Exhibit 10.4


 


March 9, 2021


 





 


Digital Transformation Opportunities Corp.

10485 NE 6th Street, Unit 3930


Bellevue, WA 98004


 


		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”)
to be entered into by and among Digital Transformation Opportunities Corp., a Delaware corporation (the “Company”),
and Barclays Capital Inc. (the “Underwriter”), relating to an underwritten initial public offering (the
 “Public Offering”), of 34,500,000 of the Company’s units (including up to 4,500,000 units that
may be purchased by the Underwriter to cover over-allotments, if any) (the “Units”), each comprising
one share of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”),
and one-fourth of one redeemable warrant. Each whole warrant (each, a “Warrant”) entitles the holder
thereof to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment. The Units will be sold in
the Public Offering pursuant to a registration statement on Form S-1 and a prospectus (the “Prospectus”),
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”) and the Company
has applied to have the Units listed on the Nasdaq Capital Market. Certain capitalized terms used herein are defined in paragraph 13
hereof.


 


In order to induce the Company and the Underwriter 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, each of Digital Transformation Sponsor LLC, a Delaware limited liability company
(the “Sponsor”) and the undersigned individuals, each of whom is a holder of shares of Class B Common
Stock of the Company or a member of the Company’s board of directors and/or management team to the Company (each, an “Insider”
and collectively, the “Insiders”), hereby agrees with the Company as follows:


 


		1.	It is acknowledged and agreed that the Company shall not enter into a definitive agreement regarding a proposed Business Combination
without the prior consent of the Sponsor.



 


		2.	The Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within
24 months from the closing of the Public Offering, or such later period approved by the Company’s stockholders in accordance
with the Company’s amended and restated certificate of incorporation (the “Charter”), the Sponsor
and each Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject to lawfully
available funds therefor, redeem 100% of the Common Stock 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
(as defined below), including interest earned on the funds held in the Trust Account and not previously released to the Company
to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then
outstanding Offering Shares, which redemption will completely extinguish all Public Stockholders’ rights as stockholders
(including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the
Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware
law to provide for claims of creditors and other requirements of applicable law. The Sponsor and each Insider agrees not to propose
any amendment to the Charter to (a) modify the substance or timing of the Company’s obligation to allow redemption in
connection with the Business Combination or to redeem 100% of the Offering Shares if the Company does not complete a Business Combination
within the time period set forth in the Charter or (b) with respect to any other provision relating to stockholders’
rights or pre-initial Business Combination activity, unless the Company provides Public Stockholders with the opportunity to redeem
their shares of Common Stock 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 funds held in the Trust Account and not previously
released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided
by the number of then outstanding Offering Shares.



 






     

     


    

 


			The Sponsor and each Insider acknowledges that it, he
or she has 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 held by it, him or her. The Sponsor
and each Insider hereby agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection
with such proposed Business Combination, it, he or she shall vote any shares of Capital Stock owned by it, him or her in favor
of any proposed Business Combination. The Sponsor and each Insider hereby waives, with respect to any shares of Common Stock held
by it, him or her, if any, any redemption rights it, he or she may have in connection with the consummation of a Business Combination,
including, without limitation, any such rights available in the context of (i) a stockholder vote to approve such Business
Combination, or (ii) a stockholder vote to approve an amendment to the Charter to (a) modify the substance or timing
of the Company’s obligation to allow redemption in connection with the Business Combination or to redeem 100% of the Offering
Shares if the Company does not complete a Business Combination within the time period set forth in the Charter or (b) with
respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity (although the
Sponsor and the Insiders shall be entitled to liquidation rights with respect to any Offering Shares it or they hold if the Company
fails to consummate a Business Combination within the time period set forth in the Charter). If the Company engages in a tender
offer in connection with any proposed Business Combination, the Sponsor and each Insider agrees that it, he or she will not seek
to sell its, his or her shares of Common Stock to the Company in connection with such tender offer.



 


		3.	The undersigned acknowledges and agrees that prior to entering into a definitive agreement for a Business Combination with
a target business that is affiliated with the undersigned or any other Insiders of the Company or their respective affiliates,
such transaction must be approved by a majority of the Company’s disinterested independent directors and the Company must
obtain an opinion from an independent investment banking firm or an independent accounting firm that such Business Combination
is fair to the Company from a financial point of view.



 


		4.	During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor
and each Insider shall not, without the prior written consent of the Representative, (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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations
of the Commission promulgated thereunder, with respect to any Units, shares of Common Stock, Founder Shares, Warrants or any securities
convertible into, or exercisable, or exchangeable for, shares of Common Stock (but excluding Units and shares of Common Stock purchased
in the Public Offering or thereafter) owned by it, him or her, (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 Units, shares of Common Stock, Founder Shares,
Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her,
whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce
any intention to effect any transaction specified in clause (i) or (ii).



 






     

     


    

 


		5.	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”), which for purposes of
clarification shall not extend to any other shareholders, members or managers of the Sponsor, or any of the other undersigned,
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 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 for services rendered (other than the Company’s independent public
accountants) or products sold to the Company 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 interest earned on the funds in the Trust Account which may be withdrawn to pay franchise
and income taxes, (y) 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) not apply to any claims under the
Company’s indemnity of the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933,
as amended (the “Securities Act”). In the event that any such executed waiver is deemed to be unenforceable
against such third party, the Indemnitor shall not be responsible to the extent of any liability for such third party claims. 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.



 


		6.	To the extent that the Underwriter does not exercise its over-allotment option to purchase up to an additional 4,500,000 Units
within 45 days from the date of the Prospectus (and as further described in the Prospectus) in full, the Sponsor agrees to forfeit,
at no cost, a number of Founder Shares so that the Initial Stockholders will own an aggregate of 20% of the Company’s issued
and outstanding shares of Capital Stock after the Public Offering (assuming, for purposes of this calculation, that the Initial
Stockholders do not purchase any Units in the Public Offering). To the extent that the size of the Public Offering is increased
or decreased, the Company will effect a stock dividend or other appropriate mechanism, as applicable, with respect to the Founder
Shares immediately prior to the consummation of the Public Offering in such amount as to maintain the number of Founder Shares,
on an as-converted basis, at 20% of the sum of the total number of shares of Common Stock and Founder Shares outstanding at such
time.



 


		7.	The Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriter and the Company would be irreparably
injured in the event of a breach by such Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 6,
7(a), 8(a), 8(b) and, solely as to each Insider, 10, as applicable, of this Letter Agreement, (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. The Sponsor shall also be entitled
to seek injunctive relief, in addition to any other remedy that such parties may have in law or in equity, in the event of a breach
under this Letter Agreement.



 


		8.	(a)The Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or shares of Common Stock
issuable upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s initial Business
Combination or (B) subsequent to the initial Business Combination, (x) if the last reported sale price of the Common
Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial
Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization
or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares
of Common Stock for cash, securities or other property (the “Founder Shares Lock-up Period”).



 






     

     


    

 


			(b)            The
Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or shares of Common Stock
issued or issuable upon the exercise of the Private Placement Warrants), until 30 days after the completion of the Company’s
initial Business Combination (the “Private Placement Warrants Lock-up Period”, together with the Founder
Shares Lock-up Period, the “Lock-up Periods”).



 


			(c)            Notwithstanding
the provisions set forth in paragraphs 8(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and shares
of Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares and
that are held by the Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 8(c)),
are permitted (a) to the Company’s officers or directors, any affiliates or family members of any of the Company’s
officers or directors, the Sponsor, any affiliate of the Sponsor or to any member(s) of the Sponsor, any affiliates of such
members and funds and accounts advised by such members, or any limited partners of any such funds that are invested in the Sponsor;
(b) in the case of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary
of which is a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization;
(c) in the case of an individual, by virtue of the 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 the consummation of an initial Business Combination at prices no greater than the price at which the securities were originally
purchased; (f) to an entity that is an affiliate of the holder; (g) in the event of the Company’s liquidation
prior to the completion of an initial Business Combination; (h) by virtue of the laws of the State of Delaware or the Sponsor’s
limited liability company agreement upon dissolution of the Sponsor; (i) in the event of the Company’s liquidation,
merger, capital stock exchange, reorganization 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 subsequent to the completion
of an initial Business Combination; or (j) to the Company for no value for cancellation in connection with the consummation
of the Company’s initial Business Combination; provided, however, that, in the case of clauses (a) through (f) or
(h), these permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions
and the other restrictions contained herein.



 


		9.	Each of the Insiders who is or is nominated to be a director or officer of the Company agrees to serve in such capacity until
the earlier of the consummation by the Company of an initial Business Combination, the liquidation of the Company, or his or her
removal, death or incapacity. The Sponsor and each Insider represents and warrants that it, he or she 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. Each Insider’s biographical information furnished to the Company (including
any such information included in the Prospectus) is true and accurate in all material respects and does not omit any material information
with respect to the Insider’s background and contains all of the information required to be disclosed pursuant to Item 401
of Regulation S-K, promulgated under the Securities Act. Each Insider’s questionnaire furnished to the Company and the Representative
is true and accurate in all material respects. Each Insider represents and warrants that: it, he or she 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; it, he or she 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 it, he or she is not currently a defendant in any such criminal
proceeding.



 






     

     


    

 


		10.	Except as disclosed in the Prospectus, neither the Sponsor nor any Insider, nor any affiliate of the Sponsor or any Insider,
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).



 


		11.	The Company, the Sponsor and each Insider represents and warrants, severally and not jointly, that it, he or she has full right
and power, without violating any agreement to which it, he or she is bound (including, without limitation, any non-competition
or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and, as applicable, to
serve as an officer, advisor and/or director on the board of directors of the Company and hereby consents to being named in the
Prospectus as an officer, advisor and/or director of the Company.



 


		12.	As used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses;
(ii) “Capital Stock” shall mean, collectively, the Common Stock and the Founder Shares; (iii) “Founder
Shares” shall mean the 8,625,000 shares of the Company’s Class B common stock, par value $0.0001 per share,
initially issued to the Sponsor (up to 1,125,000 shares of which are subject to complete or partial forfeiture by the Sponsor if
the over-allotment option is not exercised in full by the Underwriter); (iv) “Initial Stockholders”
shall mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement Warrants”
shall mean the Warrants to purchase up to 5,666,667 shares of Common Stock of the Company (or 6,266,667 shares of Common Stock
if the over-allotment option is exercised in full by the Underwriter) that the Sponsor has agreed to purchase for an aggregate
purchase price of $8,500,000 (or $9,400,000 if the over-allotment option is exercised in full by the Underwriter), or $1.50 per
Warrant, in a private placement that shall occur simultaneously with the consummation of the Public Offering; (vi) “Public
Stockholders” shall mean the holders of securities issued in the Public Offering; (vii) “Trust Account”
shall mean the trust account into which the net proceeds of the Public Offering and certain proceeds from the sale of the Private
Placement Warrants shall be deposited; and (viii) “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 Exchange Act, 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).



 


		13.	The Company will maintain an insurance policy or policies providing directors’ and officers’ liability insurance,
and each Insider 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.



 


		14.	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.



 


		15.	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, except that the Sponsor may assign its rights, interests and obligations hereunder
to any affiliate of the Sponsor. 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
Company, the Sponsor and each Insider and their respective successors, heirs and assigns and permitted transferees.



 






     

     


    

 


		16.	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.



 


		17.	This Letter Agreement may be executed in any number of original, facsimile or other electronic 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. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.



 


		18.	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.



 


		19.	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, 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.	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 or e-mail transmission.



 


		21.	This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation
of the Company.



 






     

     


    

 


	 	Sincerely,
	 	   
	 	DIGITAL TRANSFORMATION SPONSOR LLC








 


	 	By:	/s/ Kevin Nazemi
	 	 	Name: Kevin Nazemi
	 	 	Title:   Manager








 


[Signature Page to
Letter Agreement]


 






     

     


    

 


	 	/s/
    Kevin Nazemi
	 	Kevin Nazemi
	 	 
	 	/s/ Kyle
    Francis
	 	Kyle Francis  
	 	 
	 	/s/ Bradley
    Fluegel
	 	Bradley Fluegel
	 	 
	 	/s/ Jim
    Moffatt
	 	Jim Moffatt
	 	 
	 	/s/ Heather
    Zynczak
	 	Heather Zynczak


 


	Acknowledged
    and Agreed:
	 
	digital
    transformation Opportunities CORP.




 


	By:	/s/
    Kyle Francis	 
	 	Name: Kyle Francis	 
	 	Title:   Chief Financial Officer
     	 





 


[Signature Page to Letter Agreement]