ESCROW AGREEMENT
Exhibit 10.3
Execution Version
This ESCROW AGREEMENT (this “Agreement”) is made and entered into as of June 25, 2021, by and among Forum Merger III Corporation, a Delaware corporation, (“Parent”), Xxxxx Xxx, in the capacity as the initial Stockholder Representative (acting on behalf of the Stockholders and not in his personal capacity) under the Merger Agreement (as defined below) (“Stockholder Representative” and, together with the “Parent”, sometimes referred to individually as a “Party” and collectively as the “Parties”), solely for Section 2(c) and Article XIII herein, Forum Investors III LLC, a Delaware limited liability company (“Sponsor”), and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement (as defined herein).
WHEREAS, Parent, ELMS Merger Corp., a Delaware corporation and a wholly owned subsidiary of Parent, Electric Last Mile, Inc., a Delaware corporation (the “Company”) and Stockholder Representative have entered into that certain Agreement and Plan of Merger, dated as of December 10, 2020 (together with all exhibits, schedules and annexes thereto, as amended, modified or supplemented from time to time in accordance with its terms, the “Merger Agreement”), pursuant to which the parties thereto have agreed to establish an escrow arrangement for the purposes set forth therein;
WHEREAS, in accordance with Section 2.11(c) of the Merger Agreement, Parent shall deposit Two Hundred Fifty Thousand (250,000) shares of Parent Common Stock (the “Adjustment Escrow Shares”) and Five Million (5,000,000) shares of Parent Common Stock (the “Earnout Shares”) into an escrow account (the “Escrow Account”) to be held in accordance with the terms of the Merger Agreement and this Agreement;
WHEREAS, the Adjustment Escrow Shares and the Earnout Shares shall be held in escrow by the Escrow Agent pursuant to the terms of this Agreement and the Merger Agreement;
WHEREAS, pursuant to Section 8.1 of the Merger Agreement, the Stockholder Representative is appointed as the representative, true and lawful attorney-in-fact and agent for all of the Stockholders for all purposes set forth therein; and
WHEREAS, the Parties desire to constitute and appoint the Escrow Agent as escrow agent hereunder, and the Escrow Agent is willing to assume and perform the duties and obligations of the escrow agent pursuant to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
| 1. | Appointment. The Parties hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment and agrees to act as Escrow Agent in accordance with the terms and conditions set forth herein. |
| 2. | Deposit, Delivery and Receipt of Escrow Shares; Other Actions. |
| (a) | At the Closing, Parent shall deliver, or cause to be delivered (unless delivered previously) the Adjustment Escrow Shares and the Earnout Shares to the Escrow Agent, to be held in the Escrow Account. The Escrow Agent will hold the Adjustment Escrow Shares and the Earnout Shares, together with any dividend or other distribution paid on such Adjustment Escrow Shares or Earnout Shares, as applicable (the “Escrow Dividends”), in escrow for the Stockholder Representative, or the Parent, as applicable, and will administer and disburse the Adjustment Escrow Shares, the Earnout Shares and the Escrow Dividends, if any, in accordance with the terms of this Agreement and the Merger Agreement. |
| (b) | The Escrow Agent will hold the Adjustment Escrow Shares and the Earnout Shares as a book-entry position registered in the name of “Continental Stock Transfer & Trust Company, as Escrow Agent under the Escrow Agreement, dated June 25, 2021” until (i) any such Adjustment Escrow Shares are to be (x) released to the Stockholders Representative for further delivery to the Stockholders, or (y) otherwise released to Parent, in each case, in accordance with the terms of this Agreement and the Merger Agreement, or (ii) any such Earnout Shares are to be (x) released to the Stockholders Representative for further delivery to the Stockholders, or (y) otherwise released to Parent, in each case, in accordance with the terms of this Agreement and the Merger Agreement. |
| (c) | When all or any portion of the Adjustment Escrow Shares or the Earnout Shares are required to be released under the Merger Agreement, the Parties and Sponsor shall deliver joint written instructions to the Escrow Agent in accordance with the security procedures set forth in Section 11 and executed by Parent, the Stockholder Representative and Sponsor (a “Release Notice”). The Parties agree that neither the Adjustment Escrow Shares nor the Earnout Shares shall be subject to attachment by any creditor (including any creditor of any party to the Merger Agreement). |
| (d) | The Escrow Agent does not own or have any interest in the Adjustment Escrow Shares or the Earnout Shares or any Escrow Dividends, but is serving as escrow holder, having only possession thereof and agreeing to hold and distribute the Adjustment Escrow Shares or the Earnout Shares and any Escrow Dividends in accordance with the terms and conditions set forth herein. |
| (e) | With respect to the Adjustment Escrow Shares, Parent shall retain all voting and economic rights with respect to such Adjustment Escrow Shares while such Adjustment Escrow Shares remain deposited with the Escrow Agent for so long as such Adjustment Escrow Shares are held by the Escrow Agent, the Escrow Agent shall vote the Adjustment Escrow Shares solely as directed in writing by Parent. |
| (f) | Any Escrow Dividends shall be distributed to and held by the Escrow Agent, and shall be disbursed by the Escrow Agent together with and when the Adjustment Escrow Shares or the Earnout Shares, as applicable, on which such Escrow Dividend was distributed are released, to the same person or entity to whom such Adjustment Escrow Shares or Earnout Shares, as applicable, are released in accordance with the terms of this Agreement. For the avoidance of doubt, any release or distribution of the Adjustment Escrow Shares or the Earnout Shares in accordance with this Agreement shall also be understood to include a distribution of the Escrow Dividends, if any, with respect to such released Adjustment Escrow Shares or Earnout Shares. |
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| (g) | Unless otherwise instructed in writing jointly by the Parties, the Escrow Agent shall hold the Escrow Dividends in a “noninterest-bearing deposit account” insured by the Federal Deposit Insurance Corporation (“FDIC”) to the applicable limits. |
| (h) | The Escrow Agent shall have no duty, responsibility or obligation to invest any Escrow Dividends held by it hereunder other than in accordance with this Section 2. |
| 3. | Release Notices. |
| (a) | The Escrow Agent shall disburse the Adjustment Escrow Shares and the Earnout Shares only in accordance with the Release Notice. Each such Release Notice shall set forth in reasonable detail the event giving rise to the requested release and the specific release instructions with respect thereto (including the number of Adjustment Escrow Shares or Earnout Shares to be released and the identity of the person to whom they should be released). |
| (b) | If the Adjustment Escrow Shares or the Earnout Shares are to be released to the Stockholders (as opposed to a release to Parent), the specified number of Adjustment Escrow Shares or Earnout Shares, as applicable, (and the applicable portion of the Escrow Dividends) shall be released to the Stockholder Representative for further delivery to the applicable Stockholders as specified by the Stockholder Representative in the Release Notice (in which case, Parent shall have no liability for the accuracy of, or compliance with the terms of the Merger Agreement, or any other document, of such instructions). |
| (c) | If the Merger Agreement requires that all or any portion of the Adjustment Escrow Shares or the Earnout Shares are to be released to Parent, then the Release Notice shall specify the number of Adjustment Escrow Shares and the Earnout Shares, as applicable, to be released to Parent (and the applicable portion of the Escrow Dividends). |
| (d) | In the event an equitable adjustment is required under Section 4(c) below, any Release Notice shall also include reasonably detailed information with respect to such equitable adjustment. |
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| (e) | During the period from the date of this Agreement until the date upon which all of the Adjustment Escrow Shares and the Earnout Shares have been released, Parent and the Stockholder Representative agree to promptly and jointly issue all applicable Release Notices upon the occurrence of each release event, as such events are described in the Merger Agreement (and in accordance with Section 4). For the avoidance of doubt, in the event of a conflict between the terms of this Agreement and the Merger Agreement, then, as between Parent and the Stockholder Representative, the terms of the Merger Agreement shall control and the aforementioned parties shall use reasonable best efforts to effect an amendment to this Agreement (including to Section 4 below). |
| (f) | Within five (5) Business Days following the receipt of any Release Notice and subject to the receipt of required documentation for compliance with applicable anti-money laundering requirements, the Escrow Agent shall release and deliver to the person or persons designated in the applicable Release Notice the number of Adjustment Escrow Shares or Earnout Shares set forth in such Release Notice by transfer of the relevant Adjustment Escrow Shares or Earnout Shares into the securities accounts designated in such Release Notice. |
| (g) | The Escrow Agent shall be entitled to rely upon, and be held harmless for such reliance, on any Release Notice for any action taken, suffered or omitted to be taken in good faith by it. The Escrow Agent shall have no obligation to determine whether a release event has occurred or is contemplated to occur under the Merger Agreement, this Agreement (including, without limitation, under Section 4), or any other document. |
| (h) | For purposes of this Agreement, “Business Day” shall mean any day other than (a) a Saturday or a Sunday; (b) a day on which banking and savings and loan institutions are authorized or required by Law to be closed in New York City, New York; or (c) the location of the Escrow Agent’s offices in Section 10 are authorized or required by law to close. |
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| 4. | Disbursement and Termination. The Parties shall act in accordance with, and the Escrow Agent shall hold and release the Adjustment Escrow Shares or the Earnout Shares as follows: |
| (a) | Earnout Release. If, during the thirty-six (36) month period following the Closing Date (the “Earnout Period”), the closing price per share of Parent Common Stock on any twenty (20) trading days in any thirty (30) consecutive day trading period (i) equals or exceeds Fourteen Dollars ($14.00) (the “First Share Price Trigger”), or (ii) equals or exceeds Sixteen Dollars ($16.00) (the “Second Share Price Trigger” and, together with the First Share Price Trigger, each a “Share Price Trigger” and collectively, the “Share Price Triggers”) then, for each Share Price Trigger that is achieved, Two Million Five Hundred Thousand (2,500,000) shares of Parent Common Stock will be released from the Escrow Account. Upon receipt of a Release Notice with respect to any Earnout Shares, the Escrow Agent shall, promptly after receipt of such Release Notice, disburse such Earnout Shares to the Stockholder Representative, as applicable, in accordance with such Release Notice. |
| (i) | If, during the Earnout Period, there is a qualifying Change of Control in accordance with Section 2.10 of the Merger Agreement, then any Earnout Release that has not previously been released from escrow to the Stockholder Representative (whether or not previously earned) shall be deemed earned (and the applicable Share Price Trigger(s) achieved, as applicable), and Parent and the Stockholder Representative shall jointly deliver a Release Notice directing the Escrow Agent to release from the Escrow Account to Stockholder Representative a number of shares equal to the remaining Earnout Release(s) within ten (10) Business Days following the date of such qualifying Change of Control. |
| (ii) | If, during the Earnout Period, there is a Final Determination in accordance with Section 2.10 of the Merger Agreement that the Stockholders are entitled to receive an Earnout Release, then Parent and the Stockholder Representative shall jointly deliver a Release Notice directing the Escrow Agent to release from the Escrow Account to Stockholder Representative a number of shares equal to such Earnout Release within ten (10) Business Days following the date on which the applicable Share Price Trigger was met or exceeded. |
| (iii) | If, pursuant to Section 2.10 of the Merger Agreement, it is finally determined that the Stockholders are not entitled to or eligible to receive any further Earnout Releases, Parent and Stockholder Representative shall jointly direct the Escrow Agent to release from the Escrow Account to Parent for immediate cancellation of all such Earnout Shares that have not been released. |
| (b) | Escrow Termination Date. Subject to the provisions of Section 8, this Agreement shall terminate after all of the Adjustment Escrow Shares and the Earnout Shares and Escrow Dividends have been released from the Escrow Account. |
| (c) | Records. The Escrow Agent shall keep proper books of record and account in which full and correct entries shall be made of all release activity in the Escrow Account. |
| 5. | Escrow Agent. |
| (a) | The Escrow Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied. The Escrow Agent shall not have any fiduciary, partnership or joint venture relationship with any Party or any other person or entity arising out of or in connection with this Agreement. |
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| (b) | The Escrow Agent shall not be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document among the Parties, in connection herewith, if any, including without limitation the Merger Agreement, nor shall the Escrow Agent be required to determine if any person or entity has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Agreement. In the event of any conflict between the terms and provisions of this Agreement, those of the Merger Agreement, any schedule or exhibit attached to this Agreement, or any other agreement among the Parties, the terms and conditions of this Agreement shall govern and control in all respects relating to the Escrow Agent, but in every other respect involving the parties and beneficiaries of any such other agreement, the other agreement shall control. |
| (c) | The Escrow Agent may rely upon, and shall not be liable for acting or refraining from acting upon, any Release Notice or other written notice, document, instruction or request furnished to it hereunder and reasonably believed by it to be genuine and to have been signed or presented by the proper Party or Parties without inquiry and without requiring substantiating evidence of any kind. The Escrow Agent shall not be liable to any Party, any beneficiary, or other person or entity for refraining from acting upon any Release Notice or other written notice, document, instruction or request furnished to it hereunder setting forth, claiming, containing, objecting to, or related to the transfer or distribution of the Adjustment Escrow Shares or the Earnout Shares, or any portion thereof, unless such Release Notice or other written notice, document, instruction or notice shall have been delivered to the Escrow Agent in accordance with Section 11 below and the Escrow Agent has been able to satisfy any applicable security procedures as may be required hereunder and as set forth in Section 11. The Escrow Agent shall not be under any duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Escrow Agent shall have no duty to solicit any receipt of the Adjustment Escrow Shares or the Earnout Shares which may be due to it or the Escrow Account, nor shall the Escrow Agent have any duty or obligation to confirm or verify the accuracy or correctness of any number or class of Adjustment Escrow Shares or Earnout Shares deposited with it hereunder. |
| (d) | The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in good faith except to the extent that a final adjudication of a court of competent jurisdiction determines that the Escrow Agent’s fraud, gross negligence or willful misconduct was the primary cause of any loss to either Party. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through affiliates or agents, and the Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by any such attorney or agent in good faith, absent fraud, gross negligence, bad faith or willful misconduct (each as determined by a final, nonappealable judgment of a court of competent jurisdiction) in the selection and continued employment thereof. The Escrow Agent may consult with counsel, accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with, or in reasonable reliance upon, the advice or opinion of any such counsel, accountants or other skilled persons. In the event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action, and its sole obligation shall be to keep safely all property held in escrow until it shall be given a direction in writing by the Parties which eliminates such ambiguity or uncertainty to the satisfaction of Escrow Agent or by a final and non-appealable order or judgment of a court of competent jurisdiction. To the extent practicable, the Parties agree to pursue any redress or recourse in connection with any dispute arising under the Merger Agreement (other than with respect to a dispute involving the Escrow Agent) without making the Escrow Agent a party to the same. Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, incidental, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. |
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| 6. | Succession. |
| (a) | The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving thirty (30) days advance notice (pursuant to Section 10) in writing of such resignation to the Parties specifying a date when such resignation shall take effect. By delivery of joint written instructions by the Parties to the Escrow Agent, the Parties shall have the right to terminate their appointment of the Escrow Agent, or successor escrow agent, as Escrow Agent, upon thirty (30) days’ notice to the Escrow Agent. If the Escrow Agent shall resign, be removed or otherwise become incapable of acting, the Parties shall appoint a successor to be the Escrow Agent. If the Parties have failed to appoint a successor escrow agent prior to the expiration of thirty (30) days after giving notice of such removal or following the receipt of the notice of resignation or incapacity, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent within the relevant jurisdiction or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. The Escrow Agent’s sole responsibility after such thirty (30) day notice period expires shall be to hold the Adjustment Escrow Shares and the Earnout Shares (without any obligation to reinvest the same) and to deliver the same to a designated substitute escrow agent as jointly instructed in writing by the Parties, if any, or in accordance with the directions of a final order or judgment of a court of competent jurisdiction, at which time of delivery, the Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Section 8 hereunder. The Escrow Agent shall have the right to withhold monies or property in an amount equal to any amount due and then owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent that the Parties are obligated to indemnify or reimburse the Escrow Agent for pursuant to this Agreement in connection with the termination of this Agreement, so long as the Escrow Agent has previously submitted a written invoice in respect thereof to the Parties that the Parties have not paid within thirty (30) days of receipt of such invoice. |
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| (b) | Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business may be transferred, shall be the Escrow Agent under this Agreement without further action on the part of any party hereto. The Escrow Agent shall promptly notify the Parties in the event this occurs. |
| (c) | Every successor escrow agent appointed hereunder shall execute, acknowledge and deliver to its predecessor, and also to the Parties, an instrument in writing accepting such appointment hereunder, and thereupon such successor escrow agent, without any further action, shall become fully vested with all the rights, immunities and powers and shall be subject to all of the duties and obligations, of its predecessor; and every predecessor escrow agent shall deliver all property and moneys held by it hereunder to such successor escrow agent, at which time of delivery the Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Section 8. |
| 7. | Compensation and Reimbursement. Parent agrees to (a) pay the Escrow Agent upon execution of this Agreement, and from time to time thereafter, all reasonable compensation for the services to be rendered hereunder by the Escrow Agent as described in Schedule 2 attached hereto, and (b) pay or reimburse the Escrow Agent upon request for all reasonable, out-of-pocket and documented expenses, disbursements and advances, including, without limitation, reasonable attorney’s fees and expenses, incurred or made by it in connection with the performance, modification and termination of this Agreement. |
| 8. | Indemnity. |
| (a) | Subject to Section 8(c) below, the Escrow Agent shall be liable for any and all losses, damages, claims, costs, charges, penalties and related interest, counsel fees and expenses, payments, expenses and liability (collectively, “Losses”), only to the extent such Losses are determined by a court of competent jurisdiction to be a result of its own fraud, gross negligence, bad faith or willful misconduct; provided, however, that any liability of the Escrow Agent will be limited in the aggregate to the aggregate value of the Adjustment Escrow Shares, the Earnout Shares and the Earnout Dividends deposited with the Escrow Agent. |
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| (b) | The Parties shall jointly and severally indemnify and hold the Escrow Agent harmless from and against, and the Escrow Agent shall not be responsible for, any and all Losses arising out of or attributable to the Escrow Agent’s duties under this Agreement or this appointment, including the reasonable, out-of-pocket and documented costs and expenses of defending itself against any Losses or enforcing this Agreement (collectively, “Agent Claims”), except to the extent that such Losses are determined by a court of competent jurisdiction to be a result of the Escrow Agent’s own fraud, gross negligence, bad faith or willful misconduct. Notwithstanding the foregoing, and except as provided in Section 7, as between themselves, the Parties agree that any Agent Claims payable hereunder shall be paid (or reimbursed, as applicable): (a) in the case that the Agent Claim is not attributable to actions or inactions of any particular Party, by Parent; and (b) in the event that the Agent Claim is attributable to the actions or inactions of a certain Party, by such Party (and such Party shall reimburse the other Parties, in the event that such other Party(ies) has made indemnification payments under this Section 8(b) in respect of such Agent Claim). |
| (c) | Notwithstanding anything in this Agreement to the contrary, none of the Parties or the Escrow Agent shall be liable for any incidental, punitive, indirect, special or consequential damages of any nature whatsoever, including, but not limited to, loss of anticipated profits, occasioned by a breach of any provision of this Agreement even if apprised of the possibility of such damages. |
| (d) | In order that the indemnification provisions contained in this Section 8 shall apply, upon the assertion of a claim for which one party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion in writing after it becomes aware, and shall keep the other party advised with respect to all developments concerning such claim; provided, that failure to give prompt notice shall not relieve the indemnifying party of any liability to the indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such action has been materially prejudiced by the indemnified party’s failure to timely give such notice. The indemnifying party shall have the option to participate with the indemnified party in the defense of such claim or to defend against said claim in its own name or the name of the indemnified party unless such claim is (i) brought by the indemnified party or (ii) the indemnified party reasonably determines that there may be a conflict of interest between the indemnified party and the indemnifying party in the defense of such claim and the indemnified party does in fact assume the defense. The indemnified party shall in no case confess any claim, make any compromise or take any action adverse to the indemnifying party in any case in which the indemnifying party may be required to indemnify it, except with the indemnifying party’s prior written consent, which shall not be unreasonably withheld or delayed. |
| (e) | For the avoidance of doubt, this Section 8 shall survive termination of this Agreement or the resignation, replacement or removal of the Escrow Agent for any reason. |
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| 9. | Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting. |
| (a) | Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires the Escrow Agent to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, the Parties acknowledge that Section 326 of the USA PATRIOT Act and the Escrow Agent’s identity verification procedures require the Escrow Agent to obtain applicable information which is required to confirm the Parties’ identity including without limitation name, address and organizational documents (collectively, “Identifying Information”). The Parties agree to provide the Escrow Agent with and consent to the Escrow Agent obtaining from third parties any Identifying Information required as a condition of opening an account with or using any service provided by the Escrow Agent for the purposes of this Agreement. |
| (b) | Certification and Tax Reporting. The Parties have provided, or promptly following the date hereof will provide, the Escrow Agent with their respective fully executed Internal Revenue Service (“IRS”) Form W-8 or Form W-9, as applicable. The Escrow Agent shall make such reports to the applicable tax authorities as directed by Parent and shall have no obligation under this Agreement to make any other reports with respect to taxes. If required by law, the Escrow Agent shall withhold any taxes it deems appropriate in the absence of proper tax documentation or as required by law, and shall remit such taxes to the appropriate authorities. |
| 10. | Notices. All notices, demands and other communications given pursuant to the terms and provisions hereof shall be in writing, except for communications from the Parties setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution of funds, including but not limited to funds transfer instructions (all of which shall be specifically governed by Section 11 below), shall be deemed effective on the date of receipt, and may be sent by: |
| (a) | by facsimile or other electronic submission (including e-mail); |
| (b) | by overnight courier or delivery service; or |
| (c) | by certified or registered mail, return receipt requested; to the appropriate notice address set forth below or at such other address as any party hereto may have furnished to the other parties hereto in writing by registered mail, return receipt requested. |
If to the Stockholder Representative:
Xxxxx Xxx
[Address]
E-mail: xxxx@xxxxxxxxxxxxxxxx.xxx
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With a copy (which shall not constitute notice) to:
Xxxxx & Lardner LLP
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
E-mail: xxxxxxx@xxxxx.xxx
If to Parent:
Forum Merger III Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxxx Kiev
Xxxxx Xxxxx
E-mail: xx@xxxxxxxxxxxxxxxxx.xxx
xxxxx@xxxxxxxxxxx.xxx
with a copy (which shall not constitute notice) to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
E-mail: xxxx.xxxxxxxxxx@xxxxxxxxx.xxx
and
White & Case LLP
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
E-mail: xxxx.xxxxxxxxx@xxxxxxxxx.xxx
If to the Escrow Agent:
Continental Stock Transfer & Trust Company
Attention: Xxxxx Xxxxxxx
Telephone No.: 000-000-0000
E-mail: xxxxxxxx@xxxxxxxxxxxxxxx.xxx
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| 11. | Security Procedures. |
| (a) | Notwithstanding anything to the contrary as set forth in this Agreement, any instructions setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution of the Adjustment Escrow Shares or the Earnout Shares, including but not limited to any such instructions that may otherwise be set forth in a Release Notice or other written notice, document, instruction or request permitted pursuant to Section 4 of this Agreement, may be given to the Escrow Agent only by confirmed facsimile or other electronic transmission (including e-mail) and no instruction for or related to the transfer or distribution of the Adjustment Escrow Shares or the Earnout Shares, or any portion thereof, shall be deemed delivered and effective unless the Escrow Agent actually shall have received such instruction by facsimile or other electronic transmission (including e-mail) at the number or e-mail address provided to the Parties by the Escrow Agent in accordance with Section 10 and as further evidenced by a confirmed transmittal to that number or e-mail address. |
| (b) | In the event transfer instructions are so received by the Escrow Agent by facsimile or other electronic submission (including e-mail), the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 1 hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to reach the Stockholder Representative after a reasonable amount of time, the Escrow Agent is hereby authorized both to receive written instructions from and seek written confirmation of such instructions by any one or more of Parent’s executive officers (“Executive Officers”), as the Escrow Agent may select. Such Executive Officer shall deliver to the Escrow Agent a fully executed incumbency certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer as confirmation on behalf of the Stockholder Representative. |
| (c) | Notwithstanding anything to the contrary herein, the Escrow Agent shall only deliver or distribute the Adjustment Escrow Shares and the Earnout Shares upon receipt of and in accordance with the delivery instructions set forth in the applicable Release Notice. |
| (d) | The Parties acknowledge that the security procedures set forth in this Section 11 are commercially reasonable. |
| 12. | Compliance with Court Orders. In the event that any escrow or trust property shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders, judgments or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order, judgment or decree, it shall not be liable to any of the parties hereto or to any other person, entity, firm or corporation, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated. |
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| 13. | Miscellaneous. |
| (a) | Amendment. Except for transfer instructions as provided in Section 11, the provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by the parties hereto, including Sponsor. |
| (b) | Assignment. Neither this Agreement nor any right, obligation or interest hereunder may be assigned in whole or in part by any party hereto, except as provided in Section 6, without the prior written consent of all of the other parties hereto; provided that Sponsor may transfer and assign this Agreement and its rights, obligations and interests hereunder to Xxxxxxxx Kiev, Xxxxx Xxxxx or any of their respective Affiliates in connection with the dissolution or other winding up of Sponsor. |
| (c) | Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of New York, without regard to principles of law (including conflicts of law) that will require the application of the laws of any other jurisdiction. Each party to this Agreement irrevocably waives any objection on the grounds of venue, forum non-conveniens, lack of jurisdiction or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of any court of the State of New York or United States federal court located in the State of New York. The parties to this Agreement further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. |
| (d) | Force Majeure. No party to this Agreement is liable to any other party hereto for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of acts reasonably beyond its control including, without limitation, acts of God, fire, terrorism, disease, pandemic, floods, strikes, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest; provided, that the Escrow Agent shall use commercially reasonable efforts to resume performance as soon as practicable. If any such act occurs, then the Escrow Agent shall give, as promptly as practicable, written notice to the Parties, stating the nature of such act and any action being taken to avoid or minimize its effect. |
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| (e) | Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Agreement may be transmitted by facsimile or pdf (including via e-mail). A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature, and will be binding and effective upon such party when a counterpart shall have been signed by each of the parties hereto and delivered to the other parties hereto. |
| (f) | Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable by reason of any applicable law of a jurisdiction, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. |
| (g) | Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof. All references to currency, monetary values and dollars set forth herein shall mean U.S. dollars. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. |
| (h) | Enforcement, Remedies and Compliance. A person or entity who is not a party to this Agreement shall have no right to enforce any term of this Agreement. Each Party represents, warrants and covenants that each document, notice, instruction or request provided by such Party to the Escrow Agent shall comply with applicable laws and regulations. Where, however, the conflicting provisions of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by law, to the end that this Agreement shall be enforced as written. Except as expressly provided in Section 8 above, nothing in this Agreement, whether express or implied, shall be construed to give to any person or entity other than the Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in respect of this Agreement or any funds escrowed hereunder. Except as otherwise expressly provided herein or as between the applicable Parties in the Merger Agreement, any and all remedies herein expressly conferred upon a party hereto will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party hereto of any one remedy will not preclude the exercise of any other remedy. |
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| (i) | Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HERETO HEREBY FURTHER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13(i). |
| (j) | Publicity. Except as may be required by applicable law (including securities laws), court order, regulatory authority (including a securities authority) or as shall be required or desirable to be presented by a party to any tax authority of such party, none of the parties hereto shall disclose, issue a news release, public announcement, advertisement, or other form of publicity concerning the existence of this Agreement or the services to be provided hereunder without obtaining the prior written approval of the other parties hereto, which may be withheld in the other parties’ sole discretion; provided that the Escrow Agent may use Parent’s name in its customer lists or otherwise as required by applicable law or regulation. |
| (k) | Successors. All the covenants and provisions of this Agreement by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective permitted successors and assigns hereunder. |
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| (l) | Third Party Beneficiaries. The provisions of this Agreement are intended to benefit only the parties hereto and their respective permitted successors and assigns. No rights shall be granted to any other person or entity by virtue of this Agreement, and there are no third party beneficiaries hereof. |
| (m) | Survival. Notwithstanding anything to the contrary, all provisions regarding indemnification, liability and limits thereon, compensation and expenses (with respect to any fees or expenses payable in respect of the period preceding the termination or expiry of this Agreement) and confidentiality shall survive the termination or expiration of this Agreement. For the avoidance of doubt, Section 8, Section 6, Section 7 (with respect to any outstanding fees or expenses payable in respect of the period preceding the termination or expiry of this Agreement) and Section 13 shall survive termination of this Agreement or the resignation, replacement or removal of the Escrow Agent for any reason. |
| (n) | Merger of Agreement. This Agreement together with the Merger Agreement constitutes the entire agreement between the parties hereto related to the Adjustment Escrow Shares and the Earnout Shares and supersedes any prior agreement with respect to the subject matter hereof, whether oral or written. |
| (o) | No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. |
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set forth above.
FORUM MERGER III CORPORATION |
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| By: | /s/ Xxxxx Xxxxx | |
| Name: | Xxxxx Xxxxx | |
| Title: | Co-Chief Executive Officer and Chief Financial Officer | |
| STOCKHOLDER REPRESENTATIVE: | ||
| By: | /s/ Xxxxx Xxx | |
| Name: | Xxxxx Xxx | |
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS ESCROW AGENT | ||
| By: | /s/ Xxxxx Xxxxxxx | |
| Name: | Xxxxx Xxxxxxx | |
| Title: | Vice President | |
| FORUM INVESTORS III LLC | ||
| By: | Forum Capital Management III LLC, as managing member | |
| By: | /s/ Xxxxx Xxxxx | |
| Name: | Xxxxx Xxxxx | |
| Title: | Co-Chief Executive Officer and Chief Financial Officer | |
[Signature page to Escrow Agreement]
