The Purchase Agreement provides for customary termination rights for both the Bakkt Parties and the Seller Parties. Both the Bakkt Parties and the Seller Parties will have a right to terminate the Purchase Agreement if the Closing does not occur prior to July 31, 2023 (the “Outside Date”); provided that if the sole reason therefor is that certain regulatory approvals have not been received, the Outside Date will be extended to September 30, 2023, which in turn may be further extended only by agreement among the parties.
At the Closing, Bakkt Marketplace, the Seller Parties, PEAK6 Investments LLC and Apex Clearing Corporation (“ACC”) will enter into a Commercial Agreement (the “Commercial Agreement”). Under the Commercial Agreement, which has a term of four (4) years, the Company and Target would be the only preferred provider of B2B2C cryptocurrency and NFT facilitation services for ACC. In addition, Bakkt Marketplace and Target (i) will designate ACC as their only preferred provider of non-crypto security and commodity execution, tax basis and reporting, clearing, custody and other related services, and (ii) will use PEAK6 Digital Assets LLC (“PEAK6 Digital”) as a liquidity provider for supported cryptocurrencies so long as PEAK6 Digital offers competitive pricing.
At the Closing, Bakkt Marketplace and the Seller Parties will enter into a Transition Services Agreement (the “Transition Services Agreement”) pursuant to which, Bakkt Marketplace will purchase from Seller certain transition services to be provided by Seller or its Affiliates.
At the Closing, the Company and Seller will enter into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things and subject to certain restrictions, the Company is required to file with the SEC a registration statement registering for resale the Contingent Shares. The Registration Rights Agreement also provides holders of Registrable Securities (as defined therein) with certain customary piggyback registration rights. The Registration Rights Agreement shall become effective at the Closing and shall terminate in accordance with its terms.
The foregoing summary is qualified in its entirety by the full text of the Purchase Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.
Stockholders’ Agreement
On November 2, 2022, the Company, Seller and PEAK6 Investments LLC (together with Seller, the “Investor Group”) entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”). Pursuant to the Stockholders’ Agreement, Seller agreed, other than certain permitted transfers, not to transfer or dispose of (or take other analogous actions in accordance with the terms of the Stockholders’ Agreement) any economic, voting or other rights in or to: (i) the shares issued in respect of the 2022 Eligible Contingent Amount, for one year following the date of issuance, except that one third of such shares may be so transferred or disposed of following the four-month anniversary of the issuance date and another one third may be so transferred or disposed of following the eight-month anniversary of the issuance date, (ii) the lesser of (a) $25.0 million of the shares issued in respect of the 2023 Eligible Contingent Amount (other than shares issued in respect of the 2023 NFT Contingent Consideration) and (b) one half of the shares issued in respect of the 2023 Eligible Contingent Amount (other than shares issued in respect of the 2023 NFT Contingent Consideration) and the 2022 Catchup Consideration, for one year following the date of issuance, except that one third of such shares may be so transferred or disposed of following the four-month anniversary of the issuance date and another one third may be so transferred or disposed of following the eight-month anniversary of the issuance date and (iii) $25.0 million of shares issued as Earnout Consideration in respect of the 2024 Eligible Contingent Amount (other than shares issued in respect of the 2024 NFT Contingent Consideration), for six months following the date of issuance.
Pursuant to the Stockholders’ Agreement, each member of the Investor Group also agreed to customary standstill restrictions in accordance with which, among other things, each member of the Investor Group and certain of its controlled affiliates will not acquire, agree or propose or offer to acquire (including through any hedging or other similar transaction) any shares of the Company’s common stock or securities that are convertible or exchangeable into (or exercisable for) shares of the Company’s common stock (or enter into certain agreements and arrangements as set forth in the Stockholders’ Agreement) during the period commencing on the date of the Stockholders’ Agreement and continuing until December 31, 2025, subject to certain early termination provisions, other than the Contingent Shares. Each member of the Investor Group also agreed that it and certain of its controlled affiliates will not enter into any short sale transactions on the Company’s common stock prior to January 1, 2025.