Exhibit 10.3

 

STOCK ESCROW AGREEMENT

 

STOCK ESCROW AGREEMENT, dated as of April 6, 2017 (“Agreement”), by and among
FORUM MERGER CORPORATION, a Delaware corporation (“Company”), FORUM INVESTORS I,
LLC, a Delaware limited liability company (the “Founder”) and CONTINENTAL STOCK
TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).

 

WHEREAS, the Company has entered into an Underwriting Agreement, dated April 6,
2017 (“Underwriting Agreement”), with EarlyBirdCapital, Inc. (the
“Representative”) acting as representative of the several underwriters
(collectively, the “Underwriters”), pursuant to which, among other matters, the
Underwriters have agreed to purchase 15,000,000 units (“Units”) of the Company,
plus an additional 2,250,000 Units if the Representative exercises the
over-allotment option in full. Each Unit consists of one share of the Company’s
common stock, par value $.0001 per share (“Common Stock”), one right to receive
one-tenth (1/10) of one share of common stock upon the consummation of an
initial business combination, and one half of one Warrant, each whole Warrant to
purchase one share of Common Stock, all as more fully described in the Company’s
final Prospectus, dated April 6, 2017 (“Prospectus”) comprising part of the
Company’s Registration Statements on Form S-1 (File Nos. 333-216842 and
333-217187) under the Securities Act of 1933, as amended (collectively, the
“Registration Statement”), declared effective on April 6, 2017 (“Effective
Date”) (the “IPO”).

 

WHEREAS, the Founder has agreed as a condition of the sale of the Units to
deposit its 4,312,500 shares of Common Stock of the Company, as set forth
opposite its name in Exhibit A attached hereto, in escrow as hereinafter
provided.

 

WHEREAS, the Company and the Founder desire that the Escrow Agent accept the
shares, in escrow, to be held and disbursed as hereinafter provided.

 

IT IS AGREED:

 

1. Appointment of Escrow Agent. The Company and the Founder hereby appoint the
Escrow Agent to act in accordance with and subject to the terms of this
Agreement and the Escrow Agent hereby accepts such appointment and agrees to act
in accordance with and subject to such terms.

 

2. Deposit of Shares. On or before the Effective Date, the Founder shall have
delivered to the Escrow Agent certificates representing Founder’s shares (which
may be in book entry form), to be held and disbursed subject to the terms and
conditions of this Agreement. Founder acknowledges that the certificate
representing Founder’s shares is legended to reflect the deposit of such shares
under this Agreement.

 

3. Disbursement of the Escrow Shares.

 

3.1 If the Underwriters do not exercise their over-allotment option to purchase
all or a portion of the additional 2,250,000 Units of the Company within 45 days
of the date of the Prospectus (as described in the Underwriting Agreement),
Forum Investors I, LLC agrees that the Escrow Agent shall return to the Company
for cancellation, at no cost, a number of shares held by Forum Investors I, LLC
equal to 562,500 multiplied by a fraction, (i) the numerator of which is
2,250,000 minus the number of shares of Common Stock purchased by the
Underwriters upon the exercise of their over-allotment option, and (ii) the
denominator of which is 2,250,000. The Company shall promptly provide notice to
the Escrow Agent of the expiration or termination of the Underwriters’
over-allotment option and the number of Units, if any, purchased by the
Underwriters in connection with their exercise thereof.  

 

 

 

3.2 Except as otherwise set forth herein, the Escrow Agent shall hold the shares
remaining after any cancellation required pursuant to Section 3.1 above (such
remaining shares to be referred to herein as the “Escrow Shares”) until one year
after the Company consummates a business combination (as such term is described
in the Registration Statement, a “Business Combination”) (the “Escrow Period”).
The Company shall promptly provide notice of the consummation of a Business
Combination to the Escrow Agent. Upon completion of the Escrow Period, the
Company shall notify the Escrow Agent and the Escrow Agent shall disburse
Founder’s Escrow Shares to Founder; provided, however, that if the Escrow Agent
is notified by the Company pursuant to Section 6.7 hereof that the Company is
being liquidated, then the Escrow Agent shall promptly destroy the certificates
representing the Escrow Shares; provided further, however, that if, within one
year after the Company consummates a Business Combination, the last sales price
of the Common Stock equals or exceeds $12.50 per share (as adjusted for stock
splits, stock dividends, reorganizations and recapitalizations) for any 20
trading days within any 30-trading day period, then the Escrow Agent will, upon
receipt of a notice from the Company, in form reasonably acceptable to the
Escrow Agent, certifying that such transaction is then being consummated or such
conditions have been achieved, as applicable, release 50% of the Escrow Shares
to the Founder; provided further, however, that if, within one year after the
Company consummates a Business Combination, the Company (or the surviving
entity) subsequently consummates a liquidation, merger, stock exchange or other
similar transaction which results in all of the stockholders of such entity
having the right to exchange their shares of Common Stock for cash, securities
or other property, then the Escrow Agent will, upon receipt of a notice from the
Company, in form reasonably acceptable to the Escrow Agent, certifying that such
transaction is then being consummated or such conditions have been achieved, as
applicable, release all the Escrow Shares to the Founder. The Escrow Agent shall
have no further duties hereunder after the disbursement or destruction of the
Escrow Shares in accordance with this Section 3.

 

4. Rights of Founder in Escrow Shares.

 

4.1 Voting Rights as a Stockholder. Subject to the terms of the Insider Letters
described in Section 4.4 hereof and except as herein provided, the Founder shall
retain all of its rights as a stockholder of the Company as long as any shares
are held in escrow pursuant to this Agreement, including, without limitation,
the right to vote such shares.

 

4.2 Dividends and Other Distributions in Respect of the Escrow Shares. For as
long as any shares are held in escrow pursuant to this Agreement, all dividends
payable in cash with respect to the Escrow Shares shall be paid to the Founder,
but all dividends payable in stock or other non-cash property (“Non-Cash
Dividends”) shall be delivered to the Escrow Agent to hold in accordance with
the terms hereof. As used herein, the term “Escrow Shares” shall be deemed to
include the Non-Cash Dividends distributed thereon, if any.

 

4.3 Restrictions on Transfer. During the Escrow Period, the only permitted
transfers of the Escrow Shares will be (i) to the Company’s officers, directors,
employees, consultants or their affiliates, (ii) to Founder’s officers,
directors, employees or members, (iii) by bona fide gift to a member of the
immediate family of a member of the Founder or to a trust, the beneficiary of
which is a member of the Founder or a member of the immediate family of a member
of the Founder for estate planning purposes, (iv) by virtue of the laws of
descent and distribution upon death, (v) pursuant to a qualified domestic
relations order, (vi) to the Company for no value for cancellation in connection
with the consummation of a Business Combination or (vii) by private sales of the
Escrow Shares made at or prior to the consummation of a Business Combination at
prices no greater than the price at which the Escrow Shares were originally
purchased; provided, however, that except for clause (vi) or with the Company’s
prior consent, such permissive transfers may be implemented only upon the
respective transferee’s written agreement to be bound by the terms and
conditions of this Agreement and of the Insider Letter signed by the Founder
transferring the shares.

 

4.4 Insider Letters. The Founder has executed a letter agreement with the
Company and the Representative, dated as of the date hereto, the form of which
is filed as an exhibit to the Registration Statement (“Insider Letter”),
respecting the rights and obligations of Founder in certain events, including,
but not limited to, the liquidation of the Company.

 

5. Concerning the Escrow Agent.

 

5.1 Good Faith Reliance. The Escrow Agent shall not be liable for any action
taken or omitted by it in good faith and in the exercise of its own best
judgment, and may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver,
modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have
given its prior written consent thereto. 

 

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5.2 Indemnification. The Escrow Agent shall be indemnified and held harmless by
the Company from and against any expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Escrow Agent in connection with any
action, suit or other proceeding involving any claim which in any way, directly
or indirectly, arises out of or relates to this Agreement, the services of the
Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than
expenses or losses arising from the gross negligence, fraud or willful
misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent
of notice of any demand or claim or the commencement of any action, suit or
proceeding, the Escrow Agent shall notify the other parties hereto in writing.
In the event of the receipt of such notice, the Escrow Agent, in its sole
discretion, may commence an action in the nature of interpleader in an
appropriate court to determine ownership or disposition of the Escrow Shares or
it may deposit the Escrow Shares with the clerk of any appropriate court or it
may retain the Escrow Shares pending receipt of a final, non-appealable order of
a court having jurisdiction over all of the parties hereto directing to whom and
under what circumstances the Escrow Shares are to be disbursed and delivered.
The provisions of this Section 5.2 shall survive in the event the Escrow Agent
resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

 

5.3 Compensation. The Escrow Agent shall be entitled to reasonable compensation
from the Company for all services rendered by it hereunder. The Escrow Agent
shall also be entitled to reimbursement from the Company for all reasonable
expenses paid or incurred by it in the administration of its duties hereunder
including, but not limited to, all counsel, advisors’ and agents’ fees and
disbursements and all taxes or other governmental charges.

 

5.4 Further Assurances. From time to time on and after the date hereof, the
Company and the Founder shall deliver or cause to be delivered to the Escrow
Agent such further documents and instruments and shall do or cause to be done
such further acts as the Escrow Agent shall reasonably request to carry out more
effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.

 

5.5 Resignation. The Escrow Agent may resign at any time and be discharged from
its duties as escrow agent hereunder by its giving the other parties hereto
written notice and such resignation shall become effective as hereinafter
provided. Such resignation shall become effective at such time that the Escrow
Agent shall turn over to a successor escrow agent appointed by the Company and
approved by the Representative, which approval will not be unreasonably
withheld, conditioned or delayed, the Escrow Shares held hereunder. If no new
escrow agent is so appointed within the 60-day period following the giving of
such notice of resignation, the Escrow Agent may deposit the Escrow Shares with
any court it reasonably deems appropriate in the State of New York.

 

5.6 Discharge of Escrow Agent. The Escrow Agent shall resign and be discharged
from its duties as escrow agent hereunder if so requested in writing at any time
by the other parties hereto, jointly, provided, however, that such resignation
shall become effective only upon acceptance of appointment by a successor escrow
agent, and approval by the Representative, as provided in Section 5.5.

 

5.7 Liability. Notwithstanding anything herein to the contrary, the Escrow Agent
shall not be relieved from liability hereunder for its own gross negligence,
fraud or willful misconduct.

 

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

 

6. Miscellaneous.

 

6.1 Governing Law. This Agreement shall for all purposes be deemed to be made
under and shall be construed 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. Each of the
parties hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced in
the courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such personal
jurisdiction, which jurisdiction shall be exclusive. Each of the parties hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.

 

6.2 Third Party Beneficiaries. The Founder hereby acknowledges that the
Underwriters are third party beneficiaries of this Agreement.

 

6.3 Entire Agreement. This Agreement and each Insider Letter contain the entire
agreement of the parties hereto with respect to the subject matter hereof and,
except as expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to be charged.

 

6.4 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
thereof.

 

6.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the respective parties hereto and their legal representatives,
successors and assigns.

 

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6.6 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or be mailed,
certified or registered mail, or by private national courier service, return
receipt requested, postage prepaid, and shall be deemed given when so delivered
personally or, if mailed, four business days after the date of mailing, as
follows:

 

If to the Company, to:

 

Forum Merger Corporation

c/o Forum Investors I, LLC

135 East 57th Street

8th Floor

New York, New York 10022

Attn: Chief Executive Officer

 

If to a Founder, to his/it address set forth in Exhibit A.

 

and if to the Escrow Agent, to:

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Chairman

 

A copy of any notice sent hereunder shall be sent to:

 

EarlyBirdCapital, Inc.

275 Madison Avenue, 27th Floor

New York, New York 10016

Attn: Steven Levine, Chief Executive Officer

Fax No.: (212) 661-4936

 

with a copy to:

 

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, New York 10105

Attn: Douglas S. Ellenoff, Esq.

 

and:

 

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Attn: David Alan Miller, Esq.

 

The parties may change the persons and addresses to which the notices or other
communications are to be sent by giving written notice to any such change in the
manner provided herein for giving notice.

 

6.7 Liquidation of the Company. The Company shall give the Escrow Agent written
notification of the liquidation and dissolution of the Company in the event that
the Company fails to consummate a Business Combination within the time period
specified in the Prospectus.

 

6.8 Counterparts. This Agreement may be executed in several counterparts, each
one of which shall constitute an original and may be delivered by facsimile
transmission and together shall constitute one instrument.

 

[Signature Page Follows]

 

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WITNESS the execution of this Agreement as of the date first above written.

   

  FORUM MERGER CORPORATION         By: /s/ David Boris    

Name: David Boris

Title: Co-Chief Executive Officer

 

 

FOUNDER:

 

FORUM INVESTORS I, LLC

      Forum Capital Management, LLC, 
its Managing member         By: /s/ David Boris    

Name: David Boris

Title: Managing Member

        CONTINENTAL STOCK TRANSFER & TRUST COMPANY       By: /s/ Henry Farrell  
 

Name: Henry Farrell

Title: Vice President

 

 

[Signature Page to Stock Escrow Agreement]

 

 

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EXHIBIT A

 

Name and Address of

Founder

  Number of
Shares   Stock
Certificate Number  Forum Investors I, LLC 
135 East 57th Street 
8th Floor 
New York, New York 10022   4,312,500    1 

 

 

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