Exhibit 10.4


 


PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT


 


THIS
PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT, dated as of [·], 2021 (as it may from time
to time be amended, this “Agreement”), is entered into by and between Compass Digital Acquisition Corp.,
a Cayman Islands exempted company (the “Company”), and each of the undersigned parties
listed on the signature page hereto under “Purchasers” (the “Purchasers”) and in Schedule A
hereto.


 


WHEREAS, the Company intends
to consummate an initial public offering of the Company’s units (the “Public Offering”), each unit consisting
of one Class A Ordinary Share, par value $0.0001 per share, of the Company (an “Ordinary Share”), and one-third
of one redeemable warrant. Each whole warrant entitles the holder to purchase one Ordinary Share at an exercise price of $11.50 per Ordinary
Share. The Purchasers have agreed to purchase an aggregate of 4,054,167 warrants (or 4,401,667 warrants in the aggregate if the over-allotment
option in connection with the Public Offering is exercised in full) (the “Private Placement Warrants”), each
Private Placement Warrant entitling the holder to purchase one Ordinary Share at an exercise price of $11.50 per Share.


 


NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:


 


AGREEMENT


 


Section 1.          Authorization,
Purchase and Sale; Terms of the Private Placement Warrants.


 


A.           Authorization
of the Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement Warrants to the
Purchasers.


 


B.           Purchase
and Sale of the Private Placement Warrants.


 


(i)          On
the date of the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchasers and the
Company (the “Initial Closing Date”), the Company shall issue and sell to the Purchasers, and the Purchasers
shall purchase from the Company, an aggregate of 4,054,167 Private Placement Warrants at a price of $1.50 per warrant for an aggregate
purchase price of $6,081,250.50 (the “Purchase Price”), which shall be paid by wire transfer of immediately
available funds to the Company at least one business day prior to the Initial Closing Date in accordance with the Company’s wiring
instructions. On the Initial Closing Date, upon the payment by the Purchasers of the Purchase Price, the Company, at its option, shall
deliver a certificate evidencing the Private Placement Warrants purchased by the Purchasers on such date duly registered in the Purchasers’
names to the Purchasers, or effect such delivery in book-entry form.


 


(ii)         On
the date of the consummation of the closing of the over-allotment option in connection with the Public Offering or on such earlier time
and date as may be mutually agreed by the Purchasers and the Company (each such date, an “Over-allotment Closing Date”,
and each Over-allotment Closing Date (if any) and the Initial Closing Date being sometimes referred to herein as a “Closing
Date”), the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from the Company, up to an
aggregate of 347,500 additional Private Placement Warrants at a price of $1.50 per warrant for an aggregate purchase price of up to $521,250
(if the over-allotment option in connection with the Public Offering is exercised in full) (the “Over-allotment Purchase Price”).
The Purchasers shall pay the Over-allotment Purchase Price by wire transfer of immediately available funds to the Company at least one
business day prior to the Over-Allotment Closing Date in accordance with the Company’s wiring instructions. On the Over-allotment
Closing Date, upon the payment by the Purchasers of the Over-allotment Purchase Price, the Company shall, at its option, deliver a certificate
evidencing the Private Placement Warrants purchased by the Purchasers on such date duly registered in the Purchasers’ names to the
Purchasers, or effect such delivery in book-entry form.


 


C.          Terms
of the Private Placement Warrants.


 


(i)          Each
Private Placement Warrant shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent
in connection with the Public Offering (a “Warrant Agreement”).


 




     


     


    

(ii)         At
the time of the closing of the Public Offering, the Company and the Purchasers shall enter into a registration rights agreement (the “Registration
Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchasers relating to the
Private Placement Warrants and the Ordinary Shares underlying the Private Placement Warrants.


 


Section 2.          Representations
and Warranties of the Company. As a material inducement to the Purchasers to enter into this Agreement and purchase the Private
Placement Warrants, the Company hereby represents and warrants to the Purchasers (which representations and warranties shall survive the
Closing Date) that:


 


A.          Incorporation
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the laws of
the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected
to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite
corporate power and authority necessary to carry out the transactions contemplated by this Agreement and the Warrant Agreement.


 


B.         Authorization;
No Breach.


 


(i)          The
execution, delivery and performance of this Agreement and the Private Placement Warrants have been duly authorized by the Company as of
the Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms.
Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Private Placement
Warrants will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Date.


 


(ii)         The
execution and delivery by the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private Placement
Warrants, the issuance of the Ordinary Shares upon exercise of the Private Placement Warrants and the fulfillment of, and compliance with,
the respective terms hereof and thereof by the Company, do not and will not as of the Closing Date (a) conflict with or result in
a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien,
security interest, charge or encumbrance upon the Company’s equity or assets under, (d) result in a violation of, or (e) require
any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative
or governmental body or agency pursuant to the Amended and Restated Memorandum and Articles of Association of the Company in effect on
the date hereof or as may be amended prior to completion of the contemplated Public Offering, or any material law, statute, rule or regulation
to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required
after the date hereof under federal or state securities laws.








 


C.          Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, and upon registration
in the Company’s register of members, the Ordinary Shares issuable upon exercise of the Private Placement Warrants will be duly
and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the
Warrant Agreement, and upon registration in the Company’s register of members, the Purchasers will have good title to the Private
Placement Warrants and the Ordinary Shares issuable upon exercise of such Private Placement Warrants, free and clear of all liens, claims
and encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby,
(ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions
of the Purchasers.


 


D.          Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required
in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of any
other transactions contemplated hereby.


 


E.           Regulation
D Qualification. Neither the Company nor, to its knowledge, any of its affiliates, members, officers, directors or beneficial shareholders
of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation
D under the Securities Act of 1933, as amended (the “Securities Act”).


 




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Section 3.          Representations
and Warranties of the Purchasers. As a material inducement to the Company to enter into this Agreement and issue and sell the
Private Placement Warrants to the Purchasers, the Purchasers hereby represent and warrant to the Company (which representations and warranties
shall survive each Closing Date) that:


 


A.          Organization
and Requisite Authority. The Purchasers possess all requisite power and authority necessary to carry out the transactions contemplated
by this Agreement.


 


B.          Authorization;
No Breach.


 


(i)          This
Agreement constitutes a valid and binding obligation of the Purchasers, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).


 


(ii)         The
execution and delivery by the Purchasers of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchasers
do not and shall not as of each Closing Date conflict with or result in a breach by the Purchasers of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchasers are subject.


 


C.          Investment
Representations.


 


(i)          The
Purchasers are acquiring the Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Ordinary Shares issuable
upon such exercise (collectively, the “Securities”), for the Purchasers’ own accounts, for investment
purposes only and not with a view towards, or for resale in connection with, any public sale or distribution thereof.


 


(ii)         The
ultimate parent of the Purchasers is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D,
and the ultimate parent of the Purchasers has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation
D under the Securities Act.


 


(iii)        The
Purchasers understand that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and
the Purchasers’ compliance with, the representations and warranties of the Purchasers set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchasers to acquire such Securities. 





 


(iv)        The
Purchasers did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act.


 


(v)         The
Purchasers have been furnished with all materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by the Purchasers. The Purchasers have been afforded the opportunity
to ask questions of the executive officers and directors of the Company. The Purchasers understand that their investment in the Securities
involves a high degree of risk and they have sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities.


 


(vi)        The
Purchasers understand that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchasers
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.








 


(vii)       The
Purchasers understand that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold
in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither the
Company nor any other person is under any obligation to


 




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register
the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
While the Purchasers understand that Rule 144 is not available for the resale of securities initially issued by shell companies (other
than business combination related shell companies) or issuers that have been at any time previously a shell company, the Purchasers understand
that Rule 144 includes an exception to this prohibition if the following conditions are met: (i) the issuer of the securities that was
formerly a shell company has ceased to be a shell company; (ii) the issuer of the securities is subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (iii) the issuer
of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months
(or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and (iv) at least
one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity
that is not a shell company.


 


(viii)      The
Purchasers have such knowledge and experience in financial and business matters, know of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, are capable of evaluating the merits and risks of an investment
in the Securities and are able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchasers have adequate means of providing for their current financial needs and contingencies and will
have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchasers
can afford a complete loss of their investment in the Securities.


 


Section 4.          Conditions
of the Purchasers’ Obligations. The obligations of the Purchasers to purchase and pay for the Private Placement Warrants
are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:  


 


A.           Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as
of such Closing Date as though then made.


 


B.           Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by it on or before such Closing Date.


 


C.           No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.


 


D.           Warrant
Agreement. The Company shall have entered into the Warrant Agreement with a warrant agent on terms satisfactory to the Purchasers.


 


Section 5.          Conditions
of the Company’s Obligations. The obligations of the Company to the Purchasers under this Agreement are subject to the
fulfillment, on or before each Closing Date, of each of the following conditions:


 


A.           Representations
and Warranties. The representations and warranties of the Purchasers contained in Section 3 shall be true and correct at and
as of such Closing Date as though then made.


 


B.           Performance.
The Purchasers shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by the Purchasers on or before such Closing Date.  


 


C.           Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Private Placement Warrants hereunder.


 


D.           No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.


 




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E.           Warrant
Agreement. The Company shall have entered into the Warrant Agreement with a warrant agent on terms satisfactory to the Company.


 


Section 6.          Termination. This
Agreement may be terminated at any time after [·], 2021 upon the election by either the
Company or the Purchasers upon written notice to the other party if the closing of the Public Offering does not occur prior to such date.


 


Section 7.          Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.  


 


Section 8.          Definitions. Terms
used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the registration statement on Form S-1
the Company plans to file with the U.S. Securities and Exchange Commission, under the Securities Act.


 


Section 9.          Miscellaneous.


 


A.           Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed
or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement, other than assignments
by the Purchasers to affiliates thereof (including, without limitation one or more of its members).


 


B.           Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.


 


C.           Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the same agreement.


 


D.           Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation.


 


E.           Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed
in accordance with the internal laws of the State of New York.


 


F.           Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by all parties
hereto.


 


[Signature Page Follows]


 


  


 




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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement to be effective as of the date first set forth above.


 


	 	COMPANY:
	 	 
	 	COMPASS DIGITAL ACQUISITION CORP.
	 	 
	 	By:	 
	 	 	Name:  
	 	 	Title:
	 	 	 



 


	 	PURCHASERS
	 	 
	 	 






	 	By:	
 


	 	 	Name:
	 	 	Title:



 


	 	By:	
 


	 	 	Name:
	 	 	Title:



 


	 	By:	
 


	 	 	Name:
	 	 	Title:



 


	 	By:	
 


	 	 	Name:
	 	 	Title:



 


	 	By:	
 


	 	 	Name:
	 	 	Title:



 


 


[Signature Page to Private Placement Warrants
Purchase Agreement]


 


 



     


     


    

Schedule A: Purchasers


 


	Purchaser	Contact Information