INSU Acquisition Corp. II Philadelphia, PA 19104 Ladies and Gentlemen:
Exhibit 10.4
November [●], 2020
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter agreement (this “Letter Agreement”), by and among INSU Acquisition Corp. II, a Delaware corporation (the “Company”), and certain stockholders of MetroMile, Inc., a Delaware corporation (“Metromile”), identified on the signature pages hereto, who are intended to become stockholders of the Company (the “Stockholders”), is being delivered concurrently with the execution of that certain Agreement and Plan of Merger and Reorganization, dated as of the date hereof (the “Merger Agreement”), by and among the Company, INSU II Merger Sub Corp., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Metromile. Pursuant to the Merger Agreement, Merger Sub is being merged with and into Metromile (the “Merger”) and, in connection therewith, the stockholders of Metromile are receiving as consideration in the Merger shares of the Company’s Class A common stock, par value $0.0001 per share (“Common Stock”). In this Letter Agreement, the shares of Common Stock to be held by the Stockholders immediately after the effective time of the Merger are referred to as the “Shares”.
For the purposes of this Letter Agreement, the term “Shares” shall also be deemed to include any Shares that a Stockholder acquires (i) pursuant to and in accordance with Section 2 hereof and (ii) by the exercise or conversion of any security exercisable or convertible for shares of Common Stock.
Each undersigned Stockholder and, where applicable, the Company, hereby agrees as follows:
1. Subject to Section 1(b) below, from the effective time of the Merger until the six month anniversary of such effective time (the “Lock-Up Period”), such Stockholder shall not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, with respect to the Shares (a “Transfer”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of Shares, whether any such transaction is to be settled by delivery of Shares or other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in the immediately preceding subsections (i) or (ii) (any of the foregoing actions in clauses (i)-(iii), the “Transfer Restrictions”).
2. Notwithstanding the provisions contained in paragraph 1 hereof, such Stockholder may transfer Shares (a) to the Company’s officers and directors or their controlled “affiliates” (as such term is defined in Rule 405 of the Securities Act of 1933, as amended (the “Securities Act”)) or to any partner, member, investment fund or other entity controlled or managed by or under common management or control with such Stockholder or officers, directors or affiliates (as defined in Rule 405 of the Securities Act) of such Stockholder, (b) by bona fide gift, (c) to an immediate family member (as defined below), a charitable organization or a trust or other entity formed for estate planning purposes for the benefit of an immediate family member or a charitable organization, or for the indirect benefit of the Stockholder or an immediate family member of the Stockholder, (d) by will, intestacy or by virtue of laws of descent and distribution upon the death of such Stockholder, (e) by operation of law, such as pursuant to a qualified domestic relations order or in connection with a divorce settlement, (f) if such Stockholder is an entity, to any stockholder, member, partner or trust beneficiary as part of a distribution, or to any corporation, partnership or other entity that is an affiliate of such Stockholder, or by virtue of the laws of the state of the entity’s organization and the entity’s organizational documents upon dissolution of the entity, (g) in the event of a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, (h) in the event of a consolidation, merger or other similar transaction in which the Company is the surviving entity that results in the directors and officers of the Company as of immediately prior to such consolidation, merger or other similar transaction ceasing to comprise a majority of the Company’s board of directors (in the case of directors) or management (in the case of officers) of the surviving entity, (i) acquired through transactions relating to Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock acquired in open market transactions after the effective time of the Merger, provided that no such transaction is required to be, or is, publicly announced (whether on Form 4, Form 5 or otherwise, other than a required filing on Schedule 13F, 13G or 13G/A) during the Lock-Up Period (j) to the Company in connection with the “net” or “cashless” exercise of options or other rights to purchase shares of Common Stock held by such Stockholder, provided, that any shares of Common Stock issued upon exercise of such option or other rights shall remain subject to the terms of this Letter Agreement, (k) to the Company to satisfy tax withholding obligations pursuant to the Company’s equity incentive plans or arrangements, (l) pursuant to any contractual arrangement in effect at the effective time of the Merger that provides for the repurchase by the Company or forfeiture of the Stockholder’s Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock in connection with the termination of the Stockholder’s service to the Company, or (m) pursuant to the entry, by the Stockholder, at any time after the effective time of the Merger, of any trading plan providing for the sale of Common Stock by the Stockholder, which trading plan meets the requirements of Rule 10b5-1(c) under the Securities Exchange Act of 1934, provided, however, that such plan does not provide for, or permit, the sale of any Common Stock during the Lock-Up Period and no public announcement or filing is voluntarily made or required regarding such plan during the Lock-Up Period, or (n) transactions to satisfy any U.S. federal, state, or local income tax obligations of the Stockholder (or its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or the U.S. Treasury Regulations promulgated thereunder (the “Regulations”) after the date on which the Merger Agreement was executed by the parties, and such change prevents the Merger from qualifying as a “reorganization” pursuant to Section 368 of the Code (and the Merger does not qualify for similar tax-free treatment pursuant to any successor or other provision of the Code or Regulations taking into account such changes); provided, however, that, in the case of clauses (a) through (f), these transferees shall enter into a written agreement with the Company agreeing to be bound by the transfer restrictions set forth herein. For purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage, domestic partnership or adoption, not more remote than first cousin. Such Stockholder hereby consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of such Stockholder’s Shares except in compliance with the foregoing restrictions.
3. Subject to the limitations described herein, such Stockholder shall retain his, her or its respective rights as a security holder with respect to his, her or its Shares during the Lock-Up Period including, without limitation, the right to vote the Shares.
4. During the Lock-Up Period, all dividends and distributions payable in cash with respect to such Stockholder’s Shares shall be paid, as applicable, to such Stockholder, but all dividends and distributions payable in Common Stock or other equity or securities convertible into equity shall become subject to the Transfer Restrictions under this Letter Agreement until the end of the Lock-up Period.
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5. Such Stockholder represents and warrants, severally and not jointly with any other Stockholder, that he, she or it has the full right and power, or complete corporate or equivalent organizational authority, as applicable, without violating any agreement to which such Stockholder is bound, to enter into and perform his, her or its obligations under this Letter Agreement.
6. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, both written and oral, with respect to such subject matter hereof. This Letter Agreement may not be changed, amended, modified (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by each of the parties hereto. This Letter Agreement may not be waived as to any particular provision, except by a written instrument executed by the party against whom any such waiver is sought.
7. No party may assign either this Letter Agreement or any of his, her or its rights, interests, or obligations hereunder without the prior written consent of the Company. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. Subject to the foregoing, this Letter Agreement shall be binding on each undersigned party and each of such undersigned party’s, as applicable, heirs, personal representatives, successors and assigns.
8. This Letter Agreement, the rights and duties of the parties hereto, and any disputes (whether in contract, tort or statute) arising out of, under or in connection with this Letter Agreement will be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. The parties hereto irrevocably and unconditionally submit to the exclusive jurisdiction of the United States District Court for the District of Delaware or, if such court does not have jurisdiction, the Delaware state courts located in Wilmington, Delaware, in any action arising out of or relating to this Letter Agreement. The parties hereto irrevocably agree that all such claims shall be heard and determined in such a Delaware federal or state court, and that such jurisdiction of such courts with respect thereto will be exclusive. Each party hereto hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding arising out of or relating to this Letter Agreement that it is not subject to such jurisdiction, or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Letter Agreement may not be enforced in or by such courts.
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9. Each party acknowledges and agrees that monetary damages would not adequately compensate an injured party for the breach of this Letter Agreement by any party hereto and, accordingly, that this Letter Agreement shall be specifically enforceable, and that any breach of this Letter Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach and agrees that a party’s rights would be materially and adversely affected if the obligations of the other parties under this Letter Agreement were not carried out in accordance with the terms and conditions hereof.
10. In the event that any provision of this Letter Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
11. This Letter Agreement and all of its provisions shall terminate and be of no further force or effect upon the earlier to occur of (i) termination of the Merger Agreement in accordance with its terms, (ii) the mutual written agreement of the Company and the Stockholders or (iii) the expiration of the Lock-up Period. This Letter Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Delivery of an executed counterpart of a signature page to this Letter Agreement by facsimile or portable document format shall be effective as delivery of a mutually executed counterpart to this Letter Agreement.
[ Signature page follows ]
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| Very truly yours, | ||
| INSU ACQUISITION CORP. II | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Lock-up Letter Agreement]
| By: | ||
| Name: | ||
| Title: |
[Signature Page to Lock-up Letter Agreement]
[Signature Page to Lock-up Letter Agreement]
