Exhibit 10.5


 


STOCK
ESCROW AGREEMENT


 


STOCK
ESCROW AGREEMENT, dated as of October 13, 2015 (“Agreement”), by and among CAPITOL ACQUISITION CORP. III, a Delaware
corporation (“Company”), CAPITOL ACQUISITION MANAGEMENT 3 LLC, CAPITOL ACQUISITION FOUNDER 3 LLC, RICHARD C. DONALDSON,
PIYUSH SODHA, LAWRENCE CALCANO, DEREK APFEL and ALFHEIDUR H. SAEMUNDSSON (collectively the “Sponsors”) and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).


 


WHEREAS,
the Company has entered into an Underwriting Agreement, dated October 13, 2015 (“Underwriting Agreement”), with Citigroup
Global Markets Inc., Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC (the “Representatives”)
acting as representatives of the several underwriters (collectively, the “Underwriters”), pursuant to which, among
other matters, the Underwriters have agreed to purchase 30,000,000 units (“Units”) of the Company, plus an additional
4,500,000 Units if the Underwriters exercise their over-allotment option in full. Each Unit consists of one share of the Company’s
common stock, par value $.0001 per share (“Common Stock”), 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 October 13, 2015 (“Prospectus”)
comprising part of the Company’s Registration Statement on Form S-1 (File No. 333-206693) under the Securities Act of 1933,
as amended (“Registration Statement”), declared effective on October 13, 2015 (“Effective Date”) (the
“IPO”).


 


WHEREAS,
the Sponsors have agreed as a condition of the sale of the Units to deposit their shares of Common Stock of the Company, as set
forth opposite their respective names in Exhibit A attached hereto, in escrow as hereinafter provided.


 


WHEREAS,
the Company and the Sponsors 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 Sponsors 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, each of the Sponsors shall have delivered to the Escrow Agent certificates representing
such Sponsor’s respective shares, to be held and disbursed subject to the terms and conditions of this Agreement. Each Sponsor
acknowledges that the certificate representing such Sponsor’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 4,500,000 Units of
the Company within 30 days of the date of the Prospectus (as described in the Underwriting Agreement), each of Capitol Acquisition
Management 3 LLC and Capitol Acquisition Founder 3 LLC (the “Forfeiting Sponsors”) agree that the Escrow Agent shall
return to the Company for cancellation, at no cost, the number of shares held by each Forfeiting Sponsor determined by multiplying
(a) the product of (i) 1,312,500, multiplied by (ii) a fraction, (x) the numerator of which is the number of shares held by such
Forfeiting Sponsor, and (y) the denominator of which is the total number of shares held by the Forfeiting Sponsors, by (b) a fraction,
(i) the numerator of which is 4,500,000 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 4,500,000. 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 Escrow Agent shall disburse such amount of each Sponsor’s Escrow
Shares to such Sponsor; provided, however, that if the Escrow Agent is notified by the Company pursuant to Section 6.7 hereof
that the Company is being liquidated at any time during the Escrow Period, 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,
(i) 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, or (ii) the last sales price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock
splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing
at least 150 days after such Business Combination, then the Escrow Agent will, upon receipt of a notice executed by the Chairman
of the Board of Directors, Chief Executive Officer or other authorized officer of 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 Sponsors. 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 Sponsors 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 Sponsors shall retain all of their rights as stockholders 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 Sponsors, 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 a Sponsor’s officers, directors, employees or members
upon the Sponsor’s liquidation, in each case if the Sponsor is an entity, (iii) by bona fide gift to a member of the Sponsor’s
immediate family or to a trust, the beneficiary of which is the Sponsor or a member of the Sponsor’s immediate family 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), 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 Sponsor transferring the shares.


 


4.4             Insider
Letters. Each of the Sponsors has executed a letter agreement with the Company and the Representatives, dated as indicated
on Exhibit A hereto, and which is filed as an exhibit to the Registration Statement (“Insider Letter”), respecting
the rights and obligations of such Sponsor in certain events, including, but not limited to, the liquidation of the Company.


 






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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.


 


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 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 Sponsors 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.


 






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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 Representatives,
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 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. Each of the Sponsors 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:


 


Capitol
Acquisition Corp. III


509 7th
Street, N.W.


Washington,
D.C.


Attn:
Mark D. Ein, Chief Executive Officer


 


If
to a Sponsor, 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:


 


Citigroup
Global Markets Inc.


388
Greenwich Street


New
York, New York 10013


Attn:
General Counsel


Fax
No.: (212) 816-7912


 


and:


 


Deutsche
Bank Securities Inc.


60
Wall Street


New
York, New York 10005


Attention:
Equity Capital Markets – Syndicate Desk


 


and:


 


Deutsche
Bank Securities Inc.


60
Wall Street, 36th Floor


New
York, New York 10005


Attention:
General Counsel


Fax
No.: (212) 797-4561


 


and:


 


Credit
Suisse Securities (USA) LLC


Eleven
Madison Avenue


New
York, New York 10010-3629


Attention:
LCD-IBD


Fax
No. (212) 325-4296


 



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with
a copy to:


 


Graubard
Miller


The Chrysler
Building


405 Lexington
Avenue


New York,
New York 10174


Attn: David
Alan Miller, Esq.


 


and:


 


Davis
Polk & Wardwell LLP


450
Lexington Avenue


New
York, New York 10017


Attn:
Deanna L. Kirkpatrick, 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.


 






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


 





	 		CAPITOL ACQUISITION CORP. III
	 	 	 
	 	By:	/s/ Mark D. Ein
	 	 	Name: Mark D. Ein
	 	 	Title:   Chief Executive Officer
	 	 	 
	 		 INVESTORS:
	 	 	 
	 		CAPTIOL ACQUISITION MANAGEMENT 3 LLC
	 	 	 
	 	By:	/s/ Mark D. Ein
	 	 	Mark D. Ein
	 	 	 
	 		CAPTIOL ACQUISITION FOUNDER 3 LLC
	 	 	 
	 	By:	/s/ L. Dyson Dryden
	 	 	L. Dyson Dryden
	 	 	 
	 	 	/s/ Richard C. Donaldson
	 	 	Richard C. Donaldson
	 	 	 
	 	 	/s/ Piyush Sodha
	 	 	Piyush Sodha
	 	 	 
	 	 	/s/ Lawrence Calcano
	 	 	Lawrence Calcano
	 	 	 
	 	 	/s/ Derek Apfel
	 	 	Derek Apfel
	 	 	 
	 	 	/s/ Alfheidur H. Saemundsson
	 	 	Alfheidur H. Saemundsson
	 	 	 
	 		CONTINENTAL STOCK
    TRANSFER & TRUST COMPANY
	 	 	 
	 	By:	/s/ Henry Farrell
	 	 	Name: Henry Farrell
	 	 	Title:   Vice President




 






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EXHIBIT
A


 


	Name
and Address of Sponsor 
	 	Number
 of
                                         Shares
	 	 	Stock 
 Certificate
                                         Number
	 	 	Date of 
 Insider
                                         Letter

	 	 	 	 	 	 	 	 	 
	Capitol Acquisition Management 3 LLC 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	6,311,250	 	 	 	1	 	 	October 13, 2015
	 	 	 	 	 	 	 	 	 	 	 
	Capitol Acquisition Founder 3 LLC 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	2,103,750	 	 	 	2	 	 	October 13, 2015
	 	 	 	 	 	 	 	 	 	 	 
	Richard C. Donaldson 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	50,000	 	 	 	3	 	 	October 13, 2015
	 	 	 	 	 	 	 	 	 	 	 
	Piyush Sodha 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	50,000	 	 	 	4	 	 	October 13, 2015
	 	 	 	 	 	 	 	 	 	 	 
	Lawrence Calcano 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	50,000	 	 	 	5	 	 	October 13, 2015
	 	 	 	 	 	 	 	 	 	 	 
	Derek Apfel 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	40,000	 	 	 	6	 	 	October 13, 2015
	 	 	 	 	 	 	 	 	 	 	 
	Alfheidur H. Saemundsson 
509 7th Street, N.W. 
Washington, D.C. 20004	 	 	20,000	 	 	 	7	 	 	October 13, 2015



 


 


 


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