Exhibit 10.1

 

October 26, 2016

 

GTY Technology Holdings Inc.

1180 North Town Center Drive, Suite 100

Las Vegas, Nevada 89144

 

Re: Initial Public Offering

 

Ladies and Gentlemen:

 

This letter (this “Letter Agreement”) is being delivered to you in accordance
with the Underwriting Agreement (the “Underwriting Agreement”) entered into by
and among GTY Technology Holdings Inc., a Cayman Islands exempted company (the
“Company”), and Citigroup Global Markets Inc. as representative (the
“Representative”) of the several underwriters (the “Underwriters”), relating to
an underwritten initial public offering (the “Public Offering”) of 55,200,000 of
the Company’s units (including up to 7,200,000 Units that may be purchased to
cover over-allotments, if any, the “Units”), each comprised of one of the
Company’s Class A ordinary shares, par value $0.0001 per share (the “Public
Shares”), and one-third of one redeemable warrant (each, a “Warrant”). Each
whole Warrant entitles the holder thereof to purchase one Ordinary Share at a
price of $11.50 per share, subject to adjustment. The Units shall be sold in the
Public Offering pursuant to a registration statement on Form S-1 and prospectus
(the “Prospectus”) filed by the Company with the United States Securities and
Exchange Commission (the “Commission”) and the Company intends to apply to have
the Units listed on the Nasdaq Capital Market. Certain capitalized terms used
herein are defined in paragraph 1 hereof.

 

In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the Public Offering and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, GTY Investors, LLC (the “Sponsor”) and each of the undersigned
(each, a “Founder” and collectively, the “Founders”) hereby agree with the
Company as follows:

 

1. Definitions. As used herein, (i) “Business Combination” shall mean a merger,
share exchange, asset acquisition, share purchase, reorganization or similar
business combination involving the Company and one or more businesses; (ii)
“Capital Shares” shall mean, collectively, the Public Shares and the Founder
Shares; (iii) “Founder Shares” shall mean the 13,800,000 Class B ordinary shares
of the Company, par value $0.0001 per share, outstanding prior to the
consummation of the Public Offering; (iv) “Private Placement Warrants ” shall
mean the warrants to purchase Public Shares that will be acquired by the Sponsor
for an aggregate purchase price of approximately $11,600,000 (or approximately
$13,040,000 if the Underwriters’ over-allotment is exercised), or $1.50 per
Warrant, in a private placement that shall occur simultaneously with the
consummation of the Public Offering; (v) “Public Shareholders” shall mean the
holders of Ordinary Shares sold as part of the units in the Public Offering;
(vi) “Trust Account” shall mean the trust account into which a portion of the
net proceeds of the Public Offering shall be deposited; (vii) “Transfer” shall
mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate,
pledge, grant of any option to purchase or otherwise dispose of or agreement to
dispose of, directly or indirectly, or establishment or increase of a put
equivalent position or liquidation with respect to or decrease of a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any security, (b) entry into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any security, whether any such transaction
is to be settled by delivery of such securities, in cash or otherwise, or (c)
public announcement of any intention to effect any transaction specified in
clause (a) or (b); and (viii) “Charter” shall mean the Company’s Amended and
Restated Memorandum and Articles of Association, as the same may be amended from
time to time.

 

2. Representations and Warranties.

 

(a) The Sponsor and each Founder, with respect to himself, represents and
warrants to the Company that it or he has full right and power, without
violating any agreement to which it or he is bound (including, without
limitation, any non-competition or non-solicitation agreement with any employer
or former employer) to enter into this Letter Agreement, as applicable, and to
serve as a director on the Board, as applicable.

 

 

 

 

(b) The Founder’s questionnaire furnished to the Company is true and accurate in
all respects. Each Founder represents and warrants, with respect to himself,
that: such Founder’s biographical information furnished to the Company
(including any such information included in the Prospectus) is true and accurate
in all respects and does not omit any material information with respect to such
Founder’s background; such Founder is not subject to or a respondent in any
legal action for, any injunction, cease-and-desist order or order or stipulation
to desist or refrain from any act or practice relating to the offering of
securities in any jurisdiction; such Founder has never been convicted of, or
pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial
transaction or handling of funds of another person, or (iii) pertaining to any
dealings in any securities and such Founder is not currently a defendant in any
such criminal proceeding; and such Founder has never been suspended or expelled
from membership in any securities or commodities exchange or association or had
a securities or commodities license or registration denied, suspended or
revoked.

 

3. Business Combination Vote. The Sponsor and each Founders, with respect to
himself, agree that if the Company seeks shareholder approval of a proposed
initial Business Combination, then in connection with such proposed initial
Business Combination, it or he, as applicable, shall vote all Founder Shares and
any Public Shares acquired by it or him, as applicable, in the Public Offering
or the secondary public market in favor of such proposed initial Business
Combination.

 

4. Failure to Consummate a Business Combination; Trust Account Waiver.

 

(a) The Sponsor and each Founder, with respect to himself, hereby agree (i) that
in the event that the Company fails to consummate its initial Business
Combination within the time period set forth in the Charter, the Sponsor and
such Founder shall take all reasonable steps to cause the Company to (x) cease
all operations except for the purpose of winding up, (y) as promptly as
reasonably possible but not more than 10 business days thereafter, redeem 100%
of the Public Shares sold as part of the Units in the Public Offering (the
“Offering Shares”), at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account, including interest earned
on the trust account (less up to $100,000 of interest to pay dissolution
expenses and net of taxes payable), divided by the number of then outstanding
public shares, which redemption will completely extinguish Public Shareholders’
rights as shareholders (including the right to receive further liquidation
distributions, if any), and (z) as promptly as reasonably possible following
such redemption, subject to the approval of the Company’s remaining shareholders
and the Board, dissolve and liquidate, subject in the case of clauses (y) and
(z) to the Company’s obligations under Cayman Islands law to provide for claims
of creditors and in all cases subject to the other requirements of applicable
law, and (ii) not to propose any amendment to the Charter that would affect the
substance or timing of the Company’s obligation to redeem the Offering Shares if
the Company does not complete a Business Combination within the required time
period set forth in the Charter unless the Company provides its public
shareholders with the opportunity to redeem their Public Shares upon approval of
any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest earned on the
trust account and not previously released to the Company, divided by the number
of then outstanding public shares.

 

(b) The Sponsor and each Founder, with respect to himself, acknowledge that they
have no right, title, interest or claim of any kind in or to any monies held in
the Trust Account or any other asset of the Company as a result of any
liquidation of the Company with respect to the Founder Shares. The Sponsor and
each of the Founders hereby further waives, with respect to any Public Shares
and Founder Shares held by it or him, as applicable, any redemption rights it or
he may have in connection with the consummation of a Business Combination,
including, without limitation, any such rights available in the context of a
shareholder vote to approve such Business Combination or a shareholder vote to
approve an amendment to the Charter that would affect the substance or timing of
the Company’s obligation to redeem 100% of the Public Shares if the Company has
not consummated an initial Business Combination within the time period set forth
in the Charter or in the context of a tender offer made by the Company to
purchase Public Shares (although the Sponsor and the Founders shall be entitled
to redemption and liquidation rights with respect to any Public Shares (other
than the Founder Shares) they hold if the Company fails to consummate a Business
Combination within the required time period set forth in the Charter).

 

5. Lock-up; Transfer Restrictions.

 

(a) The Sponsor and Founders agree that they shall not Transfer any Founder
Shares (the “Founder Shares Lock-up”) until the earlier of (A) one year after
the completion of an initial Business Combination and (B) the date following the
completion of a Business Combination on which the Company completes a
liquidation, merger, share exchange or other similar transaction that results in
all of the Company’s shareholders having the right to exchange their Public
Shares for cash, securities or other property (the “Founder Shares Lock-up
Period”). Notwithstanding the foregoing, if, subsequent to a Business
Combination, the closing price of the Public Shares equals or exceeds $12.00 per
share (as adjusted for share splits, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing at least 150 days after our initial business combination,
the Founder Shares shall be released from the Founder Shares Lock-up.

 

(b) The Sponsor and Founders agree that they shall not effectuate any Transfer
of Private Placement Warrants or Public Shares underlying such warrants, until
30 days after the completion of a Business Combination.

 

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(c) Notwithstanding the provisions set forth in paragraphs 5(a) and (b),
Transfers of the Founder Shares, Private Placement Warrants and Public Shares
underlying the Private Placement Warrants are permitted: (a) to the Company’s
officers or directors, any affiliate or family member of any of the Company’s
officers or directors or any affiliate of the Sponsor or to any member(s) of the
Sponsor or any of their affiliates; (b) in the case of an individual, as a gift
to such person’s immediate family or to a trust, the beneficiary of which is a
member of such person’s immediate family, an affiliate of such person or to a
charitable organization; (c) in the case of an individual, by virtue of laws of
descent and distribution upon death of such person; (d) in the case of an
individual, pursuant to a qualified domestic relations order; (e) by private
sales or transfers made in connection with any forward purchase agreement or
similar arrangement or in connection with the consummation of a Business
Combination at prices no greater than the price at which the shares or warrants
were originally purchased; (f) by virtue of the laws of the State of Delaware or
our Sponsor’s limited liability company agreement upon dissolution of our
Sponsor; (g) in the event of the Company’s liquidation prior to the completion
of a Business Combination; or (h) in the event that, subsequent to the
consummation of a Business Combination, the Company consummates a liquidation,
merger, share exchange or other similar transaction that results in all of the
Company’s shareholders having the right to exchange their Public Shares for
cash, securities or other property; provided, however, that in the case of
clauses (a) through (f), these transferees must enter into a written agreement
with the Company agreeing to be bound by the transfer restrictions in this
Letter Agreement.

 

(d) During the period commencing on the effective date of the Underwriting
Agreement and ending 180 days after such date, the Sponsor and the Founders
shall not, without the prior written consent of the Representative, Transfer any
Units, Public Shares, Warrants or any securities convertible into, or
exercisable, or exchangeable for, Public Shares owned by it or him, as
applicable. The Sponsor and the Founders acknowledge and agree that, prior to
the effective date of any release or waiver of the restrictions set forth in
this paragraph 5, the Company shall announce the impending release or waiver by
press release through a major news service at least two business days before the
effective date of the release or waiver. Any release or waiver granted shall
only be effective two business days after the publication date of such press
release. The provisions of this paragraph will not apply if the release or
waiver is effected solely to permit a transfer not for consideration and the
transferee has agreed in writing to be bound by the same terms described in this
Letter Agreement to the extent and for the duration that such terms remain in
effect at the time of the transfer.

 

6. Remedies. The Sponsor and each of the Founders hereby agree and acknowledge
that (i) each of the Underwriters and the Company would be irreparably injured
in the event of a breach by the Sponsor or such Founder of its or his
obligations, as applicable under paragraphs 3, 4, 5, 7, 10, 11 and 12, (ii)
monetary damages may not be an adequate remedy for such breach and (iii) the
non-breaching party shall be entitled to injunctive relief, in addition to any
other remedy that such party may have in law or in equity, in the event of such
breach.

  

7. Payments by the Company. Except as disclosed in the Prospectus, neither the
Sponsor, nor any affiliate of the Sponsor, nor any director or officer of the
Company, shall receive from the Company any finder’s fee, reimbursement,
consulting fee, monies in respect of any repayment of a loan or other
compensation prior to, or in connection with any services rendered in order to
effectuate the consummation of the Company’s initial Business Combination
(regardless of the type of transaction that it is).

 

8. Director and Officer Liability Insurance. The Company will maintain an
insurance policy or policies providing directors’ and officers’ liability
insurance, and the Founders shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any of the Company’s directors or officers.

 

9. Termination. This Letter Agreement shall terminate on the earlier of (i) the
expiration of the Founder Shares Lock-up Period and (ii) the liquidation of the
Company; provided, however, that this Letter Agreement shall earlier terminate
in the event that the Public Offering is not consummated and closed by December
31, 2016.

  

10. Indemnification. In the event of the liquidation of the Trust Account upon
the failure of the Company to consummate its initial Business Combination within
the time period set forth in the Charter, the Sponsor (the “Indemnitor”) agrees
to indemnify and hold harmless the Company against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited to, any and all
legal or other expenses reasonably incurred in investigating, preparing or
defending against any litigation, whether pending or threatened) to which the
Company may become subject as a result of any claim by (i) any third party
(other than the Company’s independent public accountants) for services rendered
or products sold to the Company or (ii) any prospective target business with
which the Company has entered into a written letter of intent, confidentiality
or other similar agreement or Business Combination agreement (a “Target”);
provided, however, that such indemnification of the Company by the Indemnitor
shall (x) apply only to the extent necessary to ensure that such claims by a
third party or a Target do not reduce the amount of funds in the Trust Account
to below the lesser of (i) $10.00 per Offering Share and (ii) the actual amount
per Offering Share held in the Trust Account as of the date of the liquidation
of the Trust Account, if less than $10.00 per Offering Share is then held in the
Trust Account due to reductions in the value of the trust assets, less taxes
payable, (y) shall not apply to any claims by a third party or a Target which
executed a waiver of any and all rights to the monies held in the Trust Account
(whether or not such waiver is enforceable) and (z) shall not apply to any
claims under the Company’s indemnity of the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Indemnitor shall have the right to defend against any such claim with
counsel of its choice reasonably satisfactory to the Company if, within 15 days
following written receipt of notice of the claim to the Indemnitor, the
Indemnitor notifies the Company in writing that it shall undertake such defense.

 

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11. Forfeiture of Founder Shares by Sponsor. To the extent that the Underwriters
do not exercise their over-allotment option to purchase up to an additional
7,200,000 Public Shares within 45 days from the date of the Prospectus (as
further described in the Prospectus), the Sponsor agrees that it shall
automatically surrender to the Company for no consideration, for cancellation at
no cost, an aggregate number of Founder Shares equal to 1,800,000 multiplied by
a fraction, (i) the numerator of which is 7,200,000 minus the number of Public
Shares purchased by the Underwriters upon the exercise of their over-allotment
option, and (ii) the denominator of which is 7,200,000. The surrender for no
consideration will be adjusted to the extent that the over-allotment option is
not exercised in full by the Underwriters so that the initial shareholders (as
such term is defined in the Prospectus) will own an aggregate of 20.0% of the
Company’s issued and outstanding Capital Shares after the Public Offering. The
Sponsor and Founders further agree that to the extent that the size of the
Public Offering is increased or decreased, the Company will purchase or sell
Public Shares or effect a share repurchase or share capitalization, as
applicable, immediately prior to the consummation of the Public Offering in such
amount as to maintain the ownership of the initial shareholders prior to the
Public Offering at 20.0% of its issued and outstanding Capital Shares upon the
consummation of the Public Offering. In connection with such increase or
decrease in the size of the Public Offering, then (A) the references to
7,200,000 in the numerator and denominator of the formula in the first sentence
of this paragraph shall be changed to a number equal to 15% of the number of
Public Shares included in the Units issued in the Public Offering and (B) the
reference to 1,800,000 in the formula set forth in the first sentence of this
paragraph shall be adjusted to such number of Founder Shares that the Sponsor
would have to return to the Company in order for the initial shareholders to
hold an aggregate of 20.0% of the Company’s issued and outstanding Capital
Shares after the Public Offering.

 

12. Involvement in Future Blank Check Companies. The Sponsor and each Founder
agrees not to participate in the formation of, or become an officer or director
of, any other blank check company (excluding existing affiliations), until the
Company has entered into a definitive agreement with respect to a Business
Combination or the Company has failed to complete a Business Combination within
the time period set forth in the Charter.

 

13. Entire Agreement. 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, or representations by or among
the parties hereto, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated hereby. This Letter
Agreement may not be changed, amended, modified or waived (other than to correct
a typographical error) as to any particular provision, except by a written
instrument executed by all parties hereto.

 

14. Assignment. No party hereto may assign either this Letter Agreement or any
of its rights, interests, or obligations hereunder without the prior written
consent of the other parties. 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. This Letter Agreement
shall be binding on the Sponsor, each of the Founders and each of their
respective successors, heirs, personal representatives and assigns and permitted
transferees.

 

15. Persons Having Rights under this Agreement. Nothing in this Letter Agreement
shall be construed to confer upon, or give to, any person or corporation other
than the parties hereto any right, remedy or claim under or by reason of this
Letter Agreement or of any covenant, condition, stipulation, promise or
agreement hereof. All covenants, conditions, stipulations, promises and
agreements contained in this Letter Agreement shall be for the sole and
exclusive benefit of the parties hereto and their successors, heirs, personal
representatives and assigns and permitted transferees.

 

16. Counterparts. This Letter 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.

 

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

 

18. Severability. This Letter 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 Letter 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 Letter Agreement a provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and enforceable.

 

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19. Governing Law. This Letter Agreement shall be governed by and construed and
enforced in accordance with 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 parties hereto (i) all agree
that any action, proceeding, claim or dispute arising out of, or relating in any
way to, this Letter Agreement shall be brought and enforced in the courts of New
York City, in the State of New York, and irrevocably submit to such jurisdiction
and venue, which jurisdiction and venue shall be exclusive and (ii) waive any
objection to such exclusive jurisdiction and venue or that such courts represent
an inconvenient forum.

 

20. Notices. Any notice, consent or request to be given in connection with any
of the terms or provisions of this Letter Agreement shall be in writing and
shall be sent by express mail or similar private courier service, by certified
mail (return receipt requested), by hand delivery or facsimile transmission.

 

[Signature Page Follows]

 

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  Sincerely,       GTY INVESTORS, LLC       By:  /s/ Harry L. You   Name: Harry
L. You   Title: Manager        /s/ William D. Green   William D. Green      
 /s/ Joseph M. Tucci   Joseph M. Tucci        /s/ Harry L. You   Harry L. You  
     /s/ Randy Cowen   Randy Cowen        /s/ Paul Dacier   Paul Dacier      
 /s/ Stephen Rohleder   Stephen Rohleder        /s/ Charles Wert   Charles Wert

 

Acknowledged and Agreed:       GTY TECHNOLOGY HOLDINGS INC.  

  By:  /s/ Harry L. You     Name: Harry L. You     Title: President & CFO      

 

[Signature Page to Letter Agreement]