Common use of Share Escrow Clause in Contracts

Share Escrow. (a) On the Closing Date, Parent shall deliver, or cause to be delivered, to the Share Escrow Agent, as soon as practicable after the Closing Date, by restricted book entry at Parent’s transfer agent, the Escrow Shares registered in the name of the Share Escrow Agent for the benefit of Sellers’ Representative, which shall be held in a segregated account (the “Share Escrow Account”) administered by the Share Escrow Agent in accordance with this Agreement and the Share Escrow Agreement in order to (i) satisfy any EBITDA Shortfall or Revenue Shortfall pursuant to Section 2.5 and (ii) secure certain of the obligations of the Sellers pursuant to Section 9.2(a). (b) The Parties agree that the Sellers shall be treated, on the basis of their Proportionate Share, as the owners of the Escrow Shares for U.S. federal income Tax purposes for so long as such shares are in the Share Escrow Account, and the Parties shall file all Tax Returns consistent with such treatment. Effective as of the Closing, the Sellers shall have the right to vote, on a Proportionate Share basis, each of the Escrow Shares until such Escrow Shares are released to Parent or a Purchaser Indemnitee and, if applicable, resold as if each Seller was the owner of record of such Escrow Shares. Until the Escrow Shares have been released hereunder, an amount equal to any dividends or distributions that would have been payable to each Seller on a Proportionate Share basis if the Escrow Shares had been released prior to the record date for such dividends or distributions shall be delivered by Parent to the Sellers, on a Proportionate Share basis (the “Distribution Amount”). If any securities of Parent or any other Person are included in the Distribution Amount, then any dividends or distributions in respect of or in exchange for any of such securities in the Distribution Amount, whether by way of stock splits or otherwise, shall be included in the “Distribution Amount”, and will be released to the Sellers, on a Proportionate Share basis. (c) The Escrow Shares shall be released from the Share Escrow Account in accordance with Section 9.5 hereof. In furtherance thereof, on the Closing Date, simultaneously with the establishment of the Share Escrow Account contemplated by this Section 2.6, the Sellers’ Representative shall establish a brokerage account (the “Sellers’ Rep Brokerage Account”) with a broker-dealer mutually acceptable to the Parties (the “Sellers’ Rep Broker”), to receive any Escrow Shares released pursuant to Section 9.5 hereof to be sold to cover indemnifiable Losses of a Purchaser Indemnitee in accordance with Article IX hereof. The Sellers’ Representative shall consent to the creation of a lien, in form and substance reasonably satisfactory to Purchaser, on such Sellers’ Rep Brokerage Account in favor of the Purchaser to secure the obligations of the Sellers under Article IX.

Share Escrow. (ai) On At the Closing DateClosing, Parent shall deliver, or cause two million shares of the Stock Consideration (the “Escrowed Shares”) will be placed into escrow with Arizona Escrow & Financial Corporation acting as escrow agent (the “Escrow Agent”) pursuant to be delivered, an Escrow Agreement in a form reasonably satisfactory to the Share Escrow Agent, as soon as practicable after the Closing Date, by restricted book entry at Parent’s transfer agentBuyer, the Escrow Shares registered in Parent and the name of the Share Escrow Agent for the benefit of Sellers’ Representative, which shall be held in a segregated account (the “Share Escrow Account”) administered by the Share Escrow Agent in accordance with this Agreement and the Share Escrow Agreement in order to (i) satisfy any EBITDA Shortfall or Revenue Shortfall pursuant to Section 2.5 and (ii) secure certain . All of the obligations of the Sellers pursuant to Section 9.2(a). (b) The Parties agree that the Sellers Escrowed Shares shall be treated, on the basis of their Proportionate Share, as the owners of the Escrow Shares for U.S. federal income Tax purposes for so long as such shares are in the Share Escrow Account, and the Parties shall file all Tax Returns consistent with such treatment. Effective as of the Closing, the Sellers shall have the right to vote, on a Proportionate Share basis, each of the Escrow Shares until such Escrow Shares are released to Parent or a Purchaser Indemnitee and, if applicable, resold as if each Seller was the owner of record of such Escrow Shares. Until the Escrow Shares have been released hereunder, an amount equal to any dividends or distributions that would have been payable to each Seller on a Proportionate Share basis if the Escrow Shares had been released prior to the record date for such dividends or distributions shall be delivered by Parent to the Sellers, on a Proportionate Share basis (the “Distribution Amount”). If any securities of Parent or any other Person are included in the Distribution Amount, then any dividends or distributions in respect of or in exchange for any of such securities in the Distribution Amount, whether by way of stock splits or otherwise, shall be included in the “Distribution Amount”, and will be released to the Sellers, on a Proportionate Share basis. Sellers (c) The with each Seller receiving the number of Escrow Shares set forth opposite such Seller’s name on the Funds Flow) after the cultivation facility located at 4▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “Revlon Facility”) produces [**********] pounds or more of dry weight flower (excluding trim) which can legally be sold to the public over any trailing 90-day period ending after the Closing Date (the “Revlon Target”); provided that after the consummation of a Going Private Transaction (as hereinafter defined), any cash being held in escrow in lieu of the Escrowed Shares shall remain subject to the Litigation Escrow Agreement (as hereinafter defined), if still in effect. Upon the satisfaction of the Revlon Target, (1) the Buyer shall notify the Sellers’ Representative and the S▇▇▇▇ Parties immediately, (2) the Escrowed Shares, or other consideration being held in accordance with Section 1.01(d)(iii), shall be released from escrow (but not the Share Escrow Account in accordance with Section 9.5 hereof. In furtherance thereofLock-Up Agreements), on and (3) the Closing DateBuyer, simultaneously with the establishment of the Share Escrow Account contemplated by this Section 2.6, Parent and the Sellers’ Representative shall establish deliver a brokerage account joint written instruction to the Escrow Agent authorizing the release of the Escrowed Shares or other consideration (and the Buyer and the Parent shall cause the release of any consideration in lieu of Escrowed Shares (as described above) being held in escrow by the Litigation Escrow Agent to the S▇▇▇▇ Parties). Notwithstanding the preceding sentence, any consideration in lieu of Escrowed Shares (as described above) being held in escrow by the Litigation Escrow Agent shall remain subject to the Litigation Escrow Agreement, if still in effect. (ii) From the Closing Date until the Revlon Target is satisfied (the “Sellers’ Rep Brokerage AccountEscrow Period”), the Company and each Company Entity shall (and the Parent, the Buyer and their respective Affiliates shall cause the Company and each Company Entity to) (i) complete all of its obligations for (and use commercially reasonable efforts to cause any third Person not an Affiliate of the Parent, the Buyer or any of their respective Affiliates to complete their obligations for) the build out of the Revlon Facility in accordance with a broker-dealer mutually acceptable to the Parties applicable Project Plans (including, without limitation, the time frames set forth therein) (the “Revlon Plans”) and (ii) after the completion of the Revlon Plans, operate the Revlon Facility in the manner contemplated in an annual budget to be mutually agreed to by the Buyer and the Sellers’ Rep BrokerRepresentative prior to the Closing and again in December of 2021 (the “Annual Budget”), with the employees and independent contractors who provided services to receive any Escrow Shares released pursuant the Revlon Facility as of the Closing or who are expected to provide services to the Revlon Facility after the completion of the Revlon Plans as described in the Annual Budget, subject to the Parent’s and the Buyer’s rights to hire and fire as provided under Section 9.5 hereof 1.01(e)(x). The Company and each Company Entity shall (and the Parent, the Buyer and their respective Affiliates shall cause the Company and each Company Entity to) use its good faith, commercially reasonable efforts to satisfy the Revlon Target; provided that the business of the Revlon Facility and the expansion of the Revlon Facility need only be sold to cover indemnifiable Losses of a Purchaser Indemnitee carried out in accordance with Article IX hereofthe Revlon Plans and the Annual Budget. The In addition, the Company and each Company Entity shall not (and the Parent, the Buyer and their respective Affiliates shall cause the Company and each Company Entity not to) take or omit to take any action which would have a material adverse effect on the ability to satisfy the Revlon Target. (iii) In the event that the Parent consummates a Going Private Transaction (as hereinafter defined) during the Escrow Period, then the Escrowed Shares shall be converted into cash based on (A) the amount of any cash (including the aggregate principal amount of any debt security issued as consideration) paid as consideration and (B) the fair market value of any equity securities or securities convertible into equity securities issued as consideration that the Sellers would have received if the Escrowed Shares were converted into Subordinate Voting Shares immediately prior to such Going Private Transaction (as determined based on the definitive document for such Change of Control), which cash shall remain held in escrow in accordance with this Section 1.01(d). In the event the Parent consummates a Change of Control, then the Parent shall cause the acquiror in such Change of Control to agree in writing to (i) be bound by the terms and conditions of this Agreement as though it was an initial party hereto and (ii) in the case of a Change of Control that is a Going Private Transaction, deposit the new escrowed property with the Escrow Agent and Litigation Escrow Agent. During the Escrow Period, none of Lower Holdings (as hereinafter defined), Upper Holdings (as hereinafter defined), the Buyer, the Company or a Company Entity may consummate a Change of Control without the prior written consent of the Sellers’ Representative shall consent (which may be withheld in its sole discretion) except (i) for an internal reorganization which results in the equity securities of Lower Holdings, Upper Holdings, the Buyer or the Company being owned by a different wholly-owned subsidiary of the Parent or (ii) if the Parent and the Buyer provide a signed joint written instruction to the creation of a lien, in form and substance reasonably satisfactory to Purchaser, on such Sellers’ Rep Brokerage Account Representative, who shall then execute and provide the fully executed joint written instruction to the Escrow Agent authorizing the release of all the Escrowed Shares, or other consideration being held in favor escrow in lieu of the Purchaser Escrow Shares, to secure the obligations Sellers’ Representative (and the Buyer and Parent shall cause the Litigation Escrow Agent to release any consideration in lieu of Escrowed Shares (as described in Section 1.01(d)) being held in escrow by the Sellers under Article IXLitigation Escrow Agent to the S▇▇▇▇ Parties). Notwithstanding the preceding sentence, any consideration in lieu of Escrowed Shares (as described in Section 1.01(d)) being held in escrow by the Litigation Escrow Agent shall remain subject to the Litigation Escrow Agreement, if still in effect.