Exhibit 10.7

 

RIGHT AGREEMENT

 

PENSARE ACQUISITION CORP.

 

and

 

CONTINENTAL STOCK TRANSFER & TRUST COMPANY

 

RIGHT AGREEMENT

 

Dated as of July 27, 2017

 

This Right Agreement (this “Agreement”) is made as of July 27, 2017 between
Pensare Acquisition Corp., a Delaware corporation (the “Company”), and
Continental Stock Transfer & Trust Company, a New York corporation (“Rights
Agent”).

 

WHEREAS, the Company is engaged in an initial public offering (the “Offering”)
of units of the Company’s equity securities (each, a “Unit” and collectively,
the “Units”) to EarlyBirdCapital, Inc. (the “Representative”), as representative
of the several underwriters (the “Underwriters”), each such Unit comprised of
one share of common stock of the Company, par value $.001 per share (“Common
Stock”), one right to receive one-tenth of one share of Common Stock (each, a
“Public Right” and collectively, the “Public Rights”) upon the happening of an
“Exchange Event” (defined herein), and one warrant to purchase one-half of one
share of Common Stock (collectively, the “Public Warrants”), and in connection
therewith, has determined to issue and deliver up to 31,050,000 Public Rights
(including up to 4,050,000 Public Rights subject to the over-allotment option)
to public investors in the Offering; and

 

WHEREAS, the Company has entered into that certain Unit Purchase Option, dated
as of July 27, 2017, pursuant to which the Company will issue and deliver to the
Representative an aggregate of 1,250,000 Units, including 625,000 warrants (the
“Purchase Option Warrants” and together with the Private Warrants and the Public
Warrants, the “Warrants”) and 1,250,000 rights underlying such Units (the
“Purchase Option Rights” and together with the Private Rights and the Public
Rights, the “Rights”); and

 

WHEREAS, the Company has filed with the Securities and Exchange Commission
registration statements on Form S-1, File Nos. 333-219162 and 333-219518, and
the prospectus forming a part thereof (the “Prospectus”), for the registration
under the Securities Act of 1933, as amended, of the Units and each of the
securities comprising the Units, and the shares of Common Stock underlying the
Public Rights; and

 

WHEREAS, the Company desires the Rights Agent to act on behalf of the Company,
and the Rights Agent is willing to so act, in connection with the issuance,
registration, transfer and exchange of the Rights; and

 

WHEREAS, the Company desires to provide for the form and provisions of the
Rights, the terms upon which they shall be issued, and the respective rights,
limitation of rights, and immunities of the Company, the Rights Agent, and the
holders of the Rights; and

 

WHEREAS, all acts and things have been done and performed which are necessary to
make the Rights, when executed on behalf of the Company and countersigned by or
on behalf of the Rights Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of this
Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

 

1.            Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company for the Rights, and the Rights
Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this Agreement.

 

 

 

 

2.            Rights.

 

2.1          Form of Right. Each Right shall be issued in registered form only,
shall be in substantially the form of Exhibit A hereto, the provisions of which
are incorporated herein and shall be signed by, or bear the facsimile signature
of, the Chairman of the Board and the Secretary of the Company and shall bear a
facsimile of the Company’s seal. In the event the person whose facsimile
signature has been placed upon any Right shall have ceased to serve in the
capacity in which such person signed the Right before such Right is issued, it
may be issued with the same effect as if he or she had not ceased to be such at
the date of issuance.

 

2.2          Effect of Countersignature. Unless and until countersigned by the
Rights Agent pursuant to this Agreement, a Right shall be invalid and of no
effect and may not be exchanged for shares of Common Stock.

 

2.3          Registration.

 

2.3.1       Right Register. The Rights Agent shall maintain books (“Right
Register”) for the registration of original issuance and the registration of
transfer of the Rights. Upon the initial issuance of the Rights, the Rights
Agent shall issue and register the Rights in the names of the respective holders
thereof in such denominations and otherwise in accordance with instructions
delivered to the Rights Agent by the Company.

 

2.3.2       Registered Holder. Prior to due presentment for registration of
transfer of any Right, the Company and the Rights Agent may deem and treat the
person in whose name such Right shall be registered upon the Right Register
(“registered holder”) as the absolute owner of such Right and of each Right
represented thereby (notwithstanding any notation of ownership or other writing
on the Right Certificate made by anyone other than the Company or the Rights
Agent), for the purpose of the exchange thereof, and for all other purposes, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary.

 

2.4          Detachability of Rights. The securities comprising the Units,
including the Rights, will not be separately transferable until ten business
days following the earlier to occur of: (i) the 90th day following the date of
the Prospectus or (ii) the announcement by EarlyBirdCapital, Inc. of its
intention to allow separate earlier trading, except that in no event will the
securities comprising the Units be separately tradeable until the Company files
a Current Report on Form 8-K which includes an audited balance sheet reflecting
the receipt by the Company of the gross proceeds of the Offering including the
proceeds received by the Company from the exercise of the over-allotment option,
if the over-allotment option is exercised by the date thereof and the Company
issues a press release and files a Current Report on Form 8-K announcing when
such separate trading shall begin.

 

3.            Terms and Exchange of Rights.

 

3.1          Rights. Each Right shall entitle the holder thereof to receive
one-tenth of one share of Common Stock upon the happening of an Exchange Event
(defined below). No additional consideration shall be paid by a holder of Rights
in order to receive his, her or its shares of Common Stock upon an Exchange
Event as the purchase price for such shares of Common Stock has been included in
the purchase price for the Units. In no event will the Company be required to
net cash settle the Rights. The provisions of this Section 3.1 may not be
modified, amended or deleted without the prior written consent of the
Representative.

 

3.2          Exchange Event. An “Exchange Event” shall occur upon the Company’s
consummation of an initial Business Combination (as defined in the Company’s
Amended and Restated Certificate of Incorporation).

 

3.3          Exchange of Rights.

 

3.3.1       Issuance of Certificates. As soon as practicable upon the occurrence
of an Exchange Event, the Company shall direct holders of the Rights to return
their Rights Certificates to the Rights Agent. Upon receipt of a valid Rights
Certificate, the Company shall issue to the registered holder of such Right(s) a
certificate or certificates for the number of full shares Common Stock to which
he, she or it is entitled, registered in such name or names as may be directed
by him, her or it. Notwithstanding the foregoing, or any provision contained in
this Agreement to the contrary, in no event will the Company be required to net
cash settle the Rights. The Company shall not issue fractional shares upon
exchange of Rights. At the time of an Exchange Event, the Company will instruct
the Rights Agent how fractional shares will be addressed, in accordance with
Section 155 of the Delaware General Corporation Law. Each holder of a Right will
be required to affirmatively convert his, her or its rights in order to receive
the 1/10 of a share underlying each right (without paying any additional
consideration) upon consummation of the Exchange Event. Each holder of a Right
will be required to indicate his, her or its election to convert the Rights into
the underlying shares as well as to return the original certificates evidencing
the Rights to the Company.

 

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3.3.2       Valid Issuance. All shares of Common Stock issued upon an Exchange
Event in conformity with this Agreement shall be validly issued, fully paid and
nonassessable.

 

3.3.3       Date of Issuance. Each person in whose name any such certificate for
shares of Common Stock is issued shall for all purposes be deemed to have become
the holder of record of such shares on the date of the Exchange Event,
irrespective of the date of delivery of such certificate.

 

3.3.4       Company Not Surviving Following Exchange Event. Upon an Exchange
Event in which the Company does not continue as the publicly held reporting
entity, the definitive agreement will provide for the holders of Rights to
receive the same per share consideration the holders of the shares of Common
Stock will receive in such transaction, for the number of shares such holder is
entitled to pursuant to Section 3.3.1 above.

 

3.4          Duration of Rights. If an Exchange Event does not occur within the
time period set forth in the Company’s Certificate of Incorporation, as the same
may be amended from time to time, the Rights shall expire and shall be
worthless.

 

4.            Transfer and Exchange of Rights.

 

4.1          Registration of Transfer. The Rights Agent shall register the
transfer, from time to time, of any outstanding Right upon the Right Register,
upon surrender of such Right for transfer, properly endorsed with signatures
properly guaranteed and accompanied by appropriate instructions for transfer.
Upon any such transfer, a new Right representing an equal aggregate number of
Rights shall be issued and the old Right shall be cancelled by the Rights Agent.
The Rights so cancelled shall be delivered by the Rights Agent to the Company
from time to time upon request.

 

4.2          Procedure for Surrender of Rights. Rights may be surrendered to the
Rights Agent, together with a written request for exchange or transfer, and
thereupon the Rights Agent shall issue in exchange therefor one or more new
Rights as requested by the registered holder of the Rights so surrendered,
representing an equal aggregate number of Rights; provided, however, that in the
event that a Right surrendered for transfer bears a restrictive legend, the
Rights Agent shall not cancel such Right and issue new Rights in exchange
therefor until the Rights Agent has received an opinion of counsel for the
Company stating that such transfer may be made and indicating whether the new
Rights must also bear a restrictive legend.

 

4.3          Fractional Rights. The Rights Agent shall not be required to effect
any registration of transfer or exchange which will result in the issuance of a
Right Certificate for a fraction of a Right.

 

4.4          Service Charges. No service charge shall be made for any exchange
or registration of transfer of Rights.

 

4.5          Right Execution and Countersignature. The Rights Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Rights required to be issued pursuant to the provisions of this
Section 4, and the Company, whenever required by the Rights Agent, will supply
the Rights Agent with Rights duly executed on behalf of the Company for such
purpose.

 

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5.            Other Provisions Relating to Rights of Holders of Rights.

 

5.1          No Rights as Shareholder. Until exchange of a Right for shares of
Common Stock as provided for herein, a Right does not entitle the registered
holder thereof to any of the rights of a shareholder of the Company, including,
without limitation, the right to receive dividends, or other distributions,
exercise any preemptive rights to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
directors of the Company or any other matter.

 

5.2          Lost, Stolen, Mutilated, or Destroyed Rights. If any Right is lost,
stolen, mutilated, or destroyed, the Company and the Rights Agent may on such
terms as to indemnity or otherwise as they may in their discretion impose (which
shall, in the case of a mutilated Right, include the surrender thereof), issue a
new Right of like denomination, tenor, and date as the Right so lost, stolen,
mutilated, or destroyed. Any such new Right shall constitute a substitute
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated, or destroyed Right shall be at any time enforceable by
anyone.

 

5.3          Reservation of Common Stock. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exchange of all outstanding Rights
issued pursuant to this Agreement.

 

6.            Concerning the Rights Agent and Other Matters.

 

6.1          Payment of Taxes. The Company will from time to time promptly pay
all taxes and charges that may be imposed upon the Company or the Rights Agent
in respect of the issuance or delivery of shares of Common Stock upon the
exchange of Rights, but the Company shall not be obligated to pay any transfer
taxes in respect of the Rights or such shares.

 

6.2          Resignation, Consolidation, or Merger of Rights Agent.

 

6.2.1       Appointment of Successor Rights Agent. The Rights Agent, or any
successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’
notice in writing to the Company. If the office of the Rights Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall
appoint in writing a successor Rights Agent in place of the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after it
has been notified in writing of such resignation or incapacity by the Rights
Agent or by the holder of the Right (who shall, with such notice, submit his,
her or its Right for inspection by the Company), then the holder of any Right
may apply to the Supreme Court of the State of New York for the County of New
York for the appointment of a successor Rights Agent at the Company’s cost. Any
successor Rights Agent, whether appointed by the Company or by such court, shall
be a corporation organized and existing under the laws of the State of New York,
in good standing and having its principal office in the Borough of Manhattan,
City and State of New York, and authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Rights Agent shall be vested with
all the authority, powers, rights, immunities, duties, and obligations of its
predecessor Rights Agent with like effect as if originally named as Rights Agent
hereunder, without any further act or deed; but if for any reason it becomes
necessary or appropriate, the predecessor Rights Agent shall execute and
deliver, at the expense of the Company, an instrument transferring to such
successor Rights Agent all the authority, powers, and rights of such predecessor
Rights Agent hereunder; and upon request of any successor Rights Agent the
Company shall make, execute, acknowledge, and deliver any and all instruments in
writing for more fully and effectually vesting in and confirming to such
successor Rights Agent all such authority, powers, rights, immunities, duties,
and obligations.

 

6.2.2       Notice of Successor Rights Agent. In the event a successor Rights
Agent shall be appointed, the Company shall give notice thereof to the
predecessor Rights Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.

 

6.2.3       Merger or Consolidation of Rights Agent. Any corporation into which
the Rights Agent may be merged or with which it may be consolidated or any
corporation resulting from any merger or consolidation to which the Rights Agent
shall be a party shall be the successor Rights Agent under this Agreement
without any further act.

 

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6.3          Fees and Expenses of Rights Agent.

 

6.3.1       Remuneration. The Company agrees to pay the Rights Agent reasonable
remuneration for its services as such Rights Agent hereunder and will reimburse
the Rights Agent upon demand for all expenditures that the Rights Agent may
reasonably incur in the execution of its duties hereunder.

 

6.3.2       Further Assurances. The Company agrees to perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing of
the provisions of this Agreement.

 

6.4          Liability of Rights Agent.

 

6.4.1       Reliance on Company Statement. Whenever in the performance of its
duties under this Agreement, the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a statement signed by the Chief
Executive Officer, Chief Operating Officer or Chief Financial Officer and
delivered to the Rights Agent. The Rights Agent may rely upon such statement for
any action taken or suffered in good faith by it pursuant to the provisions of
this Agreement.

 

6.4.2       Indemnity. The Rights Agent shall be liable hereunder only for its
own gross negligence, willful misconduct or bad faith. Subject to Section 6.6
below, the Company agrees to indemnify the Rights Agent and save it harmless
against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Rights Agent in the execution
of this Agreement except as a result of the Rights Agent’s gross negligence,
willful misconduct, or bad faith.

 

6.4.3       Exclusions. The Rights Agent shall have no responsibility with
respect to the validity of this Agreement or with respect to the validity or
execution of any Right (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right; nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of
any Common Stock to be issued pursuant to this Agreement or any Right or as to
whether any Common Stock will when issued be valid and fully paid and
nonassessable.

 

6.5          Acceptance of Agency. The Rights Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth.

 

6.6          Waiver. The Rights Agent hereby waives any right of set-off or any
other right, title, interest or claim of any kind (“Claim”) in, or to any
distribution of, the Trust Account (as defined in that certain Investment
Management Trust Agreement, dated as of the date hereof, by and between the
Company and the Rights Agent as trustee thereunder) and hereby agrees not to
seek recourse, reimbursement, payment or satisfaction for any Claim against the
Trust Account for any reason whatsoever.

 

7.            Miscellaneous Provisions.

 

7.1          Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns.

 

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7.2          Notices. Any notice, statement or demand authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
to or on the Company shall be sufficiently given when so delivered if by hand or
overnight delivery or if sent by certified mail or private courier service
within five days after deposit of such notice, postage prepaid, addressed (until
another address is filed in writing by the Company with the Rights Agent), as
follows:

 

Pensare Acquisition Corp.
1720 Peachtree Street
Suite 629
Atlanta, GA 30309
Attention: Darrell J. Mays, Chief Executive Officer

 

Any notice, statement or demand authorized by this Agreement to be given or made
by the holder of any Right or by the Company to or on the Rights Agent shall be
sufficiently given when so delivered if by hand or overnight delivery or if sent
by certified mail or private courier service within five days after deposit of
such notice, postage prepaid, addressed (until another address is filed in
writing by the Rights Agent with the Company), as follows:

 

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attention: Compliance Department

 

with a copy to:

 

EarlyBirdCapital, Inc.
366 Madison Avenue, 8th Floor
New York, New York 10017
Attention: Steven Levine

 

7.3          Applicable Law. The validity, interpretation, and performance of
this Agreement and of the Rights shall be governed in all respects by the laws
of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the substantive laws of another
jurisdiction. The Company hereby agrees that any action, proceeding or claim
against it arising out of or relating in any way to this Agreement shall be
brought and enforced in the courts of the State of New York or the United States
District Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The Company hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in Section 7.2 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim.

 

7.4          Persons Having Rights under this Agreement. Nothing in this
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the registered holders
of the Rights and, for the purposes of Sections 3.1, 7.4 and 7.8 hereof, the
Representative, any right, remedy, or claim under or by reason of this Agreement
or of any covenant, condition, stipulation, promise, or agreement hereof. The
Representative shall be deemed to be a third-party beneficiary of this Agreement
with respect to Sections 3.1, 7.4 and 7.8 hereof. All covenants, conditions,
stipulations, promises, and agreements contained in this Agreement shall be for
the sole and exclusive benefit of the parties hereto (and the Representative
with respect to the Sections 3, 7.4 and 7.8 hereof) and their successors and
assigns and of the registered holders of the Rights. The provisions of this
Section 7.4 may not be modified, amended or deleted without the prior written
consent of the Representative.

 

7.5          Examination of the Right Agreement. A copy of this Agreement shall
be available at all reasonable times at the office of the Rights Agent in the
Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Right. The Rights Agent may require any such holder to
submit his, her or its Right for inspection by it.

 

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7.6          Counterparts. This Agreement may be executed in any number of
original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.

 

7.7          Effect of Headings. The Section headings herein are for convenience
only and are not part of this Agreement and shall not affect the interpretation
thereof.

 

7.8          Amendments. This Agreement may be amended by the parties hereto
without the consent of any registered holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the parties may deem
necessary or desirable and that the parties deem shall not adversely affect the
interest of the registered holders. All other modifications or amendments shall
require the written consent or vote of the registered holders of a majority of
the then outstanding Rights. The provisions of this Section 7.8 may not be
modified, amended or deleted without the prior written consent of the
Representative.

 

7.9          Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the day and year first above written.

 

 

PENSARE ACQUISITION CORP.

       By:

/s/ Darrell J. Mays

   

Name: Darrell J. Mays
Title: Chief Executive Officer

        CONTINENTAL STOCK TRANSFER & TRUST COMPANY          By: /s/ Henry
Farrell     Name: Henry Farrell     Title: Vice President

 

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