Document:

f8k070113ex10ii_ascendacq.htm

Exhibit 10.2

 

ESCROW AGREEMENT

 

ESCROW AGREEMENT (“Agreement”) dated July 1, 2013 by and among Ascend Acquisition Corp., a Delaware corporation (“Ascend”), Sam Humphreys and Robert Regular, acting as the representatives (the “Representatives”) of the former sole member (“Kitara Member”) of Kitara Media, LLC, a Delaware limited liability company (“Kitara Media”), and the former sole stockholder (“NYPG Stockholder” together with the Kitara Member, the “Signing Holders”) of New York Publishing Group, Inc., a Delaware corporation (“NYPG”), Jonathan J. Ledecky, acting as the committee (the “Committee”) representing the interests of Ascend, and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”).  Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement (as defined below).

 

Ascend, Ascend Merger Sub, LLC (“Merger Sub LLC”), Ascend Merger Sub, Inc. (“Merger Sub Inc.”), Kitara Media, NYPG and the Signing Holders are parties to the Merger Agreement and Plan of Reorganization, dated as of June 12, 2013 (the “Merger Agreement”), pursuant to which (i) Merger Sub LLC has merged with and into Kitara Media with Kitara Media surviving the merger and becoming a wholly-owned subsidiary of Ascend and (ii) Merger Sub Inc. has merged with and into NYPG with NYPG surviving the merger and becoming a wholly-owned subsidiary of Ascend.  Pursuant to the Merger Agreement, Ascend is to be indemnified in certain respects by the Signing Holders and the Signing Holders are to be indemnified in certain respects by Ascend.  The parties desire to establish an escrow fund as collateral security for the foregoing indemnification obligations.  The Representatives have been designated pursuant to the Merger Agreement to represent the Signing Holders and each Permitted Transferee (as hereinafter defined) of the Signing Holders (the Signing Holders and all such Permitted Transferees are hereinafter referred to collectively as the “Owners”), and to act on their behalf for purposes of this Agreement.

 

The parties agree as follows:

 

1.             (a)         Concurrently with the execution hereof, an aggregate of 3,000,000 shares of Ascend Common Stock issued to the Signing Holders and delivered to them at the Closing pursuant to the Merger Agreement, which shall be allocated among the Signing Holders in accordance with the allocation set forth on Schedule 1(a) attached hereto, together with five (5) stock powers signature medallion guaranteed from each Signing Holder separate from the share certificates executed in blank by each such Signing Holder, shall be delivered to the Escrow Agent to be held in escrow pursuant to the terms of this Agreement and Section 1.10 of the Merger Agreement.  The shares of Ascend Common Stock represented by the stock certificates so delivered to the Escrow Agent are herein referred to in the aggregate as the “Escrow Fund.”  The Escrow Agent shall maintain a separate account for each Signing Holder, and, subsequent to any transfer permitted pursuant to Paragraph 1(e) hereof, each Owner’s, portion of the Escrow Fund.

 

(b)         The parties hereby appoint the Escrow Agent to act, and the Escrow Agent hereby agrees to act, as escrow agent and to hold, safeguard and disburse the Escrow Fund solely pursuant to the terms and conditions hereof.  The Escrow Agent shall treat the Escrow Fund as a trust fund in accordance with the terms of this Agreement and not as the property of Ascend. The Escrow Agent’s duties hereunder shall terminate upon its distribution of the entire Escrow Fund in accordance with this Agreement.

 

  

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(c)         Except as herein provided, the Owners shall retain all of their rights as stockholders of Ascend with respect to the shares of Ascend Common Stock constituting the Escrow Fund during the period the Escrow Fund is held by the Escrow Agent (the “Escrow Period”), including, without limitation, the right to vote their shares of Ascend Common Stock included in the Escrow Fund.

 

(d)         During the Escrow Period, all dividends payable in cash with respect to the shares of Ascend Common Stock then contained in the Escrow Fund shall be paid to the Owners, but all dividends payable in shares 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 Fund” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

 

(e)         During the Escrow Period, no sale, transfer or other disposition may be made of any of the shares of Ascend Common Stock in the Escrow Fund except (i) to a “Permitted Transferee” (as hereinafter defined), (ii) by virtue of the laws of descent and distribution upon death of any Owner, or (iii) pursuant to a qualified domestic relations order; provided, however, that such permitted transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement.  As used in this Agreement, the term “Permitted Transferee” shall include: (x) members of a Signing Holder’s “Immediate Family” (as hereinafter defined); (y) an entity in which (A) a Signing Holder and/or members of a Signing Holder’s Immediate Family beneficially own 100% of such entity’s voting and non-voting equity securities, or (B) a Signing Holder and/or a member of such Signing Holder’s Immediate Family is a general partner and in which such Signing Holder and/or members of such Signing Holder’s Immediate Family beneficially own 100% of all capital accounts of such entity; and (z) a revocable trust established by a Signing Holder during his lifetime for the benefit of such Signing Holder or for the exclusive benefit of all or any of such Signing Holder’s Immediate Family.  As used in this Agreement, the term “Immediate Family” means, with respect to any Signing Holder, a spouse, lineal descendants, the spouse of any lineal descendant, and brothers and sisters (or a trust, all of whose current beneficiaries are members of an Immediate Family of the Signing Holder).  In connection with and as a condition to each permitted transfer, the Permitted Transferee shall deliver to the Escrow Agent a stock power signature medallion guaranteed separate from the stock certificate executed by the transferring Signing Holder or where applicable, an order of a court of competent jurisdiction, evidencing the transfer of shares to the Permitted Transferee, together with five (5) stock powers signature medallion guaranteed separate from the stock certificate executed in blank by the Permitted Transferee with respect to the shares transferred to the Permitted Transferee.  Upon receipt of such documents, the Escrow Agent shall deliver to Ascend’s transfer agent the original share certificate out of which the assigned shares are to be transferred, together with the executed stock power signature medallion guaranteed separate from the share certificate executed by the transferring stockholder, or a copy of the applicable court order, and shall request that Ascend issue new certificates representing (m) the number of shares, if any, that continue to be owned by the transferring Signing Holder, and (n) the number of shares owned by the Permitted Transferee as the result of such transfer.  Ascend, the transferring Signing Holder and the Permitted Transferee shall cooperate in all respects with the Escrow Agent in documenting each such transfer and in effectuating the result intended to be accomplished thereby.  During the Escrow Period, no Owner shall pledge or grant a security interest in such Owner’s shares of Ascend Common Stock included in the Escrow Fund or grant a security interest in such Owner’s rights under this Agreement.

 

  

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2.             (a)         Ascend, acting through the Committee, which has been appointed by Ascend to take all necessary actions and make all decisions on behalf of Ascend with respect to its rights to indemnification under Article VIII of the Merger Agreement, and Signing Holders, acting through either or both of the Representatives, which have been appointed by Signing Holders to take all necessary actions and make all decisions on behalf of the Signing Holders with respect to their rights to indemnification under Article VIII of the Merger Agreement, may make a claim for indemnification pursuant to the Merger Agreement (“Indemnification Claim”) against the Escrow Fund by giving notice (a “Notice”) to the Representatives in the case of a claim made by Ascend and to the Committee in the case of a claim made by either or both Representatives (either party against whom a claim is being made the “Indemnifying Party”) (with a copy to the Escrow Agent), specifying (i) a brief description of the nature of the Indemnification Claim, (ii) the total amount of the actual out-of-pocket Loss or the anticipated potential Loss (including any costs or expenses which have been or may be reasonably incurred in connection therewith), and (iii) whether such Loss may be covered (in whole or in part) under any insurance and the estimated amount of such Loss which may be covered under such insurance.  The Committee or Representative(s) giving Notice (the “Claimant”) also shall deliver to the Escrow Agent (with a copy to the Indemnifying Party), concurrently with its delivery to the Escrow Agent of the Notice, a certification as to the date on which the Notice was delivered to the Indemnifying Party.

 

(b)         If the Indemnifying Party shall give a notice to the Claimant (with a copy to the Escrow Agent) (a “Counter Notice”), within 30 days following the date of receipt (as specified in the Claimant’s certification) by the Representatives of a copy of the Notice, disputing (i) the amount of actual out-of-pocket or anticipated potential Loss specified in the Notice, (ii) whether the Indemnification Claim is indemnifiable under the Merger Agreement, or (iii) whether such Loss is covered (in whole or in part) under any insurance and the estimated amount of such Loss which is covered, the Committee and the Representatives shall attempt to resolve such dispute by voluntary settlement as provided in paragraph 2(c) below. If no Counter Notice with respect to an Indemnification Claim is received by the Escrow Agent from the Indemnifying Party within such 30-day period, the Indemnification Claim shall be deemed to be an Established Claim (as hereinafter defined) for purposes of this Agreement.

 

(c)         If the Indemnifying Party delivers a Counter Notice to the Escrow Agent, the Claimant and the Indemnifying Party shall, during the period of 60 days following the delivery of such Counter Notice or such greater period of time as the parties may agree to in writing (with a copy to the Escrow Agent), attempt to resolve the dispute with respect to which the Counter Notice was given.  If the Claimant and the Indemnifying Party shall reach a settlement with respect to any such dispute, they shall jointly deliver written notice of such settlement to the Escrow Agent specifying the terms thereof.  If the Claimant and the Indemnifying Party shall be unable to reach a settlement with respect to a dispute, such dispute shall be resolved by arbitration pursuant to paragraph 2(d) below.

 

  

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(d)         If the Claimant and the Indemnifying Party cannot resolve a dispute prior to expiration of the 60-day period referred to in paragraph 2(c) above (or such longer period as the parties may have agreed to in writing), then such dispute shall be submitted (and either party may submit such dispute) to a single arbitrator for arbitration before the American Arbitration Association (“AAA”) in accordance with its rules. The Claimant and the Indemnifying Party shall attempt to agree upon an arbitrator; if they shall be unable to agree upon an arbitrator within 10 days after the dispute is submitted for arbitration, then either the Claimant or the Indemnifying Party, upon written notice to the other, may apply for appointment of such single arbitrator by the AAA in accordance with its rules.  Each party shall pay its own fees and expenses for the arbitration, except that any costs and charges by the AAA and any fees of the arbitrator for his services shall be assessed against the losing party by the arbitrator.  The arbitrator shall render his decision within 90 days after his appointment.  Such decision and award shall be in writing and shall be final and conclusive on the parties, and counterpart copies thereof shall be delivered to each of the parties.  Judgment may be obtained on the decision of the arbitrator so rendered in any court having jurisdiction, and may be enforced in any such court.  If the arbitrator shall fail to render his decision or award within such 90-day period, either the Claimant or the Indemnifying Party may apply to any New York state court sitting in New York County, New York, or any federal court sitting in such county then having jurisdiction, by action, proceeding or otherwise, as may be proper to determine the matter in dispute consistently with the provisions of this Agreement.  The parties consent to the exclusive jurisdiction of the New York state courts sitting in New York County or any federal court having jurisdiction and sitting in such county for this purpose. The prevailing party (or either party, in the case of a decision or award rendered in part for each party) shall send a copy of the arbitration decision or of any judgment of the court to the Escrow Agent.

 

(e)         As used in this Agreement, “Established Claim” means any (i) Indemnification Claim deemed established pursuant to the last sentence of paragraph 2(b) above, (ii) Indemnification Claim resolved in favor of a Claimant by settlement pursuant to paragraph 2(c) above, resulting in a dollar award to the Claimant, (iii) Indemnification Claim established by the decision of an arbitrator pursuant to paragraph 2(d) above, resulting in a dollar award to a Claimant, (iv) Third Party Claim that has been sustained by a final determination (after exhaustion of any appeals) of a court of competent jurisdiction, or (v) Third Party Claim that the Committee and the Representatives have jointly notified the Escrow Agent has been settled in accordance with the provisions of the Merger Agreement; provided that, subject to the terms of the Merger Agreement, notwithstanding anything herein, no Indemnification Claim by Ascend on the one hand or the Signing Holders on the other hand shall become an Established Claim unless and until the aggregate amount of indemnification Losses (as defined in the Merger Agreement) by Ascend on the one hand or the Signing Holders on the other hand exceeds $250,000 (the “Deductible”), in which event only the amount of such Established Claim(s) in excess of $250,000 shall be payable.

 

(f)          (i)          Promptly after an Indemnification Claim becomes an Established Claim, the Committee and the Representatives shall jointly deliver a notice to the Escrow Agent (a “Joint Notice”) directing the Escrow Agent to pay to the Claimant, and the Escrow Agent promptly shall pay to such Claimant, an amount of Escrow Shares, subject to the provisions of Sections 2(f)(ii) and (iii) below, equal to (subject to the Deductible described in Section 2(e) above and Section 8.4(c) of the Merger Agreement) the aggregate dollar amount of the Established Claim (or, if at such time there remains in the Escrow Fund less than the full amount payable by any Owner to Ascend, the full amount remaining in the Escrow Fund attributable to such Owner).

 

  

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  (ii)         Payment of an Established Claim to Ascend shall be made from Escrow Shares (i) in the case of the Kitara Member or the Kitara Member’s Permitted Transferees, pro rata from the accounts maintained on behalf of each such Owner to the extent such Established Claim is attributable to Kitara Media and (ii) in the case of the NYPG Stockholder or the NYPG Stockholder’s Permitted Transferees, pro rata from the accounts maintained on behalf of each such Owner to the extent such Established Claim is attributable to NYPG.  Payment of an Established Claim to the Representatives shall be made by release of Escrow Shares to the Representatives pro rata from the accounts maintained on behalf of the Signing Holders.  For purposes of each payment, such shares shall be valued at the “Fair Market Value” (as defined below).  However, in no event shall the Escrow Agent be required to calculate Fair Market Value, make a determination of the aggregate number of shares to be delivered or released in satisfaction of any Established Claim or make a determination as to the proportion of any Established Claim attributable to Kitara Media or NYPG; rather, such calculation shall be included in and made part of the Joint Notice.  The Escrow Agent shall transfer out of the Escrow Fund that number of shares of Ascend Common Stock necessary to satisfy each Established Claim, as set out in the Joint Notice.  Any dispute between the Committee and the Representatives concerning the calculation of Fair Market Value, the number of shares necessary to satisfy any Established Claim, the proportion of any Established Claim attributable Kitara Media or NYPG, or any other dispute regarding a Joint Notice, shall be resolved between the Committee and the Representatives in accordance with the procedures specified in paragraph 2(d) above, and shall not involve the Escrow Agent.   Each transfer of shares in satisfaction of an Established Claim shall be made by the Escrow Agent delivering to Claimant one or more stock certificates held in each Owner’s account evidencing not less than such Owner’s pro rata portion of the aggregate number of shares specified in the Joint Notice, and in the case of claims made by Ascend, together with stock powers signature medallion guaranteed separate from the stock certificate executed in blank by such Owner and completed by the Escrow Agent in accordance with instructions included in the Joint Notice.  Upon receipt of the stock certificates and stock powers, Ascend shall deliver to the Escrow Agent new certificates representing the number of shares in the Escrow Fund owned by each Owner after such payment.  The parties hereto (other than the Escrow Agent) agree that the foregoing right to make payments of Established Claims in shares of Ascend Common Stock may be made notwithstanding any other agreements restricting or limiting the ability of any Owner to sell any shares of Ascend Common Stock or otherwise.  The Committee and the Representatives shall be required to exercise utmost good faith in all matters relating to the preparation and delivery of each Joint Notice.  As used in this Section 2, “Fair Market Value” means the average reported closing price for the shares of Ascend Common Stock for the ten trading days ending on the last trading day prior to (x) the day the Established Claim is paid with respect to Indemnification Claims paid on or before the fifth Business Day after Ascend is required to file its Annual Report on Form 10-K for the fiscal year ending December 31, 2013 (the “Escrow Release Date”), and (y) the Escrow Release Date with respect to shares constituting the Pending Claims Reserve (as hereinafter defined) on the Escrow Release Date.

 

  

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  (iii)        Notwithstanding anything herein to the contrary, at such time as an Indemnification Claim has become an Established Claim, each Owner shall have the right to substitute for his, her or its Escrow Shares that otherwise would be paid to Ascend in satisfaction of such claim (the “Claim Shares”) with cash in an amount equal to the Fair Market Value of the Claim Shares (“Substituted Cash”).  In such event (i) the Joint Notice shall include a statement describing the substitution of Substituted Cash for the Claim Shares, and (ii) substantially contemporaneously with the delivery of such Joint Notice, the Representatives shall cause currently available funds to be delivered to the Escrow Agent in an amount equal to the Substituted Cash.  Upon receipt of such Joint Notice and Substituted Cash, the Escrow Agent shall (y) in payment of the Established Claim described in the Joint Notice, deliver the Substituted Cash to Ascend in lieu of the Claim Shares, and (z) cause the Claim Shares to be returned to the Representative identified in the Joint Notice on behalf of the applicable Owner.

 

3.             On the first Business Day after the Escrow Release Date, upon receipt of a Joint Notice, the Escrow Agent shall distribute and deliver to each Owner share certificates representing the shares of Ascend Common Stock then in such Owner’s account in the Escrow Fund, unless at such time there are any Indemnification Claims with respect to which Notices have been received but which have not been resolved pursuant to Section 2 hereof or in respect of which the Escrow Agent has not been notified of, and received a copy of, a final determination (after exhaustion of any appeals) by a court of competent jurisdiction, as the case may be and for which the aggregate Losses to the Signing Holders, or to Ascend, under such Indemnification Claims exceed $250,000 (in either case, “Pending Claims”). If the resolution or final determination of any Pending Claims on behalf of Ascend would result in an amount payable to Ascend in excess of $250,000, the Escrow Agent shall retain, and the total amount of such distributions to such Owner shall be reduced by, the “Pending Claims Reserve” (as hereafter defined).  The Committee and the Representatives shall certify to the Escrow Agent the number of shares of Ascend Common Stock to be retained therefor.  Thereafter, if any Pending Claim on behalf of Ascend becomes an Established Claim, the Committee and the Representatives shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to Ascend an amount in respect thereof determined in accordance with Section 2(f) above. If any Pending Claim is resolved against Ascend, the Committee and the Representatives shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to each Owner the amount by which the remaining portion of his account in the Escrow Fund exceeds the then Pending Claims Reserve.  Upon resolution of all Pending Claims, the Committee and the Representatives shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to such Owner the remaining portion of his or her account in the Escrow Fund.  As used in this Section 3, the “Pending Claims Reserve” shall mean, at the time any such determination is made, that number of shares of Ascend Common Stock in the Escrow Fund having a Fair Market Value equal to the sum of the aggregate dollar amounts claimed to be due with respect to all Pending Claims on behalf of Ascend that is in excess of $250,000 (as shown in the Notices of such Claims).

 

4.             The Escrow Agent, the Committee and the Representative shall cooperate in all respects with one another in the calculation of any amounts determined to be payable to Ascend and the Owners in accordance with this Agreement and in implementing the procedures necessary to effect such payments.

 

  

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5.             (a)         The Escrow Agent undertakes to perform only such duties as are expressly set forth herein.  It is understood that the Escrow Agent is not a trustee or fiduciary and is acting hereunder merely in a ministerial capacity.

 

(b)         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.

 

(c)         The Escrow Agent’s sole responsibility upon receipt of any notice requiring any payment to Ascend pursuant to the terms of this Agreement or, if such notice is disputed by the Committee or the Representatives, the settlement with respect to any such dispute, whether by virtue of joint resolution, arbitration or determination of a court of competent jurisdiction, is to pay to Ascend the amount specified in such notice, if any, and the Escrow Agent shall have no duty to determine the validity, authenticity or enforceability of any specification or certification made in such notice.

 

(d)         The Escrow Agent shall not be liable for any action taken by it in good faith, and may consult with counsel of its own choice and shall have full and complete authorization and indemnification under Section 5(f), below, for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

 

(e)         The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by giving the other parties hereto thirty (30) days’ written notice of such resignation.  Such resignation or removal shall become effective at such time that the Escrow Agent shall turn over the Escrow Fund to the successor escrow agent appointed jointly by the Committee and the Representatives.  If no new escrow agent is so appointed within the sixty (60) day period following the giving of such notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and deposit the Escrow Fund with such successor escrow agent appointed thereby.

 

  

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(f)          Indemnification of Escrow Agent.

 

  (i)          From and at all times after the date of this Agreement, Ascend shall, to the fullest extent permitted by law and to the extent provided herein, indemnify and hold harmless the Escrow Agent and each director, officer, employee, attorney, agent and affiliate of the Escrow Agent (collectively, the “Escrow Agent Parties”) against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable fees, costs and expenses of one outside counsel (but not internal counsel)) (collectively for purposes of this Section 5(f), “Losses”) actually incurred by any of the Escrow Agent Parties from and after the date hereof, whether direct, indirect or consequential, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including, without limitation, Ascend, Kitara Media, NYPG or the Signing Holders, asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Agreement or any transactions contemplated herein, whether or not any such Escrow Agent Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Escrow Agent Party shall have the right to be indemnified hereunder for (i) any Losses to the extent they are finally determined by a court of competent jurisdiction, subject to no further appeal, to be attributable to the gross negligence or willful misconduct of such Escrow Agent Party or (ii) any settlements entered into by an Escrow Agent Party without Ascend’s written consent which shall not be unreasonably withheld.

 

  (ii)         If any such action or claim shall be brought or asserted against any Escrow Agent Party, such Escrow Agent Party shall promptly notify the Representatives, Ascend and the Committee in writing, and Ascend shall assume the defense thereof, including the employment of counsel and the payment of all reasonable expenses.  Such Escrow Agent Party shall, in its sole discretion, have the right to employ separate counsel (who may be selected by such Escrow Agent Party in its sole discretion) in any such action and to participate in the defense thereof, and the reasonable fees and expenses of such counsel shall be paid by such Escrow Agent Party, except that Ascend shall be required to pay such reasonable fees and expenses if (i) Ascend agrees to pay such reasonable fees and expenses, (ii) Ascend shall fail to assume the defense of such action or proceeding or shall fail, in the reasonable determination of such Escrow Agent Party, to employ counsel satisfactory to the Escrow Agent Party in any such action or proceeding, (iii) Ascend, Kitara Media, NYPG, or the Signing Holders are the plaintiff in any such action or proceeding or (iv) the named or potential parties to any such action or proceeding (including any potentially impleaded parties) include both the Escrow Agent Party and any of Ascend, Kitara Media, NYPG, and/or the Signing Holders, and the Escrow Agent Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to Ascend, Kitara Media, NYPG, the Kitara Member or the NYPG Stockholder.  All such reasonable fees and expenses payable by Ascend pursuant to the immediately preceding sentence shall be paid from time to time as incurred, both in advance of and after the final disposition of such action or claim.  The Losses of the Escrow Agent Parties shall be payable by Ascend.  The obligations of Ascend under this Section 5(f) shall survive any termination of this Agreement and the resignation or removal of the Escrow Agent and shall be independent of any obligation of the Escrow Agent.

 

 (g)        The Escrow Agent shall be entitled to reasonable compensation from Ascend for all services rendered by it hereunder as set forth on Schedule 5(g) hereto.  The Escrow Agent shall also be entitled to reimbursement from Ascend for all reasonable expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all reasonable counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

 

  

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(h)         From time to time on and after the date hereof, the Committee and the Representatives 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.

 

6.             This Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any agreement among the parties hereto except this Agreement and shall have no duty to inquire into the terms and conditions of any agreement made or entered into in connection with this Agreement, including, without limitation, the Merger Agreement.

 

7.             This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, successors, assigns and legal representatives and shall be governed by and construed in accordance with the law of New York applicable to contracts made and to be performed therein.  This Agreement cannot be changed or terminated except by a writing signed by the Committee, the Representative and the Escrow Agent.

 

8.             All disputes arising under this Agreement between the Committee and the Representatives, including a dispute arising from a party’s failure or refusal to sign a Joint Notice or to deliver any notice or other document required hereunder, shall be submitted to arbitration in the same manner as disputes under the Merger Agreement are to be arbitrated pursuant to Section 11.8 thereof. The Committee and the Representatives each hereby consent to the exclusive jurisdiction of the federal and state courts sitting in New York County, New York, with respect to any claim or controversy arising out of this Agreement. Service of process in any action or proceeding brought against the Committee, the Representatives in respect of any such claim or controversy may be made upon it by registered mail, postage prepaid, return receipt requested, at the address specified in Section 9.

9.             All notices and other communications under this Agreement shall be in writing and shall be deemed given if given by hand or delivered by nationally recognized overnight carrier, or if given by telecopier and confirmed by mail (registered or certified mail, postage prepaid, return receipt requested), to the respective parties as follows:

 

A.           If to the Committee, to it at:

Jonathan Ledecky

970 West Broadway, PMB 402

Jackson, Wyoming 83001

Facsimile: __________

 

  

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with a copy to:

 

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York  10174-1901

Attention:  David Alan Miller, Esq.

Facsimile: (888) 225-1565

 

B.           If to the Representatives, to them at:

Sam Humphreys

c/o London Bay Capital, LLC

15 Funston Street

San Francisco, CA 94104

Facsimile:(415) 962-4201

Robert Regular

640 Lawlins Road

Wyckoff, NJ 07481

Facsimile:

with a copy to:

Sullivan & Cromwell LLP

125 Broad Street

New York, NY  10004

Facsimile: (212) 291-9101

Attention:  Scott D. Miller

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Flr.

New York, NY  10006

Facsimile: (212) 930-9725

Attention:  Darrin M. Ocasio

 

C.           If to the Escrow Agent, to it at:

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attention: Mark Zimkind

Facsimile: (212) 509-5150

 

  

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D.           If to Ascend, to it at:

 

Ascend Acquisition Corp.

525 Washington Avenue

26th Floor

Jersey City, NJ  07310

 

with a copy to:

 

Graubard Miller

The Chrysler Building

405 Lexington Avenue

New York, New York  10174-1901

Attention:  David Alan Miller, Esq.

Facsimile: 212-818-8881

 

or to such other person or address as any of the parties hereto shall specify by notice in writing to all the other parties hereto.

 

10.           (a)           All notices delivered to the Escrow Agent shall refer to the provision of this Agreement under which such notice is being delivered and, if applicable, shall clearly specify the aggregate dollar amount due and payable to Ascend.

 

(b)           This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement.

 

(c)           When reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise specified.

 

[Signatures are on following page]

 

  

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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement on the date first above written.

 

	 	
ASCEND ACQUISITION CORP.

	 
	 	 	 	 
	 	
By: 

	
/s/ Craig dos Santos

	 
	 	Name: 	
Craig dos Santos

	 
	 	Title: 	CEO	 
	 	 	 	 
	 	
REPRESENTATIVES:

	 
	 	 	 
	 	
/s/ Sam Humphreys

	 
	 	
Sam Humphreys

	 
	 	 	 
	 	
/s/ Robert Regular

	 
	 	
Robert Regular

	 
	 	 	 
	 	
COMMITTEE:

	 
	 	 	 
	 	
/s/ Jonathan J. Ledecky

	 
	 	
Jonathan J. Ledecky

	 
	 	 	 
	 	
ESCROW AGENT:

	 
	 	 	 
	 	
CONTINENTAL STOCK TRANSFER &

	 
	 	
TRUST COMPANY

	 
	 	 	 	 
	 	
By: 

	
/s/ John W. Comer, Jr.

	 
	 	Name: 	
John W. Comer, Jr.

	 
	 	Title: 	
Vice President

	 

 

  

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Schedule 1(a)

ESCROW SHARES ALLOCATION

	
Name

	
Address

	
No. of

Escrow Shares

	
For Established Claims 

Attributable To

	 	 	 	 
	
Selling Source, LLC

	
c/o London Bay Capital, LLC

15 Funston Street

San Francisco, CA 94104

	
2,000,000

	
Kitara Media

	 	 	 	 
	 	 	 	 
	
Robert Regular

	
640 Lawlins Road

Wyckoff, NJ 07481

	
1,000,000

	
NYPG

	 	 	 	 
	
Total

	  	
3,000,000

	  

 

  

13

  

Schedule 5(g)

 

	
Amount

	
Description

	 	 
	
$300.00 per month

	
From the date hereof until the termination of the Escrow Agent’s duties pursuant to Section 1(b).

 

 

14f8k0713ex10iii_ascendacq.htm

Exhibit 10.3

 

Ascend Acquisition Corp.

Ladies and Gentlemen:

The undersigned understands that Ascend Acquisition Corp., a Delaware corporation (“Ascend”), has entered into a Merger Agreement and Plan of Reorganization (“Merger Agreement”), dated as of June 12, 2013, by and among Ascend, Ascend Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of Ascend, Ascend Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Ascend, Kitara Media, LLC, a Delaware limited liability company, New York Publishing Group, Inc., a Delaware corporation, and the securityholders executing the “Signing Holder Signature Page” to the Merger Agreement.  Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Merger Agreement.

 

As a condition to closing the transactions contemplated by the Merger Agreement, and for other good and valuable consideration the receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of Ascend, acting through its Board of Directors, the undersigned will not, during the period ending 365 days after the Closing Date, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of (each a “Transfer”), directly or indirectly, any shares of Ascend Common Stock or any securities convertible into or exercisable or exchangeable for Ascend Common Stock (including without limitation, Ascend Common Stock or such other securities of Ascend which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities of Ascend which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make any Transfer, or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Ascend Common Stock or such other securities of Ascend, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Ascend Common Stock or such other securities of Ascend, in cash or otherwise, in each case other than (A) Transfers of shares of Ascend Common Stock as a bona fide gift or gifts; (B) Transfers of shares of Ascend Common Stock to members or stockholders of the undersigned; (C) Transfers of shares of Ascend Common Stock to any trust or family limited partnership for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that any such Transfer shall not involve a disposition for value; or (D) pledges of shares of Ascend Common Stock pursuant to the agreement listed in Item 1 of Schedule 2.16 to the Merger Agreement, provided that in the case of any Transfer pursuant to clause (A), (B), (C) or (D), each donee, distribute, transferee or pledgee shall execute and deliver to Ascend a lock-up agreement in the form of this letter.

Notwithstanding the foregoing, the undersigned shall not be restricted in any way from making a Transfer of shares of Ascend Common Stock purchased by the undersigned in the Financing and the donee, distributee or transferee of such shares shall not be required to execute and deliver to Ascend a lock-up agreement in the form of this letter.

 

In furtherance of the foregoing, Ascend, and any duly appointed transfer agent for the registration or Transfer of the securities described herein, are hereby authorized to decline to make any Transfer of securities if such Transfer would constitute a violation or breach of this Letter Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement.  All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned. 

 

This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with Article XI of the Merger Agreement.

	  	
Very truly yours,

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