undersigned holds of record or beneficially, as of the date of this Lock-Up Agreement; all such shares collectively, the “Undersigned’s Shares”) or otherwise enter into any contract, option or other arrangement or undertaking to do any of the foregoing (each, a “Transfer”);
(b)deposit any of the Undersigned’s Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect to any of the Undersigned’s Shares that conflicts with any of the covenants or agreements set forth in this Lock-Up Agreement;
(c)enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s Shares; or
(d)make any demand for or exercise any right with respect to the registration of any shares of Class A Common Stock of the Company or any security convertible into or exercisable or exchangeable for Class A Common Stock of the Company.
2.In furtherance of the foregoing, the Company hereby agrees to (i) place a revocable stop order on all of the Undersigned’s Shares subject to Section 1, including those which may be covered by a registration statement, and (ii) notify the Company’s transfer agent in writing of such stop order and the restrictions on such of the Undersigned’s Shares under Section 1 and direct the Company’s transfer agent not to process any attempts by the undersigned to Transfer any of the Undersigned’s Shares except in compliance with Section 1; provided, that for the avoidance of doubt, the obligations of the Company under this Section 2 shall be deemed to be satisfied by the existence of any similar stop order and restrictions currently existing on the Undersigned’s Shares.
3.The restrictions and obligations contemplated by this Lock-Up Agreement shall not apply to:
(e)transfers of the Undersigned’s Shares:
(i)by will, other testamentary document or intestacy;
(ii)as a bona fide gift or gifts, including to charitable organizations or for bona fide estate planning purposes;
(iii)to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, or if the undersigned is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust;
(iv)to a partnership, limited liability company or other entity of which such undersigned and the immediate family of the undersigned are the legal and beneficial owner of all of the outstanding equity securities or similar interests;
(v)if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) of the undersigned, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the undersigned or affiliates of the undersigned (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), or (B) as part of a distribution to members or shareholders of the undersigned;
(vi)to a nominee or custodian of any person or entity to whom a transfer would be permissible under clauses (i) through (v) above;
(vii)in the case of an individual, by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree, separation agreement or related court order;
(viii)from an employee or a director of, or a service provider to, the Company or any of its subsidiaries upon the death, disability or termination of employment, in each case, of such person;
(ix)pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the board of directors and made to all holders of shares of the Company’s capital stock involving a Change of Control (as defined in the Company’s bylaws) (including negotiating and entering into an agreement providing for any such transaction), provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the Undersigned’s Shares shall remain subject to the Lock-Up Agreement;
(x)to the Company in connection with the exercise of any equity awards issued by the Company (including by way of “net” or “cashless” exercise) which would expire if not exercised during the Restricted Period, including for the payment of the related exercise price and for the purpose of satisfying any withholding taxes (including estimated taxes) due as a result of such exercise; or
(xi)pursuant to a transaction approved by the board of directors of the Company;
(xii)to the extent the undersigned is the beneficial owner of Shares held by Just Develop It Limited, a private limited company registered in England and Wales (“JDI” and, such Shares, the “JDI Shares”), if such Transfer of JDI Shares is at a price per Share equal to or greater than $11.00 (as equitably adjusted for any stock split, reverse stock split, stock dividend, reclassification or other similar change affecting the Class A Common Stock of the Company which may be made after the date of this Agreement);
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(xiii)those JDI Shares (not in excess of one million, two hundred and ninety-six thousand and two hundred Shares) required to be transferred by JDI, to Revnuu Limited, a private limited company registered in England and Wales (“RL”), and William Thomas pursuant to that certain Consultancy Agreement, dated November 16, 2017, by and between JDI and RL; or
(xiv)a bona fide gift of 10,000 JDI Shares to Chad Buckmaster;
provided, that (x) in the case of any transfer or distribution pursuant to this clause (a)(i) through (vii), (1) such transfer is not for value; (2) the Undersigned’s Shares shall continue to remain subject to this Lock-Up Agreement; (3) any required public report or filing (including filings under Section 16(a) of the Exchange Act of 1934, as amended (the “Exchange Act”)), shall disclose the nature of such transfer and that the Undersigned’s Shares continue to remain subject to this Lock-Up Agreement; and (4) there shall be no voluntary public disclosure or other announcement of such transfer; and (y) the undersigned may enter into a trading plan established in accordance with Rule 10b5-1 under the Exchange Act during the Restricted Period so long as no Transfers are effected under such trading plan prior to the expiration of the Restricted Period;
4.Any attempted transfer in violation of this Lock-Up Agreement will be of no effect and null and void, regardless of whether the purported transferee has any actual or constructive knowledge of the transfer restrictions set forth in this Lock-Up Agreement, and will not be recorded on the share register of the Company. In furtherance of the foregoing, the undersigned agrees that the Company and any duly appointed transfer agent for the registration or transfer of the securities described herein are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Agreement. The Company may cause the legend set forth below, or a legend substantially equivalent thereto, to be placed upon any certificate(s) or other documents, ledgers or instruments evidencing the undersigned’s ownership of Class A Common Stock of the Company:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY ONLY BE TRANSFERRED IN COMPLIANCE WITH A LOCK-UP AGREEMENT, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
5.The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
6.Any and all remedies herein expressly conferred upon the Company will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity, and the exercise by the Company of any one remedy will not preclude the exercise of any other remedy. The undersigned agrees that irreparable damage would occur to the Company in the event that any provision of this Lock-Up Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the Company shall be entitled to an injunction or injunctions to prevent breaches of this Lock-Up Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which the Company is entitled at law or in equity, and the undersigned waives any bond, surety or other security that might be required of the Company with respect thereto.
7.This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
8.This Lock-Up Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The exchange of a fully executed Lock-Up Agreement (in counterparts or otherwise) by the Company and the undersigned by electronic transmission in .pdf format or digital/e-signature (i.e. DocuSign or Adobe Sign) shall be sufficient to bind such parties to the terms and conditions of this Lock-Up Agreement.
(Signature Page Follows)
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Very truly yours,
Nicholas Baker
Print Name of Stockholder:
Signature (for individuals):
Nicholas Baker
Print Name of Stockholder:
Signature (for individuals):
Accepted and Agreed by
System1, Inc.:
By:
Name:
Title:
By:
Name:
Title:
[Signature Page to Lock-up Agreement]