UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 24, 2021

 

ELECTRIC LAST MILE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-39457   84-2308711
(State or other jurisdiction
of incorporation) 		 

(Commission

File Number)

  (IRS Employer
Identification Number)

 

1055 W. Square Lake Road

Troy, Michigan

 
48098
(Address of principal executive offices)   (Zip Code)

 

(888) 825-9111

Registrant’s telephone number, including area code

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Title of each class

  Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.0001 per share   ELMS   The Nasdaq Stock Market LLC
Redeemable warrants, each whole warrant exercisable for one share of common stock, each at an exercise price of $11.50 per share   ELMSW   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

INTRODUCTORY NOTE

 

On June 25, 2021, the registrant consummated the previously announced transactions (the “business combination”) contemplated by that certain Agreement and Plan of Merger, dated December 10, 2020, by and among Forum Merger III Corporation, a Delaware corporation (“Forum”), ELMS Merger Corp., a Delaware corporation and a wholly owned subsidiary of Forum (“Merger Sub”), Electric Last Mile, Inc., a Delaware corporation (“ELM”), and Jason Luo, in his capacity as the initial stockholder representative to ELM, as amended on May 7, 2021 by Amendment No. 1 to the Agreement and Plan of Merger (as amended, the “Merger Agreement”). Pursuant to the Merger Agreement, on June 25, 2021, Merger Sub merged with and into ELM, with ELM surviving the merger in accordance with the Delaware General Corporation Law as a wholly owned subsidiary of the registrant. In connection with the closing of the business combination on June 25, 2021 (the “Closing”), the registrant changed its name from “Forum Merger III Corporation” to “Electric Last Mile Solutions, Inc.” Unless otherwise stated or the context otherwise requires, in this Current Report on Form 8-K (this “Report”), the terms the “Company,” the “registrant,” “we,” “us” and “our” refer to Electric Last Mile Solutions, Inc., as the post-business combination company, together with its subsidiaries.

 

On June 25, 2021, in connection with the Closing, the Company:

 

● issued 77,110,597 shares of its common stock, $0.0001 par value per share (“common stock”), to the stockholders of ELM (the “ELM stockholders”) as merger consideration pursuant to the Merger Agreement;

 

● issued and sold 13,000,000 shares of its common stock for $10.00 per share, for an aggregate purchase price of $130,000,000, pursuant to previously disclosed subscription agreements (the “Subscription Agreements”) with certain third-party investors (the “PIPE Investors”);

 

● issued 2,752,223 shares of its common stock to holders of $25,000,000 in aggregate principal amount, plus accrued interest, of convertible promissory notes previously issued by ELM (the “ELM Convertible Notes”), upon automatic conversion of the ELM Convertible Notes into common stock at a conversion price of $9.0909 per share; and

 

● issued 5,000,000 shares of its common stock to SF Motors, Inc. d/b/a SERES (“SERES”) as compensation for strategic cooperation, consulting services and technical support provided by SERES to ELM prior to the Closing.

 

In addition, in connection with the Closing, all shares of Forum’s Class B common stock, par value $0.0001 per share (“Class B common stock”), were reclassified as Class A common stock, par value $0.0001 per share (“Class A common stock”), and, immediately thereafter, all shares of Class A common stock were reclassified as common stock.

 

A description of the business combination and the terms of the Merger Agreement is included in the definitive proxy statement (the “Proxy Statement”) filed by Forum with the Securities and Exchange Commission (the “SEC”) on June 9, 2021 in the section entitled “Proposal No. 1 – The Business Combination Proposal – The Merger Agreement” beginning on page 111 and is incorporated herein by reference.

 

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In addition, a description of the Subscription Agreements and the investments made pursuant thereto is included in the Proxy Statement in the section entitled “Proposal No. 1 – The Business Combination Proposal – PIPE Investment” beginning on page 127 and is incorporated herein by reference.

 

Finally, a description of the ELM Convertible Notes is included in the Proxy Statement in the section entitled “Proposal No. 1 – The Business Combination Proposal – The ELM Convertible Notes” on page 128 and is incorporated herein by reference.

 

The foregoing descriptions of the Merger Agreement, the Subscription Agreements, and the ELM Convertible Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement, the form of Subscription Agreement, and the form of ELM Convertible Note, which are attached hereto as Exhibits 2.1 and 2.2 (the Merger Agreement and Amendment No. 1 thereto), Exhibit 10.1, and Exhibit 10.2, respectively, and are incorporated herein by reference.

 

All references herein to the “Board” refer to the board of directors of the Company, all references to “Forum” refer to the Company prior to the Closing, and all references to “ELM” refer to Electric Last Mile, Inc. prior to the Closing. In addition, certain capitalized terms used but not defined in this Report have the same meanings set forth in the Proxy Statement.

 

This Report contains summaries of the material terms of various agreements and documents executed in connection with the transactions described herein. The summaries of these agreements and documents are subject to, and are qualified in their entirety by, reference to these agreements and documents, which are filed as exhibits hereto and incorporated herein by reference.

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Merger Agreement

 

The “Introductory Note” above and Item 2.01 of this Report describe the consummation of the business combination and various other transactions and events contemplated by the Merger Agreement which took place on June 25, 2021 and such descriptions are incorporated herein by reference.

 

Escrow Agreement

 

On June 25, 2021, the Company and Jason Luo, in his capacity as the initial stockholder representative, entered into an escrow agreement with Forum Investors III LLC (the sponsor of Forum (the “Sponsor”)) and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agreement”), for the purpose of holding and distributing in accordance with the Merger Agreement, (i) 5,000,000 shares of common stock payable after the Closing to the ELM stockholders upon satisfaction of certain earnout conditions based on the trading price of the Company’s common stock during the 36-month period after the Closing (the “Earnout Shares”) and (ii) 250,000 shares of common stock to secure any downward post-closing merger consideration adjustment (the “Adjustment Escrow Stock”).

 

This description of the Escrow Agreement is qualified in its entirety by the full text of the Escrow Agreement, which is included as Exhibit 10.3 to this Report and is incorporated herein by reference.

 

A more detailed description of the Earnout Shares and the Adjustment Escrow Stock (referenced above) is included in the Proxy Statement in the section entitled “Proposal No. 1 – The Business Combination Proposal – Consideration to ELM Securityholders in the Business Combination” and is incorporated herein by reference.

 

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Director Nomination Agreement

 

On June 25, 2021, the Sponsor and the Company entered into a Director Nomination Agreement providing the Sponsor certain director nomination rights, including the right to appoint or nominate for election to the Board, as applicable, two individuals, to serve as directors of the Company. The Director Nomination Agreement and the nomination rights thereunder will terminate as of the 15-month anniversary of the Closing.

 

This description of the Director Nomination Agreement is qualified in its entirety by the full text of the Director Nomination Agreement, which is included as Exhibit 10.4 to this Report and is incorporated herein by reference.

 

Amended and Restated Registration Rights Agreement

 

On June 25, 2021, the Company entered into an Amended and Restated Registration Rights Agreement with the Sponsor, Jefferies LLC (“Jefferies”), SERES, the ELM stockholders, and the other parties thereto (collectively, the “Investors”), which, among other things, amends and restates the registration rights agreement entered into by and among the Company, the Company’s initial directors and officers, the Sponsor and Jefferies at the time of the Company’s initial public offering. Pursuant to the terms of the Amended and Restated Registration Rights Agreement, among other things, the Company is obligated to file, not later than 30 days after the Closing, a registration statement covering the shares of common stock issued or issuable to the ELM stockholders and SERES pursuant to the Merger Agreement and the shares of common stock (including the shares of common stock issuable upon exercise of the private placement warrants) held by the Sponsor or Jefferies immediately after the Closing.

 

Pursuant to the Amended and Restated Registration Rights Agreement, the Sponsor agreed that it will not transfer shares of common stock held by it prior to the earlier of (x) twelve months after the Closing, (y) the date on which the last sales price of the common stock equals or exceeds $12.00, subject to adjustment as provided therein, for any 20 trading days in any 30-trading day period commencing at least 150 days after the business combination and (z) the date on which the Company completes a transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Each of the Sponsor and Jefferies agreed that they will not transfer private placement units (or any securities underlying the private placement units) until 30 days after the Closing. The ELM stockholders agreed that they will not transfer shares of common stock received as consideration in the business combination until six months after the Closing; provided, that, each of Jason Luo, James Taylor, and SERES agreed that they will not transfer (i) any shares of common stock received pursuant to the Merger Agreement until 12 months after the Closing and (ii) 50% of such shares until 24 months after the Closing.

 

This description of the Amended and Restated Registration Rights Agreement is qualified in its entirety by the full text of the Amended and Restated Registration Rights Agreement, which is included as Exhibit 10.5 to this Report and is incorporated herein by reference.

 

SERES and Sokon Agreements

 

The descriptions of the SERES Asset Purchase Agreement, the SERES Exclusive Intellectual Property License Agreement, and the Sokon Supply Agreement set forth in, and incorporated by reference into, Item 2.01 of this Report are incorporated by reference into this Item 1.01.

 

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Land Contract and Promissory Note

 

The information regarding the Land Contract (as defined below) and the Promissory Note (as defined below) set forth in, and incorporated by reference into, Item 2.03 of this Report is incorporated by reference into this Item 1.01.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

Business Combination

 

The information set forth in the “Introductory Note” above is incorporated by reference herein.

 

At the special meeting in lieu of the 2021 annual meeting of the stockholders of Forum held on June 24, 2021 (the “Special Meeting”), the Forum stockholders considered, approved, and adopted, among other matters, the Merger Agreement and the business combination. On June 25, 2021, the parties consummated the business combination.

 

On May 20, 2021, the record date for the Special Meeting, there were 31,991,250 shares of common stock outstanding and entitled to vote, of which 25,741,250 were shares of Class A common stock and 6,250,000 were shares of Class B common stock held by the Sponsor. Prior to the Special Meeting, holders of 11,077,058 shares of Class A common stock included in the units issued in Forum’s initial public offering (“public shares”) exercised their right to redeem those shares for cash at a price of approximately $10.00 per share, for an aggregate of approximately $110,771,731. The per share redemption price of approximately $10.00 for holders of public shares electing redemption was paid out of Forum’s trust account, which, after taking into account the redemption but before any transaction expenses, had a balance immediately prior to the Closing of approximately $139,230,866.

 

Forum’s units automatically separated into their component securities upon consummation of the business combination and, as a result, no longer trade as a separate security, and, on June 28, 2021, the Company’s common stock and warrants began trading on The Nasdaq Stock Market (“Nasdaq”) under the trading symbols “ELMS” and “ELMSW,” respectively. Prior the Closing, each unit of Forum consisted of one share of Class A common stock and one public warrant, whereby each public warrant entitled the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share. Upon the Closing, Forum’s second amended and restated certificate of incorporation, dated August 18, 2020, was replaced with the third amended and restated certificate of incorporation (the “A&R Certificate”), which, among other things, reclassified all shares of Class B common stock as Class A common stock and immediately thereafter reclassified all shares of Class A common stock as common stock.

 

Immediately after giving effect to the business combination, there were 124,027,012 shares of common stock and warrants to purchase 8,580,375 shares of common stock of the Company issued and outstanding.

 

As of the Closing, Jason Luo, the Executive Chairman and President of the Company, beneficially owned approximately 47.8% of the outstanding shares of common stock of the Company, the other ELM stockholders beneficially owned approximately 14.6% of the outstanding shares of common stock of the Company, the PIPE Investors beneficially owned approximately 10.5% of the outstanding shares of common stock of the Company, the holders of the ELM Convertible Notes beneficially owned approximately 2.2% of the outstanding shares of common stock of the Company, SERES beneficially owned approximately 4.0% of the outstanding shares of common stock of the Company, and the former security holders of Forum beneficially owned approximately 21.1% of the outstanding shares of common stock of the Company.

 

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Acquisition of EVAP Operations

 

On June 25, 2021, ELM completed its acquisition of the Mishawaka, Indiana manufacturing facility located at 12900 McKinley Highway, Mishawaka, Indiana (the “ELM Facility”), and which comprises the Electric Vehicle Assembly Plant Operations, a wholly owned component of SERES (“EVAP Operations”). EVAP Operations primarily consists of the ELM Facility retooled to manufacture electric passenger vehicles. To support the acquisition of EVAP Operations, ELM also entered into agreements to use certain intellectual property of SERES, procure the supply of inventory from Chongqing Sokon Motor (Group) Imp. & Exp. Co., Ltd. (“Sokon”), and other arrangements consisting of know-how to manufacture electric commercial vehicles for the North American region and to operate the EVAP Operations on a standalone basis.

 

SERES Asset Purchase Agreement

 

Pursuant to the SERES Asset Purchase Agreement, ELM purchased the ELM Facility, including the improvements thereon and the tangible personal property, including equipment, machinery and supplies, and all intangible personal property, if any, owned by SERES, including any plans and specifications and other architectural and engineering drawings for the improvements and any material service contracts to the extent assignable to ELM at SERES’s cost and subleased from SERES the parking lot associated with the ELM Facility from SERES for $71,797.00 per year.

 

ELM and SERES agreed to a purchase price for the ELM Facility of $145,000,000. At the closing, ELM paid SERES $30,000,000 and issued SERES a promissory note (the “Promissory Note”) and an irrevocable letter of credit naming SERES as beneficiary, each in the amount of $43,620,689.66. Pursuant to the land contract associated with the purchase of the ELM Facility (the “Land Contract”), ELM agreed to make 23 consecutive monthly payments of $3,103,448.28. The Promissory Note provides that monetary and non-monetary breaches or defaults under any one of the Promissory Note, the SERES Asset Purchase Agreement, the Land Contract or the sublease may entitle SERES to draw on the letter of credit and accelerate the amounts due and payable under the Promissory Note. Additionally, if there is a monetary or non-monetary default under either the Land Contract or the sublease, SERES has the right to evict ELM from the ELM Facility, terminate both the Land Contract and the sublease and retain all payments made thereunder.

 

Additional information regarding the SERES Asset Purchase Agreement is included in the Proxy Statement in the section entitled “Information about ELM – Key Agreements and Partnership Strategy – Key Contracts – SERES Asset Purchase Agreement” beginning on page 191, which is incorporated herein by reference.

 

The foregoing description of the SERES Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the SERES Asset Purchase Agreement, a copy of which is attached hereto as Exhibit 10.6 and is incorporated by reference herein.

 

SERES Exclusive Intellectual Property License Agreement

 

The SERES Exclusive Intellectual Property License Agreement provides that SERES will license to ELM certain intellectual property owned by SERES and Sokon used in the design, manufacture, development, marketing, sale, offering for sale, or commercialization of urban utility and commercial vehicles currently designated as SERES’s EC35 and D51 models, including skateboards used for urban utility truck, cargo van and open bed truck vehicles from SERES described in the exhibits to the agreement (but excluding the headlights of both models or any parts or components to the vehicles supplied by third parties) (the “Licensed Products”)). ELM’s license does not include any patents, trademarks, software, the product model names “EC35” and “D51”, any copyrights or design rights in connection with the design and styling of headlights of the licensed products, or any intellectual property owned by any party other than SERES and its affiliates. Pursuant to the terms of the SERES Exclusive Intellectual Property License Agreement, SERES granted to ELM a non-sublicensable, non-transferable, perpetual, irrevocable, royalty-bearing, exclusive (as further described below) right and license to make, have made, use, import, sell, and offer for sale the Licensed Products in the U.S., Canada and Mexico.

 

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Until April 9, 2051, SERES agreed to not authorize or grant any others any right under the license to make, have made, import, use, market, offer for sale, or sell (a) any vehicles that are similar to or compete with the Licensed Products in the U.S., Canada and Mexico, and (b) any vehicles outside the U.S., Canada and Mexico where SERES knows (or would reasonably be expected to know) that such vehicle is intended for sale within the U.S., Canada or Mexico, provided, however, that such exclusivity shall terminate (and the licenses granted to ELM shall become non-exclusive) if (a) the aggregate Licensed Product sold by ELM during the first two years does not exceed 10,000 units, or (b) the aggregate Licensed Product sold by ELM during the first 10 years does not exceed 100,000 units. Nothing in the SERES Exclusive Intellectual Property License Agreement prevents SERES from selling any products (including the Licensed Products) within or outside the U.S., Canada or Mexico.

 

Any improvement to the licensed intellectual property developed by ELM for manufacturing and distribution in the U.S., Canada and Mexico is solely and exclusively owned by ELM and ELM agreed to grant to SERES, Sokon and their affiliates a non-exclusive, perpetual, irrevocable, worldwide, royalty-free, fully paid-up, non-assignable, non-sublicensable right and license under such improved intellectual property (excluding any trademarks) to make, have made, use, sell, offer for sale, import, export and other use and exploitation of such improved intellectual property in connection with the Licensed Products.

 

Pursuant to the SERES Exclusive Intellectual Property License Agreement, ELM paid SERES a fixed royalty fee of $5,000,000 and will pay a unit royalty fee of $100 per Licensed Product vehicle up to the first 100,000 units sold by ELM within the U.S., Canada and Mexico.

 

Additional information regarding the SERES Exclusive Intellectual Property License Agreement is included in the Proxy Statement in the section entitled “Information about ELM – Key Agreements and Partnership Strategy – Key Contracts – SERES Exclusive Intellectual Property License Agreement” beginning on page 193, which is incorporated herein by reference.

 

The foregoing description of the SERES Exclusive Intellectual Property License Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the SERES Exclusive Intellectual Property License Agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated by reference herein.

 

Sokon Supply Agreement

 

Under the Sokon Supply Agreement, during each of the calendar years 2021, 2022 and 2023, ELM agreed to procure from Sokon a certain forecasted minimum amount of equipment, goods and components used in the manufacture of electric commercial vehicles. If ELM fails to meet the annual minimum quantity for any such year, Sokon has the right to terminate the agreement and any other rights or remedies which may be available at law or in equity. Products will be purchased pursuant to mutually agreeable binding purchase orders which would set forth the quantities, prices and delivery dates of the products to be purchased. Product prices for new purchase orders will be subject to change by Sokon from time to time with appropriate notice to ELM.

 

ELM has agreed that it will not sell or supply any products purchased under the Sokon Supply Agreement outside of the U.S., Canada and Mexico. Pursuant to the terms of the Sokon Supply Agreement, Sokon does not have an obligation to conform the products so as to comply with the laws or regulations applicable to the sale and supply of such products in the U.S., Canada and Mexico. If ELM is required to make any modifications to the products that are necessary to comply with applicable laws for sale of such modified products in the U.S., Canada or Mexico, then ELM is required to submit the required modifications and alterations to Sokon for their approval in their sole discretion.

 

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Additional information regarding the Sokon Supply Agreement is included in the Proxy Statement in the section entitled “Information about ELM – Key Agreements and Partnership Strategy – Key Contracts – Sokon Supply Agreement” beginning on page 193, which is incorporated herein by reference.

 

The foregoing description of the Sokon Supply Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Sokon Supply Agreement, a copy of which is attached hereto as Exhibit 10.8 and is incorporated by reference herein.

 

FORM 10 INFORMATION

 

Item 2.01(f) of Form 8-K states that if the registrant was a shell company, as Forum was immediately before the business combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, the following information is being provided to satisfy such requirements.

 

Please note that the information provided below relates to the post-business combination company after the consummation of the business combination, unless otherwise specifically indicated or the context otherwise requires.

 

Forward-Looking Statements

 

The Company makes forward-looking statements in this Report and in documents incorporated herein by reference. All statements, other than statements of present or historical fact included in or incorporated by reference in this Report, regarding the Company’s future financial performance, as well as the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Report, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would”, the negative of such terms, and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations, assumptions, hopes, beliefs, intentions and strategies regarding future events and are based on currently available information as to the outcome and timing of future events. The Company cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, incident to its business.

 

These forward-looking statements are based on information available as of the date of this Report, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements in this Report and in any document incorporated herein by reference should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

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As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

● the Company’s ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably following the Closing;

 

● the Company’s ability to maintain the listing of its common stock on Nasdaq following the Closing;

 

● the effect of the COVID-19 pandemic on the Company’s business;

 

● costs related to the business combination;

 

● changes in applicable laws or regulations;

 

● the ability of the Company to profitably expand into new markets;

 

● the ability of the Company to execute its business model, including market acceptance of its planned products and services;

 

● any delays the Company may experience in realizing its projected timelines and cost and volume targets for the production, launch and ramp up of production of the Company’s vehicles and the modification of its manufacturing facility;

 

● the ability of the Company to obtain customers, obtain product orders, and convert its non-binding pre-orders into binding orders or sales;

 

● the Company’s ability to implement its business plans and strategies;

 

● the Company’s ability to raise capital;

 

● the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and

 

● other risks and uncertainties set forth in the Proxy Statement in the section entitled “Risk Factors” beginning on page 53 of the Proxy Statement, which is incorporated herein by reference.

 

Business

 

The business conducted by Forum prior to the Closing is described in the Proxy Statement in the section entitled “Information about the Company” beginning on page 172, which is incorporated by reference herein.

 

The business of the Company is described in the Proxy Statement in the section entitled “Information about ELM” beginning on page 187, which is incorporated herein by reference.

 

The business to be conducted by the Company as a result of the acquisition of the ELM Facility and the EVAP Operations is described in Item 2.01 of this Report in the section entitled “Acquisition of EVAP Operations,” which is incorporated herein by reference.

 

Risk Factors

 

The risks associated with the Company’s business are described in the Proxy Statement in the section entitled “Risk Factors” beginning on page 53, which is incorporated herein by reference.

 

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Financial Information

 

Summary Historical Financial Information

 

The summary historical financial information of Forum as of and for the three months ended March 31, 2021 and March 31, 2020, as of and for the year ended December 31, 2020 and as of and for the period ended December 31, 2019 is included in the Proxy Statement in the section entitled “Summary Historical Financial Information of the Company” beginning on page 50 and is incorporated herein by reference.

 

The summary historical financial information of EVAP Operations as of and for the years ended December 31, 2020 and 2019, as of March 31, 2021, and for the three months ended March 31, 2021 and 2020 is included in the Proxy Statement in the section entitled “Summary Historical Financial Information of EVAP Operations (A Component of SERES)” beginning on page 51 and is incorporated by reference herein.

 

The summary historical financial information of ELM as of and for the period from August 20, 2020 (inception) through December 31, 2020 and as of and for the three months ended March 31, 2021 is included in the Proxy Statement in the section entitled “Summary Historical Financial Information of ELM” beginning on page 52 and is incorporated by reference herein.

 

Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined financial information of the Company for the year ended December 31, 2020 and as of and for the three months ended March 31, 2021 is set forth in Exhibit 99.1 hereto and is incorporated by reference herein.

 

Comparative Share Information

 

The table setting forth the per share data of Forum and ELM on a stand-alone basis and the unaudited pro forma condensed combined per share data for the period ended December 31, 2020 and the three months ended March 31, 2021 after giving effect to the business combination is included in the Proxy Statement in the section entitled “Comparative Share Information” beginning on page 101 and is incorporated by reference herein.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forum management’s discussion and analysis of the financial condition and results of operations of Forum prior to the business combination is included in the Proxy Statement in the section entitled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 182 and is incorporated by reference herein.

 

Management’s discussion and analysis of the financial condition and results of operations of ELM and EVAP Operations prior to the business combination is included in the Proxy Statement in the section entitled “ELM Management’s Discussion and Analysis of Financial Condition and Results of Operations of ELM and EVAP Operations” beginning on page 199 and is incorporated by reference herein.

 

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Properties

 

The properties of ELM prior to the business combination are described in the Proxy Statement in the section entitled “Information About ELM—Manufacturing” beginning on page 191, which is incorporated herein by reference.

 

The properties acquired by the Company through the acquisition of the ELM Facility and the EVAP Operations are described in Item 2.01 of this Report in the section entitled “Acquisition of EVAP Operations,” which is incorporated herein by reference.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information regarding the beneficial ownership of the Company’s common stock upon the Closing by:

 

● each person known by the Company to be the beneficial owner of more than 5% of the Company’s issued and outstanding common stock;

 

● each of the Company’s executive officers and directors; and

 

● all of the Company’s executive officers and directors as a group.

 

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. In computing the number of shares beneficially owned by a person or entity and the percentage ownership of that person or entity in the table below, all shares subject to options held by such person or entity were deemed outstanding if such securities are currently exercisable, or exercisable within 60 days of June 25, 2021 (the date of the Closing). These shares were not deemed outstanding, however, for the purpose of computing the percentage ownership of any other person or entity.

 

The beneficial ownership of the Company’s common stock is based on 124,027,012 shares of common stock issued and outstanding as of June 25, 2021 (the date of the Closing). There are currently no shares of Company preferred stock issued and outstanding. Currently, there are warrants to purchase approximately 8,580,375 shares of common stock of the Company issued and outstanding.

 

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

 

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Name of Beneficial Owner   Number of
Shares
Beneficially
Owned 		    Percentage of
Outstanding
Shares 		 
Executive Officers and Directors(1)            
Jason Luo(3)     59,291,874       47.8 %
James Taylor(4)     5,305,598       4.3 %
Albert Li (5)     110,088       *   
Hailiang (Jerry) Hu (6)     821,172       *   
Kev Adjemian (7)     55,044       *   
Benjamin Wu(6)     821,172       *   
David Boris(8)     6,866,250       5.5 %
Neil Goldberg(10)     --       --  
Shauna F. McIntyre     --       --  
Richard N. Peretz     --       --  
Brian M. Krzanich     --       --  
All executive officers and directors as a group (12 individuals)     72,450,026       58.4 %
                 
Five Percent Stockholders                
Marshall Kiev(2)(9)     7,366,250       5.9 %
Forum Investors III LLC(2)(8)     6,866,250       5.5 %

 

* Less than 1%.

 

(1) The business address of each of these individuals is c/o Electric Last Mile, Inc., 1055 W. Square Lake Road, Troy, Michigan 48098.
(2) The business address of each of these individuals or entities is 1615 South Congress Avenue, Suite 103, Delray Beach, Florida 33445.
(3) Includes 42,868,416 shares held by AJ Capital Investment, LLC and 16,423,459 shares held by Luo Pan Investment II, LLC. Jason Luo is the sole member of AJ Capital Investment, LLC and is the co-manager of Luo Pan Investment II, LLC and has sole voting and investment power with respect to the common stock held by these entities. Does not include 6,000,000 Earnout RSUs (as defined below) to be granted to Mr. Luo under the Incentive Plan (as defined below), as such Earnout RSUs will not vest within 60 days and will only vest upon the achievement by the Company of certain stock price targets. Does not include 2,764,500 Earnout Shares that may be issued to AJ Capital Investment, LLC following the Closing or 1,065,000 Earnout Shares that may be issued to Luo Pan Investment II, LLC after the Closing.
(4) Represents shares held by The JET Group, LLC. James Taylor, as the sole member of this entity, has sole voting and investment power with respect to the shares of common stock held by this entity. Does not include 3,300,000 Earnout RSUs to be granted to Mr. Taylor under the Incentive Plan, as such Earnout RSUs will not vest within 60 days and will only vest upon the achievement by the Company of certain stock price targets. Does not include 344,000 Earnout Shares that may be issued to The JET Group, LLC after the Closing.
(5) Includes 22,017 shares held by H and L Reunion Investments LLC and 88,071 shares held by Li Management and Consulting LLC. Albert Li and Gary Heald have shared voting and investment power with respect to the common stock held by H and L Reunion Investments LLC. Accordingly, Albert Li and Gary Heald may be deemed to have beneficial ownership of the common stock held by H and L Reunion Investments LLC. Albert Li, as the sole member of Li Management and Consulting LLC, has sole voting and investment power with respect to the common stock held by Li Management and Consulting LLC. Does not include 600,000 Earnout RSUs to be granted to Mr. Li under the Incentive Plan, as such Earnout RSUs will not vest within 60 days and will only vest upon the achievement by the Company of certain stock price targets.
(6) Represents shares held by 456 Investments, LLC. Jerry Hu and Ben Wu have shared voting and investment power with respect to the common stock held by 456 Investments, LLC. Accordingly, Jerry Hu and Ben Wu may be deemed to have beneficial ownership of the common stock held by 456 Investments, LLC. Does not include 1,500,000 Earnout RSUs to be granted to Mr. Wu under the Incentive Plan or 1,500,000 Earnout RSUs to be granted to Mr. Hu under the Incentive Plan (as applicable), as such Earnout RSUs will not vest within 60 days and will only vest upon the achievement by the Company of certain stock price targets. Does not include 53,000 Earnout Shares that may be issued to 456 Investments, LLC after the Closing.
(7) Represents shares held by the KA Trust. Kev Adjemian has sole voting and investment power with respect to the shares of common stock held by this trust. Does not include 40,000 Earnout RSUs to be granted to Mr. Adjemian under the Incentive Plan, as such Earnout RSUs will not vest within 60 days and will only vest upon the achievement by the Company of certain stock price targets.
(8) Represents shares held by the Sponsor. Each of Marshall Kiev, David Boris, Neil Goldberg, Richard Katzman, Steven Berns, and Jeffery Nachbor (the officers and directors of Forum prior to the Closing), and a trust held for the benefit of family members of David Boris, is a member of the Sponsor. Forum Capital Management III LLC is the managing member of the Sponsor and has voting and investment discretion with respect to the common stock held by the Sponsor. Marshall Kiev and David Boris are the managing members of Forum Capital Management III LLC and may be deemed to have beneficial ownership of the common stock held directly by the Sponsor. Each such person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly.
(9) Represents 6,866,250 shares held by the Sponsor and 500,000 shares held directly.
(10) Does not include any shares held by the Sponsor. This individual is a member of the Sponsor, as described in footnote 8, but does not have voting or dispositive control over the shares held by the Sponsor.

 

11

 

 

Directors and Executive Officers

 

The information set forth in Item 5.02 of this Report is incorporated herein by reference.

 

Executive Compensation

 

Information regarding the compensation of the directors and executive officers of ELM and Forum is included in the Proxy Statement in the section entitled “Executive Compensation” beginning on page 218 and in the section entitled “Certain Relationships and Related Transactions—ELM Related Party Transactions—Employment Agreements” beginning on page 239, and this information is incorporated herein by reference.

 

In addition, the information set forth in Item 5.02 of this Report is incorporated herein by reference.

 

Certain Relationships and Related Person Transactions, and Director Independence

 

Certain Relationships and Related Person Transactions

 

Information regarding the related party transactions entered into by Forum and ELM are described in the Proxy Statement in the section entitled “Certain Relationships and Related Transactions” beginning on page 237, which is incorporated herein by reference.

 

Policies and Procedures for Related Person Transactions

 

Effective upon the Closing, the Board adopted a written related party transactions policy (the “Policy”) setting forth the policies and procedures for the review and approval or ratification of related party transactions. The Policy requires that a “related party” (which is defined in substantially the same manner as the term “related person” as used in paragraph (a) of Item 404 of Regulation S-K) must notify the Company’s general counsel of the facts and circumstances of any proposed “related party transaction” (defined as any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which (i) the Company or any of its subsidiaries is or will be a participant, (ii) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, and (iii) any related party has or will have a direct or indirect material interest), prior to entering into such proposed transaction. The Company’s general counsel will undertake an evaluation of the related party transaction. If that evaluation indicates that the related party transaction would require the approval of the audit committee of the Board (which is responsible for administering the Policy), the general counsel will report the transaction, together with a summary of the material facts, to the audit committee for consideration at the next regularly scheduled audit committee meeting. The audit committee shall review all of the relevant facts and circumstances of all related party transactions that require the audit committee’s approval and either approve or disapprove of the entry into the related party transaction, subject to certain exceptions described in the Policy related to transactions that are pre-approved (such as the employment of certain executive officers, director compensation, and certain charitable contributions).

 

The audit committee may approve the related party transaction only if it determines in good faith that, under all of the circumstances, the transaction is in the best interests of the Company and its stockholders. The audit committee, in its sole discretion, may impose such conditions as it deems appropriate on the Company or the related party in connection with the approval of the related party transaction.

 

12

 

 

If a related party transaction involves a related party who is a director or an “immediate family member” of a director, such director may not participate in any discussion or vote regarding approval or ratification of approval such transaction. However, such director shall provide all material information concerning the related party transaction to the audit committee.

 

If the general counsel determines it is impractical or undesirable to wait until an audit committee meeting to consummate a related party transaction, the chairman of the audit committee may review and approve the related party transaction in accordance with the procedures set forth in the Policy. Any such approval (and the rationale for such approval) must be reported to the audit committee at the next regularly scheduled audit committee meeting.

 

If the Company becomes aware of a related party transaction that has not been approved under the Policy, the related party transaction shall be reviewed in accordance with the procedures set forth in the Policy and, if the audit committee determines it to be appropriate, ratified at the audit committee’s next regularly scheduled meeting. In any case where the audit committee determines not to ratify a related party transaction that has been commenced without approval, the audit committee may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction, or modification of the transaction to make it acceptable for ratification.

 

Director Independence

 

The information set forth in Item 5.02 of this Report is incorporated herein by reference.

 

Legal Proceedings

 

Information regarding legal proceedings is included in the Proxy Statement in the section entitled “Information About ELM – Legal Proceedings” on page 198 and in the section entitled “Information About the Company – Legal Proceedings” on page 181, which are incorporated herein by reference.

 

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

Information about the market price, ticker symbols, number of holders and dividends for Forum’s securities is set forth in the Proxy Statement in the section titled “Market Price, Ticker Symbol and Dividend Information,” which is incorporated herein by reference.

 

As of the Closing, there were 81 holders of record of the Company’s common stock and 3 holders of record of the Company’s warrants to purchase common stock (formerly Class A common stock). The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose common stock and warrants are held of record by banks, brokers and other financial institutions.

 

The Company’s common stock began trading on Nasdaq under the symbol “ELMS” and its warrants began trading on Nasdaq under the symbol “ELMSW” on June 28, 2021.

 

The Company has not paid any cash dividends on shares of its common stock to date. The payment of any cash dividends is within the discretion of the Board. It is currently expected that the Company will retain future earnings to finance operations and grow its business, and the Company does not expect to declare or pay cash dividends for the foreseeable future.

 

13

 

 

Recent Sales of Unregistered Securities

 

Information regarding Forum’s private placement of Class B common stock and Forum’s private placement of units comprised of one share of Class A common stock and one warrant to purchase one share of Class A common stock is included in the Proxy Statement in the section entitled “Certain Relationships and Related Transactions – The Company’s Related Party Transactions” beginning on page 237, which is incorporated herein by reference. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

 

In addition, the information set forth in the “Introductory Note” above and the information set forth in Item 3.02 of this Report regarding the issuance by the Company of certain unregistered securities in connection with the Closing is incorporated herein by reference.

 

Description of Registrant’s Securities

 

A description of the Company’s securities is set forth in the Proxy Statement in the section entitled “Description of Securities” beginning on page 220 and is incorporated herein by reference.

 

For a description of changes related to the common stock in connection with the business combination, see the material terms of the A&R Certificate and the general effect upon the rights of holders of the Company’s capital stock described in the sections of the Proxy Statement entitled “Proposal No. 3 – The Charter Proposal” and “Proposal No. 4 – Advisory Charter Proposals” beginning on pages 154 and 156, respectively, which are incorporated herein by reference. A copy of the A&R Certificate is filed as Exhibit 3.1 to this Report and is incorporated herein by reference.

 

Indemnification of Directors and Officers

 

The A&R Certificate limits the Company’s directors’ liability to the fullest extent permitted under the General Corporation Law of the State of Delaware (the “DGCL”). The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability:

 

● for any transaction from which the director derives an improper personal benefit;

 

● for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

 

● for any unlawful payment of dividends or redemption of shares; or

 

● for any breach of a director’s duty of loyalty to the corporation or its stockholders.

 

If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the Company’s directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

 

Delaware law and the Company’s amended and restated bylaws provide that the Company will, in certain situations, indemnify the Company’s directors and officers and may indemnify other employees and other agents, to the fullest extent permitted by law. Any indemnified person is also entitled, subject to certain limitations, to advancement of reasonable expenses (including attorneys’ fees and disbursements) in advance of the final disposition of the proceeding.

 

14

 

 

The Company maintains a directors’ and officers’ insurance policy pursuant to which the Company’s directors and officers are insured against liability for actions taken in their capacities as directors and officers.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

Financial Statements, Supplementary Data, and Exhibits

 

The information set forth under Item 9.01 of this Report is incorporated herein by reference.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

Not applicable.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

On June 25, 2021, ELM closed the transactions contemplated by the SERES Asset Purchase Agreement. In connection with the closing under the SERES Asset Purchase Agreement, ELM entered into the Promissory Note and the Land Contract with SERES governing the payment for the Mishawaka, Indiana facility.

 

Additional information regarding the Promissory Note and the Land Contract is included in the Proxy Statement in the section entitled “Information about ELM – Key Agreements and Partnership Strategy – Key Contracts – SERES Asset Purchase Agreement” beginning on page 191, which is incorporated herein by reference.

 

The foregoing descriptions of the Land Contract and the Promissory Note do not purport to be complete and are qualified in their entirety by the terms and conditions of the Land Contract and the Promissory Note, copies of which are attached hereto as Exhibits 10.9 and 10.10, respectively, and are incorporated by reference herein.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

The information set forth in the “Introductory Note” above is incorporated by reference into this Item 3.02.

 

The securities issued in connection with and/or pursuant to the Merger Agreement (including the shares of common stock issued to the ELM stockholders and SERES), the Subscription Agreements, and the conversion of the ELM Convertible Notes have not been registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

 

The issuance of Class A common stock upon the automatic conversion of the Class B common stock and the issuance of common stock upon the automatic conversion of the Class A common stock at the Closing has not been registered under the Securities Act in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act.

 

15

 

 

Item 3.03. Material Modification to Rights of Security Holders.

 

On the Closing Date, Forum filed its A&R Certificate with the Secretary of State of the State of Delaware. The material terms of the A&R Certificate and the general effect upon the rights of holders of the Company’s capital stock are described in the sections of the Proxy Statement entitled “Proposal No. 3 – The Charter Proposal” and “Proposal No. 4 – Advisory Charter Proposals” beginning on pages 154 and 156, respectively, and this information is incorporated herein by reference. A copy of the A&R Certificate is filed as Exhibit 3.1 to this Report and is incorporated herein by reference.

 

In addition, upon the Closing, pursuant to the terms of the Merger Agreement, Forum amended and restated its bylaws to make certain changes that the Board deems appropriate for a public operating company. This summary does not purport to be complete and is qualified in its entirety by reference to the text of the Amended and Restated Bylaws of the Company, a copy of which is filed as Exhibit 3.2 to this Report and is incorporated herein by reference.

 

Item 5.01. Changes in Control of Registrant.

 

The information in the section above entitled “Introductory Note” and in Item 2.01 of this Report is incorporated by reference into this Item 5.01.

 

Immediately after giving effect to the business combination, there were approximately 124 million shares of our common stock outstanding. At that time, Jason Luo, the Executive Chairman and President of the Company, beneficially owned approximately 47.8% of the outstanding shares of common stock of the Company and the other executive officers and directors of the Company held approximately 10.6% of the outstanding shares of common stock of the Company.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment of Directors and Officers

 

Effective upon the Closing, the following persons were appointed as executive officers and directors of the Company. The appointment of the directors was approved by the stockholders of Forum at the Special Meeting, as described in the Proxy Statement in the section entitled “Proposal No. 6 – The Director Election Proposal” beginning on page 169. For biographical information concerning the executive officers and directors, see the disclosure in the Proxy Statement in the sections entitled “Management After the Business Combination” beginning on page 212 and “ELM Management” beginning on page 210, which are incorporated herein by reference.

 

Name   Age   Position
Jason Luo   54   Executive Chairman, President and Class II Director
James Taylor   64   Chief Executive Officer and Class II Director
Hailiang (Jerry) Hu   48   Chief Operating Officer
Kev Adjemian   45   Chief Technical Officer
Albert Li   60   Chief Financial Officer and Treasurer
Benjamin Wu   49   General Counsel and Secretary
Shauna F. McIntyre   49   Class III Director
Richard N. Peretz   59   Class III Director
Brian M. Krzanich   60   Class III Director
David Boris   60   Class I Director
Neil Goldberg   66   Class I Director

 

16

 

 

The terms of the Class I Directors expire at the next annual meeting of stockholders in 2022, the terms of the Class II Directors expire at the annual meeting of stockholders in 2023, and the terms of the Class III Directors expire at the annual meeting of stockholders in 2024, or, in each case, when their respective successors are elected and qualified, or upon their earlier death, resignation, retirement or removal.

 

Effective upon the Closing, all executive officers and directors of Forum, other than David Boris and Neil Goldberg, resigned as executive officers and directors of Forum. For additional information regarding such executive officers and directors, see the disclosure in the Proxy Statement in the section entitled “Information about the Company – Management.”

 

Board Committees and Independence

 

Each of Ms. McIntyre and Messrs. Peretz, Krzanich, Goldberg, and Boris qualifies as an independent director according to the rules and regulations of the SEC and Nasdaq.

 

Effective upon the Closing, Messrs. Peretz, Krzanich and Goldberg were appointed to serve on the audit committee and Mr. Peretz was appointed to serve as the chair of the audit committee. Mr. Peretz qualifies as the “audit committee financial expert,” as that term is defined in Item 407(d)(5) of Regulation S-K. Each of Messrs. Peretz, Krzanich and Goldberg qualifies as an independent director according to the rules and regulations of the SEC and Nasdaq with respect to audit committee membership.

 

Effective upon the Closing, Ms. McIntyre and Messrs. Krzanich and Goldberg were appointed to serve on the compensation committee and Mr. Krzanich was appointed to serve as the chair of the compensation committee. Each of Ms. McIntyre and Messrs. Krzanich and Goldberg qualifies as an independent director according to the rules and regulations of the SEC and Nasdaq with respect to compensation committee membership.

 

Finally, effective upon the Closing, Ms. McIntyre and Messrs. Krzanich and Peretz were appointed to serve on the nominating and corporate governance committee and Ms. McIntyre was appointed to serve as the chair of the nominating and corporate governance committee.

 

Employment Agreements and Compensatory Arrangements

 

In connection with the execution of the Merger Agreement on December 10, 2020, ELM entered into employment agreements with each of Jason Luo, James Taylor, Hailiang (Jerry) Hu, and Benjamin Wu, which became effective upon the Closing. Pursuant to the terms of their respective employment agreements, Jason Luo serves as the Executive Chairman of ELM and the Company, James Taylor serves as the Chief Executive Officer of ELM and the Company, Hailiang (Jerry) Hu serves as the Chief Operating Officer of ELM and the Company, and Benjamin Wu serves as General Counsel and Secretary of ELM and the Company.

 

The terms of Mr. Luo’s employment agreement and Mr. Taylor’s employment agreement are described in the Proxy Statement in the section entitled “Executive Compensation – ELM – Employment Agreements” beginning on page 218, and this information is incorporated herein by reference.

 

17

 

 

Mr. Hu’s employment agreement provides for an annual base salary of $310,000, and Mr. Wu’s employment agreement provides for an annual base salary of $310,000. Other than with respect to these annual base salary amounts, the terms of Mr. Hu’s employment agreement and the terms of Mr. Wu’s employment agreement are identical to the terms of Mr. Taylor’s employment agreement in all material respects.

 

The descriptions of the employment agreements included above and incorporated herein do not purport to be complete and are qualified in their entirety by the terms and conditions of the employment agreements, which are included as Exhibits 10.11 through 10.14 to this Report and are incorporated herein by reference.

 

Information regarding the compensation of the other executive officers (Albert Li and Kev Adjemian) is included in the Proxy Statement in the section entitled “Certain Relationships and Related Transactions – ELM Related Party Transactions – Employment Agreements” beginning on page 239, which is incorporated herein by reference.

 

As discussed in additional detail below, the 2020 Incentive Plan (the “Incentive Plan”), in which the executive officers may participate, was approved by Forum’s stockholders at the Special Meeting. In accordance with the terms of the Merger Agreement, immediately upon the effectiveness of the Form S-8 registration statement to be filed with respect to the Incentive Plan, the Company will grant restricted stock units relating to 15,000,000 shares of common stock under the Incentive Plan’s initial share reserve to certain individuals (including executive officers). Such restricted stock units are to have vesting terms substantially similar to the Earnout Shares and are referred to herein and in the Proxy Statement as the “Earnout RSUs.” A description of the Incentive Plan is included in the Proxy Statement in the section entitled “Proposal No. 5 – The Incentive Plan Proposal” beginning on page 161, which is incorporated herein by reference. In addition, a description of the awards expected to be made to the executive officers under the Incentive Plan is included under the heading “2020 Incentive Plan” below. A copy of the Incentive Plan is filed as Exhibit 10.16 hereto and is incorporated herein by reference.

 

Finally, information regarding the Company’s plans and expectations with respect to executive compensation following the business combination is included in the Proxy Statement in the section entitled “Management After the Business Combination – Post-Combination Company Executive Compensation” beginning on page 216, which is incorporated herein by reference.

 

Director Compensation

 

As described in the Proxy Statement, the Company expects to pay its independent directors a cash retainer of $100,000 per year, payable in four equal quarterly installments. The Company anticipates compensating the Chairman of the Board and the chair of each committee an additional $15,000 per year.

 

In addition to the cash remuneration described above, the Company expects to issue to each independent director an award of restricted stock units valued at $100,000 per year. Such yearly award will be subject to the terms of the Incentive Plan, shall vest over a one-year period and shall be subject to the terms and conditions set forth in the award agreement evidencing the award.

 

This description of expected director compensation is qualified in its entirety by the form of Director Offer Letter attached hereto as Exhibit 10.15 and incorporated herein by reference.

 

18

 

 

As discussed in additional detail below, the Incentive Plan, in which the directors may participate, was approved by Forum’s stockholders at the Special Meeting.

 

2020 Incentive Plan

 

At the Special Meeting, the Incentive Plan became effective when the Forum stockholders approved the Incentive Plan and the reservation of 29,200,000 shares of common stock for issuance thereunder. The total number of shares reserved for issuance under the Incentive Plan will automatically increase on the first trading day of each calendar year by a number of shares equal to 1% of the total outstanding shares of common stock on the last day of the prior calendar year, unless the Board acts prior to January 1st of a given year to provide that there will be no such increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares than would otherwise occur. The maximum aggregate number of shares that may be issued through the exercise of incentive stock options granted under the Incentive Plan is 29,200,000 shares of common stock, which number will not be subject to the annual automatic share increase provisions described in the preceding sentence.

 

The Incentive Plan will be administered by a committee of at least two people appointed by the Board (or, if no such committee has been appointed, the Board) (the “Committee”). Eligible participants in the Incentive Plan include certain employees, directors, officers (including executive officers), advisors or consultants of the Company or its affiliates, as well as prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or its affiliates. The Committee has the authority under the Incentive Plan to designate participants and awards under the Incentive Plan.

 

As disclosed in the Proxy Statement, in accordance with the terms of the Merger Agreement, immediately upon the effectiveness of the Form S-8 registration statement to be filed with respect to the Incentive Plan, the Company will grant Earnout RSUs relating to 15,000,000 shares of common stock under the Incentive Plan’s initial share reserve to certain individuals (including executive officers). Such Earnout RSUs are to have vesting terms substantially similar to the Earnout Shares. Subject to the approval of the Board, such grants are expected to include the following:

 

Name and Position   Number of Earnout RSUs  
Jason Luo (Executive Chairman and President)     6,000,000  
James Taylor (CEO)     3,000,000  
Albert Li (CFO and Treasurer)     600,000  
Executive Group(1)     12,640,000  
Non-Executive Officer Employee Group     2,360,000  

 

(1) Includes the expected Earnout RSU grants to Messrs. Luo, Taylor, and Li identified above as well as the following additional Earnout RSU grants expected to be made to the Company’s executive officers relating to the following numbers of shares of common stock: Benjamin Wu (1,500,000 shares); Hailiang (Jerry) Hu (1,500,000 shares); and Kev Adjemian (40,000 shares).

 

 

19

 

 

Following the consummation of the business combination, when permitted by SEC rules, the Company intends to file with the SEC a registration statement on Form S-8 covering the common stock issuable under the Incentive Plan.

 

A more complete summary of the terms of the Incentive Plan is set forth in the Proxy Statement in the section entitled “Proposal No. 5 – The Incentive Plan Proposal” beginning on page 161 and is incorporated herein by reference. That summary and the foregoing description are qualified in their entirety by reference to the text of the Incentive Plan, which is filed as Exhibit 10.16 hereto and incorporated herein by reference.

 

The board of directors prior to Closing also approved the following forms of equity award agreements for use in making awards under the Incentive Plan:

 

● Form of Restricted Stock Unit Award Agreement (Earnout Shares);

 

● Form of Restricted Stock Unit Award Agreement (Time-Vesting); and

 

● Form of Restricted Stock Unit Award Agreement (Performance-Vesting).

 

These forms of equity award agreements are filed as Exhibits 10.17, 10.18 and 10.19 hereto, respectively, and are incorporated herein by reference.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

The information set forth in Item 3.03 of this Report is incorporated by reference into this Item 5.03.

 

Item 5.05. Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

 

In connection with the business combination, on June 25, 2021, the board of directors approved and adopted a new Code of Ethics and Business Conduct applicable to all employees, officers, and directors of the Company. A copy of the Code of Ethics and Business Conduct can be found in the Investors section of the Company’s website at https://ir.electriclastmile.com/governance/governance-documents/default.aspx.

  

Item 5.06. Change in Shell Company Status.

 

As a result of the business combination, the Company ceased to be a shell company as of the Closing. The material terms of the business combination are described in the Proxy Statement in the section entitled “Proposal No. 1 — The Business Combination Proposal” beginning on page 111, in the information set forth under “Introductory Note” above, and in the information set forth under Item 2.01 in this Report, each of which is incorporated herein by reference.

 

Item 9.01. Financial Statement and Exhibits.

 

(a)-(b) Financial Statements of Businesses Acquired and Pro Forma Financial Information.

 

(a) Information responsive to Item 9.01(a) of Form 8-K is set forth in the financial statements included in the Proxy Statement beginning on page F-1.

 

The combined carve-out financial statements of EVAP Operations as of and for the years ended December 31, 2020 and 2019, the related notes, and the report of independent registered public accounting firm thereto are set forth in the Proxy Statement beginning on page F-59 and are incorporated herein by reference.

 

The condensed combined carve-out financial statements of EVAP Operations as of and for the three months ended March 31, 2021 and 2020 and the related notes thereto are set forth in the Proxy Statement beginning on page F-45 and are incorporated herein by reference.

 

20

 

 

The financial statements of ELM as of December 31, 2020, for the period from August 20, 2020 (inception) through December 31, 2020, and as of and for the three months ended March 31, 2021, the related notes, and the report of the independent registered public accounting firm thereto are set forth in the Proxy Statement beginning on page F-77 and are incorporated herein by reference.

 

The consolidated financial statements of Forum (i) as of December 31, 2020 and 2019, (ii) as of March 31, 2021, (iii) for the three months ended March 31, 2021, (iv) for the period from June 25, 2019 (date of inception) through December 31, 2019, (v) for the year ended December 31, 2020, and (vi) the related notes and report of independent registered public accounting firm thereto are set forth in the Proxy Statement beginning on page F-3 and are incorporated herein by reference.

 

(b) The unaudited pro forma condensed combined financial information of the Company for the year ended December 31, 2020 and as of and for the three months ended March 31, 2021 is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.

 

(d) Exhibits.

 

Exhibit No.   Document
2.1†   Agreement and Plan of Merger, dated as of December 10, 2020, by and among Forum Merger III Corporation, ELMS Merger Corp., Electric Last Mile, Inc. and Jason Luo, in the capacity as the initial stockholder representative thereto (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-39457), filed with the SEC on December 11, 2020).
2.2   First Amendment to the Agreement and Plan of Merger, dated as of May 7, 2021, by and among Forum Merger III Corporation, ELMS Merger Corp., Electric Last Mile, Inc. and Jason Luo (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-39457), filed with the SEC on May 7, 2021).
3.1   Third Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form 8-A/A (File No. 001-39457), filed with the SEC on June 25, 2021).
3.2   Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the Registration Statement on Form 8-A/A (File No. 001-39457), filed with the SEC on June 25, 2021).
4.1   Specimen Warrant Certificate (incorporated herein by reference to Exhibit 4.3 to Forum’s Registration Statement on Form S-1 (File No. 333-240171), filed with the SEC on August 7, 2020).
4.2   Warrant Agreement, dated August 18, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-39457), filed with the SEC on August 21, 2020).
10.1   Form of Subscription Agreement (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-39457), filed with the SEC on December 11, 2020).

 

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10.2   Form of Convertible Promissory Note of Electric Last Mile, dated December 10, 2020 (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 000-39457), filed with the SEC on December 11, 2020).
10.3†*   Escrow Agreement, dated June 25, 2021, by and among Forum Merger III Corporation, Jason Luo, in the capacity as the initial stockholder representative, Forum Investors III LLC, and Continental Stock Transfer & Trust Company, as escrow agent.
10.4*   Director Nomination Agreement, dated June 25, 2021, by and between Electric Last Mile Solutions, Inc. and Forum Investors III LLC.
10.5   Amended and Restated Registration Rights Agreement, dated June 25, 2021, by and among Forum Merger III Corporation and the parties listed on the signature pages thereto (incorporated herein by reference to Exhibit 10.1 to the Registration Statement on Form 8-A/A (File No. 001-39457), filed with the SEC on June 25, 2021).
10.6*   Agreement of Purchase and Sale, dated April 9, 2021, between SF Motors, Inc. DBA SERES and Electric Last Mile, Inc.
10.7*   Exclusive IP License Agreement, dated April 9, 2021, by and between SF Motors, Inc., d/b/a SERES and Electric Last Mile, Inc.
10.8*   Supply Agreement, dated April 9, 2021, by and between Chongqing Sokon Motors (Group) Imp. & Exp. Co., Ltd. and Electric Last Mile, Inc.
10.9*   Land Contract, dated June 25, 2021, by and between SF Motors, Inc. DBA SERES and Electric Last Mile, Inc.
10.10*   Form of Promissory Note in the Original Principal Amount of $43,620,689.66, dated June 25, 2021, by Electric Last Mile, Inc. in favor of SF Motors, Inc. DBA SERES.
10.11††*   Employment Agreement, dated December 10, 2020 and effective as of June 25, 2021, by and between Jason Luo and Electric Last Mile, Inc.
10.12††*   Employment Agreement, dated December 10, 2020 and effective as of June 25, 2021, by and between James Taylor and Electric Last Mile, Inc.
10.13††*   Employment Agreement, dated December 10, 2020 and effective as of June 25, 2021, by and between Hailiang Hu and Electric Last Mile, Inc.
10.14††*   Employment Agreement, dated December 10, 2020 and effective as of June 25, 2021, by and between Benjamin Wu and Electric Last Mile, Inc.
10.15*   Form of Director Offer Letter.
10.16††*   2020 Incentive Plan.
10.17††*   Form of Restricted Stock Unit Award Agreement (Earnout Shares).
10.18††*   Form of Restricted Stock Unit Award Agreement (Time-Vesting).
10.19††*   Form of Restricted Stock Unit Award Agreement (Performance-Vesting).
10.20   Letter Agreement, dated as of May 7, 2021, by Forum Merger III Corporation (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-39457), filed with the SEC on May 7, 2021).
21.1*   List of Subsidiaries
99.1*   Unaudited Pro Forma Condensed Combined Financial Information of the Company for the year ended December 31, 2020 and as of and for the three months ended March 31, 2021.

 

 

† Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act, as amended, for any schedule or exhibit so furnished.

†† Indicates a management contract or compensatory plan.

* Filed herewith.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: June 30, 2021

 

  ELECTRIC LAST MILE SOLUTIONS, INC.
     
  By:

/s/ James Taylor

  Name:  James Taylor
  Title: Chief Executive Officer

 

 

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Exhibit 10.3

 

Execution Version

 

ESCROW AGREEMENT

 

This ESCROW AGREEMENT (this “Agreement”) is made and entered into as of June 25, 2021, by and among Forum Merger III Corporation, a Delaware corporation, (“Parent”), Jason Luo, in the capacity as the initial Stockholder Representative (acting on behalf of the Stockholders and not in his personal capacity) under the Merger Agreement (as defined below) (“Stockholder Representative” and, together with the “Parent”, sometimes referred to individually as a “Party” and collectively as the “Parties”), solely for Section 2(c) and Article XIII herein, Forum Investors III LLC, a Delaware limited liability company (“Sponsor”), and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement (as defined herein).

 

WHEREAS, Parent, ELMS Merger Corp., a Delaware corporation and a wholly owned subsidiary of Parent, Electric Last Mile, Inc., a Delaware corporation (the “Company”) and Stockholder Representative have entered into that certain Agreement and Plan of Merger, dated as of December 10, 2020 (together with all exhibits, schedules and annexes thereto, as amended, modified or supplemented from time to time in accordance with its terms, the “Merger Agreement”), pursuant to which the parties thereto have agreed to establish an escrow arrangement for the purposes set forth therein;

 

WHEREAS, in accordance with Section 2.11(c) of the Merger Agreement, Parent shall deposit Two Hundred Fifty Thousand (250,000) shares of Parent Common Stock (the “Adjustment Escrow Shares”) and Five Million (5,000,000) shares of Parent Common Stock (the “Earnout Shares”) into an escrow account (the “Escrow Account”) to be held in accordance with the terms of the Merger Agreement and this Agreement;

 

WHEREAS, the Adjustment Escrow Shares and the Earnout Shares shall be held in escrow by the Escrow Agent pursuant to the terms of this Agreement and the Merger Agreement;

 

WHEREAS, pursuant to Section 8.1 of the Merger Agreement, the Stockholder Representative is appointed as the representative, true and lawful attorney-in-fact and agent for all of the Stockholders for all purposes set forth therein; and

 

WHEREAS, the Parties desire to constitute and appoint the Escrow Agent as escrow agent hereunder, and the Escrow Agent is willing to assume and perform the duties and obligations of the escrow agent pursuant to the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

 

1. Appointment. The Parties hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment and agrees to act as Escrow Agent in accordance with the terms and conditions set forth herein.

 

 

 

 

2. Deposit, Delivery and Receipt of Escrow Shares; Other Actions.

 

(a) At the Closing, Parent shall deliver, or cause to be delivered (unless delivered previously) the Adjustment Escrow Shares and the Earnout Shares to the Escrow Agent, to be held in the Escrow Account. The Escrow Agent will hold the Adjustment Escrow Shares and the Earnout Shares, together with any dividend or other distribution paid on such Adjustment Escrow Shares or Earnout Shares, as applicable (the “Escrow Dividends”), in escrow for the Stockholder Representative, or the Parent, as applicable, and will administer and disburse the Adjustment Escrow Shares, the Earnout Shares and the Escrow Dividends, if any, in accordance with the terms of this Agreement and the Merger Agreement.

 

(b) The Escrow Agent will hold the Adjustment Escrow Shares and the Earnout Shares as a book-entry position registered in the name of “Continental Stock Transfer & Trust Company, as Escrow Agent under the Escrow Agreement, dated June 25, 2021” until (i) any such Adjustment Escrow Shares are to be (x) released to the Stockholders Representative for further delivery to the Stockholders, or (y) otherwise released to Parent, in each case, in accordance with the terms of this Agreement and the Merger Agreement, or (ii) any such Earnout Shares are to be (x) released to the Stockholders Representative for further delivery to the Stockholders, or (y) otherwise released to Parent, in each case, in accordance with the terms of this Agreement and the Merger Agreement.

 

(c) When all or any portion of the Adjustment Escrow Shares or the Earnout Shares are required to be released under the Merger Agreement, the Parties and Sponsor shall deliver joint written instructions to the Escrow Agent in accordance with the security procedures set forth in Section 11 and executed by Parent, the Stockholder Representative and Sponsor (a “Release Notice”). The Parties agree that neither the Adjustment Escrow Shares nor the Earnout Shares shall be subject to attachment by any creditor (including any creditor of any party to the Merger Agreement).

 

(d) The Escrow Agent does not own or have any interest in the Adjustment Escrow Shares or the Earnout Shares or any Escrow Dividends, but is serving as escrow holder, having only possession thereof and agreeing to hold and distribute the Adjustment Escrow Shares or the Earnout Shares and any Escrow Dividends in accordance with the terms and conditions set forth herein.

 

(e) With respect to the Adjustment Escrow Shares, Parent shall retain all voting and economic rights with respect to such Adjustment Escrow Shares while such Adjustment Escrow Shares remain deposited with the Escrow Agent for so long as such Adjustment Escrow Shares are held by the Escrow Agent, the Escrow Agent shall vote the Adjustment Escrow Shares solely as directed in writing by Parent.

 

(f) Any Escrow Dividends shall be distributed to and held by the Escrow Agent, and shall be disbursed by the Escrow Agent together with and when the Adjustment Escrow Shares or the Earnout Shares, as applicable, on which such Escrow Dividend was distributed are released, to the same person or entity to whom such Adjustment Escrow Shares or Earnout Shares, as applicable, are released in accordance with the terms of this Agreement. For the avoidance of doubt, any release or distribution of the Adjustment Escrow Shares or the Earnout Shares in accordance with this Agreement shall also be understood to include a distribution of the Escrow Dividends, if any, with respect to such released Adjustment Escrow Shares or Earnout Shares.

 

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(g) Unless otherwise instructed in writing jointly by the Parties, the Escrow Agent shall hold the Escrow Dividends in a “noninterest-bearing deposit account” insured by the Federal Deposit Insurance Corporation (“FDIC”) to the applicable limits.

 

(h) The Escrow Agent shall have no duty, responsibility or obligation to invest any Escrow Dividends held by it hereunder other than in accordance with this Section 2.

 

3. Release Notices.

 

(a) The Escrow Agent shall disburse the Adjustment Escrow Shares and the Earnout Shares only in accordance with the Release Notice. Each such Release Notice shall set forth in reasonable detail the event giving rise to the requested release and the specific release instructions with respect thereto (including the number of Adjustment Escrow Shares or Earnout Shares to be released and the identity of the person to whom they should be released).

 

(b) If the Adjustment Escrow Shares or the Earnout Shares are to be released to the Stockholders (as opposed to a release to Parent), the specified number of Adjustment Escrow Shares or Earnout Shares, as applicable, (and the applicable portion of the Escrow Dividends) shall be released to the Stockholder Representative for further delivery to the applicable Stockholders as specified by the Stockholder Representative in the Release Notice (in which case, Parent shall have no liability for the accuracy of, or compliance with the terms of the Merger Agreement, or any other document, of such instructions).

 

(c) If the Merger Agreement requires that all or any portion of the Adjustment Escrow Shares or the Earnout Shares are to be released to Parent, then the Release Notice shall specify the number of Adjustment Escrow Shares and the Earnout Shares, as applicable, to be released to Parent (and the applicable portion of the Escrow Dividends).

 

(d) In the event an equitable adjustment is required under Section 4(c) below, any Release Notice shall also include reasonably detailed information with respect to such equitable adjustment.

 

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(e) During the period from the date of this Agreement until the date upon which all of the Adjustment Escrow Shares and the Earnout Shares have been released, Parent and the Stockholder Representative agree to promptly and jointly issue all applicable Release Notices upon the occurrence of each release event, as such events are described in the Merger Agreement (and in accordance with Section 4). For the avoidance of doubt, in the event of a conflict between the terms of this Agreement and the Merger Agreement, then, as between Parent and the Stockholder Representative, the terms of the Merger Agreement shall control and the aforementioned parties shall use reasonable best efforts to effect an amendment to this Agreement (including to Section 4 below).

 

(f) Within five (5) Business Days following the receipt of any Release Notice and subject to the receipt of required documentation for compliance with applicable anti-money laundering requirements, the Escrow Agent shall release and deliver to the person or persons designated in the applicable Release Notice the number of Adjustment Escrow Shares or Earnout Shares set forth in such Release Notice by transfer of the relevant Adjustment Escrow Shares or Earnout Shares into the securities accounts designated in such Release Notice.

 

(g) The Escrow Agent shall be entitled to rely upon, and be held harmless for such reliance, on any Release Notice for any action taken, suffered or omitted to be taken in good faith by it. The Escrow Agent shall have no obligation to determine whether a release event has occurred or is contemplated to occur under the Merger Agreement, this Agreement (including, without limitation, under Section 4), or any other document.

 

(h) For purposes of this Agreement, “Business Day” shall mean any day other than (a) a Saturday or a Sunday; (b) a day on which banking and savings and loan institutions are authorized or required by Law to be closed in New York City, New York; or (c) the location of the Escrow Agent’s offices in Section 10 are authorized or required by law to close.

 

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4. Disbursement and Termination. The Parties shall act in accordance with, and the Escrow Agent shall hold and release the Adjustment Escrow Shares or the Earnout Shares as follows:

 

(a) Earnout Release. If, during the thirty-six (36) month period following the Closing Date (the “Earnout Period”), the closing price per share of Parent Common Stock on any twenty (20) trading days in any thirty (30) consecutive day trading period (i) equals or exceeds Fourteen Dollars ($14.00) (the “First Share Price Trigger”), or (ii) equals or exceeds Sixteen Dollars ($16.00) (the “Second Share Price Trigger” and, together with the First Share Price Trigger, each a “Share Price Trigger” and collectively, the “Share Price Triggers”) then, for each Share Price Trigger that is achieved, Two Million Five Hundred Thousand (2,500,000) shares of Parent Common Stock will be released from the Escrow Account. Upon receipt of a Release Notice with respect to any Earnout Shares, the Escrow Agent shall, promptly after receipt of such Release Notice, disburse such Earnout Shares to the Stockholder Representative, as applicable, in accordance with such Release Notice.

 

(i) If, during the Earnout Period, there is a qualifying Change of Control in accordance with Section 2.10 of the Merger Agreement, then any Earnout Release that has not previously been released from escrow to the Stockholder Representative (whether or not previously earned) shall be deemed earned (and the applicable Share Price Trigger(s) achieved, as applicable), and Parent and the Stockholder Representative shall jointly deliver a Release Notice directing the Escrow Agent to release from the Escrow Account to Stockholder Representative a number of shares equal to the remaining Earnout Release(s) within ten (10) Business Days following the date of such qualifying Change of Control.

 

(ii) If, during the Earnout Period, there is a Final Determination in accordance with Section 2.10 of the Merger Agreement that the Stockholders are entitled to receive an Earnout Release, then Parent and the Stockholder Representative shall jointly deliver a Release Notice directing the Escrow Agent to release from the Escrow Account to Stockholder Representative a number of shares equal to such Earnout Release within ten (10) Business Days following the date on which the applicable Share Price Trigger was met or exceeded.

 

(iii) If, pursuant to Section 2.10 of the Merger Agreement, it is finally determined that the Stockholders are not entitled to or eligible to receive any further Earnout Releases, Parent and Stockholder Representative shall jointly direct the Escrow Agent to release from the Escrow Account to Parent for immediate cancellation of all such Earnout Shares that have not been released.

 

(b) Escrow Termination Date. Subject to the provisions of Section 8, this Agreement shall terminate after all of the Adjustment Escrow Shares and the Earnout Shares and Escrow Dividends have been released from the Escrow Account.

 

(c) Records. The Escrow Agent shall keep proper books of record and account in which full and correct entries shall be made of all release activity in the Escrow Account.

 

5. Escrow Agent.

 

(a) The Escrow Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied. The Escrow Agent shall not have any fiduciary, partnership or joint venture relationship with any Party or any other person or entity arising out of or in connection with this Agreement.

 

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(b) The Escrow Agent shall not be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document among the Parties, in connection herewith, if any, including without limitation the Merger Agreement, nor shall the Escrow Agent be required to determine if any person or entity has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Agreement. In the event of any conflict between the terms and provisions of this Agreement, those of the Merger Agreement, any schedule or exhibit attached to this Agreement, or any other agreement among the Parties, the terms and conditions of this Agreement shall govern and control in all respects relating to the Escrow Agent, but in every other respect involving the parties and beneficiaries of any such other agreement, the other agreement shall control.

 

(c) The Escrow Agent may rely upon, and shall not be liable for acting or refraining from acting upon, any Release Notice or other written notice, document, instruction or request furnished to it hereunder and reasonably believed by it to be genuine and to have been signed or presented by the proper Party or Parties without inquiry and without requiring substantiating evidence of any kind. The Escrow Agent shall not be liable to any Party, any beneficiary, or other person or entity for refraining from acting upon any Release Notice or other written notice, document, instruction or request furnished to it hereunder setting forth, claiming, containing, objecting to, or related to the transfer or distribution of the Adjustment Escrow Shares or the Earnout Shares, or any portion thereof, unless such Release Notice or other written notice, document, instruction or notice shall have been delivered to the Escrow Agent in accordance with Section 11 below and the Escrow Agent has been able to satisfy any applicable security procedures as may be required hereunder and as set forth in Section 11. The Escrow Agent shall not be under any duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Escrow Agent shall have no duty to solicit any receipt of the Adjustment Escrow Shares or the Earnout Shares which may be due to it or the Escrow Account, nor shall the Escrow Agent have any duty or obligation to confirm or verify the accuracy or correctness of any number or class of Adjustment Escrow Shares or Earnout Shares deposited with it hereunder.

 

(d) The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in good faith except to the extent that a final adjudication of a court of competent jurisdiction determines that the Escrow Agent’s fraud, gross negligence or willful misconduct was the primary cause of any loss to either Party. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through affiliates or agents, and the Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by any such attorney or agent in good faith, absent fraud, gross negligence, bad faith or willful misconduct (each as determined by a final, nonappealable judgment of a court of competent jurisdiction) in the selection and continued employment thereof. The Escrow Agent may consult with counsel, accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with, or in reasonable reliance upon, the advice or opinion of any such counsel, accountants or other skilled persons. In the event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action, and its sole obligation shall be to keep safely all property held in escrow until it shall be given a direction in writing by the Parties which eliminates such ambiguity or uncertainty to the satisfaction of Escrow Agent or by a final and non-appealable order or judgment of a court of competent jurisdiction. To the extent practicable, the Parties agree to pursue any redress or recourse in connection with any dispute arising under the Merger Agreement (other than with respect to a dispute involving the Escrow Agent) without making the Escrow Agent a party to the same. Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, incidental, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

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6. Succession.

 

(a) The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving thirty (30) days advance notice (pursuant to Section 10) in writing of such resignation to the Parties specifying a date when such resignation shall take effect. By delivery of joint written instructions by the Parties to the Escrow Agent, the Parties shall have the right to terminate their appointment of the Escrow Agent, or successor escrow agent, as Escrow Agent, upon thirty (30) days’ notice to the Escrow Agent. If the Escrow Agent shall resign, be removed or otherwise become incapable of acting, the Parties shall appoint a successor to be the Escrow Agent. If the Parties have failed to appoint a successor escrow agent prior to the expiration of thirty (30) days after giving notice of such removal or following the receipt of the notice of resignation or incapacity, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent within the relevant jurisdiction or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. The Escrow Agent’s sole responsibility after such thirty (30) day notice period expires shall be to hold the Adjustment Escrow Shares and the Earnout Shares (without any obligation to reinvest the same) and to deliver the same to a designated substitute escrow agent as jointly instructed in writing by the Parties, if any, or in accordance with the directions of a final order or judgment of a court of competent jurisdiction, at which time of delivery, the Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Section 8 hereunder. The Escrow Agent shall have the right to withhold monies or property in an amount equal to any amount due and then owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent that the Parties are obligated to indemnify or reimburse the Escrow Agent for pursuant to this Agreement in connection with the termination of this Agreement, so long as the Escrow Agent has previously submitted a written invoice in respect thereof to the Parties that the Parties have not paid within thirty (30) days of receipt of such invoice.

 

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(b) Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business may be transferred, shall be the Escrow Agent under this Agreement without further action on the part of any party hereto. The Escrow Agent shall promptly notify the Parties in the event this occurs.

 

(c) Every successor escrow agent appointed hereunder shall execute, acknowledge and deliver to its predecessor, and also to the Parties, an instrument in writing accepting such appointment hereunder, and thereupon such successor escrow agent, without any further action, shall become fully vested with all the rights, immunities and powers and shall be subject to all of the duties and obligations, of its predecessor; and every predecessor escrow agent shall deliver all property and moneys held by it hereunder to such successor escrow agent, at which time of delivery the Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Section 8.

 

7. Compensation and Reimbursement. Parent agrees to (a) pay the Escrow Agent upon execution of this Agreement, and from time to time thereafter, all reasonable compensation for the services to be rendered hereunder by the Escrow Agent as described in Schedule 2 attached hereto, and (b) pay or reimburse the Escrow Agent upon request for all reasonable, out-of-pocket and documented expenses, disbursements and advances, including, without limitation, reasonable attorney’s fees and expenses, incurred or made by it in connection with the performance, modification and termination of this Agreement.

 

8. Indemnity.

 

(a) Subject to Section 8(c) below, the Escrow Agent shall be liable for any and all losses, damages, claims, costs, charges, penalties and related interest, counsel fees and expenses, payments, expenses and liability (collectively, “Losses”), only to the extent such Losses are determined by a court of competent jurisdiction to be a result of its own fraud, gross negligence, bad faith or willful misconduct; provided, however, that any liability of the Escrow Agent will be limited in the aggregate to the aggregate value of the Adjustment Escrow Shares, the Earnout Shares and the Earnout Dividends deposited with the Escrow Agent.

 

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(b) The Parties shall jointly and severally indemnify and hold the Escrow Agent harmless from and against, and the Escrow Agent shall not be responsible for, any and all Losses arising out of or attributable to the Escrow Agent’s duties under this Agreement or this appointment, including the reasonable, out-of-pocket and documented costs and expenses of defending itself against any Losses or enforcing this Agreement (collectively, “Agent Claims”), except to the extent that such Losses are determined by a court of competent jurisdiction to be a result of the Escrow Agent’s own fraud, gross negligence, bad faith or willful misconduct. Notwithstanding the foregoing, and except as provided in Section 7, as between themselves, the Parties agree that any Agent Claims payable hereunder shall be paid (or reimbursed, as applicable): (a) in the case that the Agent Claim is not attributable to actions or inactions of any particular Party, by Parent; and (b) in the event that the Agent Claim is attributable to the actions or inactions of a certain Party, by such Party (and such Party shall reimburse the other Parties, in the event that such other Party(ies) has made indemnification payments under this Section 8(b) in respect of such Agent Claim).

 

(c) Notwithstanding anything in this Agreement to the contrary, none of the Parties or the Escrow Agent shall be liable for any incidental, punitive, indirect, special or consequential damages of any nature whatsoever, including, but not limited to, loss of anticipated profits, occasioned by a breach of any provision of this Agreement even if apprised of the possibility of such damages.

 

(d) In order that the indemnification provisions contained in this Section 8 shall apply, upon the assertion of a claim for which one party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion in writing after it becomes aware, and shall keep the other party advised with respect to all developments concerning such claim; provided, that failure to give prompt notice shall not relieve the indemnifying party of any liability to the indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such action has been materially prejudiced by the indemnified party’s failure to timely give such notice. The indemnifying party shall have the option to participate with the indemnified party in the defense of such claim or to defend against said claim in its own name or the name of the indemnified party unless such claim is (i) brought by the indemnified party or (ii) the indemnified party reasonably determines that there may be a conflict of interest between the indemnified party and the indemnifying party in the defense of such claim and the indemnified party does in fact assume the defense. The indemnified party shall in no case confess any claim, make any compromise or take any action adverse to the indemnifying party in any case in which the indemnifying party may be required to indemnify it, except with the indemnifying party’s prior written consent, which shall not be unreasonably withheld or delayed.

 

(e) For the avoidance of doubt, this Section 8 shall survive termination of this Agreement or the resignation, replacement or removal of the Escrow Agent for any reason.

 

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9. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.

 

(a) Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires the Escrow Agent to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, the Parties acknowledge that Section 326 of the USA PATRIOT Act and the Escrow Agent’s identity verification procedures require the Escrow Agent to obtain applicable information which is required to confirm the Parties’ identity including without limitation name, address and organizational documents (collectively, “Identifying Information”). The Parties agree to provide the Escrow Agent with and consent to the Escrow Agent obtaining from third parties any Identifying Information required as a condition of opening an account with or using any service provided by the Escrow Agent for the purposes of this Agreement.

 

(b) Certification and Tax Reporting. The Parties have provided, or promptly following the date hereof will provide, the Escrow Agent with their respective fully executed Internal Revenue Service (“IRS”) Form W-8 or Form W-9, as applicable. The Escrow Agent shall make such reports to the applicable tax authorities as directed by Parent and shall have no obligation under this Agreement to make any other reports with respect to taxes. If required by law, the Escrow Agent shall withhold any taxes it deems appropriate in the absence of proper tax documentation or as required by law, and shall remit such taxes to the appropriate authorities.

 

10. Notices. All notices, demands and other communications given pursuant to the terms and provisions hereof shall be in writing, except for communications from the Parties setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution of funds, including but not limited to funds transfer instructions (all of which shall be specifically governed by Section 11 below), shall be deemed effective on the date of receipt, and may be sent by:

 

(a) by facsimile or other electronic submission (including e-mail);

 

(b) by overnight courier or delivery service; or

 

(c) by certified or registered mail, return receipt requested; to the appropriate notice address set forth below or at such other address as any party hereto may have furnished to the other parties hereto in writing by registered mail, return receipt requested.

 

If to the Stockholder Representative:

 

Jason Luo

[Address]

E-mail: jluo@electriclastmile.com

 

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With a copy (which shall not constitute notice) to:

 

Foley & Lardner LLP

111 Huntington Avenue

Suite 2500

Boston, MA 02199

Attention: Paul D. Broude

E-mail: pbroude@foley.com

 

If to Parent:

Forum Merger III Corporation

1615 South Congress Avenue,

Suite 103

Delray Beach, FL 33445

Attention: Marshall Kiev

David Boris

E-mail: mk@mkcapitalpartners.com

david@forummerger.com

 

with a copy (which shall not constitute notice) to:

 

White & Case LLP

1221 Avenue of the Americas

New York, New York 10020

Attention: Joel Rubinstein

E-mail: joel.rubinstein@whitecase.com

 

and

 

White & Case LLP

111 South Wacker Drive, Suite 5100

Chicago, IL 60606

Attention: Gary Silverman

E-mail: gary.silverman@whitecase.com

 

If to the Escrow Agent:

 

Continental Stock Transfer & Trust Company

Attention: Henry Farrell

Telephone No.: 212-845-3277

E-mail: hfarrell@contentialstock.com

 

11

 

 

11. Security Procedures.

 

(a) Notwithstanding anything to the contrary as set forth in this Agreement, any instructions setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution of the Adjustment Escrow Shares or the Earnout Shares, including but not limited to any such instructions that may otherwise be set forth in a Release Notice or other written notice, document, instruction or request permitted pursuant to Section 4 of this Agreement, may be given to the Escrow Agent only by confirmed facsimile or other electronic transmission (including e-mail) and no instruction for or related to the transfer or distribution of the Adjustment Escrow Shares or the Earnout Shares, or any portion thereof, shall be deemed delivered and effective unless the Escrow Agent actually shall have received such instruction by facsimile or other electronic transmission (including e-mail) at the number or e-mail address provided to the Parties by the Escrow Agent in accordance with Section 10 and as further evidenced by a confirmed transmittal to that number or e-mail address.

 

(b) In the event transfer instructions are so received by the Escrow Agent by facsimile or other electronic submission (including e-mail), the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 1 hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to reach the Stockholder Representative after a reasonable amount of time, the Escrow Agent is hereby authorized both to receive written instructions from and seek written confirmation of such instructions by any one or more of Parent’s executive officers (“Executive Officers”), as the Escrow Agent may select. Such Executive Officer shall deliver to the Escrow Agent a fully executed incumbency certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer as confirmation on behalf of the Stockholder Representative.

 

(c) Notwithstanding anything to the contrary herein, the Escrow Agent shall only deliver or distribute the Adjustment Escrow Shares and the Earnout Shares upon receipt of and in accordance with the delivery instructions set forth in the applicable Release Notice.

 

(d) The Parties acknowledge that the security procedures set forth in this Section 11 are commercially reasonable.

 

12. Compliance with Court Orders. In the event that any escrow or trust property shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders, judgments or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order, judgment or decree, it shall not be liable to any of the parties hereto or to any other person, entity, firm or corporation, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

 

12

 

 

13. Miscellaneous.

 

(a) Amendment. Except for transfer instructions as provided in Section 11, the provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by the parties hereto, including Sponsor.

 

(b) Assignment. Neither this Agreement nor any right, obligation or interest hereunder may be assigned in whole or in part by any party hereto, except as provided in Section 6, without the prior written consent of all of the other parties hereto; provided that Sponsor may transfer and assign this Agreement and its rights, obligations and interests hereunder to Marshall Kiev, David Boris or any of their respective Affiliates in connection with the dissolution or other winding up of Sponsor.

 

(c) Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of New York, without regard to principles of law (including conflicts of law) that will require the application of the laws of any other jurisdiction. Each party to this Agreement irrevocably waives any objection on the grounds of venue, forum non-conveniens, lack of jurisdiction or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of any court of the State of New York or United States federal court located in the State of New York. The parties to this Agreement further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement.

 

(d) Force Majeure. No party to this Agreement is liable to any other party hereto for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of acts reasonably beyond its control including, without limitation, acts of God, fire, terrorism, disease, pandemic, floods, strikes, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest; provided, that the Escrow Agent shall use commercially reasonable efforts to resume performance as soon as practicable. If any such act occurs, then the Escrow Agent shall give, as promptly as practicable, written notice to the Parties, stating the nature of such act and any action being taken to avoid or minimize its effect.

 

13

 

 

(e) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Agreement may be transmitted by facsimile or pdf (including via e-mail). A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature, and will be binding and effective upon such party when a counterpart shall have been signed by each of the parties hereto and delivered to the other parties hereto.

 

(f) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable by reason of any applicable law of a jurisdiction, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

(g) Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof. All references to currency, monetary values and dollars set forth herein shall mean U.S. dollars. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

 

(h) Enforcement, Remedies and Compliance. A person or entity who is not a party to this Agreement shall have no right to enforce any term of this Agreement. Each Party represents, warrants and covenants that each document, notice, instruction or request provided by such Party to the Escrow Agent shall comply with applicable laws and regulations. Where, however, the conflicting provisions of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by law, to the end that this Agreement shall be enforced as written. Except as expressly provided in Section 8 above, nothing in this Agreement, whether express or implied, shall be construed to give to any person or entity other than the Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in respect of this Agreement or any funds escrowed hereunder. Except as otherwise expressly provided herein or as between the applicable Parties in the Merger Agreement, any and all remedies herein expressly conferred upon a party hereto will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party hereto of any one remedy will not preclude the exercise of any other remedy.

 

14

 

 

(i) Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY HERETO HEREBY FURTHER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13(i).

 

(j) Publicity. Except as may be required by applicable law (including securities laws), court order, regulatory authority (including a securities authority) or as shall be required or desirable to be presented by a party to any tax authority of such party, none of the parties hereto shall disclose, issue a news release, public announcement, advertisement, or other form of publicity concerning the existence of this Agreement or the services to be provided hereunder without obtaining the prior written approval of the other parties hereto, which may be withheld in the other parties’ sole discretion; provided that the Escrow Agent may use Parent’s name in its customer lists or otherwise as required by applicable law or regulation.

 

(k) Successors. All the covenants and provisions of this Agreement by or for the benefit of the parties hereto shall bind and inure to the benefit of their respective permitted successors and assigns hereunder.

 

15

 

 

(l) Third Party Beneficiaries. The provisions of this Agreement are intended to benefit only the parties hereto and their respective permitted successors and assigns. No rights shall be granted to any other person or entity by virtue of this Agreement, and there are no third party beneficiaries hereof.

 

(m) Survival. Notwithstanding anything to the contrary, all provisions regarding indemnification, liability and limits thereon, compensation and expenses (with respect to any fees or expenses payable in respect of the period preceding the termination or expiry of this Agreement) and confidentiality shall survive the termination or expiration of this Agreement. For the avoidance of doubt, Section 8, Section 6, Section 7 (with respect to any outstanding fees or expenses payable in respect of the period preceding the termination or expiry of this Agreement) and Section 13 shall survive termination of this Agreement or the resignation, replacement or removal of the Escrow Agent for any reason.

 

(n) Merger of Agreement. This Agreement together with the Merger Agreement constitutes the entire agreement between the parties hereto related to the Adjustment Escrow Shares and the Earnout Shares and supersedes any prior agreement with respect to the subject matter hereof, whether oral or written.

 

(o) No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

* * * * *

 

16

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set forth above.

 

FORUM MERGER III CORPORATION

 
   
By: /s/ David Boris  
Name:  David Boris  
Title: Co-Chief Executive Officer and Chief Financial Officer  

 

STOCKHOLDER REPRESENTATIVE:    
   
By: /s/ Jason Luo                                   
Name:  Jason Luo  

 

CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS ESCROW AGENT    
   
By: /s/ Henry Farrell  
Name:  Henry Farrell  
Title: Vice President  

 

FORUM INVESTORS III LLC    
   
By: Forum Capital Management III LLC, as managing member  
By: /s/ David Boris  
Name:  David Boris  
Title: Co-Chief Executive Officer and Chief Financial Officer  

 

[Signature page to Escrow Agreement]

 

 

 

Exhibit 10.4

 

DIRECTOR NOMINATION AGREEMENT

 

THIS DIRECTOR NOMINATION AGREEMENT (this “Agreement”) is made and entered into as of June 25, 2021 (the “Effective Time”), by and among Electric Last Mile Solutions, Inc., a Delaware corporation (f/k/a Forum Merger III Corporation) (the “Company”), and Forum Investors III LLC, a Delaware limited liability company (the “Sponsor”). Capitalized terms used but not otherwise defined in this Agreement have the respective meanings given to them in the Merger Agreement (as defined below).

 

WHEREAS, the Company and certain of its affiliates have consummated the merger and other transactions (collectively, the “Transactions”) contemplated by the Agreement and Plan of Merger, dated as of December 10, 2020, by and among the Company, ELMS Merger Corp., a Delaware corporation, Electric Last Mile, Inc., a Delaware corporation and Jason Luo, in the capacity as the initial Stockholder Representative thereto;

 

WHEREAS, in its capacity as the sponsor of the special purpose acquisition company that was the predecessor to the Company, the Sponsor desires that, after giving effect to the Transactions, it will continue to have representation on the Board so as to continue to create value for its direct and indirect equityholders (collectively with the Sponsor, the “Forum Parties”) and for the other direct and indirect equityholders of the Company; and

 

WHEREAS, in furtherance of the foregoing, the Sponsor desires to have certain director nomination rights with respect to the Company, and the Company desires to provide the Sponsor, on behalf of the Forum Parties, with such rights, in each case, on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficient of which are hereby acknowledged, each of the parties to this Agreement agrees as follows:

 

Article 1

NOMINATION RIGHT

 

Section 1.01. Board Nomination Right.

 

(a) From the Effective Time until the termination of this Agreement in accordance with Section 2.01, at every meeting of the board of directors of the Company (the “Board”), or a committee thereof, or action by written consent, at or by which directors of the Company are appointed by the Board or are nominated to stand for election and elected by the stockholders of the Company, the Sponsor shall have the right to appoint or nominate for election to the Board, as applicable, two (2) individuals, to serve as directors of the Company (any individual appointed or nominated by the Sponsor for election to the Board pursuant to this Section 1.01(a), a “Nominee” and, collectively, the “Nominees”). At the Effective Time, unless otherwise designated by the Sponsor, the Nominees shall be David Boris and such other Nominee as shall have been designated by the Sponsor in writing.

 

 

 

 

(b) The Company shall take all necessary actions within its control, including, but not limited to, calling a meeting of the Board or executing an action by unanimous written consent of the Board, such that, as of the Effective Time, the Nominees shall either be elected by the Company’s stockholders at the meeting held to approve the Transactions or appointed to the Board as of the Effective Time, in each case, as Class I directors (as defined in the Company’s Organizational Documents, each a “Class I Director”) with terms ending at the Company’s 2022 annual meeting of stockholders.

 

(c) From and after the Effective Time, the Company shall take all actions necessary (including, without limitation, calling special meetings of the Board and the stockholders of the Company and recommending, supporting and soliciting proxies) (“Necessary Action”) to ensure that: (i) the applicable Nominees are included in the Board’s slate of nominees to the stockholders of the Company for each election of Class I Directors and recommended by the Board at any meeting of stockholders called for the purpose of electing Class I Directors; and (ii) each applicable Nominee up for election is included in the proxy statement prepared by management of the Company in connection with the Company’s solicitation of proxies or consents in favor of the foregoing for every meeting of the stockholders of the Company called with respect to the election of Class I Directors, and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders of the Company or the Board with respect to the election of Class I Directors.

 

(d) If any Nominee ceases to serve for any reason, the Sponsor shall, subject to the Sponsor then being entitled to nominate an individual for election or appointment as a director pursuant to Section 1.01(a), be entitled to designate for election or appointment as a director such person’s successor in accordance with this Agreement and the Company shall take all Necessary Action to cause any such vacancy to be filled by such replacement director designated by the Sponsor as promptly as practicable after such designation (and in any event prior to the next meeting or action of the Board).

 

(e) Notwithstanding any of this Section 1.01 to the contrary, the election or appointment of any Nominee to the Board shall be subject to the prior execution by such Nominee of an irrevocable resignation letter in the form attached hereto as Exhibit A.

 

(f) The Company shall indemnify the Nominees who are appointed or elected as Class I Directors on the same basis as all other members of the Board and pursuant to indemnity agreements with terms that are no less favorable to such Nominees than the indemnity agreements entered into between the Company and its other non-employee directors.

 

(g) Nominees who are appointed or elected as Class I Directors shall be entitled to compensation (including equity awards) that is consistent with the compensation received by other non-employee directors of the Company. In addition, the Company shall pay the reasonable, documented, out-of-pocket expenses incurred by each such Nominee in connection with his or her services provided to or on behalf of the Company and its Subsidiaries, including attending Board and committee meetings or events attended on behalf of the Company or at the Company’s request.

 

2

 

 

(h) Notwithstanding the provisions of this Section 1.01, the Sponsor shall not be entitled to designate a Person as a nominee to the Board upon a written determination by the Nominating and Corporate Governance Committee of the Company (which determination shall set forth in writing reasonable grounds for the determination) that the Person would not be qualified under any applicable law, rule or regulation to serve as a director of the Company. In such an event, the Sponsor shall be entitled to select a Person as a replacement Nominee and the Company shall use its best efforts to cause that Person to be nominated as a Nominee at the same meeting (or, if permitted, pursuant to the same action by written consent of the stockholders) as the initial Person was to be nominated.

 

Article 2

MISCELLANEOUS

 

Section 2.01. Termination. This Agreement shall terminate automatically and become void and of no further force or effect, without any notice or other action by any Person, as of the fifteen (15)-month anniversary of the Effective Time.

 

Section 2.02. Notices. All notices, requests and other communications to either party hereunder shall be in writing (including electronic transmission) and shall be given in accordance with the provisions of the Merger Agreement.

 

Section 2.03. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in a mutually acceptable manner in order that the Transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible.

 

Section 2.04. Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, directly or indirectly (including by operation of law), by any party without the prior written consent of the other parties. Notwithstanding any of the foregoing, the Sponsor may assign its rights and obligations hereunder, without the prior consent of the other parties, to (i) an Affiliate transferee, in connection with a transfer by the Sponsor of shares of the Company’s common stock to one of the Sponsor’s Affiliates, (ii) any member of the Sponsor or (iii) David Boris, Marshall Kiev or any of their respective designees.

 

Section 2.05. No Third Party Beneficiaries. This Agreement is exclusively for the benefit of the parties hereto, and their respective successors and permitted assigns, and this Agreement shall not be deemed to confer upon or give to any other third party any remedy, claim, liability, reimbursement, cause of action or other right by virtue of any applicable law in any jurisdiction to enforce any of the terms of this Agreement.

 

3

 

 

Section 2.06. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter of this Agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter of this Agreement. Each party acknowledges and agrees that, in entering into this Agreement, such party has not relied on any promises or assurances, written or oral, that are not reflected in this Agreement.

 

Section 2.07. Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.

 

Section 2.08. Jurisdiction; WAIVER OF TRIAL BY JURY. Any Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in federal and state courts located in the State of Delaware, and each of the parties hereto irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 2.08. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF.

 

Section 2.09. Specific Performance. The parties hereto acknowledge that the rights of each party to consummate the transactions contemplated hereby are unique and recognize and affirm that in the event of a breach of this Agreement by any party, money damages may be inadequate and the non-breaching party may have no adequate remedy at law. Accordingly, the parties hereto agree that such non-breaching party shall have the right to enforce its rights and the other party’s obligations hereunder by an action or actions for specific performance and/or injunctive relief (without posting of bond or other security), including any order, injunction or decree sought by such non-breaching party to cause the other party to perform its/their respective agreements and covenants contained in this Agreement and to cure breaches of this Agreement, without the necessity of proving actual harm and/or damages or posting a bond or other security therefore. Each party further agrees that the only permitted objection that it may raise in response to any action for any such equitable relief is that it contests the existence of a breach or threatened breach of this Agreement.

 

Section 2.10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or e-mail shall be as effective as delivery of a manually executed counterpart of the Agreement.

 

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Section 2.11. Amendment. This Agreement may be amended, modified or supplemented at any time only by the written consent of all of the parties hereto, and any amendment, modification or supplement so effected shall be binding on all of the parties.

 

Section 2.12. Rights Cumulative. Except as otherwise expressly limited by this Agreement, all rights and remedies of each of the parties under this Agreement will be cumulative, and the exercise of one or more rights or remedies will not preclude the exercise of any other right or remedy available under this Agreement or law.

 

Section 2.13. Further Assurances. Each of the parties hereto shall execute and deliver such further instruments and do such further acts and things as may be required to carry out the intent and purpose of this Agreement.

 

Section 2.14. Enforcement. Each of the parties hereto covenants and agrees that the disinterested members of the Board have the right to enforce, waive or take any other action with respect to this Agreement on behalf of the Company.

 

Section 2.15. Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

[Signature Page Follows]

 

5

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above.

 

  ELECTRIC LAST MILE SOLUTIONS, INC.
   
  By: /s/ Jason Luo
  Name:  Jason Luo
  Title: President
   
  FORUM INVESTORS III LLC
   
  By: Forum Capital Management III LLC, as managing member
     
  By: /s/ David Boris
  Name: David Boris
  Title: Managing Member

 

[Signature Page to Director Nomination Agreement]

 

 

 

 

Exhibit A

 

FORM OF IRREVOCABLE RESIGNATION

 

[__], 2021

 

Electric Last Mile Solutions, Inc.
1055 W Square Lake Road
Troy, Michigan 48098
Attn: Benjamin Wu

 

Re: Resignation

 

Ladies and Gentlemen:

 

This irrevocable resignation is delivered pursuant to Section 1.01(e) of the Director Nomination Agreement, dated as of June 25, 2021 (the “Agreement”), by and between Electric Last Mile Solutions, Inc. (the “Company”) and the Sponsor (as defined in the Agreement). If, following such time that the Agreement is terminated in accordance with its terms, the Board (as such term is defined in the Agreement) requests in writing that I resign as a director of the Company, I hereby tender the immediate resignation of my position as a director of the Company and from any and all committees of the Board on which I serve.

 

This resignation may not be withdrawn by me at any time.

 

Sincerely,  
   
   
[Applicable Nominee]  

 

 

 

 

Exhibit 10.6

AGREEMENT OF PURCHASE AND SALE

between

SF MOTORS, INC. DBA SERES,
a Delaware corporation
(“Seller”)

and

ELECTRIC LAST MILE, INC.,
a Delaware corporation
(“Buyer”)

 

TABLE OF CONTENTS

       
Page No.
ARTICLE I   PURCHASE AND SALE   1
Section 1.1   Purchase and Sale of Property   1
Section 1.2   Real Estate Sublease   2
Section 1.3   Excluded Assets   2
Section 1.4   Assumed Liabilities   3
Section 1.5   Purchase Price   3
Section 1.6   Allocation of Purchase Price   4
Section 1.7   Withholding   4
article ii   Transfer of Possession   4
Section 2.1   Possession Date   4
Section 2.2   Transfer of Possession Deliverables   4
Section 2.3   Costs   6
Section 2.4   Prorations   6
Section 2.5   Tangible Property Statement   6
article iii   Representations and Warranties   7
Section 3.1   Representations and Warranties of Seller   7
Section 3.2   “As Is” Transaction   10
Section 3.3   Representations and Warranties of Buyer   10
Section 3.4   Brokers   11
article iv   INDEMNIFICATION   11
Section 4.1   Survival   11
Section 4.2   Indemnification by Seller   12
Section 4.3   Indemnification by Buyer   12
Section 4.4   Certain Limitations   12
Section 4.5   Buyer Waiver and Release to Environmental Matters   15
Section 4.6   Tax Treatment of Indemnification Payments   15
article v   RISK OF LOSS   15
Section 5.1   Risk of Loss Prior to Transfer of Possession   15
Section 5.2   Material Condemnation   15
article vi   COVENANTS   15
Section 6.1   Maintenance of Improvements and Operation of Property; Removal of Tangible Personal Property   15
Section 6.2   Title Insurance   16
Section 6.3   Conditions to Transfer of Possession   16
Section 6.4   Governmental Approvals and Consents   16
Section 6.5   Bulk Sales Laws   17
Section 6.6   Landlord Estoppel and Consent   17
Section 6.7   NoUnion Employee Matters   17
Section 6.8   Certain Tax Matters   18
Section 6.9   Bargaining Unit Employees   18
Section 6.10   Service Contracts   19
Section 6.11   Letter of Credit   19
Section 6.12   Further Assurances   19
Section 6.13   Shares of Forum Merger III   19

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Page No.
article Vii   CONDITIONS TO TRANSFER OF POSSESSION   20
Section 7.1   Conditions to Obligations of Seller   20
Section 7.2   Conditions to Obligations of Buyer   20
article viii   termination   21
Section 8.1   Termination Prior to Transfer of Possession   21
article ix   miscellaneous   22
Section 9.1   Notices   22
Section 9.2   Entire Agreement   22
Section 9.3   Time   22
Section 9.4   Attorneys’ Fees   22
Section 9.5   Assignment   23
Section 9.6   Counterparts   23
Section 9.7   Governing Law   23
Section 9.8   Confidentiality and Return of Documents   23
Section 9.9   Interpretation of Agreement   23
Section 9.10   Amendments   23
Section 9.11   Recording   23
Section 9.12   No Partnership   23
Section 9.13   No Third-Party Beneficiary   23
Section 9.14   Severability   23
Section 9.15   No Waiver   23
Section 9.16   Construction   23
Section 9.17   Patriot Act   23

ii

 

EXHIBIT LIST

Exhibit A-1

 

Real Property Description

Exhibit A-2

 

Subleased Real Property Description

Exhibit B

 

Forum Merger III Common Stock Registration Rights Agreement

Exhibit C

 

Land Contract

Exhibit C-1

 

Escrow Agreement

Exhibit C-2

 

Special Warranty Deed

Exhibit C-3

 

Memorandum of Land Contract

Exhibit D

 

Bill of Sale

Exhibit E

 

Assignment of Intangibles

Exhibit F

 

Intentionally Omitted

Exhibit G

 

Promissory Note

Exhibit H

 

Sublease

Exhibit I

 

Letter of Credit

Exhibit J

 

Investor Suitability Questionnaire

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AGREEMENT OF PURCHASE AND SALE

This Agreement of Purchase and Sale (this “Agreement”), dated as of the “Execution Date” (being defined as the date that the last party signed this Agreement as shown by the date set forth next to said party’s signature below), is between SF MOTORS, INC. DBA SERES, a Delaware corporation (“Seller”), and ELECTRIC LAST MILE, INC., a Delaware corporation (“Buyer”).

RECITALS

WHEREAS, Seller owns a commercial assembly plant consisting of land, building, facilities and improvements used in connection with certain commercial vehicles assembly located at 12900 McKinley Hwy, Mishawaka, Indiana 46544. Seller leases a parking lot adjacent to the assembly plant from St. Joseph County, Indiana pursuant to a Ground Lease dated December 18, 2001 (the “Ground Lease”).

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, among other things the Real Property, Tangible Personal Property and Intangible Personal Property (as these terms are defined below) pursuant to the terms and conditions of this Agreement.

WHEREAS, concurrently with the Transfer of Possession (as defined below), Seller desires to sublease to Buyer, and Buyer desires to sublease from Seller, the premises subject to the Ground Lease pursuant to the terms and conditions of this Agreement.

WHEREAS, Seller previously entered into that certain Asset Purchase Agreement (“2017 Purchase Agreement”), dated as of June 21, 2017, by and among Seller, Chongqing Sokon Industry Group Stock Co., Ltd., a corporation established and existing under the laws of the People’s Republic of China (“Sokon”) and AM General LLC, a Delaware limited liability company (“AM General”) pursuant to which Seller purchased the commercial vehicle assembly plant located at 12900 McKinley Hwy, Mishawaka, Indiana 46544.

NOW THEREFORE, in consideration of the mutual promises hereinafter set forth and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Article I
PURCHASE AND SALE

Section 1.1     Purchase and Sale of Property.    Seller agrees to sell and transfer to Buyer, and Buyer agrees to purchase from Seller, subject to the terms, covenants and conditions set forth herein, Seller’s right, title and interest in and to the following property (collectively, the “Property”):

(a)     Real Property.    That certain real property generally located at 12900 McKinley Highway, Mishawaka, Indiana, further described on Exhibit A-1 attached hereto and made a part hereof (the “Land”), together with (1) all buildings (the “Buildings”) and improvements located thereon (the “Improvements”), (2) all rights, benefits, privileges, easements, tenements, hereditaments, rights-of-way and other appurtenances thereon or in any way appertaining thereto, including all mineral rights, development rights, air and water rights, if any, and (3) all strips and gores and any land lying in the bed of any street, road or alley, open or proposed, adjoining such Land (collectively, the “Real Property”);

(b)     Tangible Personal Property.    All of Seller’s right, title and interest in and to all of the equipment, machinery, furniture, furnishings, supplies and other tangible personal property, further described on Schedule 1.1(b) of the Seller Disclosure Schedules and owned by Seller, and now or hereafter located on and used exclusively at or in the Buildings (including the EVAP assembly plant) located on the Real Property, and all such equipment, fixtures and other tangible personal property related to the operation, ownership or maintenance of the Buildings and the Real Property, and all books and records related thereto, including ledgers, machinery and equipment instruction manuals and maintenance files, in each case, to the extent in Seller’s possession (collectively, the “Tangible Personal Property”);

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(c)     Intangible Personal Property.    All of Seller’s right, title and interest in and to, to the extent assignable at Seller’s cost, if any, all intangible personal property, if any, owned by Seller and related to the Real Property and the Improvements, including, without limitation: any plans and specifications and other architectural and engineering drawings for the Improvements; and any material service contracts (the “Service Contracts”) and other contract rights related to the Property (but only to the extent Seller’s obligations thereunder are expressly assumed by Buyer);

(d)     Warranties.    To the extent assignable, all of Seller’s rights under warranties, indemnities and all similar rights against third parties exclusively benefitting the Property, but, in each case, only to the extent those rights are assignable under applicable contracts, laws, rules and regulations and to the extent that all necessary consents to assignment have been obtained;

(e)     Permits.    To the extent assignable, all governmental permits, approvals and licenses (including any pending applications), including any environmental permits;

(f)     Seller Benefit Plans.    All Seller Benefit Plans, as set forth in Section 3.1(k), and all trusts or other assets attributable thereto.

Sellers rights described in subsections (c) and (d) above are collectively referred to as the “Intangible Personal Property”.

Section 1.2     Real Estate Sublease.    Seller agrees to sublease the real property subject to the Ground Lease (the “Subleased Real Property”) to Buyer and Buyer agrees to sublease the Subleased Real Property from Seller on the terms and subject to the conditions of the Sublease (defined below). The Subleased Real Property is described on attached Exhibit A2.

Section 1.3     Excluded Assets.    Other than the Property subject to Section 1.1, Buyer expressly understands and agrees that it is not purchasing or acquiring, and Seller is not selling or assigning, any other assets or properties of Seller, and all such other assets and properties shall be excluded from the Property (the “Excluded Assets”). Excluded Assets include the following assets and properties of Seller:

(a)     all cash and cash equivalents, bank accounts and securities of Seller;

(b)     all Contracts that are not Assigned Contracts;

(c)     all intellectual property described on Schedule 1.3(c) of the Seller Disclosure Schedules;

(d)     all rights, claims or causes of action (including, without limitation, those for bodily injury, property damage, and environmental damage or liability) that Seller may have against third parties based on acts, omissions or other circumstances occurring prior to the Execution Date or any intellectual property rights owned, licensed to or otherwise possessed by Seller, including without limitation, patents, patent applications, trademarks, trade secrets and domain names, specifically those intellectual property rights subject to that certain IP License Agreement between Seller and Buyer dated as of the Execution Date;

(e)     the corporate seals, organizational documents, minute books, stock books, tax returns, books of account or other records having to do with the corporate organization of Seller, and any books and records which Seller is prohibited from disclosing or transferring to Buyer under applicable law and is required by applicable law to retain;

(f)     all insurance policies of Seller and all rights to applicable claims and proceeds thereunder;

(g)     all tax assets (including duty and tax refunds and prepayments) of Seller;

(h)     all rights to any action, suit or claim of any nature available to or being pursued by Seller, whether arising by way of counterclaim or otherwise;

(i)     all assets, properties and rights used by Seller in its businesses and locations outside of St. Joseph County, Indiana;

(j)     the rights which accrue or will accrue to Seller under this Agreement, the Land Contract, the Promissory Note, the Letter of Credit and the other agreements and documents contemplated by this Agreement; and

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(k)     the assets, properties and rights specifically set forth in Schedule 1.3(k) of the Seller Disclosure Schedules.

Section 1.4     Assumed Liabilities.    Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge all liabilities relating to, arising out of or resulting from:

(a)     Buyer’s ownership, operation or use of the Property from and after Transfer of Possession, including but not limited to compliance with any applicable laws;

(b)     any requirement or obligation to investigate, delineate or undertake environmental response activities with respect to any contamination, toxic substances, hazardous materials, and/or hazardous materials that is present or alleged to be present at, on, under migrating from the Real Property or the Leased Real Property; or

(c)     any requirement or obligation to obtain environmental permits necessary for the Buyer’s Intended Use (as defined in Section 3.1(f)) or other operations of Buyer intended for the Real Property or Leased Real Property.

(d)     Any liabilities of Seller arising under or in connection with the Seller Benefit Plans.

Section 1.5     Purchase Price.

(a)     The purchase price of the Property is ONE HUNDRED FORTY-FIVE MILLION and 00/100 DOLLARS ($145,000,000.00) (the “Purchase Price”) plus the assumption of the Assumed Liabilities, of which NINETY MILLION AND 00/100 DOLLARS ($90,000,000.00) is being paid for the Real Property and of which FIFTY-FIVE MILLION AND 00/100 DOLLARS ($55,000,000.00) is being paid for the Property other than the Real Property.

(b)     The Purchase Price shall be paid in United States Dollars as follows:

(1)     At the Transfer of Possession, Buyer shall deliver to Seller ELEVEN MILLION THREE HUNDRED SEVENTY-NINE THOUSAND THREE HUNDRED TEN AND 34/100 DOLLARS ($11,379,310.34) (the “Initial Payment”) in immediately available funds as partial payment for the Property other than the Real Property.

(2)     At the Transfer of Possession, Buyer shall deliver to Seller a Promissory Note in the form of Exhibit G hereto in the amount of FORTY-THREE MILLION SIX HUNDRED TWENTY THOUSAND SIX HUNDRED EIGHTY-NINE AND 66/100 DOLLARS ($43,620,689.66) and payable in installments pursuant to the payment schedule described in the Promissory Note as partial payment for the Property other than the Real Property.

(3)     The balance of the Purchase Price in the amount of NINETY MILLION and 00/100 DOLLARS ($90,000,000.00) shall be paid pursuant to the Land Contract (as hereinafter defined) entered into at the Transfer of Possession to Seller by:

(i)     Buyer paying to Seller EIGHTEEN MILLION SIX HUNDRED TWENTY THOUSAND SIX HUNDRED EIGHTY-NINE AND 66/100 DOLLARS ($18,620,689.66) in immediately available funds at Transfer of Possession; and

(ii)    Buyer paying Seller SEVENTY-ONE MILLION THREE HUNDRED SEVENTY-NINE THOUSAND THREE HUNDRED TEN AND 34/100 DOLARS ($71,379,310.34) in twenty-three (23) consecutive monthly installments of THREE MILLION ONE HUNDRED THREETHOUSAND THREE HUNDRED FORTY-SEVEN AND 83/100 DOLLARS ($3,103,348.28) with the first Land Contract monthly payment being due and payable on the last day of the calendar month in which the Possession Date occurs, and the each successive Land Contract monthly payment being made no later than the last day of each calendar month thereafter until the Seller receives the entire Purchase Price.

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(c)     All payments of Purchase Price under this Agreement shall be payable to Seller as independent covenants under the Land Contract, Promissory Note and Bill of Sale without offset, counterclaim, defense, presentment, notice or demand, at such address or bank accounts as Seller may direct by written notice. There shall be no prepayment penalty for payments made before their applicable payment date.

(d)     Buyer hereby acknowledges that late payment of any monthly payment under either the Promissory Note or the Land Contract will cause Seller to incur costs not contemplated hereunder, the exact amount of which is presently anticipated to be extremely difficult to ascertain. If Seller does not receive the applicable Promissory Note or Land Contract monthly payment on the applicable payment date, and Buyer fails to cure such nonpayment within ten (10) days following receipt of written notice from Seller, Buyer will pay Seller a late charge equal to five percent (5%) of such monthly payment and default interest as provided in the Promissory Note or Land Contract as applicable.

Section 1.6     Allocation of Purchase Price.    The parties agree that the Purchase Price (including any Assumed Liabilities treated as consideration for the purchase of the Property for tax purposes) shall be allocated under Section 1060 of the Code, applicable treasury regulations and the allocation principle set forth in Schedule 1.6 of the Seller Disclosure Schedules. Within ninety (90) days after the Possession Date, Buyer shall deliver to Seller a schedule allocating the Purchase Price and related items in accordance with the foregoing sentence (the “Allocation Schedule”). The Allocation Schedule shall be deemed final unless Seller notifies the Buyer in writing that Seller objects to one or more items reflected in the Allocation Schedule within forty-five (45) days after delivery of the Allocation Schedule to Seller. In the event of any such objection, Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that if Seller and Buyer are unable to resolve any dispute with respect to the Allocation Schedule within thirty (30) days after the delivery of the Allocation Schedule to Seller, such dispute shall be resolved by an impartial nationally recognized firm of independent certified public accountants mutually acceptable to Buyer and Seller (the “Independent Accountant ”). The fees and expenses of such Independent Accountant shall be borne by Seller. Seller and Buyer agree to file their respective Internal Revenue Service Forms 8594 and all federal, state and local tax returns in accordance with the finalized Allocation Schedule. Neither Buyer nor Sellers shall take any position (whether in audits, tax returns or otherwise) that is inconsistent with such allocation unless otherwise required by application law.

Section 1.7     Withholding.     Buyer shall not withhold any payment made to Seller under this Agreement or any other transaction document as long as Seller delivers to Buyer prior to the Possession Date a properly executed IRS Form W-9 and the affidavit described in Section 2.2(a)(5).

Article II
TRANSFER of possession

Section 2.1     Possession Date.    The transfer of possession of the Property hereunder (the “Transfer of Possession”) shall be held and delivery of all items to be made at the Transfer of Possession under the terms of this Agreement shall be made on such date and time as Buyer and Seller may mutually agree upon in writing (the “Possession Date”), but in no event later than two business days after the date on which all of the conditions set forth in Article VII below are fulfilled or waived (if waivable). The Transfer of Possession shall be held at the offices of the Chicago Title Insurance Company, 135 N. Pennsylvania Street, Suite 1575 B, Indianapolis, Indiana 46204, Attn: Lloyd Sawyer, Telephone: (317) 684-3944, E-mail: sawyerl@ctt.com (the “Title Company”) using mail-away procedures or as otherwise mutually agreed on by the parties. Except as expressly provided herein, such date and time may not be extended without the prior written approval of both Seller and Buyer. The Transfer of Possession will be deemed effective as of 12:01 a.m. Eastern time on the Possession Date.

Section 2.2     Transfer of Possession Deliverables.

(a)     At the Transfer of Possession, Seller shall deliver to Buyer the following items:

(1)     The Land Contract in the form of Exhibit C attached hereto (the “Land Contract”) conveying vendee’s interest in the Real Property to Buyer, and duly executed and notarized by Seller, together with the related Escrow Agreement in the form of Exhibit C-1 attached hereto (the “Escrow Agreement”) and the Special Warranty Deed deposited thereunder in the form of Exhibit C-2 attached hereto, and the associated Memorandum of Land Contract in the form of Exhibit C-3 attached hereto (the “Memorandum of Land Contract”) with the accompanying Sales Disclosure Form;

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(2)     two (2) duly executed counterparts of the Bill of Sale in the form attached hereto as Exhibit D for the Tangible Personal Property (the “Bill of Sale”);

(3)     two (2) duly executed counterparts of an Assignment and Assumption of Service Contracts, Warranties and Other Intangible Property in the form attached hereto as Exhibit E pursuant to the terms of which Buyer shall assume all of Seller’s obligations under the Assumed Contracts, and other documents and agreements affecting the Property (the “Assignment of Intangibles”);

(4)     two (2) duly executed counterparts of the Sublease Agreement in the form attached hereto as Exhibit H (the “Sublease”);

(5)     an affidavit pursuant to Section 1445(b)(2) of the Code, and on which Buyer is entitled to rely, that Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code;

(6)     Transfer of Possession Statement including all prorations provided herein;

(7)     the Land Contract shall have sufficient representations from Seller regarding parties in possession, mechanics liens and gap undertakings for the Title Company to delete the applicable standard exceptions and insure the Transfer of Possession, or otherwise Seller shall provide such Vendor’s Affidavit or Gap Undertaking as may reasonably be required by the Title Company to remove said exception;

(8)     Such other documents, affidavits and certificates as may be reasonably necessary or appropriate to properly consummate the transactions contemplated by this Agreement; and

(9)     such authority and organizational documents as may be reasonably required by the Title Company issuing the Title Policy at Transfer of Possession.

(b)     At the Transfer of Possession, Buyer shall deliver to Seller the following:

(1)     immediately available funds in the amount of $30,000,000.00, and any additional funds necessary to close the transactions contemplated by this Agreement;

(2)     one duly executed Promissory Note;

(3)     two (2) duly executed counterparts of the Land Contract and associated Escrow Agreement and Memorandum of Land Contract in recordable form;

(4)     two (2) duly executed counterparts of the Bill of Sale;

(5)     two (2) duly executed counterparts of the Assignment of Intangibles;

(6)     two (2) duly executed counterparts of the Sublease;

(7)     Transfer of Possession Statement including all prorations provided herein;

(8)     One duly executed Letter of Credit (as defined in Section 6.11);

(9)     One stock certificate or other document(s) in the form satisfactory to Seller evidencing Seller as the holder of 5,000,000 shares of Common Stock of Forum Merger III (as defined below);

(10)     Such authority and organizational documents as may be reasonably required by Seller and by the Title Company to issue a title insurance policy at Transfer of Possession;

(11)     the ST-105 General Sales Tax Exemption Certificate of the Indiana Department of Revenue, and

(12)     Such other documents, affidavits and certificates as may be reasonably necessary or appropriate to properly consummate the transactions contemplated by this Agreement.

(c)     Seller shall deliver possession of the Property to Buyer as required hereunder and shall deliver to Buyer or make available at the Property a set of keys to the Property on the Possession Date.

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Section 2.3     Costs.

(a)     Buyer shall pay for (i) Transfer Tax (as defined in Section 6.8), if any; (ii) the costs of a vendee’s title insurance policy and any title endorsements requested by Buyer; (iii) the costs of the Survey, if any; (iv) the costs associated with Buyer’s due diligence of the Property; (v) the costs associated with the Escrow Agreement (vi) the costs associated with the Letter of Credit (as defined in Section 6.11) for the benefit of the Seller; (vii) Buyer’s attorneys’ fees; and (viii) any other costs borne by Buyer in connection with this Agreement and the Transfer of Possession. Buyer shall also pay for and provide any new and/or updated and recertified survey required by the Title Company in connection with issuing the title policy.

(b)     Seller shall pay for Seller’s attorneys’ fees.

(c)     Buyer and Seller will equally the bear the costs of any closing fee charged by the Title Company.

Section 2.4     Prorations.    Buyer shall be deemed to own the Property other than the Real Property as of 12:01 a.m. New York City time on the Possession Date and shall be responsible for any prorated obligations as of such time and date.

(a)     Real Estate taxes shall be prorated as of the Possession Date. As of the Possession Date, the Buyer shall be responsible for all charges as to the Property. With respect to the tax year in which Transfer of Possession occurs, the taxes and assessments for the Real Property will be apportioned on a daily basis, with Seller responsible for 1/365ths of such taxes for each day in the tax year prior to Transfer of Possession, and Buyer responsible for 1/365ths of such taxes for the day of Transfer of Possession and each day of the tax year thereafter. For the avoidance of doubt, the tax year in which Transfer of Possession occurs shall mean the tax year in which the taxes accrue, even though they do not become due and payable until the following year. For example, if the Transfer of Possession occurs on December 1, 2021, then Seller shall be responsible for 334/365 of the 2021 taxes payable in 2022. The provisions of this Section 2.4(a) shall survive Transfer of Possession. Buyer acknowledges that to the extent that Seller’s share of real estate taxes are not yet due and payable at Transfer of Possession, Buyer shall not receive a credit for such amount, but rather the Seller shall pay such tax installments when due as provided in the Land Contract.

(b)     Buyer shall pay to Seller an amount equal to any security deposits held by or for the landlord in connection with the Ground Lease. Likewise, all pre-paid monetary obligations of Seller under the Ground Lease will be prorated on a per diem basis as of the Possession Date and added to the Purchase Price. Seller shall pay all rent under the Ground Lease that comes due and payable prior to the Possession Date. Likewise, but without double counting, all taxes due and payable by the tenant under the Ground Lease during the year in which Transfer of Possession occurs will be prorated on a daily basis as of the Possession Date, with Seller responsible for 1/365ths of such taxes for each day from January 1 of such year through and including the day before Transfer of Possession and Buyer responsible for 1/365ths of such taxes for each day from the day of Transfer of Possession through December 31 of such year; the necessary amount will be added to or deducted from the Purchase Price to reflect such allocation. Buyer acknowledges that to the extent that Seller’s share of real estate taxes are not yet due and payable at Transfer of Possession, Buyer shall not receive a credit for such amount, but rather the Seller shall pay such tax installments when due as provided in the Sublease.

(c)     All amounts payable under the Assumed Contracts shall be prorated as of the Transfer of Possession. Seller shall be responsible for all amounts payable under the Terminated Contracts.

Section 2.5     Tangible Property Statement.    Schedule 2.5 of the Seller Disclosure Schedules sets forth certain material Tangible Personal Property and the value ascribed to each item as of the date hereof (the “Tangible Property Statement”). No less than ten Business Days prior to the Possession Date, Seller shall prepare and deliver, or cause to be prepared and delivered, to Buyer (a) an updated Tangible Property Statement as of the Possession Date, or (b) written confirmation that the Tangible Property Statement attached hereto as of the date hereof will be true, correct and complete as of the Possession Date. At least ten Business Days prior to the Possession Date, (i) Buyer shall have the opportunity to conduct a physical inventory of the material Tangible Personal Property on the Tangible Property Statement and (ii) Buyer shall provide written notice to Seller of any missing items on such statement based on Buyer’s inventory review. If Buyer does not conduct an inventory review, or if Buyer does not provide any such notice of missing items at least ten Business Days Prior to the Possession Date, the Tangible Property Statement as updated or confirmed by Seller shall be final and binding on the Parties. If a notice of missing items is provided pursuant to this Section 2.5 and if Seller cannot locate the missing items within ten (10) Business Days of its receipt of Buyer’s notice, the Purchase Price shall be reduced by the value ascribed to such missing item on the Tangible Property Statement as of the date hereof.

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Article III
Representations and Warranties

Section 3.1     Representations and Warranties of Seller.   Except as set forth in the Seller Disclosure Schedules, Seller hereby makes the following representations and warranties to Buyer as of the Execution Date:

(a)     Seller is duly organized and is validly existing as a corporation, in good standing in the State of Delaware, and has the full right and authority, and has full power and authority to own, operate or lease the properties now owned, operated or leased by it.

(b)     Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”) and any related regulations.

(c)     (i) this Agreement has been, and all documents executed by Seller which are to be delivered to Buyer at Transfer of Possession will be, duly authorized, executed and delivered by Seller (assuming due authorization, execution and delivery by Buyer), such document will constitute a legal and binding obligation of Seller, as applicable, enforceable against it in accordance with its terms, and (ii) to Seller’s Knowledge, this Agreement does not and such other documents will not violate any provision of any agreement or judicial order to which Seller is a party or to which Seller or the Property is subject (clauses (i) and (ii) are subject to obtaining all necessary consents, authorizations and approvals from Sokon, the ultimate parent company of Seller, and Sokon’s shareholders, for this Agreement and the transactions contemplated herein, and such consents, authorizations and approvals not having been revoked).

(d)     To Seller’s Knowledge and except as disclosed on Schedule 3.1(d) of the Seller Disclosure Schedules, there is no litigation or governmental proceeding (including, but not limited to any action, governmental order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, or written notice thereof, by or from any Person alleging liability or responsibility for cleanup, governmental response, removal or remediation or natural resources damages arising out of, based on or resulting from the presence, release of, or exposure to, any hazardous materials or condemnation proceeding) pending or, to Seller’s Knowledge, threatened with respect to the Property, or with respect to Seller which impairs Seller’s ability to perform its obligations under this Agreement, except for any personal injury or property damage action for which there is adequate insurance coverage.

(e)     Service Contracts.

(1)     Schedule 3.1(e) of the Seller Disclosure Schedules lists all material Service Contracts pertaining to the maintenance of the Property which Seller has executed and which remain in effect as of the Execution Date.

(2)     Each Service Contract that Buyer elects to assume (collectively, an “Assigned Contract”) is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller nor, to Seller’s Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Service Contract. To Seller’s Knowledge, no event or circumstance occurred that would constitute an event of default in any material respect under any Service Contract or result in a termination thereof or would cause or permit the acceleration of any right or obligation or the loss of any material benefit thereunder. Complete and correct copies of each Service Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer. To Seller’s Knowledge, there are no material disputes pending or threatened under any Service Contract.

(f)     Title to Property.    To its Knowledge, Seller has fee simple title to the Real Property, and such Real Property is not subject to any lease, or any person’s right to occupy the Real Property, or any portion thereof Within the last two years, to its Knowledge, Seller has not received any written notice of (i) violations of building codes and/or zoning ordinances or other governmental or regulatory laws affecting the Real Property or the Subleased Real Property which have not been cured, or (ii) existing, pending or threatened in writing condemnation proceedings affecting the Real Property or the Subleased Real Property, which could reasonably be expected to materially and adversely affect the ability to operate the Real Property or the Subleased Real Property as currently operated, and Buyer’s intended use of the Property after the Transfer of Possession for the manufacturing of vehicles (“Buyer’s Intended Use”).

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(g)     Ground Lease.

(1)     Seller holds the leasehold interest in the Ground Lease.

(2)     To Seller’s Knowledge, the Ground Lease is a valid, binding, enforceable obligation of Seller and in full force and effect, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general principles of equity, and Seller enjoys peaceful possession of the Subleased Real Property;

(3)     To Seller’s Knowledge, Seller is not in material breach or default under the Ground Lease, and to Seller’s knowledge no event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute such a breach or default, and Seller has paid all rent due and payable under such Ground Lease as of the Execution Date;

(4)     Within the last two years, Seller has not received any written notice of any Seller default under the Ground Lease or event that with notice or lapse of time, or both, would constitute a default by Seller under the Ground Lease and, to the Knowledge of Seller, Seller under the Ground Lease is not in material default thereof, and no party to the Ground Lease has exercised any termination rights with respect thereto;

(5)     Seller has not subleased, assigned or otherwise granted to any person the right to use or occupy such Subleased Real Property, which remains in effect, or any portion thereof, which remains in effect; and

(6)     Seller has not pledged, mortgaged or otherwise granted an encumbrance on its leasehold interest in the Subleased Real Property.

(h)     Insurance.    Schedule 3.1(h) to the Seller Disclosure Schedules sets forth with respect to the Property, a list of all pending claims and the claims history for Seller with its insurance carrier since October 31, 2017. Except as set forth on Schedule 3.1(h) to the Seller Disclosure Schedules, there are no claims related to the Property pending under any insurance policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights.

(i)     Condition of Assets.

(1)     To Seller’s Knowledge, other than certain equipment under construction as of the Execution Date, the Improvements and the Tangible Personal Property are in good operating condition and repair (normal wear and tear excepted), and none of the same is in need of maintenance or repairs except for ordinary, routine maintenance and repairs.

(2)     Seller is the owner of the Tangible Personal Property and the Intangible Personal Property.

(3)     All Tangible Personal Property is free and clear of any encumbrances, liens, conditional sales contracts or equipment leases with third parties except for liens for taxes not yet due and payable, mechanics’, carriers’, workmens’, repairmen’s or other like liens incurred in the ordinary course of business in amounts not material to the Property, and easements, rights of way, zoning ordinances, etc. which are not individually or in the aggregate material to the Tangible Personal Property.

(j)     Environmental Matters.    Except as set forth in Schedule 3.1(j) to the Seller Disclosure Schedules:

(1)     Since the closing date of the transactions contemplated in the 2017 Purchase Agreement (the “2017 Agreement Closing”), to Seller’s Knowledge, Seller has not received from any person, with respect to the Property, any action, governmental order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, or written notice thereof, by or from any Person alleging liability or responsibility for cleanup, governmental response, removal or remediation or natural resources damages arising out of, based on or resulting from the presence, release of, or exposure to, any hazardous materials which remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Execution Date.

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(2)     Schedule 3.1(j)(2) to the Seller Disclosure Schedule contains a complete list of all material current environmental permits held by the Seller for the Real Property and/or the Leased Real Property.

(3)     To Seller’s Knowledge, there has been no release of hazardous materials in contravention of environmental law by Seller on the Real Property or the Subleased Real Property, and Seller has not received any written notice that any of the Real Property or the Subleased Real Property (including soils, groundwater, surface water, buildings and other structure located thereon) has been contaminated with any hazardous material which could reasonably be expected to result in an any action, governmental order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom against, or a violation of environmental law or term of any permit issued pursuant to environmental law, by Seller.

(4)     Schedule 3.1(k)(4) to the Seller Disclosure Schedule contains a complete and accurate list of all active or, to Seller’s Knowledge, abandoned aboveground or underground storage tanks owned or operated by Seller in connection with the operations at the Real Property and the Subleased Real Property.

(5)     To Seller’s Knowledge, Seller has provided or otherwise made available to Buyer any and all non-privileged final environmental reports, studies, audits, records, sampling data and site assessments with respect to the Real Property which are in the possession of Seller related to compliance with environmental laws, the release of hazardous materials, or any action, governmental order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom.

(k)     Employment Matters.

(1)     Schedule 3.1(k) sets forth a true and complete list of all employees employed or engaged by Seller or its affiliates, who are primarily providing services in respect of the Property as of the date hereof (the “Property Employees”), and each Property Employee’s (I) name, (II) job title, (III) principle work site, (IV) whether classified as an exempt or non-exempt employee under applicable wage and hour laws, (V) date of hire, (VI) whether active or inactive (e.g., on a leave of absence or furloughed) (and if the latter, the date such furlough or leave took effect and expected return date), (VII) most recent base salary or wage rate, (VIII) target bonus opportunity, (IX) bank of accrued vacation or other paid time off and (X) whether represented by a union and the identity of such union.

(2)     Except for the Union Agreement (as defined in Section 6.9), neither the Seller nor its affiliates are party to or bound by a collective bargaining agreement or similar agreement with a union or other labor organization, and none is being negotiated or renegotiated; none of the Property Employees are represented by any union or other labor organization, and no union has made a demand for recognition, or filed a petition for certification, as the bargaining unit representative of any Property Employees; and there have been no known organizing activities by or of any Property Employees. There is, and has been since October 31, 2017, no pending or, to the Knowledge of the Seller, threatened, strike, material arbitration, material grievance, unfair labor practice charge, slowdown, lockout, work stoppage or other material labor dispute or disruption involving the Property Employees.

(3)     Seller and its affiliates are, and since October 31, 2017 have been, in compliance in all material respects with all laws relating to labor, employment and employment practices, including all such laws relating to labor or employment, and all terms and conditions of employment, including without limitation as relates to hiring, background checks, testing, wages, hours, overtime, worker classification (both with respect to independent contractors and other non-employee classifications and with respect to exempt employee classifications), plant closings and layoffs, collective bargaining, labor relations, discrimination, harassment, retaliation, privacy, safety and health, immigration, whistleblowing, disability rights or benefits, employee trainings and notices, workers’ compensation, employee leave, unemployment insurance, and termination.

(4)     There are no claims pending against Seller or any of its affiliates and, to the Seller’s Knowledge, threatened or pending against Seller or any of its affiliates by or before any governmental authority, by or on behalf of any Property Employee.

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(5)     Schedule 3.1(k) sets forth a list of (I) each “employee benefit plan” within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that is sponsored, maintained or contributed to by the Seller or its affiliates and in which Property Employees participate (“Seller Benefit Plan”), and (II) each union-sponsored Seller Benefit Plan, including each “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Seller or any of its affiliates contributes on behalf of the Property Employees (a “Multiemployer Plan”). Seller has made available to the Buyer copies of each Seller Benefit Plan.

(6)     No event has occurred and no condition exists that would reasonably be expected to result in any liability for the Buyer or its affiliates with respect to any Seller Benefit Plan other than participant claims for benefits in the ordinary course of business.

(7)     Each Seller Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified Benefit Plan”) has received a favorable determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and, to Seller’s Knowledge, nothing has occurred that could reasonably be expected to cause the revocation of such determination letter from the Internal Revenue Service or the unavailability of reliance on such opinion letter from the Internal Revenue Service, as applicable.

(8)     The representations and warranties set forth in this Section 3.1(k) are Seller’s sole and exclusive representations and warranties regarding employee benefit matters.

(l)     Knowledge.  ”Knowledge of Seller or Seller’s Knowledge” or any other similar knowledge qualification, means the actual knowledge of Seller’s officers, with reasonable inquiry, as of the Execution Date.

Section 3.2     “As Is” Transaction.

(a)     Except as expressly set forth in this Agreement, it is understood and agreed that Seller is not making any and has not at any time made any warranties or representations of any kind or character, expressed or implied, with respect to the Property, including but not limited to, any warranties or representations as to habitability, merchantability, fitness for a particular purpose, title, zoning, tax consequences, soil or groundwater conditions, latent or patent physical or environmental conditions, the existence, quality, adequacy or availability of utilities serving the Property, operating history, valuations, governmental approvals or the compliance of the Property with any federal, state, county or local laws, statutes, codes, ordinances, permits, approvals, rules or regulations, any judicial or governmental orders, decrees or rulings, or any covenants, conditions, restrictions or other matters recorded against the Property (all of the foregoing being collectively referred to herein as “Applicable Requirements”) and that Property is being sold and delivered in its “AS IS, WHERE IS, WITH ALL FAULTS CONDITION”. Seller shall have no obligation to construct or install any buildings, structures or other improvements on or about the Property or to pay or reimburse Buyer for the same. Buyer shall, by entering into this Agreement, be deemed to have accepted the Property and to have acknowledged that the same are in a condition acceptable to Buyer. Notwithstanding any provision to the contrary, the covenants of Buyer set forth in this Agreement shall survive the Transfer of Possession and delivery of the Land Contract and any subsequent Deed to Buyer indefinitely and shall be enforceable by Seller at any time and shall not be limited by any provision limiting damages or remedies in this Agreement; provided, however, the foregoing waivers and releases shall not apply to (i) Seller’s breaches of those express representations and warranties (as amended or qualified by the Seller Disclosure Schedule) made by Seller in favor of Buyer expressly provided in Section 3.1 hereof (but any claim or recovery based on a breach of a representation and warranty shall be limited as set forth in this Agreement), (ii) Seller’s knowing and intentional fraud, (iii) Seller’s express indemnities in favor of Buyer expressly set forth in this Agreement, or (iv) Seller’s liability for third party tort claims for personal injury or property damage occurring prior to Transfer of Possession.

Section 3.3     Representations and Warranties of Buyer.    Buyer represents and warrants to Seller as follows:

(a)     This Agreement and all documents executed by Buyer which are to be delivered to Seller at Transfer of Possession, including without limitation the Land Contract, and the consummation of the transactions contemplated hereof, do not and will not (i) conflict with or result in a violation or breach of, or default under, any provision of

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the certificate of incorporation, by-laws or other organizational documents of Buyer; (ii) conflict with or result in a violation or breach of any provision of any law or governmental order applicable to Buyer; or (iii) require the consent, notice or other action by any person under any contract to which buyer is a party, other than the consent of Forum Merger III Corporation under the Merger Agreement (as defined in Section 7.2(i)). There are no regulatory inquiries, proceedings or changes or anticipated changes in applicable law that could reasonably be likely to have the effect of preventing, enjoining or otherwise delaying the transactions contemplated hereof. Other than the filings as maybe required under the HSR Act, no consent, approval, permit, declaration or filing with, nor notice to, any governmental authority is required with respect to the execution and delivery of this Agreement, the other transaction documents and the consummation of the transactions contemplated hereof.

(b)     Buyer has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Buyer’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Buyer’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Buyer’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

(c)     Buyer has been duly organized, is validly existing and is in good standing in the state in which it was formed, and, if required to do so, at closing be qualified to do business in the state in which the Property is located. This Agreement has been, and all documents executed by Buyer which are to be delivered to Seller at Transfer of Possession will be, duly authorized, executed and delivered by Buyer, and constitute legal, valid and binding obligations of Buyer and enforceable against Buyer in accordance with their respect terms. The performance by Buyer of the transactions contemplated hereof have been duly authorized by all requisite corporate action on the part of Buyer. Buyer is not a foreign person, as this term is defined by 31 C.F.R. § 800.216.

Section 3.4     Brokers.    The parties represent and warrant to each other that no broker or finder was instrumental in arranging or bringing about this transaction. If any other person brings a claim for a commission or finder’s fee based upon any contact, dealings or communication with Buyer or Seller, then the party through whom such person makes his claim shall defend the other party (the “Indemnified Party”) from such claim, and shall indemnify the Indemnified Party and hold the Indemnified Party harmless from any and all costs, damages, claims, liabilities or expenses (including without limitation, court costs and reasonable attorneys’ fees and disbursements) incurred by the Indemnified Party in defending against the claim. The provisions of this Section 3.4 shall survive the Transfer of Possession and the delivery of the Land Contract to Buyer, or, if the purchase and sale is not consummated, any termination of this Agreement.

Article IV
INDEMNIFICATION

Section 4.1     Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties of Seller contained herein shall survive the Possession Date and shall remain in full force and effect for the following periods (each, as applicable, being the “Survival Period”), until the date that is twelve (12) months from the Possession Date; provided, that representations and warranties in Section 3.1(j) (Environmental Matters) shall not survive the Possession Date. All covenants and agreements of Buyer contained herein shall survive the Possession Date indefinitely or for the period explicitly specified therein. Notwithstanding the foregoing, any claim for a breach of any representation or warranty by any party set forth in this Agreement not notified to the other party in writing within the applicable Survival Period shall be deemed irrevocably waived. Any claims so notified in writing prior to the expiration date of the applicable Survival Period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved. Notwithstanding anything in this Agreement to the contrary, in the event of any breach of a representation or warranty by a party that involves actual fraud, such representation or warranty shall survive the Possession Date indefinitely and continue in full force and effect.

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Section 4.2     Indemnification by Seller.    Subject to the other terms and conditions of this Article IV, from and after the Possession Date, Seller shall indemnify and defend Buyer and its Affiliates and representatives (collectively, the “Buyer Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

(a)     any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement as of the date such representation or warranty was made (except for representations and warranties that expressly relate to a specified date the inaccuracy in or breach of which will be determined with reference to such specified date);

(b)     any breach of or failure by Seller to perform any covenant or agreement contained in this Agreement that is required to be performed from and after the Transfer of Possession; or

(c)     any taxes (or the nonpayment thereof) of Seller for any period prior to the Transfer of Possession, to the extent such taxes are not the express responsibility of Buyer pursuant to this Agreement.

Section 4.3     Indemnification by Buyer.    Subject to the other terms and conditions of this Article IV, from and after the Transfer of Possession, Buyer shall indemnify and defend Seller and its Affiliates and Representatives (collectively, the “Seller Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

(a)     any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement as of the date of such representation or warranty (except for representations and warranties that expressly relate to a specified date the inaccuracy in or breach of which will be determined with reference to such specified date); provided such inaccuracy or breach was first discovered after Transfer of Possession, Buyer having no liability for any inaccuracy or breach of any representation or warranty discovered by Buyer or any Affiliate of Buyer prior to Transfer of Possession;

(b)     any breach of or failure by Buyer to perform any covenant or agreement contained in this Agreement or the Land Contract that is required to be performed from and after the Transfer of Possession; or

(c)     any amounts required to be paid by Buyer under this Agreement or the Land Contract.

(d)     the actual or alleged presence of environmental contamination or any other materials deemed to be toxic substances, hazardous substances, or hazardous materials under any applicable environmental laws at, on, under, or migrating from the Real Property and/or the Leased Real Property, regardless of whether such substances were first released or introduced to the Real Property or Leased Real Property prior to or after Transfer of Possession.

(e)     any Property or liability assumed by Buyer under Section 1.4 of this Agreement.

Section 4.4     Certain Limitations.    The liability of Buyer and Seller under the indemnification provided for in Section 4.2 and Section 4.3 shall be subject to the following limitations:

(a)     Seller shall not be liable to the Buyer Indemnitees for indemnification under Section 4.2(a) or its indemnity in the Assignment of Intangibles (as defined in Section 2.2) until the aggregate amount of all Losses in respect of a breach of any representation or warranty under Section 4.2(a) exceeds $5,000,000.00 (the “Basket Amount”), in which event Seller shall be required to pay or be liable for such Losses above the Basket Amount. Notwithstanding any provision in this Agreement to the contrary, the aggregate amount of all Losses for which Seller shall be liable pursuant to Section 4.2 and its indemnity in the Assignment of Intangibles shall not exceed ten percent (10%) of the Purchase Price (the “Cap”) in the aggregate for all such Losses.

(b)     Buyer shall not be liable to the Seller Indemnitees for indemnification under Section 4.3(a), until the aggregate amount of all Losses in respect of a breach of any representation or warranty under Section 4.3(a) exceeds $5,000,000.00, in which event Buyer shall be required to pay or be liable for all such Losses above the Basket Amount, but shall not exceed the Cap.

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(c)     Notwithstanding the foregoing, the limitations set forth in Section 4.4(a) and Section 4.4(b) shall not apply to Losses based on actual fraud or any costs of enforcing this Agreement or the Land Contract or amounts owed under the Land Contract, and/or Seller’s liability or Buyer’s liability, as the case may be, in respect thereof shall not exceed the Purchase Price.

(d)     For purposes of determining the existence of any inaccuracy in or breach of any representation or warranty set forth in this Agreement, or in calculating the amount of any Losses incurred in connection with any inaccuracy in or breach of any representation or warranty in this Agreement, any and all references in this Agreement to “material” or “material adverse effect” or “Material Adverse Effect” (or other correlative or similar terms or qualifiers contained herein) shall be ignored and disregarded and treated as if they are not included in this Agreement.

(e)     With respect to Losses related to environmental response activities for which indemnification is provided to Seller by Buyer under this Agreement, Seller shall use commercially reasonable efforts to pursue any available remedies to Seller related to environmental response activities under the 2017 Purchase Agreement but only if both (i) Buyer pays the cost of pursuing such rights and remedies and (ii) Seller in its reasonable judgement determines that it has a reasonable good faith basis to assert a claim or right. If Seller recovers under 2017 Purchase Agreement with respect to such indemnification obligations and with respect to environmental response activities, then Seller shall, at Buyer’s sole discretion, use such recovered amounts to satisfy its obligations under this Article IV, or pay Buyer any amounts Seller has recovered up to the amount due to Buyer under this Article IV. Notwithstanding any provision in this Agreement to the contrary, Seller makes no representation or warranty regarding the existence or likelihood of success of any claim against AM General pursuant to the 2017 Purchase Agreement and discloses to Buyer that any assignment of rights under the 2017 Purchase Agreement by Seller may require the written consent of AM General pursuant to the terms of the 2017 Purchase Agreement.

(f)     No party shall have a right to make a claim for any Loss for contingent or inchoate claims and may claim only for a Loss that has, in fact, been paid or incurred.

(g)     Seller shall not be liable under this Article IV or otherwise under this Agreement or the Land Contract for any Losses based on or arising out of any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement if any director, officer or employee of Buyer had knowledge of such inaccuracy or breach prior to the Possession Date.

(h)     No party shall have any liability under any provision of this Agreement for any punitive, incidental, consequential, special or indirect damages, including business interruption, diminution of value, loss of future revenue, profits or income, or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement and, regardless of the legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise.

(i)     For the purposes of this Agreement, “Losses” means losses, damages, liabilities, deficiencies, interest, awards, penalties, fines, costs or expenses, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers. “Affiliate” means, with respect to any party, any other person who, directly or indirectly, controls, is controlled by, or is under common control with such party, including, without limitation, any general partner, managing member, officer, director or trustee of such party.

(j)     Indemnification procedures.

(1)     If any indemnified party receives notice of the assertion or commencement of any action, suit, claim or other legal proceeding made or brought by any person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a representative of the foregoing (a “Third-Party Claim”) against such indemnified party with respect to which the indemnifying party is obligated to provide indemnification under this Agreement, the indemnified party shall give the indemnifying party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the indemnifying party of its indemnification obligations, except and only to the extent that the indemnifying party forfeits rights or defenses by reason of such failure. Such notice by the indemnified party shall describe the Third-Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the indemnified party. The indemnifying party shall have the right to participate in, or by giving written notice to the indemnified party, to assume the defense of any Third-Party Claim at

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the indemnifying party’s expense and by the indemnifying party’s own counsel, and the indemnified party shall cooperate in good faith in such defense. In the event that the indemnifying party assumes the defense of any Third-Party Claim, subject to subsection (2) below, it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the indemnified party. The indemnified party shall have the right, at its own cost and expense, to participate in the defense of any Third-Party Claim with counsel selected by it subject to the indemnifying party’s right to control the defense thereof. If the indemnifying Party elects not to compromise or defend such Third-Party Claim or fails to promptly notify the indemnified party in writing of its election to defend as provided in this Agreement, the indemnified party may, subject to subsection (2) below, pay, compromise, defend such Third-Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third-Party Claim. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third-Party Claim, including making available records relating to such Third-Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third-Party Claim.

(2)     Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third-Party Claim without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), except as provided in this subsection (2). If a firm offer is made to settle a Third-Party Claim without leading to liability or the creation of a financial or other obligation on the part of the indemnified party and provides, in customary form, for the unconditional release of each indemnified party from all liabilities and obligations in connection with such Third-Party Claim and the indemnifying party desires to accept and agree to such offer, the indemnifying party shall give written notice to that effect to the indemnified party. If the indemnified party fails to consent to such firm offer within ten days after its receipt of such notice, the indemnified party may continue to contest or defend such Third-Party Claim and in such event, the maximum liability of the indemnifying party as to such Third-Party Claim shall not exceed the amount of such settlement offer. If the indemnified party fails to consent to such firm offer and also fails to assume defense of such Third-Party Claim, the indemnifying party may settle the Third-Party Claim upon the terms set forth in such firm offer to settle such Third-Party Claim. If the indemnified party has assumed the defense pursuant to subsection (1) above, it shall not agree to any settlement without the written consent of the indemnifying party (which consent shall not be unreasonably withheld, conditioned or delayed).

(3)     Any claim by an Indemnified Party on account of a Loss which does not result from a Third-Party Claim (a “Direct Claim”) shall be asserted by the indemnified party giving the indemnifying party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the indemnifying party of its indemnification obligations, except and only to the extent that the indemnifying party forfeits rights or defenses by reason of such failure. Such notice by the indemnified party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the indemnified party. The indemnifying party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim. During such 30-day period, the indemnified party shall allow the indemnifying party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the indemnified party shall assist the indemnifying party’s investigation by giving such information and assistance (including access to the indemnified party’s premises and personnel and the right to examine and copy any accounts, documents or records) as the indemnifying party or any of its professional advisors may reasonably request. If the indemnifying party does not so respond within such 30-day period, the indemnifying party shall be deemed to have rejected such claim, in which case the indemnified party shall be free to pursue such remedies as may be available to the indemnified party on the terms and subject to the provisions of this Agreement.

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Section 4.5     Buyer Waiver and Release to Environmental Matters.    Buyer waives and releases Seller and its Affiliates and representatives from all any and all claims, causes of action, demands, and rights of recovery, of whatever nature, for damages, loss or injury arising from or relating to the presence of any environmental contamination or other materials or substances deeded to be hazardous under applicable environmental law that are or may be present, at, on, under or from the Real Property and/or the Leased Real Property.

Section 4.6     Tax Treatment of Indemnification Payments.    All indemnification payments made (or deemed to be made) with respect to any claim pursuant to Article IV shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

Article V
RISK OF LOSS

Section 5.1     Risk of Loss Prior to Transfer of Possession.    In the event of a casualty or condemnation at the Property prior to the Transfer of Possession, Buyer shall be bound to purchase the Real Property for the full Purchase Price as required by the terms hereof, without regard to the occurrence or effect of any damage to the Property or destruction of any improvements thereon or condemnation of any portion of the Property, provided that, (a) in the case of a condemnation of Real Property only, the diminution in the value of the remaining Property as a result of a partial threatened or completed condemnation is not material (as hereinafter defined) and (b) there shall be a credit at Transfer of Possession against the Purchase Price due hereunder equal to the amount of any condemnation awards actually collected by Seller as a result of any such condemnation, less the amount of any sums expended by Seller (in its sole discretion and option) toward the collection of such awards. If the awards have not been collected as of Transfer of Possession, then such awards shall be assigned to Buyer, except to the extent needed to reimburse Seller for sums expended to collect such awards, and Seller shall retain the rights to such awards to such extent.

Section 5.2     Material Condemnation.    If the diminution in the value of the remaining Real Property as a result of a condemnation is material (as hereinafter defined), then Buyer may, at its option to be exercised within five (5) days of the commencement of condemnation proceedings, either terminate this Agreement or elect to continue this Agreement unchanged and in full force and effect. If Buyer elects to terminate this Agreement by delivering written notice thereof to Seller or fails to give Seller notice within such five (5) day period that Buyer elects to continue this Agreement unchanged and full force and effect, then this Agreement shall terminate, and neither party shall have any further rights or obligations hereunder except for any unperformed obligations as of such termination and any obligations stated in this Agreement to survive its expiration or termination. If Buyer elects not to terminate this Agreement, then upon Transfer of Possession there shall be a credit against the Purchase Price due hereunder equal to the amount of any condemnation awards collected by Seller as a result of any such condemnation, less the amount of any sums expended by Seller (in its sole discretion and option) toward the collection of such awards. If the awards have not been collected as of Transfer of Possession, then such awards shall be assigned to Buyer, except to the extent needed to reimburse Seller for sums expended (in its sole discretion and option) to collect such awards, and Seller shall retain the rights to such awards to such extent. A condemnation shall be deemed “material” if as a result of the condemnation or if reasonably likely in a pending proceeding, any portion or area is condemned which would cause the Real Property to be in violation of any then existing zoning ordinances preventing the use of the Real Property for the manufacturing of vehicles that cannot reasonably be cured by Buyer at a cost of 20% of Purchase Price or less.

Article VI
COVENANTS

Section 6.1     Maintenance of Improvements and Operation of Property; Removal of Tangible Personal Property.    Seller agrees to keep its customary property insurance covering the Property in effect until the Transfer of Possession (provided, however, that the terms of any such coverage maintained in blanket form may be modified as Seller deems necessary). Until the Transfer of Possession, Seller shall maintain all Improvements substantially in their present condition (ordinary wear and tear, casualty and condemnation excepted), and shall operate and manage the Property in a manner consistent with Seller’s practices in effect prior to the Execution Date and in compliance in all material respect with all laws applicable to the ownership and use of the Property, provided

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that Seller shall in no event be obligated to make any capital expenditures or repairs. Seller shall not enter into any new Service Contracts or other agreement affecting the Property which will be binding on the Property after Transfer of Possession except with respect to a Service Contract or other agreement affecting the Property, which is terminable on no more than thirty (30) days’ notice without payment of any penalty or fee or other cost to Seller. Prior to the Transfer of Possession, Seller shall not remove any Tangible Personal Property, except as may be required for necessary repair or replacement or in the ordinary course of business, and replacement shall be of approximately equal quality and quantity as the removed item of Tangible Personal Property. From and after the Execution Date, Seller shall promptly notify Buyer in writing of (a) any fact, circumstance, event or action the existence or occurrence of which (i) has had, individually or in the aggregate, a material adverse effect to the ability of Seller to consummate the Transfer of Possession on a timely basis (together “Material Adverse Effect”), (ii) has resulted in the failure of any of the conditions set forth in Article II to be satisfied, or (b) any notice from any governmental authority (I) challenging the transaction contemplated herein, or (II) regarding a material violation of law affecting the Property.

Section 6.2     Title Insurance.    As of the Possession Date, Buyer may purchase (at Buyer’s expense) a vendee’s title insurance policy with respect to the Real Property, issued by a Chicago Title, written as of the Possession Date, insuring Buyer in the amount of the Purchase Price allocated to the Real Property and together with such endorsements, and otherwise in such form, as Buyer shall require (and insuring over or removing such so-called “Schedule B-II Exceptions” as Buyer, the Title Company and surveyor may agree are not applicable to the Real Property). However, for the purposes of this Agreement, including the covenants and Transfer of Possession conditions set forth herein, the term “Title Policy” shall mean only a base vendee’s policy of title insurance issued by the Title Company, in the amount of the Purchase Price allocated to the Real Property, insuring vendee’s interest in the Real Property and leasehold title to the Subleased Real Property, subject to customary matters that do not have a Material Adverse Effect on the use of the Property as contemplated hereby, all easements and restrictions of record, and all matters that would be disclosed on an accurate ALTA/NSPS Land Title Survey. Notwithstanding anything to the contrary, Buyer shall accept the Title Policy so long as it is consistent with Seller’s existing owner’s policy of the insurance issued by Chicago Title Insurance Company dated November 2, 2017, Policy Number 519502, in the amount of $83,308,791 (the “Existing Policy”). Specifically, if the Title Policy contains no new exceptions on Schedule B other than those caused by this transaction, including the Land Contract and associated Memorandum of Land Contract and the Sublease, and if the only other revisions to it are the amount of the coverage, the date, the policy amount, the name of the insured and the fact that it is a land contract vendee policy (as opposed to an owner’s policy) then Buyer must accept the Title Policy without objection.

Section 6.3     Conditions to Transfer of Possession.    From the Execution Date until the Transfer of Possession, each Party hereto shall use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII hereof, except in the case where a conflicting efforts standard is expressly set forth herein, in which case such standard shall control.

Section 6.4     Governmental Approvals and Consents.

(a)     Buyer and Seller shall, as promptly as possible and in no event later than fifteen (15) Business Days after the date of this Agreement, (i) make, or cause or be made, all filings and submissions required under any law or regulation applicable to such party or any of its affiliates including such filings as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities and to cause all applicable waiting periods to expire or be terminated that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement including such filings as may be required under the HSR Act. Each party shall cooperate fully with the other parties and their respective affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals.

(b)     Without limiting the generality of the parties’ undertakings pursuant to subsection (a), each of the parties shall use all reasonable best efforts to:

(1)     respond to any inquiries by any Governmental Authority with respect to this Agreement and the transactions contemplated in this Agreement.

(1)     avoid the imposition of any Governmental Order or the taking of any action that would restrain, alter or enjoin the transactions contemplated by this Agreement; and

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(2)     in the event any Governmental Order adversely affecting the ability of the parties to consummate the transactions contemplated by this Agreement has been issued, to have such Governmental Order vacated or lifted.

(c)     All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of any party before any Governmental Authority or the staff or regulators of any Governmental Authority, solely in connection with the transactions contemplated by this Agreement (but, for the avoidance of doubt, not including any interactions between a party and a Governmental Authority in the ordinary course of business, any disclosure which is not permitted by law or any disclosure containing confidential information) shall be disclosed to each other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one another, and consider in good faith the views of the other, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each party shall give notice to the other parties with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority solely with respect to the transactions contemplated by this Agreement (for the avoidance of doubt, not including any interactions between a party and any Governmental Authority in the ordinary course of business), with such notice being sufficient to provide each other Party with the opportunity to attend and participate in such meeting, discussion, appearance or contact; provided, however, that if notice prior to any such meeting, discussion, appearance or contact is not practicable or if attendance or participation in any such meeting, discussion, appearance or contact is not advisable (in the reasonable determination of the party so attending or participating), the applicable Party shall promptly inform the other parties of any such interaction after it has occurred.

(d)     Notwithstanding the foregoing, nothing in this Section 6.4 shall require, or be construed to require, any party or any of its respective affiliates to agree to (i) sell, hold, divest, discontinue or limit, before or after the Possession Date, any assets, businesses or interests of such party or any of its affiliates; (ii) any conditions relating to, or changes or restrictions in, the operations of any such assets, businesses or interests which, in either case, could reasonably be expected to materially and adversely impact the economic or business benefits to Buyer or Seller of the transactions contemplated by this Agreement; or (iii) any material modification or waiver of the terms and conditions of this Agreement or agreements contemplated by this Agreement.

(e)     Buyer shall be responsible for all filing and other similar fees payable in connection with any filings under the HSR Act.

(f)     For purposes of this Agreement “Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction. For purpose of this Agreement, “Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

Section 6.5     Bulk Sales Laws.    The Parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Property to Buyer it being understood that any liabilities arising out of the failure of Seller to comply with the requirements and provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction shall be the responsibility of Seller.

Section 6.6     Landlord Estoppel and Consent.    Seller shall use commercially reasonable efforts to request and endeavor to obtain from the landlord under the Ground Lease: (a) confirmation that Seller is not in default under the Ground Lease and that the Ground Lease is in full force and effect; and (b) written consent to the Sublease and to the subsequent assignment and assumption of the Ground Lease from Seller to Buyer if and upon payment in full of the Land Contract as provided therein (“Landlord Consent”).

Section 6.7     Non-Union Employee Matters.

(a)     Buyer shall offer all of the non-union Property Employees at will employment with Buyer to commence as soon as practicable but no later than the Possession Date (the “Employee Transfer Date”) with wages, salaries and other benefits substantially similar to the wages, salaries and other benefits provided by Seller to such

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employee as of the Execution Date. Each Property Employee that accepts Buyer’s offer of employment is referred to herein as a “Transferred Employee”. All such offers of employment shall contain an acknowledgement that by accepting such offer, such Property Employee is resigning his or her position with Seller effective as of the Employee Transfer Date. Seller shall use commercially reasonable efforts to facilitate Buyer’s hiring of such Transferred Employees.

(b)     Each Transferred Employee shall receive credit for all service accrued or deemed accrued prior to the Employee Transfer Date with the Seller for purposes of participation in any plan, program, policy, practice, contract, agreement or other material arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, fringe benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, including each “employee benefit plan,” within the meaning of Section 3(3) of ERISA, which is or will be maintained, contributed to, or required to he contributed to, by Buyer or any ERISA affiliate of Buyer for the benefit of any Transferred Employee, or with respect to which Buyer or any ERISA Affiliate of Buyer may have any liability or obligation to any Transferred Employee (each, a “Buyer Plan”); provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit. Each such Buyer Plan that provides health benefits to Transferred Employees shall waive pre-existing condition limitations with respect to the Transferred Employees to the same extent waived under the applicable group health plan of the Seller maintained prior to the Employee Transfer Date, and each Transferred Employee shall he given credit for amounts paid under the corresponding group health plan of the Seller during the plan year in which the Employee Transfer Date occurs for purposes of applying deductibles, co-payments and out-of-pocket maximums for such plan year.

(c)     Nothing contained herein, expressed or implied, is intended to confer upon any Property Employee any rights to continued employment by Seller for any period by reason of this Agreement. Nothing contained herein, expressed or implied, is intended to confer upon any Property Employee any rights to be hired by Buyer or to have continuing employment with Buyer for any period by reason of this Agreement. Nothing contained herein is intended to confer upon any Property Employee any particular term or condition of employment.

(d)     Seller and Buyer shall follow the “standard procedure” for preparing and filing Internal Revenue Service Forms W-2 (Wage and Tax Statements), as described in Revenue Procedure 2004-53 for the Transferred Employees.

Section 6.8     Certain Tax Matters.     U.S. federal and applicable state and local tax purposes, (i) the sale and purchase of the Property shall be treated as an installment sale under Section 453 of the Code and (ii) none of the common stock of Forum Merger III received by Seller pursuant to the Subscription Agreement shall be treated as part of the Purchase Price under this Agreement.

(a)     Seller and Buyer agree to furnish or cause to be furnished to the other, upon request, as promptly as practicable, information and assistance relating to the Property, including access to books and records, as is reasonably necessary in connection with the preparation or filing of any tax return by Buyer or Seller.

(b)     All transfer, documentary, sales, use, stamp, registration, value added and other similar taxes and fees (including any additions thereto, penalties and interest) incurred in connection with this Agreement and the other transaction documents (including any real property transfer tax and any other similar tax) (“Transfer Taxes”) shall be paid by Buyer when due. All necessary documentation and tax returns with respect to such Transfer Taxes shall be prepared and filed by the party required under applicable law to file such tax returns. If required by applicable law, Seller and Buyer shall, and shall cause their respective Affiliates to, cooperate in preparing and filing, and join in the execution of, any such tax returns. Seller and Buyer shall cooperate in providing each other with any appropriate certification and other similar documentation relating to exemption from Transfer Taxes (including any appropriate resale exemption certifications), as provided under applicable law.

Section 6.9     Bargaining Unit Employees.    Buyer acknowledges and agrees that pursuant to Article I, Section 4 of that certain Agreement between Seller and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and its local Union #5, dated March 11, 2018, as amended (the “Union Agreement”), Buyer shall recognize the Union and accept the terms and conditions of the Union Agreement and assume all obligations therein, including, but not limited to, any contractual recall rights maintained by currently furloughed employees of Seller. The employees at the Property shall be employed by Buyer at Transfer of Possession with the salary, insurance and welfare at the rates and in the amounts equal to or greater than the benefit levels as of the

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Execution Date. Seller will notify the Union of this provision prior to closing and engage in any good faith bargaining over the termination of its agreement with the Union and the effects of the sale which may be legally required under the circumstances. Seller acknowledges Buyer may seek to discuss certain wage and benefit improvements to the terms and conditions of the agreement with the Union prior to closing and agrees to provide its reasonable cooperation to the Buyer in this process.

Section 6.10     Service Contracts.    Prior to the Possession Date, Buyer will advise Seller in writing which Service Contracts that Buyer will assume (collectively, the “Assumed Contracts”), and which Service Contracts Buyer requests be terminated at Transfer of Possession (collectively, the “Terminated Contracts”). To the extent that the effective date of termination of a Terminated Contract extends past the Possession Date, Buyer shall assume such Terminated Contract until the effective date of termination. From and after the Possession Date, Buyer shall be responsible for any charges for the Assumed Contracts and the Terminated Contracts whose effective date of termination extends past the Possession Date. Failure of Buyer to timely notify Seller of which Service Contracts Buyer is electing to terminate shall be deemed an election by Buyer to assume all of the Service Contracts to the extent assignable without the need for consents. All amounts payable under the Assumed Contracts shall be prorated as of the Possession Date. Buyer shall be responsible for, and shall reimburse Seller if applicable, any termination fees, cancellation fees, penalties or similar payments incurred to discontinue the Terminated Contracts, regardless of whether the effective date of such termination takes place prior to or after the Possession Date.

Section 6.11     Letter of Credit . Buyer shall cause Bank (as defined below) to deliver to Seller, prior to Transfer of Possession, a standby letter of credit naming Seller as beneficiary (the “Letter of Credit”) that complies in all respects with the requirements of this Section 6.11 in the same amount as the Promissory Note (the “LOC Amount”). The Letter of Credit shall (a) be issued by Bank; (b) in form and substance approved by Seller (in substantially the form attached hereto as Exhibit I); (c) be irrevocable, unconditional and payable upon demand; (d) be maintained in effect until September 30, 2023 (“LOC Expiration Date”); (e) contain a provision that provides that, in the event that the Maturity Date under the Promissory Date is extended or delayed for any reason, the Letter of Credit shall be automatically extended to no less than sixty (60) days following such extended or delayed Maturity Date ; (f) be fully assignable by Seller, its successors and assigns; (g) permit partial draws and multiple presentations and drawings; and in the event of default, Seller is entitled to draw balance of the LOC Amount. Subject to Seller’s confirmation (which shall not be unreasonably withheld) that Buyer has partially fulfilled its obligation to make installment payments pursuant to the Promissory Note, Bank may, by issuance of amended Letter of Credit to Seller, reduce the LOC Amount accordingly following Bank’s standard procedures, provided, however, that at no time shall the LOC Amount be reduced below an amount equal to the outstanding unpaid principal and interest balance under the Promissory Note. Buyer shall pay all expenses, points and/or fees incurred in obtaining the Letter of Credit. The term “Bank” shall mean JPMORGAN CHASE BANK, N.A.

Section 6.12     Further Assurances.    Following the Transfer of Possession, each of the Parties shall, and shall cause their respective Representatives to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transaction contemplated hereunder, and the other transaction documents. In furtherance, and not limitation, of the foregoing, if Buyer and Seller mutually agree that certain transition services are necessary and appropriate for Buyer’s short-term use and operation of the Property, Buyer and Seller shall use good faith efforts to enter into a mutually agreeable transition services arrangement, providing for certain services for the periods and on the terms and conditions as mutually agreed by the Parties; provided, however, that entering into such transition services arrangement shall not be a condition to Transfer of Possession.

Section 6.13     Shares of Forum Merger III.    Seller has and will continue through Transfer of Possession to provide Buyer with strategic and consulting services and as compensation therefor. Buyer will instruct Forum Merger III (as defined below) to, under the Merger Agreement (as defined below), deliver 5,000,000 shares of Parent Common Stock (as defined in the Merger Agreement) (the “Forum Merger III Shares”) to Seller at or prior to Transfer of Possession. Notwithstanding anything to the contrary set forth in this agreement, Seller and Buyer each acknowledge and agree that such shares of Parent Common Stock are not being received as consideration for the Property or any other assets transferred to Buyer from Seller and are solely compensation for such services provided by Seller and that Seller and Buyer shall not take any position contrary thereto. As a condition to receipt of such shares, Seller shall deliver to Forum Merger III and Buyer a duly completed investor suitability questionnaire attached hereto as Exhibit J.

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Article VII
CONDITIONS TO TRANSFER OF POSSESSION

Section 7.1     Conditions to Obligations of Seller.    The obligations of Seller to consummate the transactions contemplated hereunder shall be subject to the fulfillment or waiver (if waivable), at or prior to the Transfer of Possession, of each of the following conditions:

(a)     The representations and warranties of Buyer contained in this Agreement shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or material adverse effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or material adverse effect) as of the date hereof and on and as of the Possession Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects), except, in each case, as would not reasonably be expected to have a material adverse effect on ability to consummate the transaction contemplated hereunder.

(b)     Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement prior to or on the Possession Date; provided, that, with respect to agreements, covenants and conditions that are qualified by materiality, Buyer shall have performed such agreements, covenants and conditions, as so qualified, in all respects.

(c)     Buyer shall have delivered to Seller duly executed counterparts of the closing documents described in Section 2.2(b) of this Agreement.

(d)     Seller shall have received consents, authorizations and approvals from Sokon, the ultimate parent company of Seller, and Sokon’s shareholders, for this Agreement and the transactions contemplated herein, and such consent, authorization and approval shall not have been revoked.

(e)     Seller shall have received payment of the Initial Payment of the Purchase Price.

(f)     Seller shall have received the Landlord Consent.

(g)     The filings of the parties pursuant to the HSR Act, if any, shall have been made and the applicable waiting period and any extensions thereof shall have expired or been terminated.

(h)     No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of such transactions to be rescinded following completion thereof, and such Governmental Order shall have become final and non-appealable.

(i)     Buyer and Forum Merger III (as defined below) shall have amended the Merger Agreement (as defined below) providing for the issuance by Forum Merger III and delivery at Transfer of Possession to Seller of the Forum Merger III Shares at no cost to Seller. Seller shall have either (i) become a party to that certain Amended and Restated Registration Rights Agreement to be entered into, among other parties, stockholders of Buyer and Forum Merger III in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the Forum Merger III Shares will constitute Registerable Securities (as the term is defined in the Registration Rights Agreement); or (ii) entered into a separate registration rights agreement with Forum Merger III under which Seller is entitled to the same registration rights with respect to the Forum Merger III Shares as such rights are granted to stockholders of Buyer under the Registration Agreement.

(j)     Seller shall have received the Letter of Credit issued by Bank in the form attached hereto as Exhibit I.

Section 7.2     Conditions to Obligations of Buyer.    The obligations of Buyer to consummate the transactions contemplated hereunder shall be subject to the fulfillment or waiver (if waivable), at or prior to the Transfer of Possession, of each of the following conditions:

(a)     No governmental authority shall have enacted, issued, promulgated, enforced or entered any governmental order which is in effect and has the effect of making the transaction contemplated hereunder illegal, otherwise restraining or prohibiting consummation of the transaction contemplated hereunder or causing the transaction contemplated hereunder to be rescinded following completion thereof, and such governmental order shall have become final and non-appealable.

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(b)     Buyer shall have received the Landlord Consent.

(c)     All of Seller’s real estate mortgages, mechanic’s and materialmen’s liens, judgment liens or other monetary liens relating to the Property shall have been released from the Property in full, and Seller shall have delivered to Buyer written evidence, in form satisfactory to Buyer in its reasonable discretion of the release of such mortgages mechanic’s and materialmen’s liens, judgment liens or other monetary liens relating to the Property.

(d)     Buyer shall have received the Title Policy or a commitment by the Title Company to issue the Title Policy upon payment of the premium and satisfaction of other customary requirements in form and substance reasonably satisfactory to Buyer, subject to the provisions of Section 6.2 above. For the avoidance of doubt, Seller’s inability (without expenditure of funds) to deliver title in such condition to permit such insurance or commitment shall be a failure of this condition to Transfer of Possession but not a Seller default.

(e)     The representations and warranties of Seller contained in this Agreement shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) as of the date hereof and on and as of the Possession Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(f)     Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement prior to or on the Possession Date; provided, that, with respect to agreements, covenants and conditions that are qualified by materiality, Seller shall have performed such agreements, covenants and conditions, as so qualified, in all respects.

(g)     Seller shall have delivered to Buyer duly executed counterparts of the closing documents described in Section 2.2(a) of this Agreement.

(h)     The filings of the parties pursuant to the HSR Act, if any, shall have been made and the applicable waiting period and any extensions thereof shall have expired or been terminated.

(i)     All of the conditions to the closing under that certain agreement (the “Merger Agreement”) captioned “AGREEMENT AND PLAN OF MERGER,” by and among Forum Merger III Corporation, a Delaware corporation (“Forum Merger III”), ELMS Merger Corp., a Delaware corporation and a wholly owned Subsidiary of Forum Merger III, and Buyer, have been satisfied or waived in writing.

Article VIII
termination

Section 8.1     Termination Prior to Transfer of Possession.    This Agreement may be terminated at any time prior to the Transfer of Possession:

(a)     by the mutual written consent of Buyer and Seller;

(b)     by Buyer by giving written notice to Seller if the Transfer of Possession shall not have occurred on or before June 30, 2021 (the “End Date”) by reason of the failure of any condition precedent under Article II hereof; provided that such failure is not the result of an act, misrepresentation or omission of Buyer; provided, further, that if any condition set forth in Article II hereof has not been satisfied or waived as of the End Date, then either Party may, in its sole discretion, elect to extend the End Date to any date within one (1) month from the End Date by delivery of written notice of such extension to the other Party on or prior to the initial End Date, in which case the End Date shall be deemed for all purposes to be such later date (the “Extended End Date”); and provided, further, that if any condition set forth in Article II hereof has not been satisfied by the Extended End Date, then Seller may, in its sole discretion, elect to extend the Extended End Date to any date within three (3) months from the Extended End Date, in which case the End Date shall be deemed for all purposes to be such later date (the “Outside Date”);

(c)     by Buyer by written notice to Seller if Buyer is not then in material breach of any provision of this Agreement and there has been a breach of any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Section 7.2 hereof and such breach, inaccuracy or failure has not been cured by Seller within thirty (30) days of receipt of written notice of such breach from Buyer; or

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(d)     by Seller by written notice to Buyer if Seller is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Section 7.1 hereof and such breach, inaccuracy or failure has not been cured by Buyer within thirty (30) days of receipt of written notice of such breach from Seller, except that such cure period shall not apply to failure to pay the Initial Payment of the Purchase Price on the day of Transfer of Possession.

(e)     by Seller if Transfer of Possession has not occurred by July 31, 2021.

Article IX
miscellaneous

Section 9.1     Notices.    Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) via email if sent to the appropriate email address designated below or (d) by a commercial overnight courier that guarantees next business day delivery and provides a receipt, and such notices shall be addressed as follows:

 

To Buyer:

 

Electric Last Mile, Inc.

c/o: Benjamin Wu, General Counsel

1055 W Square Lake Rd

Troy, MI 48098

Email: bwu@electriclastmile.com

   
   

To Seller:

 

SF MOTORS, INC. dba SERES
Attn: Legal Department
3303 Scott Blvd.,
Santa Clara, CA 95054
Email: legal@driveseres.com

   
   

with a copy to:

 

King & Wood Mallesons LLP

535 Middlefield Road, Suite 245

Menlo Park, California 94025

Attention: Yuji Sun, Esq.

Email: yuji.sun@us.kwm.com

   

or to such other address as either party may from time to time specify in writing to the other party. Any such notice shall be deemed to have been given (i) upon delivery, if personally delivered, one (1) Business Day after sending if sent by any nationally recognized form of airborne/overnight delivery service, or (ii) the date of sending if sent by email.  Either party may change the address at which it desires to receive notice upon giving written notice of such request to the other party.  Buyer and Seller, and their respective counsel, hereby agree that notices may be given hereunder by the parties’ respective counsel, and that if any communication is given hereunder by Buyer’s or Seller’s counsel, such counsel may send such communication directly to all principals so long as such other counsel is copied, as required to comply with the foregoing provisions.

Section 9.2     Entire Agreement.    This Agreement, together with the Exhibits and schedules hereto, and the Land Contract and the Promissory Note, contain all representation, warranties and covenants made by Buyer and Seller and constitutes the entire understanding between the parties hereto with respect to the subject matter hereof. Any prior correspondence, memoranda or agreements are replaced in total by this Agreement together with the Exhibits and schedules hereto.

Section 9.3     Time.    Time is of the essence in the performance of each of the parties’ respective obligations contained herein. If the time period by which any right, option or election provided under this Agreement must be exercised, or by which any act required hereunder must be performed, or by which the Transfer of Possession must be held, expires on a Saturday, Sunday or legal or bank holiday, then such time period shall be automatically extended through the close of business on the next regularly scheduled business day (a “Business Day”).

Section 9.4     Attorneys’ Fees.    In the event of any litigation arising out of this Agreement, the parties shall each bear their own legal costs, including attorney fees and court costs in connection with such litigation except that Seller shall have the right to recover attorney fees and court costs in connection with enforcing its rights to collect payment under the Land Contract or the Promissory Note.

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Section 9.5     Assignment.    Buyer’s rights and obligations hereunder shall not be assignable without the prior written consent of Seller in Seller’s sole discretion.

Section 9.6     Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

Section 9.7     Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana.

Section 9.8     Confidentiality and Return of Documents.    Buyer and Seller shall each maintain as confidential any and all material obtained about the other or, in the case of Buyer, about the Property, this Agreement or the transactions contemplated hereby, and shall not disclose such information to any third party. Except as may be required by law, Buyer will not divulge any such information to other persons or entities including, without limitation, appraisers, real estate brokers, or competitors of Seller.

Section 9.9     Interpretation of Agreement.    The article, section and other headings of this Agreement are for convenience of reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term “person” shall include any individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.

Section 9.10     Amendments.    This Agreement may be amended or modified only by a written instrument signed by Buyer and Seller.

Section 9.11     Recording.    A Memorandum of Land Contract may be recorded.

Section 9.12     No Partnership.     The relationship of the parties hereto is solely that of Seller and Buyer with respect to the Property and no joint venture or other partnership exists between the parties hereto. Neither party has any fiduciary relationship hereunder to the other.

Section 9.13     No Third-Party Beneficiary.    The provisions of this Agreement are not intended to benefit any third parties.

Section 9.14     Severability.    If any term or provision of this Agreement or the application thereof to any person or circumstance shall for any reason and to any extent be held to be invalid or unenforceable, then such term or provision shall be ignored, and to the maximum extent possible, this Agreement shall continue in full force and effect, but without giving effect to such term or provision.

Section 9.15     No Waiver.    Neither the failure of either party to exercise any power given such party hereunder or to insist upon strict compliance by the other party with its obligations hereunder, nor any custom or practice of the parties at variance with the terms hereof shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof.

Section 9.16     Construction.    The parties agree that this Agreement is the result of negotiation by the parties, each of whom was represented by counsel, and thus, this Agreement shall not be construed against the maker thereof.

Section 9.17     Patriot Act.    The parties represent and warrant that they are not acting directly or indirectly, for or on behalf any person, group, entity or nation named by the United States Treasury Department as a Specially Designated National and Blocked Person, or for or on behalf of any person, group, entity or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; and that they are not engaged in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly on behalf of, any such person, group, entity or nation. Each party hereby agrees to defend, indemnify and hold harmless the other party from and against any and all claims, damages, losses, risks, liabilities and expenses (including reasonable attorneys’ fees and costs) arising from or related to any breach of the foregoing representation and warranty.

[SIGNATURES BEGIN ON NEXT PAGE]

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The parties hereto have executed this Agreement as of the date set forth next to each party’s signature below, and effective as of the Execution Date as defined in the first paragraph of this Agreement.

Date of Execution: April 9, 2021

 

SELLER:

   

SF MOTORS, INC.,

doing business as SERES,
a Delaware corporation

   

By:

 

 /s/ Yu Zheng

   

Name:

 

 Yu Zheng

   

Title:

 

 Secretary of the Corporation

Date of Execution: April 9, 2021

 

BUYER:

   

ELECTRIC LAST MILE, INC.,
a Delaware corporation

   

By:

 

 /s/ James Taylor

   

Name:

 

 James Taylor

   

Title:

 

 Chief Executive Officer

SIGNATURE PAGE TO AGREEMENT OF PURCHASE AND SALE

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LIST OF EXHIBITS AND SCHEDULES

Exhibit A-1

 

Real Property Description

Exhibit A2

 

Subleased Real Property Description

Exhibit B

 

Forum Merger III Common Stock Registration Rights Agreement

Exhibit C

 

Land Contract

Exhibit C-1

 

Escrow Agreement

Exhibit C-2

 

Special Warranty Deed

Exhibit C-3

 

Memorandum of Land Contract

Exhibit D

 

Bill of Sale

Exhibit E

 

Assignment of Intangibles

Exhibit F

 

Intentionally Omitted

Exhibit G

 

Promissory Note

Exhibit H

 

Sublease

Exhibit I

 

Letter of Credit

Exhibit J

 

Investor Suitability Questionnaire

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Exhibit A-1

REAL PROPERTY DESCRIPTION

Lot 1 in AM General Mishawaka Minor Subdivision, an addition to Penn Township, St. Joseph County, Indiana as per plat thereof recorded September 15, 2017 as Instrument Number 1725316, in the Office of the Recorder of St. Joseph County, Indiana.

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Exhibit A-2

SUBLEASED REAL PROPERTY DESCRIPTION

Lot Numbered Two (2) as shown on the recorded Plat of AM General H2 Minor Subdivision recorded May 14, 2002, in the Office of the Recorder of St. Joseph County, Indiana, as Instrument No. 0226883.

Part of the West One Half (1/2) of the Southwest Quarter (1/4) of Section Six (6) and part of the West One Half (1/2) of the Northwest Quarter (NW 1/4) of Section Seven (7), Township Thirty-Seven (37) North Range Four (4) East, all being in Penn Township, St. Joseph County, Indiana, described as follows:

Commencing at the Southeast corner of the Southeast Quarter (SE 1/4) of Section (1), Township Thirty-Seven (37) North, Range Three (3) East, which point is also the Northeast corner of the Northeast Quarter (NE 1/4) of Section  Twelve (12), Township Thirty-Seven (37) North, Range Three (3) East, Penn Township, St. Joseph County, Indiana; thence South 00 degrees 00 minutes 00 seconds West (bearing assumed) on the East line of the Northeast Quarter (NE 1/4) of said Section 12, a distance of 27.00 feet to the Northwest corner of the Northwest Quarter of Section 7, Township 37 North, Range 4 East; thence North 89 degrees 54 minutes 49 seconds East along the North line of the Northwest Quarter of said Section 7, a distance of 692.70 feet to the point of beginning of this description; thence South 09 degrees 03 minutes 27 seconds West a distance of 165.10 feet to the Southwest corner of tract numbered one on the unrecorded platted survey of the Bohlsen Tract; thence South 00 degrees 00 minutes 06 seconds East along the West lines of tracts numbered two through ten on the unrecorded platted survey of the Bohlsen Tract and said line extended, a distance of 1641.38 feet to a point 40 feet North (measured at right angles) of the centerline of Jefferson Road; thence North 69 degrees 50 minutes 47 seconds East parallel with the centerline of said Jefferson Road a distance of 646.37 feet to the Southeast corner of Lot 18 as said Lot is known and designated on the recorded plat of River Crest Subdivision (Plat Book 12, Page 5), and the West right-of-way line of Pershing Avenue as shown on the plat of said River Crest Subdivision; thence North 00 degrees 00 minutes 06 seconds West along the West right-of-way line of said Pershing Avenue a distance of 1582.60 feet to a point on the North line of the Northwest Quarter of said Section 7; thence North 89 degrees 54 minutes 49 seconds East along the said North line a distance of 30.00 feet to the Northeast corner of the West One Half of the Northwest Quarter of said Section 7 said point also being the Southeast corner of the Plat of Coyle’s Acre’s said plat being recorded in Plat Book 15, Page C; thence North 00 degrees 07 minutes 42 seconds East along the East line of said plat a distance of 213.90 feet to a point 45 feet South of the Northeast corner of Lot 10 as said Lot is known and designated on the plat of said Coyle’s Acre’s; thence South 61 degrees 41 minutes 35 seconds West a distance of 213.18 feet to a point on the West line of said Lot 10; thence North 35 degrees 53 minutes 39 seconds West along the West line of said Lot 10 a distance of 132.30 feet to a corner of said Lot 10; thence Westerly along the North line of Lot 11 as said Lot is known and designated on the plat of said Coyle’s Acre’s and along a curve to the right having a radius of 50.00 feet, a delta of 106 degrees 27 minutes 51 seconds, a chord distance of 80.11 feet bearing South 89 degrees 58 minutes 47 seconds West, a length of 92.91 feet to the Northwest corner of said Lot 11; thence South 12 degrees 18 minutes 52 seconds West a distance of 37.22 feet to an iron pipe; thence South 64 degrees 18 minutes 19 seconds West a distance of 31.59 feet to an iron pipe on the West line of said Lot 11; thence South 89 degrees 46 minutes 29 seconds West a distance of 229.19 feet to a point on the West line of said Coyle’s Acre’s said point being 170.00 feet North of the Southwest corner of Lot 12 as said Lot is known and designated on the plat of said Coyle’s Acres; thence South 00 degrees 07 minutes 42 seconds West along the West line of said Coyle’s Acres a distance of 170.00 feet to the point of beginning of this description.

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Exhibit B

FORUM MERGER III COMMON STOCK REGISTRATION RIGHTS AGREEMENT

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Exhibit C

LAND CONTRACT

This LAND CONTRACT (“Contract”) is executed to be effective as of the ____ day of ___________, 2021 (“Execution Date”), by and between SF Motors, Inc., a Delaware corporation, DBA SERES (“Vendor”), and Electric Last Mile, Inc., a Delaware corporation (“Purchaser”).

WITNESSETH, that the parties agree as follows:

Vendor hereby sells to Purchaser, and Purchaser hereby purchases from Vendor, subject to the terms, covenants and conditions set forth herein, the following property: certain real property generally located at 12900 McKinley Highway, Mishawaka, Indiana, further described on Exhibit A attached hereto and made a part hereof (the “Land”), together with (1) all buildings, improvements and fixtures located thereon (collectively, the “Improvements”), (2) all rights, benefits, privileges, easements, tenements, hereditaments, rights-of-way and other appurtenances thereon or in any way appertaining thereto, including all mineral rights, development rights, air and water rights, and (3) all strips and gores and any land lying in the bed of any street, road or alley, open or proposed, adjoining such Land (collectively, the “Real Property”).

1.      Purchase Price and Manner of Payment.

1.1.   Purchase Price. The Purchase Price for the Real Property shall be the sum of Ninety Million and 00/100 Dollars ($90,000,000.00) (“Purchase Price”), which Purchaser agrees to pay Vendor in accordance with the terms and conditions of this Contract, without relief from valuation and appraisement laws and with reasonable attorneys’ fees after and Event of Default (as defined below) and referral to an attorney for collection.

1.2.   Manner of Payment. The Purchase Price shall be paid in the following manner:

1.2.1.   The sum of Eighteen Million Six Hundred Twenty Thousand Six Hundred Eighty-Nine and 66/100 Dollars ($18,620,689.66) is herewith paid in cash on the date hereof in connection with turning over the possession of Real Property pursuant to the Purchase Agreement (the “Possession Date”) as set out in that certain Agreement of Purchase and Sale between Vendor and Purchaser dated as of ______________, 2021 (“Purchase Agreement”).

1.2.2.   The remainder of the Purchase Price in the amount of Seventy-One Million Three Hundred Seventy-Nine Thousand Three Hundred Ten and 34/100 Dollars ($71,379,310.34) (such amount plus any Delinquent Interest referred to as the “Contract Balance”) shall be paid by Purchaser to the order of Vendor in twenty-three (23) consecutive monthly installments of Three Million One Hundred Three Thousand Four Hundred Forty-Eight and 28/100 Dollars ($3,103.448.28) (each, a “Monthly Payment”), with the first Monthly Payment being due and payable on _____________ , 2021(the last day of the calendar month in which the Transfer of Possession Date occurs), and each successive Monthly Payment being made on later than the last day of each consecutive calendar month thereafter (each a “Payment Date”) until Vendor receives the entire Purchase Price.

1.2.3.   Purchaser’s obligation to pay the Contract Balance, including the Monthly Payments on the Payment Dates are independent covenants without offset, counterclaim, defense, presentment, notice or demand, at such address or bank account(s) as Vendor may direct by written notice. There shall be no prepayment penalty for payments made before the applicable Payment Date and such prepayment amount shall reduce the Purchase Price, provided that any partial prepayment shall not act to reduce or delay the next Monthly Payment, but rather shall be applied to the Contract balance in inverse order of maturity of the Monthly Payments.

1.2.4.   Purchaser hereby acknowledges that late payment of any Monthly Payment will cause Vendor to incur costs not contemplated hereunder, the exact amount of which is presently anticipated to be extremely difficult to ascertain. If Vendor does not receive the applicable Monthly Payment on the applicable Payment Date, and Purchaser fails to cure such nonpayment within five (5) days following receipt of written notice from Vendor, Purchaser will pay Vendor a late charge equal to five percent (5%) of the Monthly Payment, plus interest at the Default Rate (as defined in Section 11) and subject to other rights and remedies provided herein.

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2.    Taxes and Assessments. Real estate taxes and assessments shall be prorated and paid in accordance with the Purchase Agreement. Specifically, Vendor shall pay the installments due on May 10 and November 10, 2021 when due. Vendor will also pay its share and Purchaser’s share of the installment payable on May 10, 2022, allocated with $_______ to Vendor and $__________ to Purchaser [complete in accordance with Section 2.4(a) of Purchase Agreement, with installment payment dates to be adjusted if closing after June 30, 2021]. Purchaser shall reimburse Vendor for Purchaser’s share of such tax installment within ten (10) days after billing. Thereafter, beginning on November 10, 2022, Purchaser shall be responsible for directly paying to the taxing authority all installments of real estate taxes and assessments payable thereafter. Purchaser, upon written notice to Vendor and at Purchaser’s expense, may contest on Vendor’s and Purchaser’s behalf, any changes of the assessed valuation of the Real Property. Vendor shall forward or cause to be forwarded to Purchaser a copy of all statements for real estate taxes and assessments on the Real Property payable by Purchaser, as received, and Purchaser shall provide to Vendor upon request evidence of payment of such taxes. Should Purchaser fail to timely pay any real estate taxes or assessments required under this Section 2 and should Purchaser not rectify the situation within five (5) business days after written notice from Vendor to Purchaser, Vendor shall have the right, without assuming obligation in connection therewith, to pay such real estate taxes and assessments at the sole cost of Purchaser, and all costs incurred by Vendor shall be payable to Vendor by Purchaser within ten (10) days after demand and without prejudice to any other rights and remedies of Vendor under this Contract. Notwithstanding the foregoing, Purchaser shall have the right to appeal any tax bill so long as Purchaser does not cause any delinquency in payment of the same or penalties to accrue as a result of the same.

3.      Insurance.

3.1.   Coverages. At all times during the term of this Contract, at Purchaser’s sole cost and expense, Purchaser shall obtain and keep in force for the benefit of Purchaser and Vendor the following insurance:

3.1.1.   Property Insurance. Special causes of loss/special form property insurance (formerly known as “all risk” or “extended coverage” property insurance), earthquake insurance, and flood insurance on all Improvements and all of Purchaser’s personal property located on, in or about the Real Property. The amount of such insurance shall be the Full Insurable Replacement Value (as defined below). Each such policy shall specify that proceeds shall be payable whether or not any improvements are actually rebuilt. Each such policy shall include an endorsement protecting the named and additional insureds against becoming a co-insured under the policy. Purchaser hereby releases and waives as against Vendor and its shareholders and employees any and all claims, causes of action, demands, and rights of recovery, of whatever nature, for damages, loss or injury to the Improvements and/or the property of Purchaser in, upon or about the Real Property caused by or resulting from fire and/or any other perils required to be insured against by Purchaser hereunder, whether or not such damages, loss or injury is caused by the fault or negligence of Vendor or its shareholders or employees.

3.1.2.   “Full Insurable Replacement Value” means 100% of the actual costs to replace the Improvements (without deduction for depreciation but with standard exclusions such as foundations, excavations, paving and landscaping, as applicable to specific perils), including the costs of demolition and debris removal and including materials and equipment not in place but in transit to or delivered to the Real Property. The Full Insurable Replacement Value initially shall be determined at Purchaser’s expense by an appraiser or an insurer, selected by Purchaser and acceptable to Vendor, but in no event at any time less than the Contract Balance. Purchaser shall maintain coverage at the current Full Insurable Replacement Value throughout the term of this Contract, subject to reasonable deductibles approved by Vendor pursuant to Subsection 3.2.1. below.

3.1.3.   Business Interruption Insurance. Insurance against loss from business interruption under a business interruption policy, covering risk of loss due to causes insured against under Subsection 3.1.1. above, in an amount not less than eighteen (18) months of projected gross revenues from the Real Property.

3.1.4.   Worker’s Compensation and Employer’s Liability Insurance. Worker’s compensation insurance in the amounts and coverages required under worker’s compensation, disability and similar employee benefit laws applicable to Purchaser and/or the Real Property, and employer’s

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liability Insurance in amounts not less than $2,000,000 per occurrence for bodily injury and $2,000,000 per employee for injury by disease (or such higher amounts as may be required by law).

3.1.5.   Commercial General Liability Insurance. Commercial general liability insurance through one or more primary and umbrella liability policies against claims, including but not limited to, bodily injury and property damage occurring in, on or about the Real Property, with such limits as may be reasonably required by Vendor from time to time, but in any event not less than $10,000,000, combined single limit and annual aggregate, which Purchaser shall increase as necessary during the term of this Contract to maintain adequate coverage over time that is comparable to the requirements in effect as of the execution of this Contract. Such insurance shall insure the performance by Purchaser of the indemnity agreements contained in this Contract. If any governmental agency or department requires insurance or bonds with respect to any proposed or actual use, storage, treatment or disposal of Hazardous Materials by Purchaser, Purchaser shall be responsible for such insurance and bonds and shall pay all premiums and charges connected therewith; provided, however, that this provision shall not and shall not be deemed to modify the provisions of this Section 3.

Such liability insurance policy shall (i) delete any employee exclusion on bodily injury coverage; (ii) include employees as additional insureds; (iii) provide blanket contractual coverage, including liability assumed by and the obligations of Purchaser under this Contract for personal injury, death and/or property damage; (iv) provide products and completed operations and independent contractors coverage and broad form property damage liability coverage without exclusions for collapse, explosion, demolition, underground coverage and excavating, including blasting; (v) provide aircraft liability coverage, if applicable, and automobile liability coverage for owned, non-owned and hired vehicles; (vi) provide liability coverage on all mobile equipment used by Purchaser; and (vii) include a cross liability endorsement (or provision) permitting recovery with respect to claims of one insured against another. Such insurance shall insure against any and all claims for bodily injury, including death, resulting therefrom, and damage to or destruction of property of any kind whatsoever and to whomever belonging and arising from Purchaser’s operations at the Real Property and whether such operations are performed by Purchaser or any of its contractors, subcontractors, or by any other person (with the exception of damage or injury caused by the gross negligence or willful misconduct of Vendor occurring after the Execution Date or any other person or party acting by or on behalf of Vendor).

3.1.6.   Other. All other insurance that Purchaser is required to maintain under all applicable laws, ordinances, and regulations of any U.S and State of Indiana governmental authority having jurisdiction thereof.

3.2.   Policy Form and General.

3.2.1.   All insurance policies required to be maintained under this Contract by Purchaser, and all renewals thereof, shall be (i) issued by one or more companies of recognized responsibility, authorized and qualified to do business in the State of Indiana, with a financial rating of at least A-, X in the most recent edition of Best’s Insurance Reports (or its successor, or, if there is no equivalent successor rating, otherwise reasonably acceptable to Vendor); (ii) a primary policy payable directly to Vendor, and any insurance maintained by Vendor shall be excess of and shall not contribute with Purchaser’s policies; and (iii) endorsed such that such policies shall not be changed or canceled without at least thirty (30) days’ prior written notice to Vendor. The insurance shall be issued in the names of Purchaser and Vendor, as their respective interests may appear. All property insurance shall also be required to be maintained under this Contract by Purchaser shall name Vendor as loss payee and all liability insurance required to be maintained under this Contract by Purchaser shall name as additional insureds Vendor, its shareholder, its employees, and such other parties as Vendor may reasonably request. Any deductibles under any of the insurance required hereunder must be agreed to in advance in writing by Vendor in its reasonable, good faith discretion. All deductibles shall be paid by Purchaser.

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3.2.2.   A copy of each insurance policy required hereunder of Purchaser, or a certificate of each such policy executed by the insurance company evidencing that the required insurance coverage is in full force and effect, shall be deposited with Vendor on or before the Execution Date of this Contract, shall be maintained throughout the term of this Contract, and shall be renewed not less than thirty (30) days before the expiration of the term of the policy. No such policy shall contain any provisions for exclusions from liability and no exclusion shall be permitted in any event if it conflicts with any coverage required hereby, and, in addition, no such policy shall contain any exclusion from liability for bodily injury or sickness, disease or death or which in any way impairs coverage under the contractual liability coverage described above.

3.2.3.   No approval by Vendor of any insurer, or the terms or conditions of any policy, or any coverage or amount of insurance, or any deductible amount shall be construed as a representation, warranty or other assurance by Vendor of the solvency of the insurer or the sufficiency of any policy or any coverage or amount of insurance or deductible, and Purchaser assumes full risk and responsibility for any inadequacy of insurance coverage or any failure of insurers.

3.2.4.   Should Purchaser fail to take out and keep in force each insurance policy required under this Section 3, or should such insurance not be reasonably approved by Vendor and should Purchaser not rectify the situation within ten (10) business days after written notice from Vendor to Purchaser, Vendor shall have the right, without assuming any obligation in connection therewith, to purchase such insurance at the sole cost of Purchaser, and all costs incurred by Vendor shall be payable to Vendor by Purchaser within ten (10) days after demand and without prejudice to any other rights and remedies of Vendor under this Contract.

3.2.5    If the Improvements or any part thereof are damaged by casualty the entire insurance proceeds payable in respect of the part so taken or damaged are hereby assigned to and shall be paid directly to Vendor for the sole purpose of making the same available for Purchaser to restore the Improvements to as nearly the same condition as existed prior to such casualty so long as (i) no outstanding Event of Default exists hereunder, and (ii) sufficient insurance proceeds are available to Purchaser to completely restore the Improvements to its condition immediately preceding said loss, or if sufficient insurance proceeds are not available, Purchaser deposits with Vendor sufficient additional cash to make up for any such deficiency of insurance proceeds, (iii) the Improvements can be restored on the Real Property in compliance with applicable law (including zoning ordinances), (iv) the loss occurs at a time which is greater than three (3) months prior to the due date of the final Monthly Payment, and (iv) at Vendor’s option, such insurance proceeds shall be held by Vendor in a non-interest bearing account disbursed by Vendor with final disbursement being made only at such time as the restoration is completed in a good and workmanlike manner, lien free, a certificate of occupancy for the restored Improvements has been issued by the appropriate governmental authority (if available). Vendor shall not be responsible for conducting any of such restoration work. If the foregoing requirements are not met, or if the insurance proceeds exceeds the cost of reconstruction, restoration or repair, the insurance proceeds, or the excess insurance proceeds, as the case may be, shall be applied to the payment of the Contract Balance. The event of casualty shall in no case relieve Purchaser from continuing to pay each full Monthly Payment when due until the Contract Balance is satisfied in full from such payments and application of the insurance proceeds.

3.3.   Purchaser’s Responsibility for Accidents. Purchaser hereby assumes all risk and responsibility for accident, injury or damage to person and property arising from Purchaser’s use and control of the Real Property and the Improvements thereon except for accidents, injury or damage caused by or arising out of the gross negligence or willful misconduct occurring after the Execution Date of Vendor or any party acting through or on behalf of Vendor and not covered by insurance required to be maintained by Purchaser hereunder. Purchaser shall insure such risk by carrying standard commercial general liability insurance, in such amounts as are satisfactory to Vendor, insuring the Vendor’s liability as well as the Purchaser’s, pursuant to this Section 3.

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4.    Title, Escrow And Final Payment. Vendor has delivered to Escrow Agent (defined below) a fully-executed (i) Special Warranty Deed in recordable form (the “Deed”), (ii) executed Assignment of the Ground Lease by and between Vendor and St. Joseph County Indiana, Department of Redevelopment acting by and through the St. Joseph County Redevelopment Commission, dated December 18, 2001, in recordable form (the “Lease Assignment”) and (iii) a Release and Termination of Memorandum of Land Contract in recordable form (“Memorandum Release”) (collectively, the Recordable Documents”). Purchaser has obtained Contract Owner’s Title Policy in the amount of the Purchase Price from the Chicago Title Insurance Company (referred to herein as the “Title Company” or the “Escrow Agent”). Upon written direction by both Vendor and Purchaser to Escrow Agent that all conditions have been satisfied, and in accordance with the provisions of the Escrow Agreement by and between Escrow Agent, Vendor and Purchaser, Escrow Agent shall (i) record the Recordable Document in the Office of the Recorder of St. Joseph County, Indiana, (ii) promptly provide to Purchaser file stamped copies of the recorded Recordable Documents and, (iii) return the original recorded Recordable Documents to Purchaser promptly after recorded (the “Final Payment Transaction”). At the Final Payment Transaction, Purchaser’s obligations under this Land Contract shall be satisfied in full.

5.    Representations and Warranties. The representations and warranties of Vendor and Purchaser are as set out in the Purchase Agreement. In addition, Vendor hereby warrants that Vendor has good and merchantable title to the Real Estate, free and clear of any and all liens, leases, restrictions and encumbrances, except as follows:

(i)     Easements and restrictions of record;

(ii)    Current real estate taxes not yet delinquent;

(iii)   Matters that would be disclosed by an accurate inspection or survey of the Real Estate; and

(iv)   Applicable zoning, building, land use and other governmental restrictions, laws, ordinances, rules and regulations;

Vendor further represents and warrants the following as of the date hereof: Vendor has made no contract to sell all or a part of the Real Estate to any person other than the Purchaser; Vendor has not given to any person an option, which is presently exercisable, to purchase all or any part of the Real Estate; there are no unpaid claims for labor done upon or materials furnished for the Real Estate in respect of which liens have been or may be filed; there is no judgment of any court of the State of Indiana or of any court of the United States that is or may become a lien on the Real Estate; and Vendor is neither principal nor surety on any bond payable to the State of Indiana.

6.    Purchaser’s Right to Mortgage the Real Property. Purchaser shall not have the right to encumber the Real Property or Purchaser’s interest in this Contract in any way, including with an easement, lease, mortgage, security interest, assignment or any form of lien or debt instrument and any such encumbrance shall be void ab initio.

7.    Transfer of Purchaser’s Interest — Condemnation. Purchaser’s interest in this Contract and Purchaser’s interest in the Real Property may not be sold, assigned, pledged, mortgaged, encumbered or transferred by Purchaser without the prior written consent of Vendor, which consent may be withheld at Vendor’s sole discretion. If the Real Property or any part thereof is taken or damaged pursuant to an exercise or threat of exercise of the power of eminent domain, the entire proceeds of the award or compensation payable in respect of the part so taken or damaged are hereby assigned to and shall be paid directly to Vendor. Such proceeds shall be applied, at Vendor’s option and without premium, in part or entirely as a prepayment of the Contract Balance or to restoration of the Real Property; provided, however, that if by electing to apply part of any such award or compensation against the Contract Balance, the Contract Balance shall be recalculated and the Monthly Payment amount shall be reduced to amortize the recalculated Contract Balance over the remaining term of this Contract. If the Contract Balance is paid in full, then Vendor shall pay the balance of the proceeds of the award to Purchaser.

8.    Indemnification and Release. (a) Regardless of whether or not separate, several, joint or concurrent liability may be imposed upon Vendor, Purchaser shall indemnify, defend and hold harmless Vendor from and against all damages, claims and liability arising from or connected with Purchaser’s control or use of the Real Property, including, without limitation, any damage or injury to person or property with the exception of any liability, damage or injury caused by or arising from the gross negligence or willful misconduct occurring after the Execution Date of Vendor or any person or party acting through or on behalf of Vendor and not covered by insurance required to be maintained by Vendor. This indemnification shall not include any matter for which the Vendor is effectively protected by insurance. If Vendor without fault of Vendor any person or party acting by or on behalf of Vendor, shall become a party to litigation commenced by or against Purchaser (but not by Purchaser against Vendor), then Purchaser shall indemnify,

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defend and hold Vendor harmless. The indemnification provided by this paragraph shall include all reasonable legal costs and attorneys’ fees incurred by Vendor in connection with any such claim, action or proceeding. (b) Vendor shall indemnify, defend and hold harmless Purchaser from and against all damages, claims and liability arising from or connected with use of, or access to, the Real Property occurring after the Execution Date by Vendor or any person or party acting through or on behalf of Vendor, including, without limitation, any damage or injury to person or property.

9.      Covenants.

9.1.   Maintenance.Purchaser shall, at its sole cost and expense, shall maintain, repair and make all replacements to the Real Property and all common area, parking, machinery, apparatus, equipment and systems located thereon, including, without limitation, the roof, roof membrane, foundation, slabs, load bearing and exterior walls, other structural elements of the Real Property, windows, boilers, heating, ventilation, air conditioning and other mechanical systems, plumbing and sewer systems, electrical systems on or serving the Real Property, necessary to keep the Real Property and all such machinery, apparatus, equipment and systems in good condition, repair and working order; provided that Vendor shall be responsible for all maintenance, repair and replacement necessitated by damage caused after the Execution Date by Vendor or any person or party acting through or on behalf of Vendor. Purchaser shall keep the Real Property in a neat and orderly condition and in compliance with all applicable laws, ordinances, and regulations of any governmental authority having jurisdiction thereof.

9.2.   Use. Purchaser shall use and operate the Real Property for the manufacturing of vehicles and related uses (“Purchaser’s Intended Use”) and shall not change such usage. The Real Property shall not, without the prior written consent of Vendor, be rented, leased or occupied by persons other than Purchaser, until payment in full of the Contract Balance.

9.3.   Alterations. Purchaser shall not make or permit to be made any alteration, addition or improvement in, upon or to the Real Property, or any portion thereof, without the prior written consent of Vendor, which consent shall not be unreasonably withheld, conditioned or delayed. In the event Vendor’s consent is obtained, all such alterations, additions or improvements shall be performed at the expense of Purchaser in a diligent, good and workmanlike manner, free from faults and defects and in accordance with all applicable laws, ordinances, and regulations of any governmental authority having jurisdiction thereof. Prior to commencing the construction, installation or making of any alterations, additions or improvements, Purchaser shall provide Vendor with detailed plans and specifications therefor along with all necessary building permits and other governmental approvals and shall obtain Vendor’s written approval thereof.

9.4.   Liens. Purchaser shall not permit any Statement of Intention to hold a Mechanic’s Lien to be filed against the Real Property nor against any interest or estate therein by reason of labor, services or materials claimed to have been performed or furnished to or for Purchaser. If such Statement of Intention to hold a Mechanic’s Lien shall be filed, Vendor, at Vendor’s option, may compel the prosecution of an action for the foreclosure of such Mechanic’s Lien by the lienor. If any such Statement of Intention to hold a Mechanic’s Lien shall be filed and an action commenced to foreclose the lien, Purchaser, upon demand by Vendor, shall cause the lien to be released at Purchaser’s expense by the filing of a written undertaking with a surety approved by the Court and obtaining an order from the Court releasing the property from such lien. Nothing in this instrument shall be deemed or construed to constitute consent to, or a request to any party for, the performance of any labor or services or the furnishing of any materials for the improvement, alteration or repairing of the Real Property; nor as giving Purchaser the right or authority to contract for, authorize or permit the performance of any labor or services or the furnishing of any material that would permit the attaching of a valid mechanic’s lien.

9.5.   Possession. Purchaser acknowledges that, except as expressly set forth herein, it has had a full opportunity to inspect the Real Property and agrees to accept the Real Property as of the Execution Date in its current condition “AS IS, WHERE IS, WITH ALL FAULTS CONDITION”, as set-out in the Purchase Agreement. EXCEPT AS EXPRESSLY SET FORTH HEREIN, VENDOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE CONDITION OF THE REAL PROPERTY OR ITS HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURCHASE.

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9.6    Tax Treatment. For all applicable tax purposes, Vendor and Purchaser shall treat the transaction contemplated herein as a purchase of the Real Property by Purchaser from Vendor as of the Possession Date.

10.    Vendor’s Right of Entry. Vendor reserves and shall have the right to enter the Real Property (accompanied by an employee of Purchaser) upon at least two business (2) days prior notice (except in an extreme emergency, when no notice shall be required) to inspect the Real Property, to evaluate Purchaser’s compliance with this Contract (including Purchaser’s compliance with all applicable laws, ordinances, and regulations of any governmental authority having jurisdiction thereof), to cure any default of Purchaser, to post notices of non-compliance, to perform any obligation and/or to exercise any rights Vendor has under this Contract. Vendor’s entry provided herein shall (i) be accomplished in a manner designed to least interfere with Purchaser’s operations, (ii) comply with Purchaser’s safety protocols, and (iii) not constitute an actual or constructive eviction of Purchaser, in whole or in part, or giving rise to an abatement of Purchase Price by reason of loss or interruption of business of Purchaser or giving rise to any liability for direct or indirect injury to or interference with Purchaser’s business or any inconvenience or annoyance suffered by Purchaser. Notwithstanding anything to the contrary set forth in this Section 10, Vendor shall be responsible for any and all damage, injury or other liability arising out of Vendor’s exercise of its access rights set forth above to the extent the same is not covered by the insurance which Purchaser is required to maintain hereunder.

11.    Default and Acceleration. It is expressly agreed by Purchaser that time is of the essence of this Contract. Upon the occurrence of any Event of Default, as hereinafter defined, and at any time thereafter, the entire Contract Balance and all Obligations (as defined in Section 11.2), and all accrued, unpaid interest thereon, shall, at the option of Vendor, become immediately due and payable without any notice, presentment, demand, protest, notice of protest, or other notice or dishonor or demand of any kind, all of which are hereby expressly waived by Purchaser, and Vendor shall have the right to pursue immediately any and all remedies, legal or equitable, as are available under applicable law to collect such Contract Balance together with a default rate of interest equal to twelve percent (12%) per annum beginning to accrue on the date of the Event of Default (the “Default Interest”). Vendor shall be entitled to avail itself of the remedy of declaring a forfeiture and cancel the Contract as provided below and thereby taking possession and removing the Purchaser from the Real Property. The following shall each constitute an “Event of Default” for purposes of this Contract:

11.1. Default by Purchaser in the payment of:

11.1.1. any Monthly Payment installment of the Purchase Price within five (5) days of the date due under the terms of this Contract,

11.1.2. any installment of real estate taxes on the Real Property or assessment for a public improvement which by the terms of this Contract are payable by Purchaser, on or before the date the same becomes delinquent,

11.1.3. any lapse of insurance required by the terms of this Contract to be maintained by Purchaser,

11.1.4. any installment of basic rent or other additional charges payable under the that certain sublease between Vendor and Purchaser to the ground lease for parking lot purposes by and between Vendor and St Joseph County, Indiana Department of Redevelopment, acting by and through the St. Joseph County Redevelopment Commission dated December 18, 2001 (the “Sublease”),

11.1.5. any other mutually agreed upon amount payable pursuant to this Contract.

11.2. Default, for a period of ten (10) days (provided that, with the exception of Purchaser’s payment obligations, if any breach of this Contract cannot reasonably be remedied within such ten (10) day period, it shall not be a Purchaser Default hereunder so long as Purchaser commences such cure within the ten (10) day period and proceeds diligently until such cure is complete, but in no event longer than sixty (60) days) after written notice thereof is given to Purchaser, in the indebtedness, obligations and liabilities, or the performance or observation of any other covenant or term of this Contract or the Sublease, (collectively, the “Contract Documents”) of Purchaser owing to Vendor (collectively, the “Obligations”).

11.3. Lease, sublease or encumbrance of the Real Property or any part thereof, or the making of any levy, seizure or attachment thereof or thereon or a substantial, uninsured loss of any part of the Real Property.

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11.4. Purchaser

11.4.1. institutes or consents to any proceedings in insolvency, or for the adjustment, liquidation, extension or composition or arrangement of debts or for any other relief under any insolvency law or laws relating to the relief or reorganization of debtors’,

11.4.2. files an answer admitting bankruptcy or insolvency or in any manner is adjudged insolvent, or

11.4.3. makes an assignment for the benefit of creditors or admits in writing inability to pay debts as they become due.

11.5. Any part of Real Property or all or a substantial part of the property or assets of Purchaser is placed in the hands of any receiver, trustee or other officers or representatives of any court, or Purchaser consents, agrees or acquiesces to the appointment of any such receiver or trustee.

11.6. Desertion or abandonment of the Real Property, or any part thereof, by Purchaser.

11.7. Actual or threatened alteration, demolition or removal of any Improvements which are a part of the Real Property.

11.8. Sale, transfer, conveyance or other disposition of Purchaser’s interest in this Contract or Purchaser’s interest in any of the Real Property, or any part thereof, without Vendor’s prior written consent and without paying the Purchase Price in full.

12.    Land Contract Forfeiture. Purchaser acknowledges that it has only acquired a vendee’s interest in the Real Property and that Vendor is retaining fee simple title in the same to secure payment of the Contract Balance. In the event Purchaser commits an Event of Default as defined above, including without limitation fails to pay the Contract Balance when due, deserts or abandons the Real Property or commits any breach of this Contract which materially diminishes the security intended to be given to Vendor under and by virtue of this Contract, then, it is expressly agreed by Purchaser that Vendor may, at Vendor’s option and in its sole discretion in lieu of foreclosure set forth in Section 13 below, cancel this Contract and take possession of the Real Property and remove Purchaser therefrom, or those holding or claiming under Purchaser without any demand and to the full extent permitted by applicable law. In the event of Vendor’s cancellation upon such default by Purchaser, all rights and demands of Purchaser under this Contract and in and to the Real Property shall cease and terminate and Purchaser shall have no further right, title or interest, legal or equitable, in and to the Real Property, or any portion thereof, and Vendor shall have the right to retain all amounts paid by Purchaser toward the Purchase Price as an agreed payment for Purchaser’s possession and use of the Real Property prior to such default. Such retention shall not bar Vendor’s right to recover damages for unlawful detention of the Real Property after default, for any failure to pay taxes, insurance or other amounts owing as a result Purchaser’s possession of the Real Property, for failure to maintain the Real Property at any time, for waste committed thereon or for any other damages suffered by Vendor, including reasonable attorneys’ fees incurred by Vendor in enforcing any right hereunder or in removing any encumbrance on the Real Property made or suffered by Purchaser. In the event of Vendor’s cancellation of this Contract upon default by Purchaser, Purchaser shall surrender and vacate the Real Property immediately and deliver exclusive possession thereof to Vendor in as clean, good and tenantable condition as existed on the Execution Date, ordinary wear and tear, casualty and condemnation excepted, and free of any Hazardous Material (a) discharged, disposed of or released by Purchaser or any of its agents, employees, contractors, vendors, suppliers, licensees, customers, or invitees or (b) otherwise resulting from Purchaser’s operations at the Property. All alterations, additions and improvements made or added to the Real Property by or on behalf of Purchaser shall, at Vendor’s option, be deemed part of the Real Property and surrendered to Vendor lien free upon such termination without compensation to Purchaser. Any alterations, additions or improvements that Vendor does not elect to have surrendered with the Real Property, together with any personal property of the Purchaser, shall be removed by Purchaser as soon as practicable following Vendor’s cancellation of this Contract, and Purchaser shall repair all damage to the Real Property resulting from such removal. Any personal property of Purchaser than remains on the premises of the Real Property after thirty (30) days following Vendor’s cancellation of this Contract shall be deemed abandoned by Purchaser, or at Vendor’s option, Vendor may store or remove the personal property at the risk, cost and expense of Purchaser and Vendor shall in no event be responsible for the value, preservation or safekeeping thereof.

All of Vendor’s remedies under this Section 12 and Sections 13 through 16 shall be cumulative and not exclusive and shall include the right to appoint a receiver in the Event of Default, to foreclose on Purchaser’s interest under

Ex-C-8

foreclosure laws and collect all attorneys’ fees in the enforcement of this Contract. Failure of Vendor to exercise any remedy at any time shall not operate as a waiver of the right of Vendor to exercise any remedy for the same or any subsequent default at any time thereafter.

13.    Mortgage Foreclosure. As an alternative remedy to Vendor in the Event of Default which may be pursued simultaneously with the institution of the Land Contract forfeiture procedures in Section 12, Vendor, in its sole and absolute discretion, may foreclose on this Contract under Indiana mortgage foreclosure laws as a real estate mortgage. Purchaser hereby mortgages, warrants, and grants a security in the Real Property to Vendor to secure all Obligations. Upon an Event of Default, Vendor:

13.1  may, to the extent permitted by law, either in person or by agent, with or without bringing any action or proceeding, enter upon and take possession of the Real Property, or any part thereof, in its own name, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Real Property or part thereof or interest therein, increase the income therefrom or protect the security hereof and, with or without taking possession of the Real Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same to its costs and expenses and then to the Contract Balance and all amounts due under the Contract Documents. The entering upon and taking possession of the Real Property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default and notwithstanding the continuance in possession of the Real Property or the collection, receipt and application of rents, issues or profits, Vendor shall be entitled to exercise every right provided for in any of the Contract Documents or by law upon occurrence of any Event of Default hereunder.

13.2  may commence an action to foreclose this Contract as an Indiana mortgage, appoint a receiver, or specifically enforce any of the covenants hereof and to take all such other actions permitted by applicable law.

13.3  may exercise any or all of the remedies available to a secured party under the Indiana Uniform Commercial Code to the extent applicable to the Real Property.

13.4  may collect all expenses which may be paid or incurred by or on behalf of Vendor in connection with the foreclosure of this Contract for attorneys’ fees, appraisers’ fees, outlays for documentary and expert evidence, stenographers’ charges, publication costs and cost of procuring all environmental assessments and all title searches, policies and examinations and similar data and assurances with respect to title and the environmental condition of the Real Property as Vendor reasonably may deem necessary to prosecute such suit shall constitute advancements, shall be immediately due and payable by Purchaser, with Default Interest, and shall be allowed and included as indebtedness in the judgment for sale and part of the Obligations.

13.5  recover a deficiency from Purchaser to the extent the mortgage foreclosure sale fails to pay the Obligations in full in accordance with Indiana law.

14.    Foreclosure Proceedings and Receiver. Upon the commencement of any proceedings to forfeit or foreclose this Contract, Vendor shall be entitled forthwith to the appointment of a receiver or receivers, as a matter of right, without the giving of notice to any other party, without regard to the adequacy or inadequacy of any security for the Contract Balance and without the requirement of any bond, and Purchaser hereby consents to such appointment. Vendor shall be entitled to recover judgment either before or after or during the pendency of any proceedings for the enforcement of this Contract. The right of Vendor to recover such judgment shall not be affected by the exercise of any other right, power or remedy for the enforcement of this Contract, or the foreclosure of the lien of this Contract.

15.    Assignment of Leases and Rents. As additional security for the repayment of the Contract Balance or other indebtedness hereby secured, Purchaser assigns to Vendor its entire interest, as lessor, in all present and future leases, all rentals and other income from the Real Property and all licenses, permits, agreements or contracts pertaining to the Real Property. This assignment shall not be construed as a consent by Vendor to any such lease, license, permit, agreement or contract hereby assigned nor impose upon Vendor any obligations with respect thereto since it is given as collateral security only. In the Event of a Default, Purchaser shall, upon demand therefor made by Vendor, surrender possession of the Real Property to Vendor, its duly constituted agents, or to a duly appointed receiver who may thereafter take possession and assume the management of the Real Property and collect the rentals and other income therefrom, rent or lease the Real Property or any portion thereof, upon such terms and for such time as it may deem

Ex-C-9

best, terminate any tenancy and maintain proceedings to recover possession of the Real Property from any tenant or trespasser, and apply the net proceeds of such rent and income to the following purposes and in the following order: (a) preservation and management of the Real Property; (b) payment of taxes; (c) payment of insurance premiums; and (d) payment of the Contract Balance and any amounts due under the Contract Documents. Vendor, its duly constituted agent, or duly appointed receiver, as applicable, shall be liable to account only for those rents actually received.

16.    Intentionally Omitted.

17.    Interpretation of Contract. The article, section and other headings of this Contract are for convenience of reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term “person” shall include any individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.

18.    Notices. Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) via email or (d) by a commercial overnight courier that guarantees next business day delivery and provides a receipt, and such notices shall be addressed as follows:

To Purchaser:

 

Electric Last Mile, Inc.
c/o: Benjamin Wu, General Counsel
1055 W Square Lake Rd
Troy, MI 48098
Email: bwu@electriclastmile.com

with a copy to:

 

Mark E. Wright Mark E. Wright
Faegre Drinker Biddle & Reath LLP
600 E. 96th Street, Suite 600
Indianapolis, Indiana 46240, USA
mark.wright@faegredrinker.com
Phone: 317-569-4659

To Vendor:

 

SF MOTORS, INC. dba SERES
Attn: Legal Department
3303 Scott Blvd.,
Santa Clara, CA 95054
Email: legal@driveseres.com

with copy to:

 

King & Wood Mallesons LLP
535 Middlefield Road, Suite 245
Menlo Park, California 94025
Attn: Yuji Sun, Esq.
Email: yuji.sun@us.kwm.com

or to such other address as either party may from time to time specify in writing to the other party. Any such notice shall be deemed to have been given (i) upon delivery, if personally delivered, one (1) business day after sending if sent by any nationally recognized form of airborne/overnight delivery service, or (ii) the date of sending if sent by email. Either party may change the address at which it desires to receive notice upon giving written notice of such request to the other party. Purchaser and Vendor, and their respective counsel, hereby agree that notices may be given hereunder by the parties’ respective counsel, and that if any communication is given hereunder by Purchaser’s or Vendor’s counsel, such counsel may send such communication directly to all principals so long as such other counsel is copied, as required to comply with the foregoing provisions.

19.    Entire Contract. This Contract, together with the Exhibits and schedules hereto and all other Contract Documents, contain all representations, warranties and covenants made by Purchaser and Vendor and constitutes the entire understanding between the parties hereto with respect to the subject matter hereof. All obligations of Purchaser in the Contract Documents are independent of its obligations hereunder and are not integrated or replaced by this Contract, nor shall Purchaser be excused of any performance hereunder due to any limitations set forth in the Purchase Agreement or any alleged breach by Vendor of any obligations under the Purchase Agreement.

Ex-C-10

20.    Time. Time is of the essence in the performance of each of the parties’ respective obligations contained herein. If the time period by which any right, option or election provided under this Contract must be exercised, or by which any act required hereunder must be performed expires on a Saturday, Sunday or legal or bank holiday, then such time period shall be automatically extended through the close of business on the next regularly scheduled business day (a “Business Day”).

21.    Attorneys’ Fees. Purchaser will pay Vendor’s reasonable attorneys’ fees and costs in connection with the enforcement of the Contract Documents after an Event of Default, including costs to protect, collect, lease, sell, take possession of, or liquidate any of the Real Property, or to attempt to enforce or protect any security interest or lien or other right under any of the Contract Documents, or to enforce any rights of Vendor or obligations of Purchaser or any other person, firm or corporation which may be obligated to Vendor by virtue of this Contract or under any of the Contract Documents and any expenses, costs and charges relating thereto, which shall constitute an additional indebtedness owing by Purchaser to Vendor payable on demand and evidenced and secured by the Contract Documents.

22.    Assignment. Purchaser’s rights and obligations hereunder shall not be assignable without the prior written consent of Vendor in Vendor’s sole discretion.

23.    Counterparts. This Contract may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

24.    Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of Indiana.

25.    Confidentiality and Return of Documents. Purchaser and Vendor shall each maintain as confidential any and all material obtained about the other or, in the case of Purchaser, about the Property, this Contract or the transactions contemplated hereby, and shall not disclose such information to any third party. Except for Purchaser’s attorneys, accountants and consultants (who also shall be subject to the obligations set forth in this Section 25) and as may be required by law, Purchaser will not divulge any such information to other persons or entities including, without limitation, appraisers, real estate brokers, or competitors of Vendor.

26.    Amendments. This Contract may be amended or modified only by a written instrument signed by Purchaser and Vendor.

27.    No Recording. This Contract shall not be recorded, but a Memorandum thereof providing for the names of the parties, the legal description of the Real Property the duration of the contract term may be recorded to the extent required for the Title Company to issue the vendee’s policy of title insurance.

28.    No Partnership. The relationship of the parties hereto is solely that of Vendor and Purchaser with respect to the Real Property and no joint venture or other partnership exists between the parties hereto. Neither party has any fiduciary relationship hereunder to the other.

29.    No Third-Party Beneficiary. The provisions of this Contract are not intended to benefit any third parties.

30.    Severability. If any term or provision of this Contract or the application thereof to any person or circumstance shall for any reason and to any extent be held to be invalid or unenforceable, then such term or provision shall be ignored, and to the maximum extent possible, this Contract shall continue in full force and effect, but without giving effect to such term or provision.

31.    No Waiver. Neither the failure of either party to exercise any power given such party hereunder or to insist upon strict compliance by the other party with its obligations hereunder, nor any custom or practice of the parties at variance with the terms hereof shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof.

32.    Construction. The parties agree that this Contract is the result of negotiation by the parties, each of whom was represented by counsel, and thus, this Contract shall not be construed against the maker thereof.

[Signature page to follow]

Ex-C-11

IN WITNESS WHEREOF, Vendor and Purchaser have executed this Land Contract to be effective as of the Execution Date.

 

VENDOR:

   

SF MOTORS, INC.,
a Delaware corporation,
doing business as SERES

   

By: ____________________________________

   

Printed: ________________________________

   

Title: __________________________________

     
   

PURCHASER:

   

ELECTRIC LAST MILE, INC.,
a Delaware corporation

   

By: ____________________________________

   

Printed: ________________________________

   

Title: __________________________________

Ex-C-12

EXHIBIT A

Legal Description of the Land

Lot 1 in AM General Mishawaka Minor Subdivision, an addition to Penn Township, St. Joseph County, Indiana as per plat thereof recorded September 15, 2017 as Instrument Number 1725316, in the Office of the Recorder of St. Joseph County, Indiana.

Ex-C-13

Exhibit C-1

ESCROW AGREEMENT

This Agreement is executed on this __________ day of ___________________, 2021, [possession date] by and among SF MOTORS, INC. DBA SERES, a Delaware corporation (“Seller”), ELECTRIC LAST MILE, INC., a Delaware corporation (“Buyer”) and FIDELITY NATIONAL TITLE INSURANCE COMPANY, as escrow agent (“Escrow Agent”).

RECITALS

A.   Buyer and Seller have entered into that certain Agreement of Purchase and Sale dated __________________, 2021 (the “Purchase Agreement”), and are as of this date [the Possession Date] closing on the possession of the property subject thereto and entering into that certain Land Contract of even date herewith (the “Land Contract”).

B.   Pursuant to the Purchase Agreement, Buyer and Seller are entering into this Escrow Agreement to deliver to Escrow Agent certain executed original documents as more specifically listed on Schedule 1 attached hereto (the “Escrow Documents”) to hold the same in escrow for recording on the written direction of both Buyer and Seller as hereinafter provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and agreements contained herein, it is hereby agreed as follows:

1.     The Escrow Documents are herewith deposited with the Escrow Agent, the receipt of which is acknowledged by the Escrow Agent, to be held by the Escrow Agent in accordance with the terms of this Escrow Agreement.

2.     For a term of Five (5) years commencing on the date hereof and continuing until ________, 2026 (the “Term”), Escrow Agent is hereby instructed to hold the Escrow Documents in escrow until such time as receipt of written direction by both Buyer and Seller that all conditions and requirements relating to the delivery of such documents have been satisfied. Upon such notification, Escrow Agent is authorized and shall record the Escrow Documents with the Office of the Recorder of St. Joseph County, Indiana (the “Recording Office”). Buyer acknowledges and agrees that upon any Event of Default under the Land Contract, Buyer shall be required to direct the Escrow Agent to return the Escrow Documents to Seller, and Seller acknowledges and agrees that upon payment in full of all obligations under the Land Contract, Seller shall be required to direct the Escrow Agent to record the Escrow Documents. If no mutual instructions are received by Escrow Agent prior to the expiration of the Term, the Escrow Agent shall, after thirty (30) days prior written notice to both Buyer and Seller, record the Escrow Documents with the Recording Office; provided, however, if there is an action pending between Buyer and Seller for delivery or recording of the Escrow Documents, the Term shall be extended until such time as Escrow Agent makes delivery in accordance with such action. Notwithstanding the foregoing if within thirty (30) days after providing such notice of expiration of the Term, Seller objects to such recording and tenders a replacement escrow agent that is a licensed title insurer or agent in the State of Indiana willing to agree to the same terms of this Escrow Agent, the Escrow Agent shall deliver the Escrow Documents to such successor.

3.     Escrow Agreement agrees to hold the Escrow Documents, in trust and as a fiduciary, and deliver the same in accordance with the terms of this Agreement. The Escrow Agent shall not be liable for its good faith performance on this Escrow Agreement, and Buyer and Seller hereby jointly and severally release and waive any claims they may have against the Escrow Agent which may result from its performance in good faith of its function under this Escrow Agreement, including, but not limited to, any delay in the recording of the Escrow Documents. The Escrow Agent shall be liable for loss or damage caused by (i) any violation by Escrow Agent of its obligations under Section 2 of this Agreement (including Escrow Agent’s failure to follow written direction by both Buyer and Seller in releasing or recording the Escrow Documents), and (ii) its acts of negligence while performing as Escrow Agent under Escrow Agreement.

Ex-C-1-1

4.     In the event of any controversy related to the Escrow Documents or conflicting instructions with respect thereto, the Escrow Agent shall consider the matter a disputed claim, disregarding the conflicting instructions and shall be under a duty to withhold delivery until it receives authorization as follows:

a)      written authorization executed by both Buyer and Seller; or

b)      a certified or file-stamped copy of the court order resolving the disputed claim or directing the delivery of the Escrow Documents.

5.     Escrow Agent may, in its sole discretion, resign by giving thirty (30) days written notice thereof to the parties hereto. Following receipt of Escrow Agent’s notice of resignation, the parties shall furnish to the Escrow Agent written instructions for the deposit of the Escrow Documents. If the Escrow Agent shall not have received such written instructions within the thirty (30) days, the Escrow Agent may petition any court of competent jurisdiction for the appointment of such a successive Escrow Agent and upon such appointment deliver the Escrow Documents to such successor.

6.     The Escrow Agent operates under the laws of Arizona and its charges for acting as Escrow Agent hereunder shall be Zero And No/100 Dollars ($0.00). In the event that the Escrow Agent determines that it must employ counsel regarding a dispute over the Escrow Documents, it may recover reasonable attorney’s fees from the parties.

7.     In the event litigation is required to enforce the terms of the Agreement, the parties hereby agree that the prevailing party shall be entitled to recover attorneys’ fees and costs.

8.     All notices, requests and consents and other communications required or permitted under this Escrow Agreement shall be in writing and shall be deemed to have been duly and properly given on the date of service if delivered personally, or, if mailed, on the date of receipt such notice, addressed to the parties as follows:

 

To Buyer:

 

Electric Last Mile, Inc.

Attn: General Counsel

1055 W Square Lake Rd

Troy, MI 48098

Email: bwu@electriclastmile.com

with a copy to:

 

Faegre Drinker Biddle & Reath LLP

Attn: Mark E. Wright

600 E. 96th Street, Suite 600

Indianapolis, Indiana 46240

Phone: 317-569-4659

Email: mark.wright@faegredrinker.com

To Seller:

 

SF MOTORS, INC. dba SERES

Attn: Legal Department

3303 Scott Blvd.,

Santa Clara, CA 95054

Email: legal@driveseres.com

with a copy to:

 

King & Wood Mallesons LLP

535 Middlefield Road, Suite 245

Menlo Park, California 94025

Attention: Yuji Sun, Esq.

Email: yuji.sun@us.kwm.com

9.     This Escrow Agreement shall be construed, enforced and administered in accordance with the laws of the State of Indiana. This Escrow Agreement shall be binding upon and inure to the benefit of each party’s successors, assigns, executors, and administrators.

Ex-C-1-2

IN WITNESS WHEREOF, the parties hereto have entered into Agreement as of the above first mentioned date.

SELLER:

SF MOTORS, INC.,

doing business as SERES,

a Delaware corporation

By:

 

   

Name:

 

   

Title:

 

 

   

BUYER:

ELECTRIC LAST MILE, INC.,

a Delaware corporation

By:

 

   

Name:

 

   

Title:

 

 

   

ESCROW AGENT:

FIDELITY NATIONAL TITLE
INSURANCE COMPANY

By:

 

   

Name:

 

   

Title:

 

 

   

Ex-C-1-3

SCHEDULE 1

1.     Special Warranty Deed dated _____________________, 2021 [the possession date] by SF Motors, Inc. dba Seres, Grantor, and Electric Last Mile, Inc., as Grantee.

2.     Assignment of Ground Lease dated _______________________, 2021 [the possession date] by and between SF Motors, Inc. dba Seres and St. Joseph County, Indiana, Department of Redevelopment acting by and through the St. Joseph County Redevelopment Commission.

3.     Release and Termination of Memorandum of Land Contract dated _______________________, 2021 [the possession date] by and between SF Motors, Inc. dba Seres and Electric Last Mile, Inc.

Ex-C-1-4

Exhibit C-2

SPECIAL WARRANTY DEED

THIS INDENTURE WITNESSETH, that SF Motors, Inc., a Delaware corporation DBA SERES (“Grantor”), CONVEYS to Electric Last Mile, Inc., a Delaware corporation (“Grantee”), for the sum of Ten Dollars ($10.00) and other valuable consideration, the receipt and sufficiency of which hereby are acknowledged, that certain real property located in St. Joseph County, Indiana, and more particularly described on Exhibit A, attached hereto and incorporated herein by reference, together with all improvements thereon and appurtenances thereto (collectively, the “Real Estate”).

SUBJECT TO the lien of real estate taxes due and payable after the date hereof, and thereafter, to all general and special assessments and other governmental, municipal and charges and impositions not delinquent, and to the following:

1.      All easements, agreements, covenants, restrictions and encumbrances of record;

2.      All rights of public, the State of Indiana or any political subdivision of the State of Indiana in and to that part of the Real Estate which has been taken or used for highways, streets, rights-of-ways or related purposes;

3.      All applicable zoning, building and land use, and other governmental restrictions, laws, ordinances, rules and regulations;

4.      All matters that would be disclosed by an ALTA Minimum Standard Survey of the Real Estate; and

5.      Parties in possession and any title matter burdening the Real Estate as a result of the acts or omissions of Grantee, including the rights under that certain Land Contract between Grantor and Grantee dated ___________________, 2021, as evidenced by that certain Memorandum of Land Contract recorded as Instrument No. ______________.

TO HAVE AND TO HOLD the Real Estate to Grantee and Grantee’s successors and assigns forever. Grantor covenants and warrants that the Real Estate is free of any encumbrance made or suffered by Grantor except those matters of record referenced above, and that Grantor and its successors shall warrant and defend title to the Real Estate to Grantee and Grantee’s successors and assigns forever, against the lawful claims and demands of all persons claiming by, through, or under Grantor, but against none other. It is the purpose of this special warranty deed to transfer fee simple title to the Real Estate to Grantee.

The undersigned person executing this Special Warranty Deed on behalf of Grantor has been duly authorized and fully empowered by all necessary actions of Grantor and has full power and authority to execute and deliver this document on behalf of Grantor.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

Ex-C-2-1

IN WITNESS WHEREOF, Grantor has executed this Special Warranty Deed this _____ day of _______________, 2021.

 

GRANTOR:

   

SF MOTORS, INC.,
a Delaware corporation,
doing business as SERES

 

By:

   
   

Printed:

   
   

Title:

   

STATE OF __________________________________

 

)

   
       

) SS:

   

COUNTY OF ________________________________

 

)

   

Before me, a Notary Public in and for the above County and State, personally appeared __________________ the ____________________ of SF Motors, Inc., a Delaware corporation DBA SERES, who acknowledged the execution of the foregoing, and who, having been duly sworn, stated that any representations contained therein are true.

WITNESS my hand and Notarial Seal this _______ day of ______________, 2021.

[SEAL]

 

Notary Public

   

Printed:

 

 

I am a resident of _______________ County, _____________.

My commission expires: _____________________.

Grantee’s post office address for purposes of delivering tax statements is:

______________________________________________________________________________.

I affirm, under penalties for perjury, that I have taken reasonable care to redact each social security number in this document, unless required by law: Mark E. Wright

This instrument was prepared by, and after recording return to, Mark E. Wright, Faegre Drinker Biddle & Reath LLP, 600 E. 96th Street, Suite 600, Indianapolis, Indiana, 46240

Ex-C-2-2

Exhibit C-3

MEMORANDUM OF LAND CONTRACT

This Memorandum of Land Sale Contract (the “Memorandum”), effective as of the ______ day of _______________, 2021, by and between SF Motors, Inc., a Delaware corporation DBA SERES (“Vendor”) and Electric Last Mile, Inc., a Delaware corporation (“Purchaser”) WITNESSES THAT:

Recitals:

A.     Vendor and Purchaser entered into a Land Sale Contract dated on or about even date herewith (the “Contract”), whereby Vendor is selling to Purchaser certain real property located at 12900 McKinley Highway, Mishawaka, St. Joseph County, Indiana, as more particularly described on Exhibit A attached hereto, together with all improvements located thereon and appurtenances thereto.

B.     This Memorandum is being executed and recorded to evidence the Contract and shall not be construed to limit, amend or modify the provisions of the Contract in any respect.

Memorandum:

1. Legal Description.  The specific legal description of the Land is as described in Recital A above.

2. Term.  The term of the Contract expires on _____________, 2023 (the “Termination Date”) or earlier on the recording of a deed for the Land from Vendor to Purchaser.

3. Contract Provisions.  Provisions regarding the sale of the Land are set forth at length in the Contract and all of said provisions, terms, covenants and conditions are, by reference thereto, hereby incorporated in and made a part of this Memorandum. Capitalized terms used and not defined herein have the same meaning as provided in the Contract.

4. Binding Effect.  This instrument shall also bind and benefit, as the case may require, the heirs, legal representatives, assigns and successors of the respective parties, and all covenants, conditions and agreements herein contained shall be construed as covenants running with the land.

5. No Amendment.  This Memorandum is made and executed by the parties hereto for the purpose of recording the same in the office of the public records of St. Joseph County, Indiana, and is subject in each and every respect, to the terms, covenants and conditions of the Contract, bearing even date herein, between the parties hereto and this Memorandum is executed and delivered with the understanding and agreement that the same shall not in any manner or form whatsoever, alter, modify or vary the terms, covenants and conditions of the Contract.

6. Counterparts.  This Memorandum may be executed with counterpart signature pages and in duplicate originals, each of which shall be deemed an original, and all of which shall collectively constitute a single instrument.

Ex-C-3-1

IN WITNESS WHEREOF, the parties have executed or caused the execution of this Memorandum as of the day and year first above written.

 

VENDOR:

   

SF MOTORS, INC.,

   

a Delaware corporation,

   

doing business as SERES

 

By:

   
   

Printed:

   
   

Title:

   

STATE OF

     

)

       

) SS:

COUNTY OF

     

)

Before me, a Notary Public in and for the above County and State, personally appeared __________________________ the ____________________ of SF Motors, Inc., a Delaware corporation DBA SERES, who acknowledged the execution of the foregoing, and who, having been duly sworn, stated that any representations contained therein are true.

WITNESS my hand and Notarial Seal this _______ day of ______________, 2021.

[SEAL]

 

Notary Public

   

Printed:

   

I am a resident of _______________ County, _____________.

My commission expires: _____________________.

Ex-C-3-2

 

PURCHASER:

   

ELECTRIC LAST MILE, INC.,

   

a Delaware corporation,

 

By:

   
   

Printed:

   
   

Title:

   

STATE OF

 

)

   

) SS:

COUNTY OF

 

)

Before me, a Notary Public in and for the above County and State, personally appeared _________________________ the ____________________ of Electric Last Mile, Inc., a Delaware corporation, who signed and acknowledged the foregoing and who having been duly sworn, stated that any representations contained therein are true.

WITNESS my hand and Notarial Seal this _______ day of _____________, 2021.

[SEAL]

 

Notary Public

   

Printed:

   

I am a resident of _______________ County, _____________.

My commission expires: _____________________.

I affirm, under penalties for perjury, that I have taken reasonable care to redact each social security number in this document, unless required by law: Mark E. Wright

This instrument was prepared by, and after recording return to, Mark E. Wright, Faegre Drinker Biddle & Reath LLP, 600 E. 96th Street, Suite 600, Indianapolis, Indiana, 46240

Ex-C-3-3

Exhibit D

BILL OF SALE

Bill of Sale

This Bill of Sale (the “Bill of Sale”) is made and entered into this ___ day of _______, 2021, by and between SF Motors, Inc. dba SERES (“Assignor”), and Electric Last Mile, Inc. (“Assignee”).

In consideration of the sum of Ten Dollars ($10) and other good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby assign, transfer, convey and deliver to Assignee, its successors and assigns, all items of Tangible Personal Property (as defined in the Agreement referred to below), if any, owned by Assignor and situated upon and used exclusively in connection with the Real Property (as defined in the Agreement) and more particularly described on Exhibit A attached hereto and made a part hereof for all purposes, including, without limitation, the Tangible Personal Property identified in Exhibit B, if any, attached hereto and made a part hereof for all purposes (the “Personal Property”).

Assignee acknowledges and agrees that, except as expressly provided in, and subject to the limitations contained in, that certain Agreement of Purchase and Sale dated _______________, 2021, by and between SF Motors, Inc. dba SERES, and Electric Last Mile, Inc. (the “Agreement”), Assignor has not made, does not make and specifically disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to (a) the nature, quality or conditions of the Personal Property, (b) the income to be derived from the Personal Property, (c) the suitability of the Personal Property for any and all activities and uses which Assignee may conduct thereon, (d) the compliance of or by the Personal Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body, (e) the quality, habitability, merchantability or fitness for a particular purpose of any of the Personal Property, or (f) any other matter with respect to the Personal Property.

Ex-D-1

IN WITNESS WHEREOF, Assignor and Assignee have caused this Bill of Sale to be executed on the date and year first above written.

 

ASSIGNOR:

   

SF MOTORS, INC.

 

By:

 

   

Name:

 

   

Its:

 

 

ASSIGNOR:

   

ELECTRIC LAST MILE, INC.

 

By:

 

   

Name:

 

   

Its:

 

Ex-D-2

Exhibit E

ASSIGNMENT OF INTANGIBLES

Assignment Service Contracts,
Warranties and Other Intangible Property

This Assignment of Service Contracts, Warranties and Other Intangible Property (this “Assignment”) is made and entered into this ___ day of ________, 2021 by and between SF Motors, Inc. dba SERES (“Assignor”), and Electric Last Mile, Inc. (“Assignee”).

For good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby assign, transfer, set over and deliver unto Assignee all of Assignor’s right, title, and interest in and to the following (collectively, the “Assigned Items”): (i) those certain service contracts (the “Service Contracts”) listed on Exhibit A, if any, attached hereto and made a part hereof for all purposes, and (ii) those warranties held by Assignor against third parties exclusively benefiting any Tangible Personal Property (as defined in the Agreement) (the “Warranties”), if any, and (iii) to the extent transferrable, all zoning, use, occupancy and operating permits, and other permits, licenses, approvals and certificates, maps, plans, specifications, and all other Intangible Personal Property (as defined in the Agreement) owned by Assignor and used exclusively in the use or operation of the Real Property and Personal Property (each as defined in the Agreement)(collectively, the “Other Intangible Property”).

ASSIGNEE ACKNOWLEDGES AND AGREES, BY ITS ACCEPTANCE HEREOF, THAT, EXCEPT AS EXPRESSLY PROVIDED IN, AND SUBJECT TO THE LIMITATIONS CONTAINED IN, THAT CERTAIN AGREEMENT OF PURCHASE AND SALE, DATED AS OF _________________, 2021, BY AND BETWEEN ASSIGNOR AND ASSIGNEE (THE “AGREEMENT”), THE ASSIGNED ITEMS ARE CONVEYED “AS IS, WHERE IS” AND IN THEIR PRESENT CONDITION WITH ALL FAULTS, AND THAT ASSIGNOR HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE NATURE, QUALITY OR CONDITION OF THE ASSIGNED ITEMS, THE INCOME TO BE DERIVED THEREFROM, OR THE ENFORCEABILITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE ASSIGNED ITEMS.

Except as otherwise expressly provided in the Agreement, by accepting this Assignment and by its execution hereof, Assignee assumes the payment and performance of, and agrees to pay, perform and discharge, all the debts, duties and obligations to be paid, performed or discharged from and after the Possession Date (as defined in the Agreement) by (a) the owner under the Service Contracts, the Warranties and/or the Other Intangible Property. Assignee agrees to indemnify, hold harmless and defend Assignor from and against any and all claims, losses, liabilities, damages, costs and expenses (including, without limitation, court costs and reasonable attorneys’ fees and disbursements) resulting by reason of the failure of Assignee to pay, perform or discharge any of the debts, duties or obligations assumed or agreed to be assumed by Assignee hereunder arising out of or relating to, directly or indirectly, in whole or in part, the Assigned Items, from and after the Possession Date. Except as otherwise expressly provided in the Agreement (which provisions are not modified in any way by the following indemnity), Assignor agrees to protect, indemnify, defend and hold Assignee harmless from and against all claims, losses, damages, costs, expenses, obligations and liabilities (including, without limitation, court costs and reasonable attorneys’ fees and disbursements) (collectively, “Claims”) arising out of or relating to, directly or indirectly, in whole or in part, the Service Contracts prior to the Possession Date.

All of the covenants, terms and conditions set forth herein shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Ex-E-1

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be executed on the day and year first above written.

 

ASSIGNOR:

   

SF MOTORS, INC.

 

By:

 

   

Name:

 

   

Its:

 

 

ASSIGNOR:

   

ELECTRIC LAST MILE, INC.

 

By:

 

   

Name:

 

   

Its:

 

Ex-E-2

Exhibit F

Intentionally Omitted

Ex-F-1

Exhibit G

PROMISSORY NOTE

[$43,620,689.66]

 

Effective Date: _________, 2021

Maturity Date: _________, 20231

FOR VALUE RECEIVED, ELECTRIC LAST MILE, INC., a Delaware corporation (hereinafter referred to as “Borrower”), hereby promises to pay to the order of SF MOTORS, INC., DBA SERES, a Delaware corporation (hereinafter referred to as “Lender”), in lawful money of the United States of America, at the Lender’s principal office or at such other place or to such other party as the Lender may from time to time designate by written notice, the principal sum of FORTY-THREE MILLION SIX HUNDRED TWENTY THOUSAND SIX HUNDRED EIGHTY-NINE and 66/100 Dollars ($43,620,689.66) and to pay interest as hereinafter provided as follows:

(a)     From the Effective Date through and including the Maturity Date Borrower shall pay interest on the principal balance of this Note at a fixed per annum rate of interest equal to eleven (11) basis points (0.11%) (“Interest Rate”). All interest under this Note shall be computed for the actual number of days elapsed on the basis of a year of 360 days.

(b)    Borrower shall repay the principal of and interest on this Note as follows: (i) ONE MILLION EIGHT HUNDRED NINETY-SIX THOUSAND FIVE HUNDRED FIFTY-ONE AND 72/100 DOLLARS ($1,896,551.72) on ____, 2021 [the last day of the calendar month in which this Note is issued]; (ii) ELEVEN MILLION EIGHT HUNDRED NINETY-SIX THOUSAND FIVE HUNDRED FIFTY-ONE DOLLARS AND 72/100 DOLLARS ($11,896,551.72) on ____, 2021 [the last day of the month following the calendar month in which this Note is issued]; and (iii) the balance of the principal and interest on this Note in twenty-one (21) equal monthly installments of ONE MILLION FOUR HUNDRED AND TWENTY THOUSAND THREE HUNDRED SIXTY-ONE AND 25/100 Dollars ($1,420,361.25) commencing __________, 2021 and on the last Day of each monthly period thereafter through and including the month in which the Maturity Date occurs. On the Maturity Date, whether by acceleration, demand or otherwise, the unpaid balance of principal of this Note, together with all accrued but unpaid interest, and all other charges (including, without limitation, late charges, costs and expenses of collection and reasonable attorneys’ fees) shall be due and payable in full.

(c)     Upon the occurrence and during the continuance of an Event of Default beyond all applicable notice and cure periods, and after maturity, including maturity by acceleration, Lender, at its option, may do one or both of the following: (i) increase the interest rate under this Note to the rate that is twelve percent (12.0%) per annum, and (ii) add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). The Interest Rate of this Note will not exceed the maximum rate permitted by applicable law under any circumstances.

(d)    If Borrower fails to pay any amount due hereunder, or any fee in connection herewith, in full within ten (10) days after its due date, Borrower, in each case, shall incur and shall pay a late charge equal to Five Percent (5%) of the unpaid amount and an additional late charge for purposes of defraying the expense incidental to handling on the first day of each successive calendar month equal to Five Percent (5%) of the unpaid amount until such amount has been paid in full. After acceleration of repayment of this Note by the Lender, the payment of a late charge will not cure or constitute a waiver of any Event of Default under this Note.

All amounts payable by Borrower to the Lender under this Note shall be without relief from valuation and appraisement laws and with attorneys’ fees and costs of collection. If any payment of principal of or interest on this Note falls due on a day which is not a Banking Day, the due date shall be extended to the next succeeding Banking Day and interest shall be payable at the applicable rate for the period of such extension.

This Note may be prepaid, in whole or in part, at any time without prepayment premium or penalty.

____________

​1        23 months from effective date

Ex-G-1

For purposes of this Note, “Banking Day” means a day which is not (a) a Saturday, Sunday or legal holiday on which banking institutions in the State of Indiana or the city in which the office of the Lender is located is authorized to remain closed, or (b) a day on which the New York Stock Exchange is closed.

All amounts which shall be paid with respect to this Note shall be applied first to the payment of interest due on the balance of the principal sum or so much thereof as shall from time to time remain unpaid, second to any costs of collection and expenses reimbursable by the Borrower to the Lender, third to the principal amount of this Note which may then be currently due and payable, and last to any late charges then due and payable under this Note.

This Note evidences indebtedness incurred under (i) that certain Agreement of Purchase and Sale dated ___, 2021, between Borrower and Lender (the “Purchase Agreement”), the terms of which are incorporated into this Note by reference and to which reference is made for definitions of capitalized terms used but not otherwise defined herein, for the terms and conditions upon which payment of this Note may be accelerated and all amounts outstanding hereunder declared immediately due and payable for the maturity of this Note and for the security provided for the payment of this Note. In the event of any discrepancy between this Note and the Purchase Agreement, this Note shall control any discrepancy. This Note is secured by the Letter of Credit.

Upon the occurrence of any of the following events (each, an “Event of Default”), Lender may, at its option, without any demand or notice whatsoever, declare this Note and all indebtedness and obligations of Borrower owing to Lender to be fully due and payable in their aggregate amount, together with accrued interest and all fees, and charges applicable thereto:

(a)     Any failure to make any payment of principal or accrued interest on this Note or under the Purchase Agreement within ten (10) days following receipt of written notice from Lender to Borrower.

(b)    Intentionally Deleted.

(c)     Borrower shall fail to observe or perform any other material term or condition of this Note or any other term or condition set forth in the Purchase Agreement or Borrower shall otherwise default in the observance or performance of any covenant.

(d)    The dissolution or merger of Borrower.

(e)     The creation of any lien (except a lien in favor of Lender) on, the institution of any garnishment proceedings by attachment, levy or otherwise against, the entry of a judgment against, or the seizure of, any of the property of Borrower or any endorser or guarantor hereof.

(f)     Intentionally Deleted.

(g)    Any judgment, order or decree for the payment of money is rendered against Borrower and remains undischarged for 10 days during which time execution is not effectively stayed.

(h)    Intentionally Deleted.

(i)     A commencement by the Borrower of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or the entry of a decree or order for relief in respect of the Borrower in a case under any such law or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Borrower, or for any substantial part of the property of Borrower, or ordering the wind-up or liquidation of the affairs of Borrower; or the filing and pendency for 30 days without dismissal of a petition initiating an involuntary case under any such bankruptcy, insolvency or similar law; or the making by Borrower of any general assignment for the benefit of creditors; or the taking of action by the Borrower in furtherance of any of the foregoing.

(j)     Intentionally Deleted.

(k)    The commencement of any foreclosure proceedings (except by Lender), proceedings in aid of execution, attachment actions, levies against, or the filing by any taxing authority of a lien against any of the collateral or any property securing the repayment of any of the indebtedness due and owing under this Note.

(l)     Intentionally Deleted.

Ex-G-2

Upon the occurrence of a default, breach, or an Event of Default under this Note and/or any documents executed in connection therewith that secure this Note or any other documents or agreements executed by Borrower in connection with the indebtedness evidenced by this Note, all of the indebtedness evidenced by this Note and remaining unpaid balances of interest and expenses shall, at the option of the Lender and without demand or notice, become immediately due and payable and Lender shall be permitted to exercise any rights or remedies set forth in this Note. This Note may also be declared due at the option of the Lender prior to its expressed maturity at the time, upon the terms and in the manner provided in this Note. Failure to exercise any such option shall not constitute a waiver of the right to exercise any such option if the Borrower is in default hereunder. Time is of the essence of this Note and all other obligations of the Borrower to the Lender or any of its affiliates.

Borrower waives demand, presentment for payment, notice of dishonor, protest and notice of protest, and expressly agrees that this Note and any payment coming due under it may be extended from time to time without in any way affecting their liability hereunder. This Note shall be binding upon the Borrower’s heirs, personal representatives, successors, and assigns. Lender may renew this Note or reduce the payments thereon and any such renewal or reduction shall not release Borrower from liability.

The rights or remedies of the Lender as provided in this Note shall be cumulative and concurrent, and may be pursued singly, successively, or together.

Notwithstanding anything herein to the contrary, no provision contained herein which purports to obligate Borrower to pay any amount of interest or any fees, costs or expenses which are in excess of the maximum permitted by applicable law, shall be effective to the extent that it requires the payment of any interest or other sums in excess of such maximum. In the event Borrower shall at any time following the date hereof pay any amount of interest or any fees, costs or expenses which are in excess of the maximum permitted by applicable law, such overpayments shall be deemed to be loans from Borrower to the Lender, which loans shall be due and payable by the Lender upon demand by Borrower together with interest from the date or dates of such overpayments calculated at the same rate as Borrower is required to pay under this Note, and the repayment of such loans by the Lender shall be the sole remedy at law or in equity of Borrower for such overpayments.

The person executing this Note for and on behalf of Borrower hereby certifies that he is duly empowered by the Borrower and has been duly authorized by all necessary action on the part of Borrower to execute and deliver this Note for and on behalf of the Borrower.

This Note may be assigned or transferred, in whole or in part, by Lender to any person at any time without notice to or the consent of Borrower. Borrower may not assign or transfer this Note or any of its rights hereunder without the prior written consent of Lender. This Note shall inure to the benefit of and be binding upon the parties hereto and their permitted assigns.

THIS NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF INDIANA APPLICABLE TO CONTRACTS MADE BY AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district of St. Joseph County, Indiana; provided that nothing contained in this Note will prevent Lender from bringing any action, enforcing any award or judgment or exercising any rights against Borrower, against any security or against any property of Borrower within any other county, state or other foreign or domestic jurisdiction. Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both Lender and Borrower. Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note or in the Purchase Agreement.

BORROWER AND LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE, THE PURCHASE AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

[signature page follows]

Ex-G-3

SIGNATURE PAGE — PROMISSORY NOTE

IN WITNESS WHEREOF, Borrower has executed this Note effective as of the day and year first above written.

 

“BORROWER”

   

ELECTRIC LAST MILE, INC.,

   

a Delaware corporation,

 

By:

 

 

   

Name:

 

 

   

Title:

 

 

Ex-G-4

Exhibit H

SUBLEASE

     This SUBLEASE (“Sublease”) is made and entered into as of the ____ day of _______________________, 2021 (“Effective Date”) by and between SF MOTORS, INC. d/b/a SERES, a Delaware corporation (“Sublandlord “), and ELECTRIC LAST MILE INC., a Delaware corporation (“Subtenant “).

1.     Basic Sublease Provisions.

(a)

 

Prime Landlord

 

St. Joseph County, Indiana, Department of Redevelopment, acting by and through the St. Joseph County Redevelopment Commission.

(b)

 

Prime Lease

 

Ground Lease dated as of December 18, 2001, entered into by and between AM General (“AMG”) and Prime Landlord (the “Ground Lease”); and the Assignment of Ground Lease dated as of November 2, 2017, pursuant to which AMG assigned all of its rights, title and interest in the Ground Lease to Sublandlord.

(c)

 

Sublease Term

 

The term of this Sublease shall begin on the Effective Date and shall continue until ______________________, 2023, unless sooner terminated as provided in this Sublease.

(d)

 

Base Rent

 

$71,797.00 per year.

(e)

 

Payee of Rent

 

Sublandlord, at Sublandlord’s Address set forth below.

(f)

 

Premises

 

The real property described on attached Exhibit A together with all existing
improvements located thereon.

(g)

 

Subtenant’s Use

 

Subtenant may use the Premises only for the “Permitted Uses” specified in
Section 5.01 of the Prime Lease.

(h)

 

Broker

 

N/A

(i)

 

Security Deposit

 

N/A

2.     Prime Lease.    Sublandlord, as tenant, and Prime Landlord, as landlord, are parties to the Prime Lease identified in Section 1.    Sublandlord represents and warrants to Subtenant that the Prime Lease is currently in full force and effect and that neither party thereto is in default of the terms thereof.

3.     Sublease.    Sublandlord hereby subleases to Subtenant, and Subtenant accepts from Sublandlord, the Premises identified in Section 1.

4.     Term.    The term of this Sublease shall be as provided in Section 1(c) above.

5.     Possession.    Sublandlord agrees to deliver possession of the Premises to Subtenant on the Effective Date of this Sublease. Subtenant agrees to accept the Premises “AS IS” and “WITH ALL FAULTS”. Sublandlord makes no representations or warranties whatsoever with respect to the Premises and hereby affirmatively disclaims any and all warranties relating to the Premises, including, without limitation, any warranties as to the physical condition of the Premises, its suitability for Subtenant’s intended use, zoning, or fitness for a particular purpose.

6.     Subtenant’s Use.    The Premises shall be used and occupied only for the Subtenant’s Use set forth in Section 1 and for no other purpose without the prior written consent of Sublandlord, which consent may be withheld in Sublandlord’s sole discretion. Subtenant will not use the Premises for any purpose or in any manner in violation of the Prime Lease, any law, municipal ordinance, or regulation, or any certificate of occupancy covering or affecting the use of the Premises.

7.     Rent.    Beginning on the Commencement Date, Subtenant agrees to pay base rent of $71,797.00 per year to the Sublandlord at the Sublandlord’s address specified below, in advance and without prior demand and without any deduction whatsoever. Base rent shall be paid as follows: (i) an amount equal to $71,797.00 multiplied by a fraction, the numerator of which is the number of days from and including the Effective Date through and including July 31, 2021, and the denominator of which is 365 shall be paid on the Commencement Date; and (ii) an amount equal to $71,797.00 shall be due on or before August 1, 2021, with like payments of $71,797.00 due on each anniversary thereafter. If any payment of Rent (defined below) is not paid when due, Subtenant shall pay, relative to the delinquent payment, a late fee of five percent (5%). In addition, Subtenant shall also pay interest on any delinquent payment at a per annum rate equal to twelve percent (12%) per annum. Subtenant’s obligation to pay Rent shall be independent of

Ex-H-1

every other covenant in this Sublease. Annual base rent and any other charges or costs required to be paid by Subtenant to Sublandlord under this Sublease shall be collectively referred to herein as “Rent”. Rent for any partial calendar year shall be prorated.

8.     Subtenant’s Obligations.    Subtenant shall also be responsible for, and/or shall reimburse Sublandlord for Sublandlord’s obligations under the Prime Lease, as follows:

(a)     All utility costs including, without limitation, gas, electric, phone, water, sewer, garbage and other charges incurred in connection with the Premises. Subtenant shall hold Sublandlord harmless from costs or expenses Sublandlord may incur from Subtenant’s failure to pay utility bills or to perform any of its obligations with respect to the purchase of utilities.

(b)    All janitorial expenses.

(c)     All trash removal services, landscape maintenance services, and snow and ice removal services.

(d)    All maintenance and repairs to the Premises.

(e)     All Taxes (as defined in the Prime Lease) due under Article VII of the Prime Lease.

9.     Subtenant’s Insurance.    Subtenant shall procure and maintain, at its cost, such insurance policies as are required to be carried by Sublandlord under the Prime Lease, naming Sublandlord, as well as Prime Landlord, in the manner required by the Prime Lease. Subtenant shall furnish to Sublandlord certificates of Subtenant’s insurance required hereunder prior to Subtenant’s taking possession of the Premises. Each party hereby waives claims against the other for property damage provided such waiver shall not invalidate the waiving party’s property insurance; each party shall obtain from its insurance carrier a waiver of its right of subrogation. Subtenant hereby waives claims against Prime Landlord and Sublandlord for property damage to the Premises or its contents if and to the extent that Sublandlord waives such claims against Prime Landlord under the Prime Lease. Subtenant agrees to obtain, for the benefit of Prime Landlord and Sublandlord, such waivers of subrogation rights from its insurer as are required of Sublandlord under the Prime Lease.

10.   Assignment or Subletting.    Subtenant shall not (i) assign, convey, or mortgage this Sublease or any interest in it; (ii) allow any transfer of this Sublease or any lien upon Subtenant’s interest by operation of law; (iii) further sublet all or any part of the Premises; or (iv) permit the occupancy of all or any part of the Premises by anyone other than Subtenant. A change in control of the voting stock of Subtenant or a merger of Subtenant or any other corporate combination shall be considered to be an assignment for which Sublandlord’s consent shall be required. Sublandlord’s consent to an assignment of this Sublease or a further sublease of the Premises may be withheld in Sublandlord’s sole discretion. Sublandlord shall be permitted to assign all of its interests as tenant under the Prime Lease to Subtenant without consent upon written notice to Prime Landlord.

11.   Alterations.  Subtenant shall not make any alterations in or additions to the Premises, except with Sublandlord’s prior written consent, which may be withheld in Sublandlord’s sole discretion, and except as expressly allowed under the Prime Lease.

12.   Surrender.    Upon the expiration or earlier termination of this Sublease, or of the Subtenant’s right to possession of the Premises, Subtenant will surrender the Premises, together with all improvements thereon, to Sublandlord in the condition and repair as required by the Prime Lease.

13.   Removal of Tenant’s Property.    Upon the expiration of this Sublease, Subtenant shall remove Subtenant’s personal property from the Premises; provided, however, that Subtenant shall repair any injury or damage to the Premises which may result from such removal and shall restore the Premises to the same condition as prior to such removal.

14.   Holding Over.    Subtenant shall have no right to occupy the Premises or any portion thereof after the expiration of this Sublease or after termination of this Sublease or of Subtenant’s right to possession in consequence of an Event of Default. In the event Subtenant or any party claiming by, through, or under Subtenant holds over, such tenancy shall be on a month-to-month basis and Sublandlord may exercise any and all remedies available to it at law

Ex-H-2

or in equity to recover possession of the Premises, and to recover damages, including without limitation, damages payable by Sublandlord to Prime Landlord by reason of such holdover. For each month of such holdover period, Subtenant shall pay, as minimum damages, and not as a penalty, monthly rental in an amount equal to $11,966.17 per month.

15.   Encumbering Title.    Subtenant shall not do any act which shall in any way encumber the title of Prime Landlord in and to the Premises, nor shall the interest or estate of Prime Landlord or Sublandlord be in any way subject to any claim by way of lien or encumbrance, whether by operation of law, by virtue of any express or implied contract by Subtenant, or by reason of any other act or omission of Subtenant. Any claim to, or lien upon, the Premises, the Building, or the Land arising from any act or omission of Subtenant shall accrue only against the subleasehold estate of Subtenant and shall be subject and subordinate to the paramount title and rights of Prime Landlord in and to the Premises, the Building, and the Land and the interest of Sublandlord in the premises leased pursuant to the Prime Lease. Without limiting the generality of the foregoing, Subtenant shall not permit the Premises, the Building, or the Land to become subject to any mechanics’, laborers’, or materialmen’s lien on account of labor or material furnished to Subtenant or claimed to have been furnished to Subtenant in connection with work of any character performed or claimed to have been performed on the Premises by, or at the direction or sufferance of Subtenant.

16.   Indemnity.    Subtenant agrees to indemnify Sublandlord and hold Sublandlord harmless from all losses, damages, liabilities, and expenses which Sublandlord may incur, or for which Sublandlord may be liable to Prime Landlord, arising from the acts or omissions of Subtenant, including without limitation, any breach of this Sublease.

17.   Sublandlord’s Reserved Rights.    Sublandlord reserves the right, on no less than one (1) business day’s prior written notice, to inspect the Premises or, in the last six (6) months of the Sublease Term, to exhibit the Premises to persons having a legitimate interest at any time during the Term. Any such access shall be undertaken in a manner designed to least interfere with Subtenant’s operations and Sublandlord shall indemnify Subtenant for any and all liabilities arising out of or related to Sublandlord’s access to the Premises.

18.   Defaults.    Any one or more of the following events shall be considered “Events of Default”:

(a)     Subtenant shall default in any payment of Base Rent when due and such default shall continue for two (2) business days after written notice to Subtenant;

(b)    Subtenant shall default in any of the other covenants and agreements contained in this Sublease to be kept, observed, and performed by Subtenant, and such default shall continue for thirty (30) days after written notice to Subtenant; provided that if such default cannot be cured within the thirty (30) day period, then Subtenant shall not be in default hereunder so long as Subtenant commences such cure within the thirty (30) day period and proceeds diligently until such remedy is complete;

(c)     Subtenant shall be adjudged a bankrupt or make any assignment for the benefit of creditors.

(d)    Subtenant shall, by its conduct, cause a default under the Prime Lease and such default shall not be cured within the time, if any, permitted for such cure under the Prime Lease; or

(e)     Subtenant shall be in default of that certain Land Contract of even date herewith pursuant to which Subtenant, as buyer, is purchasing a parcel of real property adjacent to the Premises (the “Adjacent Property”) from Sublandlord, as seller (the “Land Contract”),.

Upon the occurrence of any one or more Events of Default, Sublandlord may exercise any remedy against Subtenant which Prime Landlord may exercise for default by Sublandlord under the Prime Lease.

19.   Sublandlord Default.    Sublandlord shall indemnify, hold harmless and defend Subtenant from and against any claim, action, damage or other liability arising out of or related to Sublandlord’s default under the Prime Lease or breach of its obligations hereunder. If Sublandlord breaches its obligations under the Prime Lease causing the Prime Lease to terminate, Subtenant may terminate this Sublease, or, upon written notice to Prime Landlord, Prime Landlord shall, from the date of such notice, recognize Subtenant as Tenant under the Prime Lease (provided that Subtenant shall not be responsible for any Sublandlord default or breach under the Prime Lease).

Ex-H-3

20.   Notices.    Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) via email if sent to the appropriate email address designated below or (d) by a commercial overnight courier that guarantees next business day delivery and provides a receipt, and such notices shall be addressed as follows:

 

To Subtenant:

 

Electric Last Mile, Inc.

1055 W Square Lake Rd

Troy, MI 48098

Attention: General Counsel

Email: bwu@electriclastmile.com

   

with a copy to:

 

Mark E. Wright

Faegre Drinker Biddle & Reath LLP

600 E. 96th Street, Suite 600

Indianapolis, Indiana 46240

Phone: 317-569-4659

Email: mark.wright@faegredrinker.com

 

To Sublandlord:

 

SF MOTORS, INC. dba SERES

3303 Scott Blvd.,

Santa Clara, CA 95054

Attention: Legal Department

Email: Legal@driveseres.com

 

with a copy to:

 

King & Wood Mallesons LLP

535 Middlefield Road, Suite 245

Menlo Park, California 94025

Attention: Yuji Sun, Esq.

Email: yuji.sum@us.kwm.com

 

or to such other address as either party may from time to time specify in writing to the other party. Any such notice shall be deemed to have been given (i) upon delivery, if personally delivered, one (1) Business Day after sending if sent by any nationally recognized form of airborne/overnight delivery service, or (ii) the date of sending if sent by email.  Either party may change the address at which it desires to receive notice upon giving written notice of such request to the other party.  Subtenant and Sublandlord, and their respective counsel, hereby agree that notices may be given hereunder by the parties’ respective counsel, and that if any communication is given hereunder by Subtenant’s or Sublandlord’s counsel, such counsel may send such communication directly to all principals so long as such other counsel is copied, as required to comply with the foregoing provisions.

21.   Provisions Regarding Sublease.    This Sublease and all the rights of the parties under this Sublease are subject and subordinate to the Prime Lease. In furtherance of the foregoing, the parties hereby confirm, each to the other, that it is not practical in this Sublease to enumerate all of the rights and obligations of the various parties under the Prime Lease and specifically to allocate those rights and obligations in this Sublease. Accordingly, in order to afford to Subtenant the benefits of this Sublease and of those provisions of the Prime Lease which by their nature are intended to benefit the party in possession of the Premises, and in order to protect Sublandlord against a default by Subtenant which might cause a default or event of default by Sublandlord under the Prime Lease:

(a)     Provided Subtenant shall timely pay all Rent when and as due under this Sublease, Sublandlord shall pay, when and as due, all base rent, additional rent and other charges payable by Sublandlord to Prime Landlord under the Prime Lease.

(b)    Except for Sublandlord’s obligations set forth in subparagraph (a) above, Subtenant shall perform all affirmative covenants of Sublandlord due under the Prime Lease and shall also refrain from performing any act which is prohibited by the negative covenants of the Prime Lease.

(c)     Subtenant shall perform all affirmative covenants of the Prime Lease and shall refrain from performing any act which is prohibited by the negative covenants of the Prime Lease.

Ex-H-4

Notwithstanding anything contained herein to the contrary, Article III and Section 4.01 of the Prime Lease are inapplicable to this Sublease.

22.   Security Deposit.    The parties agree to the security deposit terms described in the Purchase and Sale Agreement between them dated as of ______, 2021.

23.   Option to Purchase.    Notwithstanding anything in this Sublease to the contrary, during the term of this Sublease Subtenant shall have no rights arising under or relating to Article XXII of the Prime Lease (“Option to Purchase”) and Sublandlord shall have no obligation to exercise said option. During the term of this Sublease, all rights relating to said option are reserved exclusively to Sublandlord and Sublandlord may elect, in its sole discretion, whether or not to exercise said option. This Paragraph 23 shall automatically terminate and be null and void upon the mutual execution and delivery of the Assignment of Ground Lease contemplated in Paragraph 24 below. All rights relating to said option are reserved exclusively to Sublandlord and Sublandlord may elect, in its sole discretion, whether or not to exercise said option.

24.   Assignment and Assumption of Ground Lease.    If Subtenant, as buyer, fulfills all of its obligations under the Land Contract, then promptly after Subtenant has paid Sublandlord, as seller, all amounts due under the Land Contract in full, the parties shall execute and deliver an assignment and assumption of the Ground Lease in the form of attached Exhibit B (the “Assignment of Ground Lease”). Upon full execution and delivery of the Assignment of Ground Lease, Paragraph 23 shall be null and void and all of Assignor’s rights in the Ground Lease, including, without limitation, the Option to Purchase, shall belong solely to Assignee.

[Signature page follows]

Ex-H-5

The parties have executed this Sublease the day and year first above written.

SUBLANDLORD:

 

SUBTENANT:

SF MOTORS, INC. d/b/a SERES

 

ELECTRIC LAST MILE, INC.,

By:

 

 

 

By:

 

 

Its:

 

 

 

Its:

 

 

Prime Landlord agrees to the form and substance of this Sublease, to the rights afforded to Subtenant herein and the obligations and duties of Prime Landlord as expressed herein and consents to this Sublease pursuant to Article VI of the Prime Lease:

ST. JOSEPH COUNTY, INDIANA DEPARTMENT OF REDEVELOPMENT,
acting by and through the ST. JOSEPH REDEVELOPMENT COMMISSION

By:

 

 

   

Its:

 

 

   

Ex-H-6

Ex-H-7

Ex-H-8

EXHIBIT B

ASSIGNMENT AND ASSUMPTION OF GROUND LEASE

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

Electric Last Mile Inc.

Attention: _____________________

______________________________

______________________________

 

Tax Parcel Key No(s).:

71-10-07-101-002.000-031

SPACE ABOVE THIS LINE

RESERVED FOR RECORDER’S USE

ASSIGNMENT OF GROUND LEASE

THIS ASSIGNMENT OF GROUND LEASE (this “Assignment”) is made as of ______________, 2021 (the “Execution Date of the Assignment”), by and between SF Motors, Inc., a Delaware corporation (“Assignor”), and Electric Last Mile Inc., a Delaware corporation (“Assignee”).

W I T N E S S E T H:

WHEREAS, AM General Corporation (“AMG”) and the St. Joseph County, Indiana, Department of Redevelopment, acting by and through the St. Joseph Redevelopment Commission, entered into that certain Ground Lease with an effective date as of December 18, 2001, a memorandum of which is recorded with the Office of the Recorder of St. Joseph County, Indiana, as Instrument No. 0201109 pertaining to premises more particularly described in Exhibit A hereto (the “Ground Lease”);

WHEREAS, AMG assigned all of its right, title and interest in, to and under the Ground Lease to Assignor pursuant to that Assignment of Ground Lease dated as of October 31, 2017, recorded as Instrument No. 1730176;

WHEREAS, Pursuant to the terms and conditions of that certain Sublease between the Assignor (as Sublandlord) and Assignee (as Subtenant) dated as of the Execution Date of this Assignment (the “Sublease”), if and when Assignee has fulfilled certain obligations as described in Section 24 of the Sublease, Assignor shall assign and Assignee shall assume the tenant’s interest in the Ground Lease;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Assignor and Assignee hereby agree as follows:

Assignment of Ground Lease.    Subject to the terms and conditions of the Sublease, if Assignee has fulfilled obligations described in Section 24 of the Sublease, Assignor hereby assigns, sets over and transfers to Assignee, to have and to hold from and after the date hereof, all of Assignor’s right, title and interest in, to and under the Ground Lease.

Assumption of Ground Lease.    Subject to the terms and conditions of the Sublease, if Assignee has fulfilled obligations described in Section 24 of the Sublease, Assignee hereby accepts the foregoing assignment and assumes and agrees to perform and comply with and to be bound by all of the terms, covenants, agreements, provisions and conditions of the Ground Lease on the part of Assignee thereunder from and after the date hereof.

Ex-H-9

Effective Date of this Assignment.    This Assignment shall be executed by both Assignor and Assignee on one original copy constituting the one and only valid and original instrument of this Assignment (the “Original Copy”), which shall be delivered to and held by Chicago Title Insurance Company (the “Escrow Agent”) pursuant to that certain Escrow Agreement entered into among the Escrow Agent, Assignor and Assignee on the Execution Date of the Assignment (the “Escrow Agreement”). This Assignment shall be effective when (but not prior to) the delivery of the Original Copy by the Escrow Agent to Assignee following written direction by both Assignor and Assignee that all conditions and requirements relating to the delivery of the Original Copy have been satisfied, as provided in the Escrow Agreement.

Miscellaneous.    This Assignment shall inure to the benefit of, and be binding upon, the successors, executors, administrators, legal representatives and assigns of the parties. This Assignment shall be construed under and enforced in accordance with the laws of the State of Indiana. Each of the parties to this Assignment represents and warrants that it has full power and authority to execute this Assignment and to perform its obligations hereunder and that any and all consents and/or approvals necessary and/or required in connection therewith have been obtained.

[Signature Pages follow.]

Ex-H-10

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Assignment as of the day and year first above written.

 

ASSIGNOR:

   

SF MOTORS, INC., a Delaware corporation

 

By:

 

 

   

Name:

   
   

Title:

   
 

ASSIGNEE:

   

ELECTRIC LAST MILE INC., a Delaware corporation

 

By:

 

 

   

Name:

   
   

Title:

   

Ex-H-11

STATE OF _____________________

 

)

   

) SS:

COUNTRY OF __________________

   

Before me the undersigned, a Notary Public in and for said County and State, personally appeared _________________________, the __________________________ of SF MOTORS, INC., who acknowledged the execution of the foregoing Assignment of Ground Lease behalf of said SF MOTORS, INC.

WITNESS, my hand and Notarial Seal this ____ day of _______________, 2021.

     

 

       

(signature)

(SEAL)

       
     

________________________ Notary Public
(printed name)

       

Residing in ___________County,_________

       

My commission expires: ________________

Ex-H-12

STATE OF _____________________

 

)

   

) SS:

COUNTRY OF __________________

   

Before me the undersigned, a Notary Public in and for said County and State, personally appeared _________________________, the_________________________ of ELECTRIC LAST MILE INC., who acknowledged the execution of the foregoing Assignment of Ground Lease on behalf of said ELECTRIC LAST MILE INC..

WITNESS, my hand and Notarial Seal this ____ day of ________________, 2021.

     

 

       

(signature)

(SEAL)

       
     

_________________________Notary Public
(printed name)

       

Residing in ___________County,_________

       

My commission expires: ________________

Assignee’s mailing address is and send tax statements to:

 

Electric Last Mile Inc.

   
   

 

   
   

 

   
   

 

   

     This instrument was prepared by Steven J. Morren, Esq., Varnum LLP, 333 Bridge Street, N.W., Ste. 1700, Grand Rapids, MI 49504.

     I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law. Steven J. Morren.

Ex-H-13

Exhibit I

LETTER OF CREDIT

DRAFT

THIS DRAFT LC IS PROVIDED TO YOU AT YOUR REQUEST AND THERE IS NO OBLIGATION ON OUR PART DESPITE OUR ASSISTANCE IN THE PREPARATION OF THIS DRAFT LC. THE DRAFT LC IS NOT TO BE CONSTRUED AS EVIDENCE OF COMMITMENT ON OUR PART TO ISSUE OR ADVISE SUCH LC’S IN THE FUTURE.

Electric_Last_Mile-AMB-3-10-21 20210304IE025323

*********************************************

JPMORGAN CHASE BANK, N.A
GLOBAL TRADE OPERATIONS
10420 HIGHLAND MANOR DRIVE, FLOOR 04
TAMPA, FL 33610-9128
SWIFT: CHASUS33

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER _________
DATED: ________

To:
SF MOTORS, INC. D/B/A SERES
3303 SCOTT BLVD
SANTA CLARA, CA 95054

DEAR SIR/MADAM:

WE HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR.

BENEFICIARY:

 

SF MOTORS, INC. D/B/A SERES

   

3303 SCOTT BLVD

   

SANTA CLARA, CA 95054

ACCOUNT PARTY:

 

ELECTRIC LAST MILE, INC

   

1055 W SQUARE LAKE ROAD

   

TROY, MI 48098

DATE OF EXPIRY:

 

[30-SEP-2023]

PLACE OF EXPIRY:

 

OUR COUNTERS

AMOUNT:

 

USD43,620,689.66

APPLICABLE RULES:

 

ISP LATEST VERSION

FUNDS UNDER THIS CREDIT ARE AVAILABLE UP TO AN AGGREGATE AMOUNT OF USD43,620,689.66 AT SIGHT WITH JPMORGAN CHASE BANK N.A. UPON PRESENTATION OF THE FOLLOWING:

BENEFICIARY’S SIGNED AND DATED STATEMENT READING AS FOLLOWS:

“I (NAME/TITLE) HEREBY CERTIFY THAT I AM AN AUTHORIZED REPRESENTATIVE OF SF MOTORS, INC. D/B/A SERES AND HEREBY REPRESENT THAT AN EVENT OF DEFAULT INVOLVING EITHER A FAILURE TO MAKE A PAYMENT WHEN DUE OR THE OCCURRENCE OF AN EVENT DESCRIBED IN SUBPARAGRAPH (i) HAS OCCURRED UNDER THAT CERTAIN PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF USD43,620,689.66 DATED ________, 2021, MADE BY ELECTRIC LAST MILE,

Ex-I-1

INC, AS BORROWER, IN FAVOR OF SF MOTORS, INC. D/B/A SERES, AS LENDER.  I HEREBY DEMAND PAYMENT IN THE AMOUNT OF USD____________ UNDER JPMORGAN CHASE BANK, N.A. LETTER OF CREDIT NUMBER XXXXXX.” 

DRAWINGS HEREUNDER MAY BE PRESENTED BY FACSIMILE/TELECOPY (‘’FAX’’) TO FAX NUMBER 856-294-5267 UNDER TELEPHONE PRE-ADVICE TO 1-800-634-1969. SUCH FAX PRESENTATION(S) MUST BE RECEIVED ON OR BEFORE THE EXPIRY DATE IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT. ANY SUCH FAX PRESENTATION SHALL BE CONSIDERED THE SOLE OPERATIVE INSTRUMENT OF DRAWING. IN THE EVENT OF PRESENTATION BY FAX, THE ORIGINAL DOCUMENTS SHOULD NOT ALSO BE PRESENTED.

PARTIAL AND MULTIPLE DRAWINGS ARE PERMITTED.

THIS LETTER OF CREDIT IS TRANSFERABLE BY US, BUT ONLY IN ITS ENTIRETY, AND MAY BE SUCCESSIVELY TRANSFERRED. TRANSFER OF THIS LETTER OF CREDIT SHALL BE EFFECTED BY US UPON YOUR SUBMISSION OF THIS ORIGINAL LETTER OF CREDIT, INCLUDING ALL AMENDMENTS, IF ANY, ACCOMPANIED BY THE ATTACHED TRANSFER REQUEST FORM DULY COMPLETED AND EXECUTED, ALONG WITH PAYMENT OF OUR TRANSFER CHARGES AS INDICATED THEREIN. IN ANY EVENT, WE MUST COMPLY WITH ALL SANCTIONS, EMBARGO AND OTHER LAWS AND REGULATIONS OF THE U.S. AND OF OTHER APPLICABLE JURISDICTIONS TO THE EXTENT THEY DO NOT CONFLICT WITH SUCH U.S. LAWS AND REGULATIONS (“APPLICABLE RESTRICTIONS”). THIS LETTER OF CREDIT MAY NOT BE TRANSFERRED TO ANY PERSON OR ENTITY LISTED IN OR OTHERWISE SUBJECT TO ANY APPLICABLE RESTRICTIONS. [Note: JPMorgan Chase Bank to add its Transfer Request Form.]

WE ENGAGE WITH YOU THAT DOCUMENTS DRAWN AND PRESENTED UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT SHALL BE DULY HONORED ON OR BEFORE THE THIRD BANKING DAY AFTER PRESENTATION, IF PRESENTED BY FACISIMILIE AS HEREIN PROVIDED OR AT OUR COUNTERS AT 10420 HIGHLAND MANOR DRIVE, 4TH FLOOR, TAMPA, FLORIDA 33610 ATTN: STANDBY LETTER OF CREDIT UNIT ON OR BEFORE THE EXPIRATION DATE. ALL PAYMENTS DUE HEREUNDER SHALL BE MADE BY WIRE TRANSFER TO THE BENEFICIARY’S ACCOUNT PER THEIR INSTRUCTIONS. ALL DOCUMENTS PRESENTED MUST BE IN ENGLISH.

THIS IRREVOCABLE STANDBY LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING. THIS UNDERTAKING IS INDEPENDENT OF AND SHALL NOT IN ANY WAY BE MODIFIED, AMENDED, AMPLIFIED OR INCORPORATED BY REFERENCE TO ANY DOCUMENT, CONTRACT OR AGREEMENT REFERENCED HEREIN OTHER THAN THE STIPULATED ICC RULES AND GOVERNING LAWS.

ALL APPLICATION AND AMENDMENT FEE OF THIS STANDBY LETTER OF CREDIT WILL BE PAID BY APPLICANT.

THIS LETTER OF CREDIT MAY BE CANCELLED PRIOR TO EXPIRATION PROVIDED THE ORIGINAL LETTER OF CREDIT (AND AMENDMENTS, IF ANY) ARE RETURNED TO JPMORGAN CHASE BANK, N.A., AT OUR ADDRESS AS INDICATED HEREIN, WITH A STATEMENT SIGNED BY THE BENEFICIARY STATING THAT THE ATTACHED LETTER OF CREDIT IS NO LONGER REQUIRED AND IS BEING RETURNED TO THE ISSUING BANK FOR CANCELLATION.

THIS LETTER OF CREDIT IS GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND, EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, TO THE INTERNATIONAL STANDBY PRACTICES, ICC PUBLICATION NO. 590 (THE “ISP98”), AND IN THE EVENT OF ANY CONFLICT ISP98 WILL CONTROL, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. ANY DISPUTES ARISING FROM OR IN CONNECTION WITH THIS STANDBY LETTER OF CREDIT SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN.

PLEASE ADDRESS ALL WRITTEN CORRESPONDENCE TO THE BANK REGARDING THIS LETTER OF CREDIT TO JPMORGAN CHASE BANK, N.A., GLOBAL TRADE OPERATIONS, 10420 HIGHLAND MANOR DR., 4TH FL., TAMPA, FL 33610 ATTN: STANDBY LETTER OF CREDIT DEPT., INCLUDING THE LETTER OF CREDIT NUMBER MENTIONED ABOVE.

Ex-I-2

ALL INQUIRIES REGARDING THIS TRANSACTION MAY BE DIRECTED TO OUR CLIENT SERVICE GROUP AT THE FOLLOWING TELEPHONE NUMBER OR EMAIL ADDRESS QUOTING OUR REFERENCE _________.

TELELPHONE NUMBER 1-800-634-1969
EMAIL ADDRESS: GTS.CLIENT.SERVICES@JPMCHASE.COM

YOURS FAITHFULLY,

JPMORGAN CHASE BANK, N.A.

…………………………………………………..

Authorized Signature

[Note: JPMorgan Chase Bank to add its Transfer Request Form.]

Ex-I-3

Exhibit J

INVESTOR SUITABILITY QUESTIONNAIRE

Electric Last Mile, Inc., a Delaware corporation (the “Company”), will use the responses to this questionnaire to qualify prospective investors (each, an “Investor”) for purposes of federal and state securities laws. Please complete, sign, date and return one copy of this questionnaire as soon as possible to the Company, attention Benjamin Wu, at bwu@electriclastmile.com.

Name:________________________________________________________________________

(EXACT NAME AS IT SHOULD APPEAR IN COMPANY RECORDS)

1.      Please indicate the state in which you maintain your principal residence and how long you have maintained your principal residence in that state.

 

State: ___________________________

   
   

Duration: ________________________

   
   

Address: ________________________

   
   

Email Address: ___________________

   

2.      Verification of Status as an “Accredited Investor.”

A.     If an individual, check each category that is applicable:

 

£

 

(1)     The Investor is a natural person whose net worth, either individually or jointly with such Investor’s spouse, exceeds $1,000,000, excluding the value of the Investor’s primary residence2;

£

 

(2)     The Investor is a natural person who had an income in excess of $200,000, or joint income with such Investor’s spouse in excess of $300,000, in the past two years and reasonably expects to have income reaching the same level in this year;

£

 

(3)     The Investor is a natural person who is a director or executive officer of the Company.

£

 

(4)     Neither of (1), (2) or (3) above.

B.     If a trust, please check the category that is applicable:

 

£

 

(5)     The Investor is either a revocable trust (such as a living trust) or a trust formed for the purpose of acquiring the securities of the Company (the “Securities”) and for which, in either case, each grantor is an accredited investor. Indicate each grantor and the category that describes how each such grantor is qualified as an “accredited investor.”

       

 

   

£

 

(6)     The Investor is a trust which has total assets in excess of $5,000,000, was not formed for the specific purpose of acquiring the Securities, and whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company.

   

£

 

(7)     Neither of (5) or (6) above.

____________

​2        An individual should not deduct from his or her net worth the amount of mortgage debt secured by an excluded primary residence other than (i) the amount by which the mortgage liability exceeds the fair value of the residence and (ii) any increase in the amount of the debt secured by the primary residence in the 60 days preceding the date hereof unless the increase was a result of the acquisition of the residence.

Ex-J-1

C.     If not an individual or trust, please check each category that is applicable:

 

£

 

(8)     The Investor (i) is either a corporation, a partnership, a limited liability company, an organization described in Section 501(c)(3) of the Internal Revenue Code, or a Massachusetts or similar business trust, (ii) has not been formed for the specific purpose of acquiring the Securities and (iii) has total assets in excess of $5,000,000;

£

 

(9)     The Investor is a bank as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity;

£

 

(10)     The Investor is a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended;

£

 

(11)     The Investor is an insurance company as defined in Section 2(13) of the Securities Act;

£

 

(12)     The Investor is an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;

£

 

(13)     The Investor is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

£

 

(14)     The Investor is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5,000,000;

£

 

(15)     The Investor is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, and (i) the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or (ii) the employee benefit plan has total assets in excess of $5,000,000, or (iii) if a self-directed plan, the investment decisions are made solely by persons that are accredited investors;

£

 

(16)     The Investor is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

£

 

(17)     The Investor is an entity in which all of the equity owners qualify under any of the above categories (including the categories for individuals and trusts listed above). If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies:

   

 

   

 

   

(Continue on a separate piece of paper, if necessary.)

£

 

(18)     None of (8) through (17) above.

*    *    *    *    *

Ex-J-2

You agree that the Company may present this questionnaire to such parties as the Company deems appropriate to establish the availability of exemptions from registration under federal and state securities laws. You represent that the information furnished in this questionnaire is true and correct and you acknowledge that the Company and its counsel are relying on the truth and accuracy of such information to comply with federal and state securities laws. You agree to notify the Company promptly of any changes in the foregoing information that may occur prior to the investment.

Date:

 

 

     

 

           

Name:

 

 

           

Title:

 

 

Ex-J-3

Exhibit 10.7

Execution Copy
Privileged & Confidential

EXCLUSIVE IP LICENSE AGREEMENT

This EXCLUSIVE IP LICENSE AGREEMENT (together with all Exhibits hereto, this “Agreement”) is executed as of April 9, 2021 (the “Execution Date”) and entered into by and between SF Motors, Inc., d/b/a SERES (the “Licensor”), a Delaware corporation and Electric Last Mile, Inc. (“Licensee”), a Delaware corporation (collectively, the “Parties,” or each, individually, a “Party”).

RECITALS:

WHEREAS, Licensor has the right to use certain Licensed Intellectual Property (defined below) related to the manufacture and design of urban utility and commercial vehicles currently designated as Licensor’s EC35 and D51 models, including skateboards used for urban utility truck, cargo van, and open bed truck vehicles ;

WHEREAS, Licensor wishes to license the Licensed Intellectual Property for the Licensed Products to Licensee and Licensee wishes to obtain such a license, in each case, on the terms and conditions set forth herein; and

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein and for other good and valuable consideration, the adequacy, receipt, and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.      Definitions. For purposes of this Agreement, the following terms have the following meanings:

“Affiliate” of a Person means any other Person that, at any time during the Term, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” for purposes of this definition means the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise/direct or indirect ownership of more than fifty percent (50%) of the voting securities of a Person, and “controlled by” and “under common control with” have correlative meanings.

“Copyleft Terms” means any terms of a license commonly referred to as an open source, free Software, copyleft, or community source code license (including the GNU General Public License, GNU Lesser General Public License, Affero General Public License, or Mozilla Public License) or any similar license, in each case that includes the following requirement as a condition of use, modification, or distribution of any material subject to that license: (a) such software, or anything combined or distributed with such licensed material, is required to be: (i) disclosed or distributed in source code form; (ii) licensed for the purpose of making derivative works; or (iii) redistributable at no charge; or (b) the imposition of restrictions on future patent licensing or enforcement.

“Improvement” means, with respect to any Licensed Intellectual Property, any improvement, enhancement, updates, invention (whether or not patentable), variation, derivative work, modification, or adaptation of such Intellectual Property.

“Intellectual Property” means all intellectual property and industrial property rights, including all: (a) works of authorship and expressions, whether or not copyrightable, including copyrights, designs, author, performer, moral and neighboring rights, and all registrations, applications for registration and renewals of such copyrights, and all unregistered design rights, design registrations, design patents, and applications for any of the foregoing (“Copyrights and Design Rights”); (b) trade secrets, business and technical information and know-how and other confidential and proprietary information and all rights therein (“Know-How”); (c) software and firmware, including data files, source code, object code, application programming interfaces, architecture, files, records, schematics, algorithms, data collections, computerized databases, and other related specifications and documentation (“Software”); (d) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof), patent applications, and other patent rights and any other government-issued indicia of invention ownership, including inventor’s certificates, petty patents, and patent utility models (“Patents”), provided that, “Patents” does not include any unregistered design rights, design registrations, design patents, and applications for any of the foregoing; and (e) trademarks, service marks, trade names, brand names, logos, trade dress, and other similar designations of source, sponsorship, association, or origin, together with the goodwill

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connected with the use of and symbolized by, and all registrations, applications, and renewals for, any of the foregoing (“Trademarks”), provided that “Trademarks” does not include any unregistered design rights, design registrations, design patents, and applications for any of the foregoing.

“Licensed Intellectual Property” means the following Intellectual Property of EC35 and D51 models that are owned by Licensor and Chongqing SOKON Industry Group Stock Co., Ltd. (hereafter called “Sokon”) and used in the design, manufacture, development, market, sell, offer to sell, or commercialize the Licensed Products as such Licensed Products are designed, manufactured, marketed and sold as of the Execution Date: (a) Copyrights and Design Rights, including drawings, plans, specifications, and other engineering documentation, quality control and testing plans, databases, and data collections, and all other written documentation related to the Licensed Products; (b) Know-How, including technical documents for welding, painting and assembling (including 3D data, 2D drawing, technical standard, BOM list), technical protocol, electrical diagram, manufacturing process and flow, configuration data, performance parameters, technical index, technical reports, test reports(if any), operation guidance, and other related technical knowledge, experience, methods or the combination that are not known to the public ; and (c) trade secrets, business and technical information and other confidential and proprietary information and rights; provided that, for clarity, “Licensed Intellectual Property” does not include any Patents, any Trademarks, any software, the product Model Name “EC35” and “D51“, any Copyright or Design Rights in connection with the design of the styling of headlights of the Licensed Product, or any Intellectual Property owned by any party other than Licensor and its affiliates. A complete list of all Licensed Intellectual Property is attached hereof as Exhibit A.

“Licensed Products” means urban utility or commercial vehicles currently designated as Licensor’s EC35 and D51 models, including skateboards used for urban utility truck, cargo van, and open bed truck vehicles described in Exhibit B. License Products do not include headlights of both the EC35 and the D51 models, or any parts or components to the vehicles that are supplied by third parties.

“Person(s)” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association, or other entity.

“Territory” means the United States of America (including all territories and possessions), Canada, and Mexico.

“Use” shall mean to use, practice, reproduce, distribute, display, make, have made, sell, offer to sell, import, export, provide, and commercialize, conduct research and development and to make Improvements, including in each case to commercialize products and services thereunder.

2.      Licenses.

2.1        Grant. Subject to the terms and conditions set forth herein, Licensor hereby grants to Licensee during the Term (defined below) a non-sublicensable, non-transferable, perpetual (subject to early termination of this Agreement), irrevocable, royalty-bearing (subject to Section 2.10 and 3.2), exclusive as to the Territory (as further described in Section 2.1(a) and subject to Sections 2.2(b) below) right and license under the Licensed Intellectual Property to make, have made, use, import, sell, and offer for sale the Licensed Products in the Territory and to Use the Licensed Intellectual Property in connection with Licensed Products in the Territory.

2.1(a) Exclusivity For clarity, unless otherwise terminated pursuant to Section 2.1(b) below, between the Execution Date and the thirtieth year anniversary of the Execution Date, Licensor shall not authorize or grant others any right under the Licensed Intellectual Property to make, have made, import, use, market, offer for sale or sell (a) any vehicles that are similar to or compete with the Licensed Products in the Territory; or (b) any vehicles outside the Territory where Licensor knows (or would reasonably be expected to know) that such vehicle is intended for sale, offer for sale, commercialization within the Territory. Nothing in this Agreement intends to restrict Licensor from making, importing, using, marketing, or selling any products (including the Licensed Products) within or outside the Territory.

2.1(b) Termination of Exclusivity In the event that that the aggregate Licensed Product sold by Licensee during the two-year period following the Effective Date does not exceed 10,000 (the “First Exclusive Milestone”), Licensor’s obligations ser forth in Section 2.1(a) above shall terminate as of the second anniversary of the Effective Date and the license granted to Licensee shall become a non-exclusive license thereafter. In the event that First Exclusive Milestone is achieved, and the aggregate Licensed Product sold by Licensee during the ten-year period following the Effective Date does not exceed 100,000 (the “Second Exclusive Milestone”), Licensor’s obligations ser forth in Section 2.1(a) above shall terminate as of the tenth anniversary of the Effective Date and the license granted

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to Licensee shall become a non-exclusive license thereafter. In the event that both the First Exclusivity Milestone and the Second Exclusivity Milestone are achieved, Licensor’s obligations ser forth in Section 2.1(a) above shall terminate as of the thirtieth anniversary of the Effective Date and the license granted to Licensee shall become a non-exclusive license thereafter. Parties hereby acknowledge and agree that the milestones and the possible termination of Exclusivity rights are fair and reasonably business arrangements. Any early termination of Licensee’s Exclusive rights pursuant to this Section 2.1(b) shall not change in any manner the amount or the payment schedule of the Royalty Payment set forth in Section 3.1.

2.2        Technology Transfer to ELMS. In exchange of Licensor’s receiving of the Fixed Royalty Fee (as defined in Section 2.10 below), the Parties will complete the transfer from Licensor to Licensee of all materials and information related to the Licensed Intellectual Property, the specific time is subject to subsequent confirmation by both parties. Licensor shall use commercially reasonable efforts to obtain all relevant technology, other necessary information and assistance from relevant Third Parties, if reasonably required. For clarity, Licensor is not required to transfer any materials or information related Licensed Intellectual Property unless and until the Fixed Royalty Payment is received.

2.3        Disclosure. At Licensee’s request, Licensor will disclose or deliver to Licensee the Licensed Intellectual Property used by Licensor in design or manufacture of any Licensed Products, together with the general and specific knowledge, technical documentation, technical support, manufacturing, assembly and product processes and techniques, experience, information, and any other relevant materials owned by Licensor if such materials and information are listed in Exhibit A.

2.4        Intellectual Property Ownership; Rights with Respect to Improvements. (a) The Parties agree that as between the Parties, Licensor solely and exclusively owns all Licensed Intellectual Property that existed as of the Execution Date (collectively, the “Foundation IP”), subject only to the licenses granted to Licensor pursuant to this Section 2, and nothing in this Agreement shall be construed as transferring any ownership interest in the Foundation IP. (b) The Parties agree that as between the Parties, Licensor solely and exclusively owns all right, title, and interest in and to any Intellectual Property that is created, conceived, authored, discovered, reduced to practiced, or otherwise developed solely by Licensor after the Effective Date. (c) Any Improvement of the Foundation IP developed by Licensee under this Agreement for manufacturing and distribution in the Territory (“Derivative IP”) shall be solely and exclusively owned by Licensee, provided that (x) the foregoing is not intended to be, and shall not be construed as, a grant of any rights or license by Licensor to Licensee of any rights of Licensor’s intellectual property that are not Licensed Intellectual Property, (y)Licensee’s rights, if any, in the Derivative IP shall be subject to Licensor’s intellectual property rights in any technology from which such Derivative IP were derived, and (z) no license under any Licensor’s Patent is granted hereunder by Licensor to Licensee with respect to such Derivative IP or otherwise. (e) Licensee hereby grants Licensor, Sokon and their affiliates a non-exclusive, perpetual, irrevocable, worldwide, royalty-free, fully paid-up, non-assignable, non-sublicensable right and license under the Derivative IP, excluding Trademarks, to make, have made, use, sell, offer for sale, import, export and otherwise Use and exploit the Derivative IP in connection with the Licensed Products.

2.5        Intentionally Omitted.

2.6        Licensor’s Representations and Warranties. As of the date of the commencement of the TERM (except for such representations and warranties that speak as of a particular date), Licensor represents and warrants that:

(a)        Licensor has the full right, power, and authority to execute and deliver this Agreement and to grant the license granted in Section 2.1 hereof and perform its obligations hereunder.

(b)        Licensor (i) has, and throughout the Term will retain, the right necessary to grant the license granted to Licensee hereunder, and (ii) within the Territory, has not granted, is not under any obligation to grant, and will not grant during the Term to any third party any license, lien, option, encumbrance, or other contingent or non-contingent right, title, or interest in or to the Licensed Intellectual Property that conflicts with the rights and licenses granted to Licensee hereunder.

(c)        To the knowledge of Licensor, in the Territory there is no settled, pending, or threatened litigation, opposition, or other claim or proceeding challenging the validity, enforceability, ownership, registration, or use of the Licensed Intellectual Property in connection with Licensee’s uses permitted hereunder in the Territory.

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(d)        Licensor has not brought or threatened any claim against any third party alleging infringement of the Licensed Intellectual Property, nor to its knowledge, is any third party infringing or threatening to infringe the Licensed Intellectual Property in the Territory.

2.7        (a) Disclaimer of Other Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY WARRANTY WHATSOEVER WITH RESPECT TO THE LICENSED PRODUCTS, THE SPECIFICATIONS, TRADE NAMES AND/OR TRADEMARKS THEREFOR, OR ANY OF THE OTHER INFORMATION PROVIDED BY EITHER PARTY TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT, AND NEITHER PARTY GIVES OR MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, IS GIVEN OR MADE OR SHALL ARISE BY OR IN CONNECTION WITH ANY USE, MANUFACTURE, DISTRIBUTION, IMPORTATION, OFFER FOR SALE, COMMERCIALIZATION OR SALE OF ANY LICENSED PRODUCT BY LICENSEE OR ITS CUSTOMERS, OR LICENSOR’S AND/OR CUSTOMER’S CONDUCT IN RELATION THERETO OR TO EACH OTHER. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN,

(b)        All THE LICENSED INTELLECTUAL PROPERTY, ALL RIGHTS, MATERIALS, AND INFORMATION IN CONNECTION WITH THE LICENSED INTELLECTUAL PROPERTY UNDER THIS AGREEMENT ARE PROVIDED “AS-IS” AND WITHOUT WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. Licensor specifically disclaims all implied warranties and conditions of noninfringement, merchantability, and fitness for a particular purpose with respect to the Licensed Intellectual Property. Licensee acknowledges that it obtains the license and uses the Licensed Intellectual Property in the Territory at Licensees’ own risk, including the risk of infringement of intellectual property rights of third parties. Despite Licensor’s representation and warranties in Section 2.6 of this Agreement, this Section 2.7(b) shall supersedes Section 2.6.

(c)        Without limiting Sections 2.7(a) and (b) above, Licensor makes no warranty or representation of any kind that the Licensed Products are in compliance with applicable laws and regulations for marketing and sale in the Territory. Parties agree that Licensor is not required, and has no obligation, to conform the Licensed Products to comply with laws or regulation applicable for sale in the Territory. Subject to the terms and conditions of this Agreement, Licensor may at its own expenses develop the Licensed Intellectual Property to conform the Licensed Products to comply with applicable laws and regulations for sale in the Territory. To the extent any modification or alteration to the Licensed Products are necessary to make such product in compliance with applicable laws and regulations in the Territory, Licensee shall submit such necessary modifications or alterations to Licensor for approval at Licensor’s sole discretion. Licensor is not responsible for, and Licensee shall hold Licensor harmless, against any products liability claims raised by Licensee’s customers or end users of Licensee’s products sold in the Territory incorporating the Licensed Intellectual Property (including any Improvement or Derivative IP).

2.8        Use of Licensor’s Patents and Trademarks and other Identifiers. Except as expressly provided under this Agreement or by other written agreement of the Parties, Licensee is granted no license or other right to use any of the Licensor’s Patents, Trademarks, or product, part, SKU or other identification numbers (including Model Numbers EC35 and D51), and agrees to refrain from using (a) any such Patents and (b) any Trademarks or identification number confusingly similar to Licensor’s Trademarks or identification numbers used by Licensor as of the Effective Date. For all kinds of logos and product codes in the Licensed Products, Licensee shall be responsible to eliminate legal risks in the Territory.

2.9        Geographic Restriction. During the Term, Licensee shall not make any sale of Licensed Products for delivery, or known to Licensee (or reasonably be expected to know by Licensee) to be for ultimate use, outside of the Territory.

2.10        Royalty Payment. The Parties agree that Licensee shall pay Licensor (i) a royalty payment at the amount of USD 5,000,000 (the “Fixed Royalty Fee”) within 30 days of the Effective Date in exchange for the technology transfer to licensee (see 2.2 for details); and (ii) one hundred US dollars ($100.00 USD) royalty fee per Licensed Product vehicle (for the first 100,000 units) (“Unit Royalty Fee”) sold by Licensee within the Territory. For clarity, after payments of both the Fixed Royalty Fee and the Unit Royalty Fee for the first 100,000 units of Licensed Product vehicles have been made (the “Paid Up Date”), no further Unit Royalty Fee shall be due or payable and the license

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granted to Licensee pursuant to this Agreement shall be fully paid up. Licensee shall keep accurate records of all sales of Licensed Product vehicles and prior to the Paid Up Date, shall submit to Licensor a quarterly report (“Quarterly Report”) within thirty (30) days after the end of each calendar quarter, indicating its total sales of Licensed Product vehicles for the immediately preceding quarter and the amount of Unit Royalty Fees due to Licensor. Licensee shall also submit payment to Licensors of all Unit Royalty Fees for the immediately preceding quarter with the Quarterly Report. All payments hereunder shall be made in United States Dollars. Payments to Licensor by Licensee shall be made by check or wired to an account in a bank designated by Licensor and the costs of any such remittance shall be borne by Licensee. Any overdue amounts payable by Licensee hereunder shall bear interest compounded monthly at the prime lending rate for United States Dollars published from time to time plus five percent (5%) per annum, or, if lower, the maximum amount allowed by applicable law, from the due date until the date of payment.

2.11        Service Support. At Licensee’s request, Licensor or its Affiliates may provide service support to assist Licensee in the resolution and implementation of the relevant know-how, including engineering, manufacturing training, and other services required in connection with the Licensed Intellectual Property (the “Services”). The specific service fee and terms shall be subject to separate negotiation and execution of a separate technical service agreement between the Parties.

2.12        Records and Licensor Audit Rights. During the Term of this Agreement and for two (2) years after termination of this Agreement, Licensor or its audit-related agents shall have access to, and Licensee shall maintain, any books, documents, records, papers, or other materials of Licensee related to this Agreement and the manufacture and sale of Licensed Product vehicles (the “Relevant Records”). Licensee shall establish and maintain a reasonable accounting system that enables Licensor and its audit-related agents to identify Licensee’s sales of Licensed Product vehicles. Licensee shall maintain a system of internal controls to prevent the payment of bribes and provide reasonable assurance that financial statements and reporting are accurate. False, misleading, incomplete, inaccurate, or artificial entries in the books and records are prohibited. No more than three times during each calendar year of the Term prior to the Paid Up Date and no more than three times each calendar year after the Paid Up Date, Licensor may audit Licensee’s Relevant Records solely to the extent necessary to verify the accuracy of Licensee’s payment of Royalty Fees hereunder. Licensor will provide Licensee with at least five (5) days’ written notice of Licensor’s intent to exercise such audit rights under this provision. The Relevant Records and, if requested, relevant employees, shall be made available to Licensor or its audit-related agents during normal business hours at the Licensee’s office or place of business. If no such location is available, then the Relevant Records, and if requested, relevant employees, shall be made available at a time and location that Licensor will determine.

3.     Termination.

3.1        This Agreement shall become Effective upon the Closing of the transactions contemplated that certain agreement (the “Merger Agreement”) captioned “AGREEMENT AND PLAN OF MERGER,” by and among Forum Merger III Corporation, a Delaware corporation (“Parent”), ELMS Merger Corp., a Delaware corporation and a wholly owned Subsidiary of Parent, and Licensee (the “Effective Date”). If the Closing of the Merger Agreement has not taken place on or prior to June 30, 2021, Licensor may terminate this Agreement.

3.2.        Termination Events. This Agreement may be terminated as follows: (a) by mutual written consent of the Parties; (b) by either Party, in the event that the other Party defaults in the performance of any of its material obligations set forth in this Agreement, at any time during the continuance of such default, upon not less than ninety (90) days’ written notice to the Party in default, specifying such default, unless within such ninety (90) day period such default specified therein has been remedied; or (c) by either Party, in the event that the other Party becomes the subject of a voluntary or involuntary petition in bankruptcy or any proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors and such petition or proceeding is not dismissed with prejudice within sixty (60) days after filing, then the notifying Party may terminate this Agreement effective thirty (30) days after providing written notice of termination to such Party.

3.3.        Licensee Default and Licensor Termination.

(a)        Licensor has the right to Terminate this Agreement when one of the following events (“Licensee Default”) occurs.

(i) Licensee fails to pay the Fixed Royalty Fee in accordance with Section 2.10 and such failure remains uncured for 3 days after receiving a written notice of payment from Licensee.

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(ii) Licensee fails to pay the Unit Royalty Fee in accordance with Section 2.10 and such failure remains uncured for 3 days after receiving a written notice of payment from Licensee.

(iii) Licensee submits a Quarterly Report that is inaccurate in material aspects.

(iv) Licensee refuses to cooperate with Licensor’s exercising the audit right set forth in Section 2.15.

(v) Licensee’s violation of Section 2.1, including without limitation, sublicenses of the Licensed Intellectual Property without Licensee’s express authorization, or use the Licensed Intellectual Property beyond the Territory, and such violation remains uncured for 30 days after receiving a written notice from Licensee demanding for cure.

(b)        If the Agreement is terminated by Licensor due to any Licensee Default, Licensee shall be responsible for the Unit Royalty Fee Payment due and payable prior to such termination, and any loss and damages incurred to Licensor.

3.4.        Effect of Termination. Termination of this Agreement shall not relieve either Party of any of its obligations accrued hereunder prior to the effective date of termination. Neither Party will be entitled to any compensation or reimbursement for inability to recoup any investment made in connection with performance under this Agreement, loss of prospective profits or anticipated sales or other losses occasioned by termination of this Agreement pursuant to its terms. Upon termination of this Agreement, the license set forth in Section 2.1 shall automatically terminate and Licensee shall promptly cease all use of the Licensed Intellectual Property. Licensee’s use of the Licensed Intellectual Property thereafter will constitute infringement of Licensor’s rights and shall be responsible for such infringement. For clarity, all licenses in and to existing Licensed Products that were manufactured or sold prior to the effective date of termination will survive.

4.     Assignment.

Except as permitted by this Agreement, neither Party shall assign, transfer, or delegate, any of its rights or obligations under this Agreement, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other Party. Any attempted assignment or delegation in violation of this Section 4 shall be null and void. This Agreement is binding upon and will inure to each Party’s respective permitted successors in interest and permitted assigns.

5.     Nature of Relationship.

It is agreed and understood that each of the Parties, in the performance of its obligations under this Agreement, is an independent contractor, and that nothing herein contained will be deemed to create an agency, partnership, joint venture, or likely relationship between the Parties. The Parties shall work together in good faith for supply and contract manufacturing associated with this Agreement.

6.     Notices.

Notices, demands, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to be made or given when personally delivered or five (5) business days after being mailed by registered or certified mail, postage prepaid, return receipt requested, or two (2) business days after being sent by recognized courier guaranteeing overnight or two-day delivery, to the Party to receive notice at its address set forth in the first paragraph of this Agreement, to the attention of the individual representing that Party under this Agreement, or at such other address as that Party may designate from time to time by notice hereunder.

7.     Modifications.

No waiver, amendment, or modification of this Agreement will be valid or binding unless written and signed by the Parties. Waiver by either Party of any breach or default of any clause of this Agreement by the other Party shall not operate as a waiver of any previous or future default or breach of the same or different clause of this Agreement.

8.     Severability.

In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired.

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9.     Governing Law.

This Agreement shall be construed according to and governed by the laws of the State of Delaware, without regard to any conflicts of law provisions. Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination or this Agreement or any dispute regarding non-contractual obligations arising out of or relating to it shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The arbitration proceedings shall be conducted in English.

10.     Indemnification; Limitation of Liability.

10.1        Indemnification. Subject to the provisions of Sections 10.2 and 10.3, each Party shall defend, indemnify, and hold the other Party and its Affiliates and their respective directors, officers, agents, and employees harmless from and against any and all liabilities, claims, damages, and expenses (including without limitation actual court costs and reasonable attorneys’ fees regardless of outcome) resulting from or arising out of or in connection with any negligent or intentionally wrongful acts or omissions of the other Party or any of its Affiliates, or any breach by the other Party of any material representation, material warranty, or covenant made by it in this Agreement.

10.2        Exclusion of Consequential and Other Indirect Damages. TO THE FULLEST EXTENT PERMITTED BY LAW, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY, ITS AFFILIATES, OR ANY OTHER PERSON WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT FOR ANY INJURY TO OR LOSS OF GOODWILL, REPUTATION, BUSINESS, PRODUCTION, REVENUES, PROFITS, ANTICIPATED PROFITS, CONTRACTS, OR OPPORTUNITIES (REGARDLESS OF HOW THESE ARE CLASSIFIED AS DAMAGES), OR FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, PUNITIVE, OR ENHANCED DAMAGES WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR OTHERWISE (INCLUDING THE ENTRY INTO, PERFORMANCE, OR BREACH OF THIS AGREEMENT), REGARDLESS OF WHETHER SUCH LOSS OR DAMAGE WAS FORESEEABLE OR THE PARTY AGAINST WHOM SUCH LIABILITY IS CLAIMED HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE; PROVIDED, NOTHING IN THIS SECTION 10 SHALL LIMIT THE OBLIGATION OF A PARTY UNDER THIS SECTION 10 FOR LOSSES PURSUANT TO A THIRD PARTY CLAIM OR THE LIABILITY OF A PARTY FOR A BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT.

10.3        Indemnification Procedure. The Party claiming indemnification (the “Indemnified Party”), after being advised of any assertions of any such third party claims or suits or upon the bringing or filing of such claims or suits by any third party against the Indemnified Party, shall promptly notify the Party from which indemnification is sought (the “Indemnifying Party”) thereof; provided, that the failure to promptly notify shall not affect the Indemnifying Party’s obligations hereunder except to the extent the Indemnifying Party is prejudiced by the delay in notification. The Indemnified Party shall permit the Indemnifying Party’s attorneys to control the defense of such claims or suits at the Indemnifying Party’s cost. The Indemnified Party shall co-operate with the Indemnifying Party in the defense of such claims or suits. The Parties agree that there shall be no settlements, whether agreed to in court or out of court, without the prior written consent of the Indemnifying Party.

11.     Confidentiality.

11.1        General. Each Party (the “Discloser”) may from time to time disclose to the other Party (the “Recipient”) certain Confidential Information (as defined below) of the Discloser. Recipient agrees to receive in confidence from Discloser all of Discloser’s Confidential Information. Recipient agrees that it, its employees, contractors, representatives, successors, assigns, Affiliates, parents, subsidiaries, officers, directors, and the like shall, for the Confidentiality Period, (a) hold Discloser’s Confidential Information in strict confidence, use a high degree of care in safeguarding Discloser’s Confidential Information, and take all precautions reasonably necessary to protect Discloser’s Confidential Information including, without limitation, all precautions Recipient normally employs with respect to its own Confidential Information; (b) not divulge any of Discloser’s Confidential Information or any information derived therefrom to any third person; (c) not make any use whatsoever at any time of Discloser’s Confidential Information, except as is necessary or appropriate in the exercise of Recipient’s rights or licenses

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or performance of Recipient’s specific duties under this Agreement; (d) except pursuant to the license granted in Section 2.1, not copy, reverse engineer, alter, modify, break down, melt down, disassemble or transmit any of Discloser’s Confidential Information;(e) notify Discloser in writing immediately upon discovery of any unauthorized use or disclosure of Discloser’s Confidential Information by Recipient or its employees or any third party; and (f) upon demand by Discloser, promptly return, or, at Discloser’s option, destroy, and certify to Discloser the destruction of, all documents, papers, files, notes, samples and materials of any kind, including copies or reproductions thereof, to the extent they contain Discloser’s Confidential Information. “Confidentiality Period” means (i) for all Confidential Information that constitutes a ‘trade secret’ under applicable law, the period beginning on the date of disclosure to the Recipient and ending on when such Confidential Information is no longer a trade secret under applicable law or (ii) for all other Confidential Information, the period beginning on the date of disclosure to the Recipient and ending on the date that is five (5) years after the expiration or termination of this Agreement.

11.2        Definition of Confidential Information. For purposes hereof, the term “Confidential Information” means any and all confidential and/or proprietary knowledge, data or information of a Party in tangible or intangible form that is in writing and marked as CONFIDENTIAL INFORMATION (or if transmitted orally or visually, identified as such by the Discloser at the time of disclosure, and identified in writing to the Recipient, as CONFIDENTIAL INFORMATION, within thirty (30) days after such oral or visual disclosure), including without limitation trade secrets, techniques, sketches, drawings, models, inventions, products, know how, processes, apparatus, equipment, algorithms, technology, software programs, software source documents, formulae, research, experimental work, development, design details, and specifications, engineering, financial information, procurement requirements, operations, purchasing, manufacturing, customer lists, business forecasts, sales and merchandising, and marketing plans and information. Notwithstanding anything to the contrary above, Licensor’s materials and information delivered, transferred or otherwise provided to Licensee under this Agreement, including those transferred under Section 2.2 and/or disclosed under Section 2.3, constitutes Licensor’s Confidential Information under this Section 11.2, subject to exceptions to “Confidential Information” further described hereof. The definition of “Confidential Information” shall not include information (a) that is already known by Recipient prior to disclosure, unless Recipient is subject to pre-existing obligations to keep such information confidential; (b) that is publicly known or becomes publicly known without breach of Recipient’s obligations under this Agreement; (c) that is rightfully acquired by Recipient from a third party who or which is not subject to any restriction on disclosure or use of such information; or (d) that is independently developed by employees of Recipient without knowledge or reference to any of Discloser’s Confidential Information. Recipient will have the burden of proof respecting any of the aforementioned events on which Recipient may rely as excluding information from the definition of “Confidential Information”.

11.3        Exception. The restrictions on the disclosure of a Party’s Confidential Information under this Section 11 shall not apply to the extent that (i) information is required to be disclosed under order of a court of competent jurisdiction, provided that Recipient promptly notifies Discloser of such order and reasonably cooperates in any action by the Discloser to seek a protective order (or similar order) with respect to such Confidential Information and to oppose such disclosure, or (ii) such information must be disclosed to the Securities and Exchange Commission or other regulatory body as part of an initial public offering or as otherwise required by law, provided that Recipient notifies Discloser of such proposed disclosure to such regulatory body by the Discloser to seek a confidential treatment with respect to such Confidential Information.

11.4        Acknowledgments.

(a)        Recipient acknowledges that Discloser’s Confidential Information is valuable information, whether technical or nontechnical, of use in Discloser’s trade or business, and that unauthorized use or disclosure by Recipient will harm Discloser economically. Recipient acknowledges that all or some of the Confidential Information may constitute a trade secret under the law and agrees to be bound by the law of unfair competition and applicable trade secret law as to that portion of the Confidential Information.

(b)        Recipient acknowledges and agrees that due to the unique nature of Discloser’s Confidential Information, there may be no adequate remedy at law for any breach of Recipient’s obligations hereunder, which breach may result in irreparable harm to Discloser, and therefore, that upon any such breach or any threat thereof, Discloser may be entitled to appropriate equitable relief, including injunction, without the requirement of posting a bond, in addition to whatever remedies it might have at law.

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12.     Survival.

The following provisions of this Agreement as well as any right, obligation, or required performance of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination or expiration of this Agreement, will survive any such termination or expiration: Section 1 (Definitions), Section 2.4(a) – (e) (Use and Non-Disclosure), Section 2.7(b)-(c), 2.8(Use of Licensor’s Patents and Trademarks and other Identifiers) , Section 0 (Effect of Termination), Section 5 (Nature of Relationship), and Sections 6 – 18.

13.     Taxes.

(a)        Licensor shall be responsible for the payment of all transfer, registration, stamp, value added, sales, use and excise taxes, duties, levies, and all other similar charges imposed by any U.S. federal, state, local, or non-U.S. governmental authority with respect to the Royalty Fees and any other amounts payable by Licensee under this Agreement (“Transfer Taxes”). Licensor shall, at its sole cost and expense, timely file any tax return or other document with respect to such Transfer Taxes (and Licensee shall cooperate with respect thereto as necessary).

(b)        In no event shall either Party pay or be responsible for any taxes imposed on or based on the other Party’s income, revenues, gross receipts, personnel or real or personal property, or other assets.

(c)        Licensee (and its representatives) shall be entitled to deduct and withhold from the amounts otherwise payable to any Person pursuant to this Agreement, such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of U.S. federal, state, local or non-U.S. tax law. If Licensee (or its representatives) withholds any such amounts, the amounts so withheld shall be treated for all purposes of this Agreement as having been paid to the Person that otherwise would have received such amount but for such withholding to the extent such amounts are remitted to the appropriate taxing authority.

14.     Export Laws.

The Parties acknowledge that this Agreement is subject to compliance with applicable United States laws, regulations, or orders including those that may relate to the export of technical data and equipment, such as International Traffic in Arms Regulations (“ITAR”) and/or Export Administration Act/Regulations (“EAR”), as may be amended, and agree to comply with all such laws, regulations or orders. It is the intent of the Parties not to disclose any export-controlled information. However, if a Party determines that export-controlled information must be disclosed, such Party will provide the other Party with written notice containing the nature of the export-controlled information prior to any exchange of export-controlled information. Licensee is solely responsible for any violation of such laws and regulations involving Licensee or its sublicensees, and will defend, indemnify, and hold harmless Licensor if any legal action of any nature results from any such violation.

15.     Further Assurances.

Each Party shall and shall cause their respective Affiliates to, upon the reasonable request, and at the sole cost and expense, of the other Party, promptly execute such documents and take such further actions as may be necessary to give full effect to the terms of this Agreement.

16.     Entire Agreement.

This Agreement (including any Exhibits hereto) contains all of the terms of the Agreement between the Parties and supersedes any previous oral or written agreement between the Parties with respect to the subject matter hereof (including the Original Agreement).

17.    Bankruptcy Code Section 365(n). All rights and licenses under the Licensed Intellectual Property granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”), licenses of rights to “intellectual property”, including as defined under Section 101 of the Bankruptcy Code. Licensee, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code in the event of the commencement of a bankruptcy proceeding by or against licensor under the Bankruptcy Code, including the right to treat this Agreement as terminated or to retain its rights as a licensee under this Agreement.

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18.     Headings.

The term “days” refers to calendar days. All headings are for informational purposes only and are not binding on the Parties.

19.     Language.

This agreement is prepared and signed both in English and Chinese language. If there are different interpretations between the Chinese and English version, the English version shall prevail.

20.     Counterparts.

This Agreement may be executed in separate counterparts, each of which shall be an original, but which together shall constitute one and the same instrument. A facsimile or .pdf copy of a signature of a Party hereto, if delivered by that Party to the other Party hereto, shall have the same effect and validity as an original signature.

(This space intentionally left blank)

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IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement as of the day, month and year first above written.

SF Motors, Inc., d/b/a SERES.

     

Electric Last Mile, Inc

By:

 

/s/ Yu Zheng

     

By:

/s/ James Taylor

Name:

 

Yu Zheng

     

Name:

James Taylor

Title:

 

Secretary of the Corporation

     

Title:

Chief Executive Officer

SIGNATURE PAGE TO EXCLUSIVE IP LICENSE AGREEMENT

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EXHIBIT A

List of Licensed Intellectual Property

#

文件名称

Doc. name

备注

1

整车BOM

BOM list

 

2

3D数据

3D data (overall size)

三维数模为外形尺寸

3

零部件2D图纸

2D drawing for components (vehicle BOM level parts drawing, L level materials of BOM list)

提供图纸为整车BOM中采购级物料（整车BOM中L级物料）

4

整车配置表

Vehicle configuration table

 

5

维修手册

Maintenance manual

 

6

使用说明书

User manual

 

7

结构图册

Parts manual

 

8

整车通用技术条件

General technical requirements

 

9

电动车专用技术条件

EV related technical requirements

 

10

零部件检查技术条件

Parts inspection requirements (for vehicle BOM level parts, L level materials of BOM list)

提供零部件检查技术条件为整车BOM中采购级物料（整车BOM中L级物料）

11

关键零部件与CCC清单

Key components and CCC list

 

12

白车身专用技术条件

BIW technical requirements

 

13

涂装车身专用技术条件

Painted body technical requirements

 

14

工艺装备数据（检具）

Process equipment data (checking fixtures)

工厂自制件检具

15

工艺装备数据（模具）

Process equipment data (Tooling)

工厂自制件模具

16

工艺装备数据（夹具）

Process equipment data (Jigs&fixtures)

 

17

生产线平面布置图

Production line layout

 

18

工艺流程图

Flow chart

 

19

工艺卡

Process card (welding, painting and GA)

（焊装、涂装、总装）

20

总装物流配送清单

GA logistics distribution list

 

21

辅料消耗定额

Consumable list

 

22

辅料检查技术条件

Consumable checking requirements

 

23

整车电控单元软件版本信息

VCU software version info

 

24

工艺人员定编

Workstation personnel

 

25

控制计划

Control plan

 

26

关键工序清单

Key process list

 

27

过程特殊特性清单

Special process list

 

28

工具、设备清单

Tool and equipment list

 

29

盛具清单

List of containers

 

30

车型使用专利清单

List of vehicle patents

 

31

公告检测报告

China standard test report-if needed

 

Note: all documents will be provided in Chinese, Licensee shall be responsible for translation into other language if needed.

Ex-A-1

EXHIBIT B

EC35 Cargo van

Lenth mm

4500

 
 

Width mm

1680

 
 

Height mm

1985

 
 

Wheelbase mm

3050

 
 

Cargo Size mm

2570*1440*1270

 
 

Gross Weight kg

2600

 
 

Curb Weight kg

1520

 
 

Battery Capacity (kWh)

41.4

 
 

Peak Power( kW)

60

 
 

Motor cooling

Water Cooling

 
 

Front Suspension

Independent Mac Pherson Strut

 
 

Rear Suspension

Leaf Spring

 
 

Steering

Electric Power Assisted

 
 

ABS

YES

 
 

Parking Sensor

YES

 

Ex-B-1

D51 mini truck

Gasoline

Lenth mm

5450

 
 

Width mm

1600

 
 

Height mm

2050

 
 

Wheelbase mm

3400

 
 

Cargo Size mm

3400*1600*370

 
 

Gross Weight kg

3450

 
 

Curb Weight kg

1330

 
 

Battery Capacity (kWh)

-

 
 

Peak Power( kW)

82（Engine）

 
 

Motor cooling

Water Cooling

 
 

Front Suspension

Independent Mac Pherson Strut

 
 

Rear Suspension

Leaf Spring

 
 

Steering

Electric Power Assisted

 
 

ABS

optional

 
 

Parking Sensor

optional

 

Ex-B-2

Exhibit 10.8

Execution Copy
Privileged & Confidential

SUPPLY AGREEMENT

This SUPPLY AGREEMENT (this “Agreement”) is made as of the 9th day of April, 2021, by and between Chongqing Sokon Motors(Group) Imp. & Exp. Co., Ltd. , a People’s Republic of China corporation with address at No. 618 Liangjiang Avenue, Longxing, Yubei District, Chongqing, China (“Supplier”), and Electric Last Mile, Inc., a Delaware corporation (“Buyer”) with address at 1055 W Square Lake Rd, Troy, Michigan 48098.

WITNESSETH:

WHEREAS, Supplier is an import and export trading company established in accordance with the laws of the People’s Republic of China that engages in import and export of goods including but not limited to brands of mini vehicles, auto parts, electronic products, etc. in the business, among others, of marketing and selling equipment, vehicles, auto components and parts, and can also assist its client to source other customized products as needed.

WHEREAS, subject to the terms and conditions of this Supply Agreement, Buyer wishes to obtain of a source of supply and Supplier is willing to supply vehicles and parts listed in Annex A from Supplier, or purchase other customized components and parts per the technical requirements, drawing or technical standards on Buyer’s behalf. The Supplied Products agreed in this Supply Agreement include: (i) EC35 (cargo van)and D51 (mini truck) models, which will be supplied either in complete build up sets (CBU) , semi-knocked down units (SKD) or Completely knocked-down units (CKD); (ii) components and spare parts to vehicles, and Supplier is willing to sell such products to Buyer, all pursuant to the provisions of this Agreement. Products described in (i) and (ii) are collectively referred to as Supplied Products herein after. SKD and CKD are collectively referred to as KD Sets herein after. For clarity, all vehicle identification numbers and product codes referenced in this Agreement are for reference at the time of Purchase Order placement, and Buyer is granted no right to use any of the Supplier’s vehicle identification numbers (including Model Numbers EC35 and D51), all kinds of logos and product codes, and agrees to refrain from using any such vehicle identification number, all kinds of logos and product codes as of the Effective Date (as defined below)

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, the parties agree as follows:

ARTICLE I.
PRODUCTS; SCOPE

1.1    Sales of Products.    Subject to the terms and conditions hereof, Supplier agrees to sell to Buyer, and Buyer agrees to purchase from Supplier, vehicles and parts listed in Annex A, or other customized components and parts per the technical requirements, drawing or technical standards from Buyer as needed. The Supplied Products agreed in this Supply Agreement include: (i) EC35 (cargo van) and D51 (mini truck) models, which will be supplied either in complete build up sets (CBU) , semi-knocked down units (SKD) or completely knocked-down units (CKD); (ii) components and spare parts to vehicles, and Supplier is willing to sell such products to Buyer, all pursuant to the provisions of this Agreement. Products described in (i) and (ii) are collectively referred to as Supplied Products herein after. SKD and CKD are collectively referred to as KD Sets herein after. The list of Products may be amended from time to time by the mutual written agreement of the parties and under the following conditions:

a)      Compliance with Law:    the Supplied Products’ specifications, trademarks and product codes shall comply with all laws and regulations as applicable to sell and supply such Products in the People’s Republic of China. For clarity, Supplier is not required, and has no obligation, to conform the Products to comply with laws or regulation applicable to sell and supply such Products in the Territory (as defined below). Buyer shall at its own expenses conduct risk investigation and make necessary improvements and adjustments accordingly to conform the Products to any and all applicable laws and regulations for sale in the Territory, including obtain any approval, certificates and homologations from the appropriate authorities of the Territory, to which Supplier shall not take any legal responsibilities. To the extent any modification or alteration to the Products are necessary to make such product in compliance with applicable laws and regulations in the Territory, Buyer shall submit such necessary modifications or alterations to Supplier

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for approval at Supplier’s sole discretion. Supplier may assist Buyer in conforming the Products to be in compliance in the Territory, subject to mutually agreed terms including reasonable compensation to Supplier in providing such assistance.

b)      Minimum order quantity:    During calendar years 2021, 2022 and 2023, Buyer agrees to procure from the Supplier forecasted minimums of 2,000 units, 10,000 Units and 20,000 Units, respectively (each, a “Minimum Order Quantity or MOQ”), the MOQ including CBU, SKD and CKD sets (see specific Purchase Order per Section 2.2 below).

c)      Notices of Off-Spec Products:    Supplier shall notify Buyer in event of a manufacturing issue (off-spec products; untimely delivery; raw material shortages, change in laws; change in manufacturing process).

d)      Notices — Commercial Viability:    Either Party shall notify the other in the event of a potential quality issue that would impact commercial viability.

e)      Nature & Quality of Supply Services:    With respect to the products and services provided by Supplier to Buyer under this Agreement, Supplier shall use the same degree of care as it applies to Supplier’s other customers. When purchasing customized parts and components according to Buyer’s technical requirements, drawings, and standards, which requires special development and manufacture of the parts by the parts supplier, Buyer shall bear the cost; Supplier shall immediately notify Buyer, and Both Parties shall discuss and negotiate about the requirements/scope, development fee and payment terms separately, and shall enter into separate development agreement(s) .

f)      Maintain Books & Records:    Both Parties shall maintain books and records of all data relating to manufacture, sale and supply of products supplied and purchased under this Agreement. Buyer shall have the right to obtain a copy of necessary data from the Supplier reasonably necessary to ensure quality and commercial viability.

g)      Restrictions:    Buyer agrees that the Products purchased under this Agreement may only be sold and supplied by the Buyer within the United States, Mexico and Canada (the “Territory”) except Supplier itself and its affiliates.

1.2    Relationship of Parties.    The relationship between Supplier and Buyer is that of a seller and buyer; they are independent contractors. Neither Buyer nor any of its employees or agents are or will be deemed to be the employees, agents or representatives of Supplier for any purpose whatsoever. Neither Buyer nor its employees or agents are granted by this Agreement or otherwise any express or implied right or authority to assume or create any obligation or responsibility on behalf or in the name of Supplier.

ARTICLE II.
TERMS AND CONDITIONS OF SALE

2.1    Forecasts of Orders.    At the beginning of each calendar year, Buyer shall provide to Supplier on an annual order forecast and shall confirm on a quarterly basis the order forecast of the Products to be purchased by Buyer during each of the following three calendar months, with such forecasts specifying Product quantities and requested delivery dates and, to the best knowledge of the Buyer, the Buyer shall promptly inform the Supplier any change of internal and external conditions that may materially affect such forecasts . Each such forecast shall constitute a non-binding, good faith estimate of plan by Buyer to purchase Products in the quantities and in accordance with the delivery dates set forth in the forecast; each such order, including the requested delivery dates, shall be subject to Supplier’s acceptance.

2.2    Purchase Orders.    Based on the agreed and forecasted annual Minimum Order Quantity set forth in 1.1b, Buyer shall from time to time provide to Supplier binding purchase orders (each a “Purchase Order”) to purchase Products in the actual quantities and in accordance with the requested delivery dates set forth in the orders; each such order, including the requested delivery dates, shall be subject to Supplier’s acceptance with issuance of a Proforma Invoice( “Proforma Invoice”). Supplier will use its commercially reasonable efforts to accept and fulfill these orders. Supplier will use its commercial best efforts to deliver the applicable Products within forty-five (45) days of Supplier’s receipt of down payment of the Purchase Order. To the extent it is unable to meet any aspect of a forecast or order, Supplier shall so inform Buyer, and the parties shall negotiate a mutually acceptable modified Product delivery schedule.

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2.3    Terms of Sale.    All sales of Products by Supplier to Buyer shall be governed by the terms of this Agreement, which as supplemented by the Product quantities and delivery dates in forecasts or orders that have been accepted by Supplier shall constitute the entire agreement of the parties with respect to sales of Products; no additional or different terms set forth in any of the Buyer’s forms, correspondence or other communications shall apply to any such sales.

2.4    Shipping Terms.    All Products sold under this Agreement shall be sold either (i) EXW Supplier’s plant (as such term is defined in Incoterms 2020), with risk of loss of or damage to the Products being transferred to Buyer when they are made available to Buyer’s carrier for loading at Supplier’s warehouse; or (ii) FOB Supplier’s dock, with risk of loss of or damage to the Products being transferred to the Buyer when they are made available to Buyer’s carrier for loading at Supplier’s dock. The detailed shipping terms shall be specified in each Purchase Orders. All provisions stated in Incoterms 2020 shall govern the responsibilities of each party.

2.5    Pricing.    Product pricing shall be mutually agreed between the Parties and shall be specified in Proforma Invoices applicable to each Purchase Order. The Product prices in effect on the date of this Agreement are set forth in Exhibit B attached hereto. If no prices are included on Exhibit B, the Parties agree to negotiate in good faith to establish the prices for inclusion on the Exhibit B. Product prices for new Purchase Orders shall be subject to change by Supplier from time to time on 30 calendar days’ notice to Buyer. Supplier can not change the mutually agreement upon Product Price on prior issued Purchased Orders. It is understood and agreed that, if Supplier incurs surcharges or similar charges from its vendors or suppliers related to increases in the cost of materials, fuels, or other inputs associated with the Products, such surcharges or other charges shall be passed through to Buyer. Buyer shall have the right to offset any costs for short deliveries. The Parties mutually agree that export prices will be determined separately based on the Product status and Supplier’s export rules, which shall be mutually agreed between the Parties.

2.6    Currency; Terms of Payment.    All payments hereunder shall be made in United States Dollars (USD). Supplier shall issue Buyer an invoice upon Supplier’s receipt of Purchase Order. Buyer shall pay a 20% down payment of such invoice amount within 7 days after Buyer’s receipt of the invoice and shall pay the balance prior to the shipment date as specified in the applicable Purchase Order. Buyer shall pay interest on past due amounts at the lesser of 5% per annum or the highest rate permitted under applicable law, calculated from the due date until paid. If the balance is not paid in 30 days or above, Supplier has the right to cancel the order, forfeit the down payment, and reserve the right to claim compensation for any losses caused by the cancellation. Supplier has the right not to ship the goods before receipt of full payment

2.7    Cancellation of order.    Order can be cancelled before Supplier receives the down payment, in case of any cancellation of the order required after receipt of down payment, Supplier is entitled to forfeit the down payment and reserves the right to ask for compensation of any loss due to the cancellation.

2.8    Inspection of the order. Buyer has the right to do inspection at Supplier’s site before each shipment. If Buyer decides not to do the inspection before shipment, Buyer has 10 days from the date of receiving the shipment to inspect all Supplied Products, in case of any material defects, wrong parts, or shorts in quantity founded, Buyer shall provide Supplier with a report with reasonable details including photos and statements. If no claims received within 10 days from date of receipt by Buyer, it is considered as the shipment is fully inspected and accepted. Buyer is responsible for all cost and expenses related to the Supplied Products following delivery.

2.9    Indemnification.    Each Party shall defend, indemnify and hold harmless the other Party from and against any and all damages, liabilities, losses, costs and expenses (including without limitation reasonable attorneys’ fees) that are incurred or suffered by the other Party as a result of (i) any failure by such Party or any of its employees or agents to comply with any applicable laws, regulations, rules or ordinances in connection with the use of the Products or otherwise in connection with their performance under this Agreement; or (ii) the negligence or willful misconduct of such Party or its employees or agents.

Buyer shall defend, indemnify and hold harmless Supplier and its affiliates, officers, employees and agents (collectively “Supplier Indemnified Parties”) from and against any and all damages, liabilities, losses, costs and expenses (including without limitation reasonable attorneys’ fees) that are incurred or suffered by Supplier Indemnified Parties as a result of (i) any improper installation, misuse, abuse or improper maintenance or repair of the Supplied Products by Buyer or its agents or employees; or (ii) any third party claims (including any products liability claims) against any products sold or supplied by the Buyer, unless such third party claim is solely caused by the Supplied Products’ failure to meet Supplier’s express specifications.

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2.10    Point of Contact.    Supplier shall be Buyer’s point of contact for the Products; Buyer may contact any of the Supplier’s subcontractors or third party vendors regarding the Products with written authorization from Supplier in writing, and such authorization shall not be unreasonably withheld.

2.11    Buyer shall import, assemble, manufacture, distribute and sell the products and relevant Parts, in strict compliance with all applicable laws, rules and regulations of governmental authorities of the Territory, and shall be in charge of handling the relative legal transactions.

ARTICLE III.
CONFIDENTIAL INFORMATION

3.1    Each Party (the “Discloser”) may from time to time disclose to the other Party (the “Recipient”) certain Confidential Information (as defined below) of the Discloser. Recipient agrees to receive in confidence from Discloser all of Discloser’s Confidential Information. Recipient agrees that it, its employees, contractors, representatives, successors, assigns, Affiliates, parents, subsidiaries, officers, directors, and the like shall, for the Confidentiality Period, (a) hold Discloser’s Confidential Information in strict confidence, use the same degree of care (but no less than a reasonable degree of care) in safeguarding Discloser’s Confidential Information as safeguarding Recipient’s own Confidential Information, and take all precautions reasonably necessary to protect Discloser’s Confidential Information including, without limitation, all precautions Recipient normally employs with respect to its own Confidential Information; (b) not divulge any of Discloser’s Confidential Information or any information derived therefrom to any third person; (c) not make any use whatsoever at any time of Discloser’s Confidential Information, except as is necessary or appropriate in the exercise of Recipient’s rights or performance of Recipient’s specific duties under this Agreement; (d) not copy, reverse engineer, alter, modify, break down, melt down, disassemble or transmit any of Discloser’s Confidential Information1;(e) notify Discloser in writing immediately upon discovery of any unauthorized use or disclosure of Discloser’s Confidential Information by Recipient or its employees or any third party; and (f) upon demand by Discloser, promptly return, or, at Discloser’s option, destroy, and confirm in writing to Discloser the destruction of, all documents, papers, files, notes, samples and materials of any kind, including copies or reproductions thereof, to the extent they contain Discloser’s Confidential Information. “Confidentiality Period” means (i) for all Confidential Information that constitutes a ‘trade secret’ under applicable law, the period beginning on the date of disclosure to the Recipient and ending on when such Confidential Information is no longer a trade secret under applicable law or (ii) for all other Confidential Information, the period beginning on the date of disclosure to the Recipient and ending on the date that is five (5) years after the expiration or termination of this Agreement.

3.2    Definition of Confidential Information.    For purposes hereof, the term “Confidential Information” means any and all confidential and/or proprietary knowledge, data or information of a Party in tangible or intangible form that is either (i) in writing and marked as CONFIDENTIAL INFORMATION (or if transmitted orally or visually, identified as such by the Discloser at the time of disclosure, and identified in writing to the Recipient, as CONFIDENTIAL INFORMATION, within thirty (30) days after such oral or visual disclosure) or (ii) not marked as “Confidential Information” but given the circumstance of disclosure reasonably expected to be confidential or proprietary in nature, including without limitation trade secrets, techniques, sketches, drawings, models, inventions, products, know-how, processes, apparatus, equipment, algorithms, technology, software programs, software source documents, formulae, research, experimental work, development, design details, and specifications, engineering, financial information, procurement requirements, operations, purchasing, manufacturing, customer lists, procurement source, and supply chain system, business forecasts, sales and merchandising, and marketing plans and information. The definition of “Confidential Information” shall not include information (a) that is already known by Recipient prior to disclosure (unless Recipient is subject to pre-existing obligations to keep such information confidential; (b) that is publicly known or becomes publicly known without breach of Recipient’s obligations under this Agreement; (c) that is rightfully acquired by Recipient from a third party who or which is not subject to any restriction on disclosure or use of such information; or (d) that is independently developed by employees of Recipient without knowledge or reference to any of Discloser’s Confidential Information. Recipient will have the burden of proof respecting any of the aforementioned events on which Recipient may rely as excluding information from the definition of “Confidential Information”.

____________

​1           Note to draft: both parties shall comply with U.S. Export Control laws, but that is separate and different from keep information confidential. For example, a party can transfer confidential information not subject to U.S. export control over internet while keeping such information confidential.

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3.3     Exception.    The restrictions on the disclosure of a Party’s Confidential Information under this Section 3 shall not apply to the extent that (i) information is required to be disclosed under order of a court of competent jurisdiction, provided that Recipient promptly notifies Discloser of such order and reasonably cooperates in any action by the Discloser to seek a protective order (or similar order) with respect to such Confidential Information and to oppose such disclosure, or (ii) such information must be disclosed to the Securities and Exchange Commission or other regulatory body as part of an initial public offering or as otherwise required by law, provided that Recipient notifies Discloser of such proposed disclosure to such regulatory body by the Discloser to seek a confidential treatment with respect to such Confidential Information.

3.4     Acknowledgments.

(a)     Recipient acknowledges that Discloser’s Confidential Information is valuable information, whether technical or nontechnical, of use in Discloser’s trade or business, and that unauthorized use or disclosure by Recipient will harm Discloser economically. Recipient acknowledges that all or some of the Confidential Information may constitute a trade secret under the law and agrees to be bound by the law of unfair competition and applicable trade secret law as to that portion of the Confidential Information.

(b)     Recipient acknowledges and agrees that due to the unique nature of Discloser’s Confidential Information, there may be no adequate remedy at law for any breach of Recipient’s obligations hereunder, which breach may result in irreparable harm to Discloser, and therefore, that upon any such breach or any threat thereof, Discloser may be entitled to appropriate equitable relief, including injunction, without the requirement of posting a bond, in addition to whatever remedies it might have at law.

ARTICLE IV.
TERM AND TERMINATION

4.1     Term.    Unless earlier terminated pursuant to Section 4.2, this Agreement shall enter into force upon the Transfer of Possession date provided in that certain Asset Purchase agreement (the “Purchase Agreement”) executed by and between SF Motors Inc. dba Seres and Buyer on the even date hereof (the “Effective Date”) and continue in full force and effect for a term of 5 years.

4.2     Premature Termination.    This Agreement may be terminated at any time: (a) by either party, effective immediately, if the other party breaches any of its material obligations (including but not limited to the full and punctual payment of any amount due) under this Agreement and fails to cure such breach within 30 calendar days (10 calendar days if the breach involves failure to make any payment when due) after receipt of written notice of the breach from the non-breaching party; or (b) by either party, effective immediately, if the other party (i) makes a general assignment for the benefit of creditors; (ii) applies for or consents to the appointment of a receiver, trustee or liquidator for all or a substantial portion of its assets; (iii) files a voluntary bankruptcy or insolvency petition, or becomes the subject of an involuntary bankruptcy petition that is not dismissed within 60 calendar days after the date it is filed; or (iv) if either Party is generally unable to pay its debts as they mature for a period of six months, or admits in writing its inability to pay for a period of six months, its debts as they mature, or otherwise becomes insolvent; or (c) by the Supplier, within _30_ days following the beginning of any applicable calendar year, if the Buyer fails to meet the Minimum Order Quantity applicable to the previous calendar year.

4.3     Right to Suspend.    In the event that Buyer materially breaches the Purchase Agreement (including failure to make installment payments provided thereunder), Supplier has the right to suspend its performance under this Agreement, including suspension of delivery of all unfulfilled Purchase Orders, until Buyer provides performance assurance satisfactory to Supplier.

4.4     Effect of Termination; Survival.    Upon expiration or termination of this Agreement, Buyer shall return to Supplier any and all documents, materials and other property of Supplier, and all confidential information of Supplier, that may then be in the possession or under the control of Buyer. For no more than five (5) years following termination or expiration of this Agreement, Buyer may purchase spare parts of the Supplied Products purchased during the Term of this Agreement, subject to the price, delivery time and other terms and conditions acceptable to Supplier for such continued supply of spare parts. Those provisions of this Agreement that by their nature or their express terms are meant to survive termination or expiration hereof shall so survive. Expiration or termination of this Agreement shall not affect rights or obligations of the parties that accrued prior to expiration or termination.

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ARTICLE V.
GENERAL PROVISIONS

5.1     Force Majeure.    Delay by either party in performing, or failure by either party to perform, any of its obligations under this Agreement (except for the obligation to pay money when due) shall be excused to the extent caused by circumstances that are beyond the reasonable control of such party, including without limitation acts of God, fires, floods, pandemic, riots, war, floods, strikes or other labor disturbances, inability to obtain necessary labor, materials or manufacturing facilities, governmental acts, requests, orders or regulation, embargo, transportation delays and terrorist acts. Any party affected by such a force majeure event shall promptly notify the other party in writing of said event and its expected duration, and shall utilize commercially reasonable efforts to overcome the effects of such event and resume performance as soon as reasonably practicable. Other cases of force majeure if not mentioned in this agreement shall be as defined in the ICC (International Chamber of Commerce) Force Majeure clause 2003.

5.2     Governing Law.    This Agreement shall be construed, enforced and performed in accordance with the laws of the China, without reference to principles of conflicts of laws.

5.3     Arbitration.    During the period of execution of this agreement, if there are different interpretations, all disputes arising from the performance of this agreement shall be settled through amicable negotiation. In case no settlement can be reached, any party of this agreement can submit the dispute to the Arbitration center of CIETAC (China International Economic and Trade Arbitration Commission). The decision made by the Arbitration shall be final and binding upon the two parties. Arbitration fees shall be borne by the losing party, unless otherwise awarded.

5.4     Entire Agreement.    This Agreement, including the attached Exhibits, sets forth the entire agreement and understanding between the parties, superseding all prior agreements, understandings, representations and negotiations, on the subject matter hereof, whether oral or written. Neither of the parties shall be bound by any conditions, representations or warranties with respect to the subject matter of this Agreement, other than as expressly provided herein. To the greatest extent possible, this document and the attached Exhibits shall be construed consistently, so as to complement each other. Any irreconcilable conflict or inconsistency between any provision of this document and a provision of any of the attached Exhibits shall be resolved by giving priority to this document.

5.5     Severability/Waiver.    The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any of the remaining provisions hereof. The failure of either party at any time to require performance by the other party of any of the provisions of this Agreement shall not operate as a waiver of the right of such party to require strict performance of the same or other provisions hereof at a later time.

5.6     Amendment.    This Agreement may not be amended or altered except as mutually agreed by the parties in writing.

5.7     Assignment.    This Agreement may be assigned by Buyer, in whole or in part, whether voluntarily or by operation of law, with the prior written consent of Supplier (such consent not to be unreasonably withheld).

5.8     Notices.    Notification required or permitted under this Agreement shall be deemed given when sent via reputable overnight courier, via confirmed facsimile transmission, email or via certified mail, return receipt requested and postage prepaid, and directed to the party to be given notification at the address (or facsimile number) to which that party has previously requested, by notice hereunder, that notices be sent or, if no such request has been made, at the address (or facsimile number) listed in conjunction with that party’s name in the signature area of this Agreement. Notices shall be effective upon receipt.

5.9     Construction.    This Agreement has been submitted to the scrutiny of, and has been negotiated by, both parties hereto and their respective counsel, and it shall be given a fair and reasonable interpretation in accordance with the terms hereof, without consideration or weight being given to its having been drafted by any party hereto or its counsel.

5.10     Miscellaneous.    Headings in this Agreement are for convenience of reference only and shall be of no force or effect in the construction or interpretation of any of the provisions of this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

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This agreement is prepared and signed both in English and Chinese language. If there are different interpretations between the Chinese and English version, the English version shall prevail.

This agreement upon coming to force and effect supersedes all agreements reached either in writing or orally by both parties with respect to the Supply of Products before. Any modification to this agreement must be done in writing and signed by authorized representatives of both parties.

(This space intentionally left blank)

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IN WITNESS WHEREOF, Supplier and Buyer have caused this Agreement to be executed by their duly authorized representatives, as of the date first written above.

SUPPLIER

     

BUYER

                 
                 
                 

By:

 

/s/ Zhang Xingyan 

     

By:

 

/s/ James Taylor 

                 

Printed name: Zhang Xingyan

     

Printed name: James Taylor

                 

Title: General Manager

     

Title: Chief Executive Officer

                 

Date:

 

April 9, 2021 

     

Date:

 

April 9, 2021 

SIGNATURE PAGE TO SUPPLY AGREEMENT

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EXHIBIT A

Supplied Products

EC35 Cargo van

Lenth mm

4500

 
 

Width mm

1680

 
 

Height mm

1985

 
 

Wheelbase mm

3050

 
 

Cargo Size mm

2570*1440*1270

 
 

Gross Weight kg

2600

 
 

Curb Weight kg

1520

 
 

Battery Capacity (kWh)

41.4

 
 

Peak Power( kW)

60

 
 

Motor cooling

Water Cooling

 
 

Front Suspension

Independent Mac Pherson Strut

 
 

Rear Suspension

Leaf Spring

 
 

Steering

Electric Power Assisted

 
 

ABS

YES

 
 

Parking Sensor

YES

 

SIGNATURE PAGE TO SUPPLY AGREEMENT

Ex-A-1

D51 mini truck

Gasoline and diesel

Lenth mm

5450

 
 

Width mm

1600

 
 

Height mm

2050

 
 

Wheelbase mm

3400

 
 

Cargo Size mm

3400*1600*370

 
 

Gross Weight kg

1330

 
 

Curb Weight kg

3450

 
 

Battery Capacity (kWh)

-

 
 

Peak Power( kW)

82（Engine）

 
 

Motor cooling

Water Cooling

 
 

Front Suspension

Independent Mac Pherson Strut

 
 

Rear Suspension

Leaf Spring

 
 

Steering

Electric Power Assisted

 
 

ABS

optional

 
 

Parking Sensor

optional

 

Ex-A-2

EXHIBIT B

Supplied Products prices

(to be discussed and attached to this agreement when needed)

Ex-B-1

Exhibit 10.9

 

LAND CONTRACT

 

This LAND CONTRACT (“Contract”) is executed to be effective as of the 25th day of June, 2021 (“Execution Date”), by and between SF Motors, Inc., a Delaware corporation, DBA SERES (“Vendor”), and Electric Last Mile, Inc., a Delaware corporation (“Purchaser”).

 

WITNESSETH, that the parties agree as follows:

 

Vendor hereby sells to Purchaser, and Purchaser hereby purchases from Vendor, subject to the terms, covenants and conditions set forth herein, the following property: certain real property generally located at 12900 McKinley Highway, Mishawaka, Indiana, further described on Exhibit A attached hereto and made a part hereof (the “Land”), together with (1) all buildings, improvements and fixtures located thereon (collectively, the “Improvements”), (2) all rights, benefits, privileges, easements, tenements, hereditaments, rights-of-way and other appurtenances thereon or in any way appertaining thereto, including all mineral rights, development rights, air and water rights, and (3) all strips and gores and any land lying in the bed of any street, road or alley, open or proposed, adjoining such Land (collectively, the “Real Property”).

 

1. Purchase Price and Manner of Payment.

 

1.1. Purchase Price. The Purchase Price for the Real Property shall be the sum of Ninety Million and 00/100 Dollars ($90,000,000.00) (“Purchase Price”), which Purchaser agrees to pay Vendor in accordance with the terms and conditions of this Contract, without relief from valuation and appraisement laws and with reasonable attorneys’ fees after and Event of Default (as defined below) and referral to an attorney for collection.

 

1.2. Manner of Payment. The Purchase Price shall be paid in the following manner:

 

1.2.1. The sum of Eighteen Million Six Hundred Twenty Thousand Six Hundred Eighty-Nine and 66/100 Dollars ($18,620,689.66) is herewith paid in cash on the date hereof in connection with turning over the possession of Real Property pursuant to the Purchase Agreement (the “Possession Date”) as set out in that certain Agreement of Purchase and Sale between Vendor and Purchaser dated as of April 9, 2021 (“Purchase Agreement”).

 

1.2.2. The remainder of the Purchase Price in the amount of Seventy-One Million Three Hundred Seventy-Nine Thousand Three Hundred Ten and 34/100 Dollars ($71,379,310.34) (such amount plus any Delinquent Interest referred to as the “Contract Balance”) shall be paid by Purchaser to the order of Vendor in twenty-three (23) consecutive monthly installments of Three Million One Hundred Three Thousand Four Hundred Forty-Eight and 28/100 Dollars ($3,103.448.28) (each, a “Monthly Payment”), with the first Monthly Payment being due and payable on June 30, 2021 (the last day of the calendar month in which the Transfer of Possession Date occurs), and each successive Monthly Payment being made on later than the last day of each consecutive calendar month thereafter (each a “Payment Date”) until Vendor receives the entire Purchase Price.

 

 

1.2.3. Purchaser’s obligation to pay the Contract Balance, including the Monthly Payments on the Payment Dates are independent covenants without offset, counterclaim, defense, presentment, notice or demand, at such address or bank account(s) as Vendor may direct by written notice. There shall be no prepayment penalty for payments made before the applicable Payment Date and such prepayment amount shall reduce the Purchase Price, provided that any partial prepayment shall not act to reduce or delay the next Monthly Payment, but rather shall be applied to the Contract balance in inverse order of maturity of the Monthly Payments.

 

1.2.4. Purchaser hereby acknowledges that late payment of any Monthly Payment will cause Vendor to incur costs not contemplated hereunder, the exact amount of which is presently anticipated to be extremely difficult to ascertain. If Vendor does not receive the applicable Monthly Payment on the applicable Payment Date, and Purchaser fails to cure such nonpayment within five (5) days following receipt of written notice from Vendor, Purchaser will pay Vendor a late charge equal to five percent (5%) of the Monthly Payment, plus interest at the Default Rate (as defined in Section 11) and subject to other rights and remedies provided herein.

 

2. Taxes and Assessments. Real estate taxes and assessments shall be prorated and paid in accordance with the Purchase Agreement. Specifically, Vendor shall pay the installments due on May 10 and November 10, 2021 when due. Vendor will also pay its share and Purchaser’s share of the installment payable on May 10, 2022, allocated with 176/181 to Vendor and 5/181 to Purchaser (approximately $170,963.31 to Vendor and $4,856.91). Purchaser shall reimburse Vendor for Purchaser’s share of such tax installment within ten (10) days after billing. Thereafter, beginning on November 10, 2022, Purchaser shall be responsible for directly paying to the taxing authority all installments of real estate taxes and assessments payable thereafter. Purchaser, upon written notice to Vendor and at Purchaser’s expense, may contest on Vendor’s and Purchaser’s behalf, any changes of the assessed valuation of the Real Property. Vendor shall forward or cause to be forwarded to Purchaser a copy of all statements for real estate taxes and assessments on the Real Property payable by Purchaser, as received, and Purchaser shall provide to Vendor upon request evidence of payment of such taxes. Should Purchaser fail to timely pay any real estate taxes or assessments required under this Section 2 and should Purchaser not rectify the situation within five (5) business days after written notice from Vendor to Purchaser, Vendor shall have the right, without assuming obligation in connection therewith, to pay such real estate taxes and assessments at the sole cost of Purchaser, and all costs incurred by Vendor shall be payable to Vendor by Purchaser within ten (10) days after demand and without prejudice to any other rights and remedies of Vendor under this Contract. Notwithstanding the foregoing, Purchaser shall have the right to appeal any tax bill so long as Purchaser does not cause any delinquency in payment of the same or penalties to accrue as a result of the same.

 

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3. Insurance.

 

3.1. Coverages. At all times during the term of this Contract, at Purchaser’s sole cost and expense, Purchaser shall obtain and keep in force for the benefit of Purchaser and Vendor the following insurance:

 

3.1.1. Property Insurance. Special causes of loss/special form property insurance (formerly known as “all risk” or “extended coverage” property insurance), earthquake insurance, and flood insurance on all Improvements and all of Purchaser’s personal property located on, in or about the Real Property. The amount of such insurance shall be the Full Insurable Replacement Value (as defined below). Each such policy shall specify that proceeds shall be payable whether or not any improvements are actually rebuilt. Each such policy shall include an endorsement protecting the named and additional insureds against becoming a co-insured under the policy. Purchaser hereby releases and waives as against Vendor and its shareholders and employees any and all claims, causes of action, demands, and rights of recovery, of whatever nature, for damages, loss or injury to the Improvements and/or the property of Purchaser in, upon or about the Real Property caused by or resulting from fire and/or any other perils required to be insured against by Purchaser hereunder, whether or not such damages, loss or injury is caused by the fault or negligence of Vendor or its shareholders or employees.

 

3.1.2. “Full Insurable Replacement Value” means 100% of the actual costs to replace the Improvements (without deduction for depreciation but with standard exclusions such as foundations, excavations, paving and landscaping, as applicable to specific perils), including the costs of demolition and debris removal and including materials and equipment not in place but in transit to or delivered to the Real Property. The Full Insurable Replacement Value initially shall be determined at Purchaser’s expense by an appraiser or an insurer, selected by Purchaser and acceptable to Vendor, but in no event at any time less than the Contract Balance. Purchaser shall maintain coverage at the current Full Insurable Replacement Value throughout the term of this Contract, subject to reasonable deductibles approved by Vendor pursuant to Subsection 3.2.1. below.

 

3.1.3. Business Interruption Insurance. Insurance against loss from business interruption under a business interruption policy, covering risk of loss due to causes insured against under Subsection 3.1.1. above, in an amount not less than eighteen (18) months of projected gross revenues from the Real Property.

 

3.1.4. Worker’s Compensation and Employer’s Liability Insurance. Worker’s compensation insurance in the amounts and coverages required under worker’s compensation, disability and similar employee benefit laws applicable to Purchaser and/or the Real Property, and employer’s liability Insurance in amounts not less than $2,000,000 per occurrence for bodily injury and $2,000,000 per employee for injury by disease (or such higher amounts as may be required by law).

 

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3.1.5. Commercial General Liability Insurance. Commercial general liability insurance through one or more primary and umbrella liability policies against claims, including but not limited to, bodily injury and property damage occurring in, on or about the Real Property, with such limits as may be reasonably required by Vendor from time to time, but in any event not less than $10,000,000, combined single limit and annual aggregate, which Purchaser shall increase as necessary during the term of this Contract to maintain adequate coverage over time that is comparable to the requirements in effect as of the execution of this Contract. Such insurance shall insure the performance by Purchaser of the indemnity agreements contained in this Contract. If any governmental agency or department requires insurance or bonds with respect to any proposed or actual use, storage, treatment or disposal of Hazardous Materials by Purchaser, Purchaser shall be responsible for such insurance and bonds and shall pay all premiums and charges connected therewith; provided, however, that this provision shall not and shall not be deemed to modify the provisions of this Section 3.

 

Such liability insurance policy shall (i) delete any employee exclusion on bodily injury coverage; (ii) include employees as additional insureds; (iii) provide blanket contractual coverage, including liability assumed by and the obligations of Purchaser under this Contract for personal injury, death and/or property damage; (iv) provide products and completed operations and independent contractors coverage and broad form property damage liability coverage without exclusions for collapse, explosion, demolition, underground coverage and excavating, including blasting; (v) provide aircraft liability coverage, if applicable, and automobile liability coverage for owned, non-owned and hired vehicles; (vi) provide liability coverage on all mobile equipment used by Purchaser; and (vii) include a cross liability endorsement (or provision) permitting recovery with respect to claims of one insured against another. Such insurance shall insure against any and all claims for bodily injury, including death, resulting therefrom, and damage to or destruction of property of any kind whatsoever and to whomever belonging and arising from Purchaser’s operations at the Real Property and whether such operations are performed by Purchaser or any of its contractors, subcontractors, or by any other person (with the exception of damage or injury caused by the gross negligence or willful misconduct of Vendor occurring after the Execution Date or any other person or party acting by or on behalf of Vendor).

 

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3.1.6. Other. All other insurance that Purchaser is required to maintain under all applicable laws, ordinances, and regulations of any U.S and State of Indiana governmental authority having jurisdiction thereof.

 

3.2. Policy Form and General.

 

3.2.1. All insurance policies required to be maintained under this Contract by Purchaser, and all renewals thereof, shall be (i) issued by one or more companies of recognized responsibility, authorized and qualified to do business in the State of Indiana, with a financial rating of at least A-, X in the most recent edition of Best’s Insurance Reports (or its successor, or, if there is no equivalent successor rating, otherwise reasonably acceptable to Vendor); (ii) a primary policy payable directly to Vendor, and any insurance maintained by Vendor shall be excess of and shall not contribute with Purchaser’s policies; and (iii) endorsed such that such policies shall not be changed or canceled without at least thirty (30) days’ prior written notice to Vendor. The insurance shall be issued in the names of Purchaser and Vendor, as their respective interests may appear. All property insurance shall also be required to be maintained under this Contract by Purchaser shall name Vendor as loss payee and all liability insurance required to be maintained under this Contract by Purchaser shall name as additional insureds Vendor, its shareholder, its employees, and such other parties as Vendor may reasonably request. Any deductibles under any of the insurance required hereunder must be agreed to in advance in writing by Vendor in its reasonable, good faith discretion. All deductibles shall be paid by Purchaser.

 

3.2.2. A copy of each insurance policy required hereunder of Purchaser, or a certificate of each such policy executed by the insurance company evidencing that the required insurance coverage is in full force and effect, shall be deposited with Vendor on or before the Execution Date of this Contract, shall be maintained throughout the term of this Contract, and shall be renewed not less than thirty (30) days before the expiration of the term of the policy. No such policy shall contain any provisions for exclusions from liability and no exclusion shall be permitted in any event if it conflicts with any coverage required hereby, and, in addition, no such policy shall contain any exclusion from liability for bodily injury or sickness, disease or death or which in any way impairs coverage under the contractual liability coverage described above.

 

3.2.3. No approval by Vendor of any insurer, or the terms or conditions of any policy, or any coverage or amount of insurance, or any deductible amount shall be construed as a representation, warranty or other assurance by Vendor of the solvency of the insurer or the sufficiency of any policy or any coverage or amount of insurance or deductible, and Purchaser assumes full risk and responsibility for any inadequacy of insurance coverage or any failure of insurers.

 

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3.2.4. Should Purchaser fail to take out and keep in force each insurance policy required under this Section 3, or should such insurance not be reasonably approved by Vendor and should Purchaser not rectify the situation within ten (10) business days after written notice from Vendor to Purchaser, Vendor shall have the right, without assuming any obligation in connection therewith, to purchase such insurance at the sole cost of Purchaser, and all costs incurred by Vendor shall be payable to Vendor by Purchaser within ten (10) days after demand and without prejudice to any other rights and remedies of Vendor under this Contract.

 

3.2.5 If the Improvements or any part thereof are damaged by casualty the entire insurance proceeds payable in respect of the part so taken or damaged are hereby assigned to and shall be paid directly to Vendor for the sole purpose of making the same available for Purchaser to restore the Improvements to as nearly the same condition as existed prior to such casualty so long as (i) no outstanding Event of Default exists hereunder, and (ii) sufficient insurance proceeds are available to Purchaser to completely restore the Improvements to its condition immediately preceding said loss, or if sufficient insurance proceeds are not available, Purchaser deposits with Vendor sufficient additional cash to make up for any such deficiency of insurance proceeds, (iii) the Improvements can be restored on the Real Property in compliance with applicable law (including zoning ordinances), (iv) the loss occurs at a time which is greater than three (3) months prior to the due date of the final Monthly Payment, and (iv) at Vendor’s option, such insurance proceeds shall be held by Vendor in a non-interest bearing account disbursed by Vendor with final disbursement being made only at such time as the restoration is completed in a good and workmanlike manner, lien free, a certificate of occupancy for the restored Improvements has been issued by the appropriate governmental authority (if available). Vendor shall not be responsible for conducting any of such restoration work. If the foregoing requirements are not met, or if the insurance proceeds exceeds the cost of reconstruction, restoration or repair, the insurance proceeds, or the excess insurance proceeds, as the case may be, shall be applied to the payment of the Contract Balance. The event of casualty shall in no case relieve Purchaser from continuing to pay each full Monthly Payment when due until the Contract Balance is satisfied in full from such payments and application of the insurance proceeds.

 

3.3. Purchaser’s Responsibility for Accidents. Purchaser hereby assumes all risk and responsibility for accident, injury or damage to person and property arising from Purchaser’s use and control of the Real Property and the Improvements thereon except for accidents, injury or damage caused by or arising out of the gross negligence or willful misconduct occurring after the Execution Date of Vendor or any party acting through or on behalf of Vendor and not covered by insurance required to be maintained by Purchaser hereunder. Purchaser shall insure such risk by carrying standard commercial general liability insurance, in such amounts as are satisfactory to Vendor, insuring the Vendor’s liability as well as the Purchaser’s, pursuant to this Section 3.

 

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4. Title, Escrow And Final Payment. Vendor has delivered to Escrow Agent (defined below) a fully-executed (i) Special Warranty Deed in recordable form (the “Deed”), (ii) executed Assignment of the Ground Lease by and between Vendor and St. Joseph County Indiana, Department of Redevelopment acting by and through the St. Joseph County Redevelopment Commission, dated December 18, 2001, in recordable form (the “Lease Assignment”) and (iii) a Release and Termination of Memorandum of Land Contract in recordable form (“Memorandum Release”) (collectively, the Recordable Documents”). Purchaser has obtained Contract Owner’s Title Policy in the amount of the Purchase Price from the Chicago Title Insurance Company (referred to herein as the “Title Company” or the “Escrow Agent”). Upon written direction by both Vendor and Purchaser to Escrow Agent that all conditions have been satisfied, and in accordance with the provisions of the Escrow Agreement by and between Escrow Agent, Vendor and Purchaser, Escrow Agent shall (i) record the Recordable Document in the Office of the Recorder of St. Joseph County, Indiana, (ii) promptly provide to Purchaser file stamped copies of the recorded Recordable Documents and, (iii) return the original recorded Recordable Documents to Purchaser promptly after recorded (the “Final Payment Transaction”). At the Final Payment Transaction, Purchaser’s obligations under this Land Contract shall be satisfied in full.

 

5. Representations and Warranties. The representations and warranties of Vendor and Purchaser are as set out in the Purchase Agreement. In addition, Vendor hereby warrants that Vendor has good and merchantable title to the Real Estate, free and clear of any and all liens, leases, restrictions and encumbrances, except as follows:

 

(i) Easements and restrictions of record;
     
(ii) Current real estate taxes not yet delinquent;
     
(iii) Matters that would be disclosed by an accurate inspection or survey of the Real Estate; and
     
(iv) Applicable zoning, building, land use and other governmental restrictions, laws, ordinances, rules and regulations;

 

Vendor further represents and warrants the following as of the date hereof: Vendor has made no contract to sell all or a part of the Real Estate to any person other than the Purchaser; Vendor has not given to any person an option, which is presently exercisable, to purchase all or any part of the Real Estate; there are no unpaid claims for labor done upon or materials furnished for the Real Estate in respect of which liens have been or may be filed; there is no judgment of any court of the State of Indiana or of any court of the United States that is or may become a lien on the Real Estate; and Vendor is neither principal nor surety on any bond payable to the State of Indiana.

 

6. Purchaser’s Right to Mortgage the Real Property. Purchaser shall not have the right to encumber the Real Property or Purchaser’s interest in this Contract in any way, including with an easement, lease, mortgage, security interest, assignment or any form of lien or debt instrument and any such encumbrance shall be void ab initio.

 

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7. Transfer of Purchaser’s Interest -- Condemnation. Purchaser’s interest in this Contract and Purchaser’s interest in the Real Property may not be sold, assigned, pledged, mortgaged, encumbered or transferred by Purchaser without the prior written consent of Vendor, which consent may be withheld at Vendor’s sole discretion. If the Real Property or any part thereof is taken or damaged pursuant to an exercise or threat of exercise of the power of eminent domain, the entire proceeds of the award or compensation payable in respect of the part so taken or damaged are hereby assigned to and shall be paid directly to Vendor. Such proceeds shall be applied, at Vendor’s option and without premium, in part or entirely as a prepayment of the Contract Balance or to restoration of the Real Property; provided, however, that if by electing to apply part of any such award or compensation against the Contract Balance, the Contract Balance shall be recalculated and the Monthly Payment amount shall be reduced to amortize the recalculated Contract Balance over the remaining term of this Contract. If the Contract Balance is paid in full, then Vendor shall pay the balance of the proceeds of the award to Purchaser.

 

8. Indemnification and Release. (a) Regardless of whether or not separate, several, joint or concurrent liability may be imposed upon Vendor, Purchaser shall indemnify, defend and hold harmless Vendor from and against all damages, claims and liability arising from or connected with Purchaser’s control or use of the Real Property, including, without limitation, any damage or injury to person or property with the exception of any liability, damage or injury caused by or arising from the gross negligence or willful misconduct occurring after the Execution Date of Vendor or any person or party acting through or on behalf of Vendor and not covered by insurance required to be maintained by Vendor. This indemnification shall not include any matter for which the Vendor is effectively protected by insurance. If Vendor without fault of Vendor any person or party acting by or on behalf of Vendor, shall become a party to litigation commenced by or against Purchaser (but not by Purchaser against Vendor), then Purchaser shall indemnify, defend and hold Vendor harmless. The indemnification provided by this paragraph shall include all reasonable legal costs and attorneys’ fees incurred by Vendor in connection with any such claim, action or proceeding. (b) Vendor shall indemnify, defend and hold harmless Purchaser from and against all damages, claims and liability arising from or connected with use of, or access to, the Real Property occurring after the Execution Date by Vendor or any person or party acting through or on behalf of Vendor, including, without limitation, any damage or injury to person or property.

 

9. Covenants.

 

9.1. Maintenance. Purchaser shall, at its sole cost and expense, shall maintain, repair and make all replacements to the Real Property and all common area, parking, machinery, apparatus, equipment and systems located thereon, including, without limitation, the roof, roof membrane, foundation, slabs, load bearing and exterior walls, other structural elements of the Real Property, windows, boilers, heating, ventilation, air conditioning and other mechanical systems, plumbing and sewer systems, electrical systems on or serving the Real Property, necessary to keep the Real Property and all such machinery, apparatus, equipment and systems in good condition, repair and working order; provided that Vendor shall be responsible for all maintenance, repair and replacement necessitated by damage caused after the Execution Date by Vendor or any person or party acting through or on behalf of Vendor. Purchaser shall keep the Real Property in a neat and orderly condition and in compliance with all applicable laws, ordinances, and regulations of any governmental authority having jurisdiction thereof.

 

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9.2. Use. Purchaser shall use and operate the Real Property for the manufacturing of vehicles and related uses (“Purchaser’s Intended Use”) and shall not change such usage. The Real Property shall not, without the prior written consent of Vendor, be rented, leased or occupied by persons other than Purchaser, until payment in full of the Contract Balance.

 

9.3. Alterations. Purchaser shall not make or permit to be made any alteration, addition or improvement in, upon or to the Real Property, or any portion thereof, without the prior written consent of Vendor, which consent shall not be unreasonably withheld, conditioned or delayed. In the event Vendor’s consent is obtained, all such alterations, additions or improvements shall be performed at the expense of Purchaser in a diligent, good and workmanlike manner, free from faults and defects and in accordance with all applicable laws, ordinances, and regulations of any governmental authority having jurisdiction thereof. Prior to commencing the construction, installation or making of any alterations, additions or improvements, Purchaser shall provide Vendor with detailed plans and specifications therefor along with all necessary building permits and other governmental approvals and shall obtain Vendor’s written approval thereof.

 

9.4. Liens. Purchaser shall not permit any Statement of Intention to hold a Mechanic’s Lien to be filed against the Real Property nor against any interest or estate therein by reason of labor, services or materials claimed to have been performed or furnished to or for Purchaser. If such Statement of Intention to hold a Mechanic’s Lien shall be filed, Vendor, at Vendor’s option, may compel the prosecution of an action for the foreclosure of such Mechanic’s Lien by the lienor. If any such Statement of Intention to hold a Mechanic’s Lien shall be filed and an action commenced to foreclose the lien, Purchaser, upon demand by Vendor, shall cause the lien to be released at Purchaser’s expense by the filing of a written undertaking with a surety approved by the Court and obtaining an order from the Court releasing the property from such lien. Nothing in this instrument shall be deemed or construed to constitute consent to, or a request to any party for, the performance of any labor or services or the furnishing of any materials for the improvement, alteration or repairing of the Real Property; nor as giving Purchaser the right or authority to contract for, authorize or permit the performance of any labor or services or the furnishing of any material that would permit the attaching of a valid mechanic’s lien.

 

9.5. Possession. Purchaser acknowledges that, except as expressly set forth herein, it has had a full opportunity to inspect the Real Property and agrees to accept the Real Property as of the Execution Date in its current condition “AS IS, WHERE IS, WITH ALL FAULTS CONDITION”, as set-out in the Purchase Agreement. EXCEPT AS EXPRESSLY SET FORTH HEREIN, VENDOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE CONDITION OF THE REAL PROPERTY OR ITS HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURCHASE.

 

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9.6 Tax Treatment. For all applicable tax purposes, Vendor and Purchaser shall treat the transaction contemplated herein as a purchase of the Real Property by Purchaser from Vendor as of the Possession Date.

 

10. Vendor’s Right of Entry. Vendor reserves and shall have the right to enter the Real Property (accompanied by an employee of Purchaser) upon at least two business (2) days prior notice (except in an extreme emergency, when no notice shall be required) to inspect the Real Property, to evaluate Purchaser’s compliance with this Contract (including Purchaser’s compliance with all applicable laws, ordinances, and regulations of any governmental authority having jurisdiction thereof), to cure any default of Purchaser, to post notices of non-compliance, to perform any obligation and/or to exercise any rights Vendor has under this Contract. Vendor’s entry provided herein shall (i) be accomplished in a manner designed to least interfere with Purchaser’s operations, (ii) comply with Purchaser’s safety protocols, and (iii) not constitute an actual or constructive eviction of Purchaser, in whole or in part, or giving rise to an abatement of Purchase Price by reason of loss or interruption of business of Purchaser or giving rise to any liability for direct or indirect injury to or interference with Purchaser’s business or any inconvenience or annoyance suffered by Purchaser. Notwithstanding anything to the contrary set forth in this Section 10, Vendor shall be responsible for any and all damage, injury or other liability arising out of Vendor’s exercise of its access rights set forth above to the extent the same is not covered by the insurance which Purchaser is required to maintain hereunder.

 

11. Default and Acceleration. It is expressly agreed by Purchaser that time is of the essence of this Contract. Upon the occurrence of any Event of Default, as hereinafter defined, and at any time thereafter, the entire Contract Balance and all Obligations (as defined in Section 11.2), and all accrued, unpaid interest thereon, shall, at the option of Vendor, become immediately due and payable without any notice, presentment, demand, protest, notice of protest, or other notice or dishonor or demand of any kind, all of which are hereby expressly waived by Purchaser, and Vendor shall have the right to pursue immediately any and all remedies, legal or equitable, as are available under applicable law to collect such Contract Balance together with a default rate of interest equal to twelve percent (12%) per annum beginning to accrue on the date of the Event of Default (the “Default Interest”). Vendor shall be entitled to avail itself of the remedy of declaring a forfeiture and cancel the Contract as provided below and thereby taking possession and removing the Purchaser from the Real Property. The following shall each constitute an “Event of Default” for purposes of this Contract:

 

11.1. Default by Purchaser in the payment of:

 

11.1.1. any Monthly Payment installment of the Purchase Price within five (5) days of the date due under the terms of this Contract,

 

11.1.2. any installment of real estate taxes on the Real Property or assessment for a public improvement which by the terms of this Contract are payable by Purchaser, on or before the date the same becomes delinquent,

 

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11.1.3. any lapse of insurance required by the terms of this Contract to be maintained by Purchaser,

 

11.1.4. any installment of basic rent or other additional charges payable under the that certain sublease between Vendor and Purchaser to the ground lease for parking lot purposes by and between Vendor and St Joseph County, Indiana Department of Redevelopment, acting by and through the St. Joseph County Redevelopment Commission dated December 18, 2001 (the “Sublease”),

 

11.1.5. any other mutually agreed upon amount payable pursuant to this Contract.

 

11.2. Default, for a period of ten (10) days (provided that, with the exception of Purchaser’s payment obligations, if any breach of this Contract cannot reasonably be remedied within such ten (10) day period, it shall not be a Purchaser Default hereunder so long as Purchaser commences such cure within the ten (10) day period and proceeds diligently until such cure is complete, but in no event longer than sixty (60) days) after written notice thereof is given to Purchaser, in the indebtedness, obligations and liabilities, or the performance or observation of any other covenant or term of this Contract or the Sublease, (collectively, the “Contract Documents”) of Purchaser owing to Vendor (collectively, the “Obligations”).

 

11.3. Lease, sublease or encumbrance of the Real Property or any part thereof, or the making of any levy, seizure or attachment thereof or thereon or a substantial, uninsured loss of any part of the Real Property.

 

11.4. Purchaser

 

11.4.1. institutes or consents to any proceedings in insolvency, or for the adjustment, liquidation, extension or composition or arrangement of debts or for any other relief under any insolvency law or laws relating to the relief or reorganization of debtors’,

 

11.4.2. files an answer admitting bankruptcy or insolvency or in any manner is adjudged insolvent, or

 

11.4.3. makes an assignment for the benefit of creditors or admits in writing inability to pay debts as they become due.

 

11.5. Any part of Real Property or all or a substantial part of the property or assets of Purchaser is placed in the hands of any receiver, trustee or other officers or representatives of any court, or Purchaser consents, agrees or acquiesces to the appointment of any such receiver or trustee.

 

11.6. Desertion or abandonment of the Real Property, or any part thereof, by Purchaser.

 

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11.7. Actual or threatened alteration, demolition or removal of any Improvements which are a part of the Real Property.

 

11.8. Sale, transfer, conveyance or other disposition of Purchaser’s interest in this Contract or Purchaser’s interest in any of the Real Property, or any part thereof, without Vendor’s prior written consent and without paying the Purchase Price in full.

 

12. Land Contract Forfeiture. Purchaser acknowledges that it has only acquired a vendee’s interest in the Real Property and that Vendor is retaining fee simple title in the same to secure payment of the Contract Balance. In the event Purchaser commits an Event of Default as defined above, including without limitation fails to pay the Contract Balance when due, deserts or abandons the Real Property or commits any breach of this Contract which materially diminishes the security intended to be given to Vendor under and by virtue of this Contract, then, it is expressly agreed by Purchaser that Vendor may, at Vendor’s option and in its sole discretion in lieu of foreclosure set forth in Section 13 below, cancel this Contract and take possession of the Real Property and remove Purchaser therefrom, or those holding or claiming under Purchaser without any demand and to the full extent permitted by applicable law. In the event of Vendor’s cancellation upon such default by Purchaser, all rights and demands of Purchaser under this Contract and in and to the Real Property shall cease and terminate and Purchaser shall have no further right, title or interest, legal or equitable, in and to the Real Property, or any portion thereof, and Vendor shall have the right to retain all amounts paid by Purchaser toward the Purchase Price as an agreed payment for Purchaser’s possession and use of the Real Property prior to such default. Such retention shall not bar Vendor’s right to recover damages for unlawful detention of the Real Property after default, for any failure to pay taxes, insurance or other amounts owing as a result Purchaser’s possession of the Real Property, for failure to maintain the Real Property at any time, for waste committed thereon or for any other damages suffered by Vendor, including reasonable attorneys’ fees incurred by Vendor in enforcing any right hereunder or in removing any encumbrance on the Real Property made or suffered by Purchaser. In the event of Vendor’s cancellation of this Contract upon default by Purchaser, Purchaser shall surrender and vacate the Real Property immediately and deliver exclusive possession thereof to Vendor in as clean, good and tenantable condition as existed on the Execution Date, ordinary wear and tear, casualty and condemnation excepted, and free of any Hazardous Material (a) discharged, disposed of or released by Purchaser or any of its agents, employees, contractors, vendors, suppliers, licensees, customers, or invitees or (b) otherwise resulting from Purchaser’s operations at the Property. All alterations, additions and improvements made or added to the Real Property by or on behalf of Purchaser shall, at Vendor’s option, be deemed part of the Real Property and surrendered to Vendor lien free upon such termination without compensation to Purchaser. Any alterations, additions or improvements that Vendor does not elect to have surrendered with the Real Property, together with any personal property of the Purchaser, shall be removed by Purchaser as soon as practicable following Vendor’s cancellation of this Contract, and Purchaser shall repair all damage to the Real Property resulting from such removal. Any personal property of Purchaser than remains on the premises of the Real Property after thirty (30) days following Vendor’s cancellation of this Contract shall be deemed abandoned by Purchaser, or at Vendor’s option, Vendor may store or remove the personal property at the risk, cost and expense of Purchaser and Vendor shall in no event be responsible for the value, preservation or safekeeping thereof.

 

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All of Vendor’s remedies under this Section 12 and Sections 13 through 16 shall be cumulative and not exclusive and shall include the right to appoint a receiver in the Event of Default, to foreclose on Purchaser’s interest under foreclosure laws and collect all attorneys’ fees in the enforcement of this Contract. Failure of Vendor to exercise any remedy at any time shall not operate as a waiver of the right of Vendor to exercise any remedy for the same or any subsequent default at any time thereafter.

 

13. Mortgage Foreclosure. As an alternative remedy to Vendor in the Event of Default which may be pursued simultaneously with the institution of the Land Contract forfeiture procedures in Section 12, Vendor, in its sole and absolute discretion, may foreclose on this Contract under Indiana mortgage foreclosure laws as a real estate mortgage. Purchaser hereby mortgages, warrants, and grants a security in the Real Property to Vendor to secure all Obligations. Upon an Event of Default, Vendor:

 

13.1 may, to the extent permitted by law, either in person or by agent, with or without bringing any action or proceeding, enter upon and take possession of the Real Property, or any part thereof, in its own name, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Real Property or part thereof or interest therein, increase the income therefrom or protect the security hereof and, with or without taking possession of the Real Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same to its costs and expenses and then to the Contract Balance and all amounts due under the Contract Documents. The entering upon and taking possession of the Real Property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default and notwithstanding the continuance in possession of the Real Property or the collection, receipt and application of rents, issues or profits, Vendor shall be entitled to exercise every right provided for in any of the Contract Documents or by law upon occurrence of any Event of Default hereunder.

 

13.2 may commence an action to foreclose this Contract as an Indiana mortgage, appoint a receiver, or specifically enforce any of the covenants hereof and to take all such other actions permitted by applicable law.

 

13.3 may exercise any or all of the remedies available to a secured party under the Indiana Uniform Commercial Code to the extent applicable to the Real Property.

 

13.4 may collect all expenses which may be paid or incurred by or on behalf of Vendor in connection with the foreclosure of this Contract for attorneys’ fees, appraisers’ fees, outlays for documentary and expert evidence, stenographers’ charges, publication costs and cost of procuring all environmental assessments and all title searches, policies and examinations and similar data and assurances with respect to title and the environmental condition of the Real Property as Vendor reasonably may deem necessary to prosecute such suit shall constitute advancements, shall be immediately due and payable by Purchaser, with Default Interest, and shall be allowed and included as indebtedness in the judgment for sale and part of the Obligations.

 

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13.5 recover a deficiency from Purchaser to the extent the mortgage foreclosure sale fails to pay the Obligations in full in accordance with Indiana law.

 

14. Foreclosure Proceedings and Receiver. Upon the commencement of any proceedings to forfeit or foreclose this Contract, Vendor shall be entitled forthwith to the appointment of a receiver or receivers, as a matter of right, without the giving of notice to any other party, without regard to the adequacy or inadequacy of any security for the Contract Balance and without the requirement of any bond, and Purchaser hereby consents to such appointment. Vendor shall be entitled to recover judgment either before or after or during the pendency of any proceedings for the enforcement of this Contract. The right of Vendor to recover such judgment shall not be affected by the exercise of any other right, power or remedy for the enforcement of this Contract, or the foreclosure of the lien of this Contract.

 

15. Assignment of Leases and Rents. As additional security for the repayment of the Contract Balance or other indebtedness hereby secured, Purchaser assigns to Vendor its entire interest, as lessor, in all present and future leases, all rentals and other income from the Real Property and all licenses, permits, agreements or contracts pertaining to the Real Property. This assignment shall not be construed as a consent by Vendor to any such lease, license, permit, agreement or contract hereby assigned nor impose upon Vendor any obligations with respect thereto since it is given as collateral security only. In the Event of a Default, Purchaser shall, upon demand therefor made by Vendor, surrender possession of the Real Property to Vendor, its duly constituted agents, or to a duly appointed receiver who may thereafter take possession and assume the management of the Real Property and collect the rentals and other income therefrom, rent or lease the Real Property or any portion thereof, upon such terms and for such time as it may deem best, terminate any tenancy and maintain proceedings to recover possession of the Real Property from any tenant or trespasser, and apply the net proceeds of such rent and income to the following purposes and in the following order: (a) preservation and management of the Real Property; (b) payment of taxes; (c) payment of insurance premiums; and (d) payment of the Contract Balance and any amounts due under the Contract Documents. Vendor, its duly constituted agent, or duly appointed receiver, as applicable, shall be liable to account only for those rents actually received.

 

16. Intentionally Omitted.

 

17. Interpretation of Contract. The article, section and other headings of this Contract are for convenience of reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term “person” shall include any individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.

 

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18. Notices. Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) via email or (d) by a commercial overnight courier that guarantees next business day delivery and provides a receipt, and such notices shall be addressed as follows:

 

  To Purchaser:

Electric Last Mile, Inc.

c/o: Benjamin Wu, General Counsel

1055 W Square Lake Rd

Troy, MI 48098

Email: bwu@electriclastmile.com

 

  with a copy to:

Mark E. Wright Mark E. Wright

Faegre Drinker Biddle & Reath LLP

600 E. 96th Street, Suite 600

Indianapolis, Indiana 46240, USA

mark.wright@faegredrinker.com

Phone: 317-569-4659

 

  To Vendor:

SF MOTORS, INC. dba SERES

Attn: Legal Department

3303 Scott Blvd.,

Santa Clara, CA 95054

Email: legal@driveseres.com

 

  with copy to:

King & Wood Mallesons LLP

535 Middlefield Road, Suite 245

Menlo Park, California 94025

Attn: Yuji Sun, Esq.

Email: yuji.sun@us.kwm.com

 

or to such other address as either party may from time to time specify in writing to the other party. Any such notice shall be deemed to have been given (i) upon delivery, if personally delivered, one (1) business day after sending if sent by any nationally recognized form of airborne/overnight delivery service, or (ii) the date of sending if sent by email. Either party may change the address at which it desires to receive notice upon giving written notice of such request to the other party. Purchaser and Vendor, and their respective counsel, hereby agree that notices may be given hereunder by the parties’ respective counsel, and that if any communication is given hereunder by Purchaser’s or Vendor’s counsel, such counsel may send such communication directly to all principals so long as such other counsel is copied, as required to comply with the foregoing provisions.

 

19. Entire Contract. This Contract, together with the Exhibits and schedules hereto and all other Contract Documents, contain all representations, warranties and covenants made by Purchaser and Vendor and constitutes the entire understanding between the parties hereto with respect to the subject matter hereof. All obligations of Purchaser in the Contract Documents are independent of its obligations hereunder and are not integrated or replaced by this Contract, nor shall Purchaser be excused of any performance hereunder due to any limitations set forth in the Purchase Agreement or any alleged breach by Vendor of any obligations under the Purchase Agreement.

 

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20. Time. Time is of the essence in the performance of each of the parties’ respective obligations contained herein. If the time period by which any right, option or election provided under this Contract must be exercised, or by which any act required hereunder must be performed expires on a Saturday, Sunday or legal or bank holiday, then such time period shall be automatically extended through the close of business on the next regularly scheduled business day (a “Business Day”).

 

21. Attorneys’ Fees. Purchaser will pay Vendor’s reasonable attorneys’ fees and costs in connection with the enforcement of the Contract Documents after an Event of Default, including costs to protect, collect, lease, sell, take possession of, or liquidate any of the Real Property, or to attempt to enforce or protect any security interest or lien or other right under any of the Contract Documents, or to enforce any rights of Vendor or obligations of Purchaser or any other person, firm or corporation which may be obligated to Vendor by virtue of this Contract or under any of the Contract Documents and any expenses, costs and charges relating thereto, which shall constitute an additional indebtedness owing by Purchaser to Vendor payable on demand and evidenced and secured by the Contract Documents.

 

22. Assignment. Purchaser’s rights and obligations hereunder shall not be assignable without the prior written consent of Vendor in Vendor’s sole discretion.

 

23. Counterparts. This Contract may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

 

24. Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of Indiana.

 

25. Confidentiality and Return of Documents. Purchaser and Vendor shall each maintain as confidential any and all material obtained about the other or, in the case of Purchaser, about the Property, this Contract or the transactions contemplated hereby, and shall not disclose such information to any third party. Except for Purchaser’s attorneys, accountants and consultants (who also shall be subject to the obligations set forth in this Section 25) and as may be required by law, Purchaser will not divulge any such information to other persons or entities including, without limitation, appraisers, real estate brokers, or competitors of Vendor.

 

26. Amendments. This Contract may be amended or modified only by a written instrument signed by Purchaser and Vendor.

 

27. No Recording. This Contract shall not be recorded, but a Memorandum thereof providing for the names of the parties, the legal description of the Real Property the duration of the contract term may be recorded to the extent required for the Title Company to issue the vendee’s policy of title insurance.

 

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28. No Partnership. The relationship of the parties hereto is solely that of Vendor and Purchaser with respect to the Real Property and no joint venture or other partnership exists between the parties hereto. Neither party has any fiduciary relationship hereunder to the other.

 

29. No Third-Party Beneficiary. The provisions of this Contract are not intended to benefit any third parties.

 

30. Severability. If any term or provision of this Contract or the application thereof to any person or circumstance shall for any reason and to any extent be held to be invalid or unenforceable, then such term or provision shall be ignored, and to the maximum extent possible, this Contract shall continue in full force and effect, but without giving effect to such term or provision.

 

31. No Waiver. Neither the failure of either party to exercise any power given such party hereunder or to insist upon strict compliance by the other party with its obligations hereunder, nor any custom or practice of the parties at variance with the terms hereof shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof.

 

32. Construction. The parties agree that this Contract is the result of negotiation by the parties, each of whom was represented by counsel, and thus, this Contract shall not be construed against the maker thereof.

 

[Signature page to follow]

 

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IN WITNESS WHEREOF, Vendor and Purchaser have executed this Land Contract to be effective as of the Execution Date.

 

  VENDOR:
   
  SF MOTORS, INC.,
  a Delaware corporation,
  doing business as SERES

 

  By: /s/ Yu Zheng
  Printed: Yu Zheng
  Title: Secretary of the Corporation

 

  PURCHASER:
   
  ELECTRIC LAST MILE, INC.,
  a Delaware corporation
     
  By: /s/ James Taylor
  Printed: James Taylor
  Title: CEO

 

 

 

EXHIBIT A

 

Legal Description of the Land

 

Lot 1 in AM General Mishawaka Minor Subdivision, an addition to Penn Township, St. Joseph County, Indiana as per plat thereof recorded September 15, 2017 as Instrument Number 1725316, in the Office of the Recorder of St. Joseph County, Indiana.

 

Non-exclusive easement for sewer and discharge of water as reserved in a Deed of Easement granted by Indiana & Michigan Electric Company to Rockwell Spring and Axle Company, dated February 3, 1956 and recorded February 5, 1956 in Deed Record 551, page 156 in the Office of the Recorder of St. Joseph County, Indiana.

 

 

 

 

 

 

Exhibit 10.10

 

PROMISSORY NOTE

 

$43,620,689.66

Effective Date: June 25, 2021

Maturity Date: May 25, 2023

 

FOR VALUE RECEIVED, ELECTRIC LAST MILE, INC., a Delaware corporation (hereinafter referred to as “Borrower”), hereby promises to pay to the order of SF MOTORS, INC., DBA SERES, a Delaware corporation (hereinafter referred to as “Lender”), in lawful money of the United States of America, at the Lender’s principal office or at such other place or to such other party as the Lender may from time to time designate by written notice, the principal sum of FORTY-THREE MILLION SIX HUNDRED TWENTY THOUSAND SIX HUNDRED EIGHTY-NINE and 66/100 Dollars ($43,620,689.66) and to pay interest as hereinafter provided as follows:

 

(a) From the Effective Date through and including the Maturity Date Borrower shall pay interest on the principal balance of this Note at a fixed per annum rate of interest equal to eleven (13) basis points (0.13%) (“Interest Rate”). All interest under this Note shall be computed for the actual number of days elapsed on the basis of a year of 360 days.

 

(b) Borrower shall repay the principal of and interest on this Note as follows: (i) ONE MILLION EIGHT HUNDRED NINETY-SIX THOUSAND FIVE HUNDRED FIFTY-ONE AND 72/100 DOLLARS ($1,896,551.72) on June 30, 2021; (ii) ELEVEN MILLION EIGHT HUNDRED NINETY-SIX THOUSAND FIVE HUNDRED FIFTY-ONE DOLLARS AND 72/100 DOLLARS ($11,896,551.72) on July 31, 2021; and (iii) the balance of the principal and interest on this Note in twenty-one (21) equal monthly installments of ONE MILLION FOUR HUNDRED AND TWENTY THOUSAND THREE HUNDRED SIXTY-ONE AND 25/100 Dollars ($1,420,361.25) commencing August 31, 2021 and on the last Day of each monthly period thereafter through and including the month in which the Maturity Date occurs. On the Maturity Date, whether by acceleration, demand or otherwise, the unpaid balance of principal of this Note, together with all accrued but unpaid interest, and all other charges (including, without limitation, late charges, costs and expenses of collection and reasonable attorneys’ fees) shall be due and payable in full. Borrower and Lender agree that the total accrued interest through the Maturity Date is $41,515.83 (less any interest previously paid by Borrower).

 

(c) Upon the occurrence and during the continuance of an Event of Default beyond all applicable notice and cure periods, and after maturity, including maturity by acceleration, Lender, at its option, may do one or both of the following: (i) increase the interest rate under this Note to the rate that is twelve percent (12.0%) per annum, and (ii) add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). The Interest Rate of this Note will not exceed the maximum rate permitted by applicable law under any circumstances.

 

(d) If Borrower fails to pay any amount due hereunder, or any fee in connection herewith, in full within ten (10) days after its due date, Borrower, in each case, shall incur and shall pay a late charge equal to Five Percent (5%) of the unpaid amount and an additional late charge for purposes of defraying the expense incidental to handling on the first day of each successive calendar month equal to Five Percent (5%) of the unpaid amount until such amount has been paid in full. After acceleration of repayment of this Note by the Lender, the payment of a late charge will not cure or constitute a waiver of any Event of Default under this Note.

 

 

 

 

All amounts payable by Borrower to the Lender under this Note shall be without relief from valuation and appraisement laws and with attorneys’ fees and costs of collection. If any payment of principal of or interest on this Note falls due on a day which is not a Banking Day, the due date shall be extended to the next succeeding Banking Day and interest shall be payable at the applicable rate for the period of such extension.

 

This Note may be prepaid, in whole or in part, at any time without prepayment premium or penalty.

 

For purposes of this Note, “Banking Day” means a day which is not (a) a Saturday, Sunday or legal holiday on which banking institutions in the State of Indiana or the city in which the office of the Lender is located is authorized to remain closed, or (b) a day on which the New York Stock Exchange is closed.

 

All amounts which shall be paid with respect to this Note shall be applied first to the payment of interest due on the balance of the principal sum or so much thereof as shall from time to time remain unpaid, second to any costs of collection and expenses reimbursable by the Borrower to the Lender, third to the principal amount of this Note which may then be currently due and payable, and last to any late charges then due and payable under this Note.

 

This Note evidences indebtedness incurred under (i) that certain Agreement of Purchase and Sale dated April 9, 2021, between Borrower and Lender (the “Purchase Agreement”), the terms of which are incorporated into this Note by reference and to which reference is made for definitions of capitalized terms used but not otherwise defined herein, for the terms and conditions upon which payment of this Note may be accelerated and all amounts outstanding hereunder declared immediately due and payable for the maturity of this Note and for the security provided for the payment of this Note. In the event of any discrepancy between this Note and the Purchase Agreement, this Note shall control any discrepancy. This Note is secured by the Letter of Credit.

 

Upon the occurrence of any of the following events (each, an “Event of Default”), Lender may, at its option, without any demand or notice whatsoever, declare this Note and all indebtedness and obligations of Borrower owing to Lender to be fully due and payable in their aggregate amount, together with accrued interest and all fees, and charges applicable thereto:

 

(a) Any failure to make any payment of principal or accrued interest on this Note or under the Purchase Agreement within ten (10) days following receipt of written notice from Lender to Borrower.

 

(b) Intentionally Deleted.

 

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(c) Borrower shall fail to observe or perform any other material term or condition of this Note or any other term or condition set forth in the Purchase Agreement or Borrower shall otherwise default in the observance or performance of any covenant.

 

(d) The dissolution or merger of Borrower.

 

(e) The creation of any lien (except a lien in favor of Lender) on, the institution of any garnishment proceedings by attachment, levy or otherwise against, the entry of a judgment against, or the seizure of, any of the property of Borrower or any endorser or guarantor hereof.

 

(f) Intentionally Deleted.

 

(g) Any judgment, order or decree for the payment of money is rendered against Borrower and remains undischarged for 10 days during which time execution is not effectively stayed.

 

(h) Intentionally Deleted.

 

(i) A commencement by the Borrower of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or the entry of a decree or order for relief in respect of the Borrower in a case under any such law or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Borrower, or for any substantial part of the property of Borrower, or ordering the wind-up or liquidation of the affairs of Borrower; or the filing and pendency for 30 days without dismissal of a petition initiating an involuntary case under any such bankruptcy, insolvency or similar law; or the making by Borrower of any general assignment for the benefit of creditors; or the taking of action by the Borrower in furtherance of any of the foregoing.

 

(j) Intentionally Deleted.

 

(k) The commencement of any foreclosure proceedings (except by Lender), proceedings in aid of execution, attachment actions, levies against, or the filing by any taxing authority of a lien against any of the collateral or any property securing the repayment of any of the indebtedness due and owing under this Note.

 

(l) Intentionally Deleted.

 

Upon the occurrence of a default, breach, or an Event of Default under this Note and/or any documents executed in connection therewith that secure this Note or any other documents or agreements executed by Borrower in connection with the indebtedness evidenced by this Note, all of the indebtedness evidenced by this Note and remaining unpaid balances of interest and expenses shall, at the option of the Lender and without demand or notice, become immediately due and payable and Lender shall be permitted to exercise any rights or remedies set forth in this Note. This Note may also be declared due at the option of the Lender prior to its expressed maturity at the time, upon the terms and in the manner provided in this Note. Failure to exercise any such option shall not constitute a waiver of the right to exercise any such option if the Borrower is in default hereunder. Time is of the essence of this Note and all other obligations of the Borrower to the Lender or any of its affiliates.

 

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Borrower waives demand, presentment for payment, notice of dishonor, protest and notice of protest, and expressly agrees that this Note and any payment coming due under it may be extended from time to time without in any way affecting their liability hereunder. This Note shall be binding upon the Borrower’s heirs, personal representatives, successors, and assigns. Lender may renew this Note or reduce the payments thereon and any such renewal or reduction shall not release Borrower from liability.

 

The rights or remedies of the Lender as provided in this Note shall be cumulative and concurrent, and may be pursued singly, successively, or together.

 

Notwithstanding anything herein to the contrary, no provision contained herein which purports to obligate Borrower to pay any amount of interest or any fees, costs or expenses which are in excess of the maximum permitted by applicable law, shall be effective to the extent that it requires the payment of any interest or other sums in excess of such maximum. In the event Borrower shall at any time following the date hereof pay any amount of interest or any fees, costs or expenses which are in excess of the maximum permitted by applicable law, such overpayments shall be deemed to be loans from Borrower to the Lender, which loans shall be due and payable by the Lender upon demand by Borrower together with interest from the date or dates of such overpayments calculated at the same rate as Borrower is required to pay under this Note, and the repayment of such loans by the Lender shall be the sole remedy at law or in equity of Borrower for such overpayments.

 

The person executing this Note for and on behalf of Borrower hereby certifies that he is duly empowered by the Borrower and has been duly authorized by all necessary action on the part of Borrower to execute and deliver this Note for and on behalf of the Borrower.

 

This Note may be assigned or transferred, in whole or in part, by Lender to any person at any time without notice to or the consent of Borrower. Borrower may not assign or transfer this Note or any of its rights hereunder without the prior written consent of Lender. This Note shall inure to the benefit of and be binding upon the parties hereto and their permitted assigns.

 

THIS NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF INDIANA APPLICABLE TO CONTRACTS MADE BY AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district of St. Joseph County, Indiana; provided that nothing contained in this Note will prevent Lender from bringing any action, enforcing any award or judgment or exercising any rights against Borrower, against any security or against any property of Borrower within any other county, state or other foreign or domestic jurisdiction. Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both Lender and Borrower. Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note or in the Purchase Agreement.

 

BORROWER AND LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE, THE PURCHASE AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

[signature page follows]

 

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SIGNATURE PAGE - PROMISSORY NOTE

 

IN WITNESS WHEREOF, Borrower has executed this Note effective as of the day and year first above written.

 

  “BORROWER”
   
  ELECTRIC LAST MILE, INC.,
  a Delaware corporation
   
  By:                           
  Name:  
  Title:  

 

 

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Exhibit 10.11

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is agreed upon and entered into this 10th day of December, 2020, by and between Jason Luo (the “Employee”) and Electric Last Mile, Inc., a Delaware corporation, together with its affiliates, successors and assigns (the “Company”) (each individually a “Party” and collectively the “Parties”).

 

RECITALS

 

A. Pursuant to that Agreement and Plan of Merger by and among Forum Merger III Corporation, ELMS Merger Corp. (the “Merger Sub”), the Company, and Jason Luo, in the capacity as the initial Stockholder Representative thereto, dated on or about December 10, 2020 (the “Merger Agreement”), the Company intends to merge with and into the Merger Sub with the Company surviving the merger (the “Merger”) upon the Effective Time (as such term in defined the Merger Agreement); and

 

B. The Company desires to employ the Employee, and the Employee desires to be employed by the Company and any publicly-traded parent entity of the Company, to the extent applicable (the “Parent”), to be effective as of the first business day immediately following the Effective Time.

 

AGREEMENTS

 

In consideration of the mutual covenants and agreements set forth in this Agreement and for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties, each intending to be legally bound hereby, agree as follows:

 

1. Employment

 

1.1. Duties. The Employee shall serve as Executive Chairman of the Company and any Parent, as applicable in its discretion, and will, under the direction of the Board of Directors of the Company (the “Company Board”) and any Board of Directors of the Parent (the “Parent Board”), faithfully and to the best of the Employee’s ability perform the duties assigned by the Company Board and any Parent Board in its discretion from time to time. The Employee shall, if requested, also serve as a member of the Company Board and Parent Board or as a director or officer of any affiliate of the Company for no additional compensation.

 

1.2. Best Efforts. The Employee agrees to devote a substantial portion of the Employee’s business time, and best effort, skill and attention to the discharge of the Employee’s duties while employed by the Company.

 

1.3. Duty to Act in the Best Interest of the Company. The Employee shall not, directly or indirectly, act in any manner which may damage the business of the Company or which would adversely affect the goodwill, reputation or business relations of the Company with its customers, the public generally, or with any of its other employees. The Employee shall act in the best interest of the Company at all times. The Employee will not engage in any other business, profession, or occupation for compensation or otherwise that would conflict or interfere with the performance of the Employee’s services under the Agreement either directly or indirectly without the prior written consent of the Company Board and any Parent Board; provided that the Employee may serve on other boards of directors, subject to any limits or requirements of the Company’s or Parent’s corporate governance policies (as in effect from time to time) and to the extent such service does not conflict or interfere with the Employee’s duties to the Company. The Employee agrees that the Employee will disclose any such directorship to the Company Board and Parent Board prior to the Effective Time or prior to commencing such position, as applicable.

 

 

 

 

1.4. Place of Performance; Required Travel. The Employee’s principal place of employment shall be the Company’s office as of the Effective Time that is located in Auburn Hills, MI or the metropolitan area of Detroit, MI, provided that the Employee will be required to travel as needed on Company business during the Term (as such term is defined in Section 2.1 below). Required travel is anticipated to occupy up to 40% of Employee’s working time on average but may occupy more or less time depending on business needs.

 

2. Term of Employment

 

2.1. Term. The Employee’s employment with the Company shall commence on the day that is the first business day immediately following the Effective Time of the Merger (the “Commencement Date”) and shall, subject to Section 2.2, continue until the Company or the Employee terminate the Agreement in accordance with the terms herein (the “Term”).

 

2.2. “At Will” Employment Status. Notwithstanding any term or provision of this Agreement, at all times the Employee shall be employed by Company on an “at will” basis, subject to termination in accordance with Section 5.

 

3. Base Compensation and Incentive Compensation.

 

3.1. Base Compensation. During the Term, the Company shall pay to the Employee an annual base salary in the amount of $480,000.00 (the “Base Compensation”). The Base Compensation shall be paid in periodic installments in accordance with the Company’s normal payroll procedures, subject to all applicable taxes and withholdings. The Base Compensation may be increased from time-to-time by the Company in accordance with the regular compensation review practices of the Company Board and any Parent Board or the Compensation Committee of the Company Board and any Parent Board (the “Compensation Committee”), as applicable, and may be decreased from time-to-time by the Company, but only to the extent such decrease is part of an across-the-board salary reduction that applies in a consistent manner to similarly-situated executives of the Company.

 

3.2. Annual Bonus. The Employee shall be eligible to participate in a Company annual cash incentive plan, as established by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time for similarly-situated executives of the Company, and through which the Company awards performance-based cash bonuses on an annual basis, subject to the Company achieving performance targets as approved by the independent directors on the Company Board and Parent Board or by the Compensation Committee. The Employee shall be eligible to participate in any such plan at a target bonus level as determined by the Compensation Committee from time to time, but such target bonus level shall be no less than 100% of the Employee’s Base Compensation (as then in effect from time to time). The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and the decision to provide any bonus opportunity and the amount and terms of any annual bonus shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee. The Company’s payment of any such bonus pursuant to such plan to the Employee shall be subject to the Employee’s employment with the Company on the applicable bonus payment date.

 

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3.3. Long-Term Incentive Compensation/Equity Awards. The Employee shall be eligible to participate in a Company long-term incentive compensation plan, through which the Company grants equity awards to its key employees, pursuant to the separate terms and conditions of such plan. The Employee shall be eligible to participate in any such plan at a target award level as determined by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time. The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and any applicable award agreements, and the decision to provide any award and the amount and terms of any award shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee.

 

4. Benefits.

 

4.1. Employee Benefits. During the Term, the Employee shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time to the extent consistent with applicable law and the terms of the applicable benefit plan, practice or program. Notwithstanding anything otherwise provided under this Agreement, nothing contained herein shall obligate the Company to continue or maintain any particular benefit plan or program on an ongoing basis and the Company reserves the right to amend, establish or terminate any benefit plan, practice or program at any time in its sole discretion.

 

4.2. Paid Time Off. During the Term, the Employee will be entitled to paid time off on a substantially-similar basis as other similarly-situated executives of the Company in accordance with the Company’s policies as such policies may exist from time to time.

 

4.3. Business Expenses. The Employee shall be entitled to reimbursement for reasonable and necessary out-of-pocket business expenses incurred by the Employee in connection with the performance of the Employee’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures (including the requirement to provide appropriate documentation of such expenses), as in effect from time to time.

 

5. Termination of Employment

 

5.1. Termination for Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment with the Company at any time for any of the following causes (each a “Cause”):

 

(a) Any act of fraud, dishonesty, gross negligence, misrepresentation, or embezzlement, misappropriation, or conversion of assets of the Company or any of its affiliates (or attempt to do any of the foregoing);

 

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(b) Subject to any protections set forth under applicable laws, commission of, indictment for, conviction of, pleading guilty or nolo contendere to, or engaging in any crime that constitutes a felony or any crime or other act involving fraud, theft, embezzlement, or moral turpitude;

 

(c) Subject to any protections set forth under applicable laws, commission of, conviction of, pleading guilty or nolo contendere to, or engaging in any crime or other act that violates any other law, rule, or regulation that the Company Board and Parent Board reasonably determines is job-related and/or is likely to have an adverse impact on the performance of the Employee’s duties under this Agreement;

 

(d) Willful or material violation of any federal, state, or foreign securities laws;

 

(e) Conduct or omission which the Company Board and Parent Board reasonably determines is or is reasonably likely to be detrimental to the reputation, goodwill, public image, or business operations of the Company;

 

(f) Continued failure by the Employee to perform the Employee’s duties or responsibilities to the Company or its affiliates (other than absence due to bona fide illness or Disability as defined herein);

 

(g) The Employee’s failure or refusal to comply with the lawful directions of the Company Board and Parent Board;

 

(h) Making of threats or engaging in acts of violence in the workplace;

 

(i) Engaging in sexual, racial, or other forms of harassment or discrimination in violation of the law or Company policies;

 

(j) Breach of the Employee’s fiduciary duties or confidentiality obligations or engaging in any other act of material dishonesty or disloyalty toward the Company;

 

(k) Violating any of the Company’s written policies or codes of conduct including, but not limited to, written policies related to equal employment opportunity, performance of illegal or unethical activities, and ethical misconduct;

 

(l) Repeatedly reporting to work under the influence of alcohol or drugs in a manner that impacts the Employee’s ability to perform the duties of the Employee’s job or the obligations under this Agreement;

 

(m) The Employee’s failure to obtain and/or maintain proper authorization to work in the United States commensurate with the needs of the Company;

 

(n) The Employee’s voluntary resignation or other termination of employment effected by the Employee at any time when the Company could effect a termination for Cause pursuant to this Agreement; and/or

 

(o) The Employee’s material breach of any term of this Agreement or any other agreement with the Company or any of its affiliates or failure to perform any of the Employee’s duties to the satisfaction of the Company Board and Parent Board.

 

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The Company Board and Parent Board shall, in its sole discretion, have the authority to make the determination that the Employee has been terminated for Cause. Upon the effectiveness of any termination for Cause by the Company, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for (i) any payment of compensation accrued but unpaid through the date of such termination for Cause, (ii) any vested employee benefits covered by the Employee Retirement Income Security Act of 1974, as amended, to which the Employee is entitled upon termination of employment with the Company in accordance with the terms and conditions of the applicable plans of the Company, as applicable, and (iii) reimbursement for any unreimbursed business expenses incurred by the Employee on or prior to the Employee’s last date of employment with the Company pursuant to Section 4.3 (collectively, the “Accrued Amounts”). In the event that (1) the Employee’s employment with the Company terminates for any reason other than for Cause and (2) any of the facts and circumstances described in the definition of Cause existed as of the date of such termination (whether or not known by the Company Board and Parent Board or the Company or any of its affiliates as of the time of such termination or discovered after any such termination), then, the Company may deem such termination of employment to have been for Cause, and such termination shall be treated as a termination by the Company for Cause and the Employee acknowledges that the Employee’s compensation may also be subject to any clawback provisions required by law, rule, regulation or Company policy (as in effect upon the Commencement Date or any time thereafter), as well as any other agreement between the Company and the Employee that provides for clawback of any compensation or equity in the Company (including any equity related awards).

 

5.2. Termination by the Company Without Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment without Cause, at any time, and for any reason or no reason at all, subject to the following:

 

(a) If the Company terminates this Agreement and the Employee’s employment and such termination is not a termination for Cause under Section 5.1, then the Employee shall receive the Accrued Amounts and a cash payment from the Company as severance (the “Severance Payment”) equal to twelve (12) months of Base Compensation as in effect at the time of the termination, subject to all applicable federal, state, local and other withholdings. The Severance Payment shall be paid in substantially equal installments with the Company’s regular payroll over the twelve (12) month period (the “Severance Pay Period”) following the effective date of termination of employment and commencing on the first administratively practicable payroll date on or next following the date the Release Agreement becomes effective and fully irrevocable in accordance with Section 5.2(c) (provided that the initial and final payments may be a greater or lesser amount so as to conform with the Company’s regular payroll period); provided that any amounts that would be payable prior to the effectiveness of the Release Agreement (as defined below) shall be delayed until the Release Agreement is effective and fully irrevocable.

 

(b) The Severance Payment will be subject to offset by the amount of any compensation earned by the Employee or to which the Employee is entitled during the Severance Pay Period (regardless of when any such amount is paid by a subsequent employer or by the Company): (i) from any subsequent employer following the termination of the Employee’s employment with the Company, or (ii) from the Company under any contingent employment agreement between the Company and the Employee. In the event the Employee obtains other employment before the end of the Severance Pay Period, the Employee shall immediately notify the Company of such employment in writing.  The Employee expressly agrees that failure to immediately advise Company of the Employee’s new employment shall constitute a material breach of this Agreement, and the Employee will forfeit all Severance Payment amounts paid or that otherwise would be paid by the Company under this Section 5 from the date of the Employee’s new employment until the end of the Severance Pay Period.  The Employee shall immediately repay to the Company all amounts paid by the Company as a Severance Payment applicable to the period commencing on the date of the Employee’s new employment through the end of the Severance Pay Period.  Notwithstanding such forfeiture, the remaining provisions of this Agreement shall remain in full force and effect. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company to substantiate the Employee’s new employment and all compensation and rights under the Employee’s new employment.

 

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(c) Before receiving the Severance Payment set forth in Section 5.2(a), and as a condition to receiving the same, the Employee shall sign, and not revoke, a release of any and all claims or potential claims against the Company which the Employee has or may have, whether known or unknown, as of the date of execution of the release by the Employee (the “Release Agreement”). The Company must provide the form of Release Agreement to the Employee within fifteen (15) days after the Employee’s separation from service and the Employee must sign the Release Agreement and provide it to the Company within twenty-one (21) days (or forty-five (45) days, if applicable under applicable law) after receiving it from the Company and not revoke such release during any applicable revocation period. The Release Agreement shall be in the form as determined by the Company, in its sole discretion. To the extent the Severance Payment is subject to Section 409A and the period for executing (and not revoking) the Release Agreement begins in one taxable year and ends in another taxable year, the Severance Payment shall not begin until the beginning of the second taxable year; provided that, the first installment payment shall include all amounts that would otherwise have been paid to the Employee during the period beginning on the date of the Employee’s termination and ending on the first payment date if no delay had been imposed.

 

5.3. Termination by the Employee for Good Reason. The Employee may terminate this Agreement and/or the Employee’s employment with the Company for Good Reason, as defined below. If the Employee terminates this Agreement for Good Reason, then the Employee shall receive the Accrued Amounts and the Severance Payment as set forth in Section 5.2(a), subject to the requirements of Sections 5.2(b) and (c). For purposes of this Agreement, “Good Reason” shall mean:

 

(a) a material diminution in the Employee’s authority, duties or responsibilities;

 

(b) a material diminution in the Employee’s Base Compensation except for across-the-board salary reductions similarly affecting other similarly-situated executives of the Company or due to unforeseeable business circumstances, pandemics, natural disasters or similar circumstances;

 

(c) a change that would require the Employee to relocate to a primary office that is more than fifty (50) miles from the location of the Company’s then principal offices unless such relocation is closer to the Employee’s personal residence; or

 

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(d) a material breach by the Company of any of its obligations under this Agreement.

 

Notwithstanding the foregoing, no such event described above shall constitute Good Reason unless: (1) the Employee gives written notice to the Company specifying the condition or event relied upon for such termination within thirty (30) days of the initial existence of such event; and (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of the Employee’s written notice. If the Employee does not terminate his or her employment for Good Reason within sixty (60) days after the end of such thirty (30)-day cure period, then the Employee will be deemed to have waived his or her right to terminate for Good Reason with respect to such grounds. If the Company cures the Good Reason condition during such cure period, Good Reason will be deemed not to have occurred.

 

5.4. Termination by Employee Without Good Reason. The Employee may resign from employment without Good Reason by providing sixty (60) days’ advance, written notice of the Employee’s intent to resign from employment. Upon the effectiveness of such resignation, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts. With respect to any notice period pursuant to the immediately preceding sentence, the Company may in its sole discretion (a) place the Employee on a paid, non-working, garden leave during some or all of such notice period (and, for the avoidance of doubt, relieve the Employee of the Employee’s title and duties during such period), and/or (b) waive such notice, in whole or in part, by accelerating the Employee’s termination date and paying the Employee the Employee’s base salary in lieu of the portion of the notice period waived by the Company and without affecting the voluntary nature of the Employee’s termination.

 

5.5. Termination Due to Disability or Death. The Company shall have the right to terminate this Agreement and the Employee’s employment, at any time, upon the occurrence of the Employee’s death or Disability. If the Employee’s employment is terminated during the Term on account of the Employee’s death or Disability, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts through the date of such termination due to death or Disability. The term “Disability” as used in this Agreement shall mean that the Employee is entitled to receive long-term disability benefits under the Company’s long-term disability plan or, if there is no such plan, the Employee has incurred (1) a permanent and total disability within the meaning of Section 22(e)(3) of the Internal Revenue Code or any successor provision, or (2) a physical or mental disability that renders the Employee unable to perform the required functions of the Employee’s position, duties, and responsibilities under this Agreement, and which, in either case, has existed for at least ninety (90) consecutive days or one hundred and twenty (120) non-consecutive days during any three hundred sixty-five (365) day period as determined by the Company Board and Parent Board.

 

5.6. COBRA Coverage. Solely in the event of a termination by the Company without Cause pursuant to Section 5.2 and subject to the execution of the Release Agreement by the Employee and the Release Agreement becoming effective and fully irrevocable pursuant to Section 5.2(c), if the Employee timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse the Employee for the difference between the monthly COBRA premium actually paid by the Employee for the Employee and the Employee’s dependents and the monthly premium amount paid by similarly-situated active executives of the Company during the same period. Such reimbursement shall be paid to the Employee in the month immediately following the month in which the Employee timely remits the premium payment and the Employee provides proof of payment of such premium. The Employee shall be eligible to receive such reimbursement until the earliest of: (i) the end of the Severance Period; (ii) the date the Employee is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Employee becomes eligible to receive substantially similar coverage from another employer or other source. Notwithstanding the foregoing, the Company may, in its sole discretion, elect to provide a cash payment to the Employee in lieu of providing reimbursement as described herein in an amount reasonably determined by the Company to be equivalent to the amount of COBRA premium reimbursements that would otherwise be due by the Company under this Section 5.6 for the Severance Period, without regard to any effect of taxation of such cash payment to the Employee. If the Employee obtains other employment prior to the end of the Severance Period which offers any of such insurance coverage, the Company’s obligation to reimburse the Employee for COBRA payments will be immediately terminated. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company regarding subsequent benefit eligibility.

 

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5.7. Incentive Compensation. In the event of any termination of employment, any equity-based or cash incentive awards shall be treated as provided in the applicable plan document.

 

6. Confidentiality, Inventions, and Non-Solicitation Agreement. 

Prior to the Effective Time, the Employee shall enter into with the Company a Confidentiality, Inventions, and Non-Solicitation Agreement in substantially the form set forth under Exhibit A hereto (the “CIIAA”). Notwithstanding anything to the contrary herein, this Agreement shall have no force or effect and be null and void ab initio if the Employee fails to execute the CIIAA prior to the Effective Time.

 

7. Non-Competition, Non-Solicitation, and Non-Disparagement.

 

7.1. Definitions. As used in this Agreement, the following terms shall have the following specified meanings:

 

(a) “Business” means any business engaged in the manufacture, import, distribution and/or sale or resale of electric commercial delivery vehicles. A Business includes any business pursuing research and development, products or services in competition with the products or services which are, during and at the end of the Term, either (a) produced, marketed, distributed, sourced or otherwise commercially exploited by the Company or (b) in actual or demonstrably anticipated research or development by the Company.

 

(b) “Competing Business” means any Person, business, or subdivision of a business engaged in Business in competition with the Company or, to the Employee’s actual knowledge, any such Persons who are actively pursuing or otherwise affirmatively planning to engage in competition with the Company.

 

(c) “Customer” means a Person to whom the Company provided products or services for compensation at any time during the Term and with whom the Employee had direct contact, or provided services to, on behalf of the Company (or, if following the Employee’s last day of employment with the Company (such day, the “Termination Date”), then as of such Termination Date or at any time during the twelve (12) month period immediately preceding the Termination Date).

 

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(d) “Person” shall be construed broadly to mean an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization, an educational entity, a governmental entity or any department, agency, or political subdivision thereof, and any other entity.

 

(e) “Prospective Customer” shall mean a Person with whom the Company has had any negotiations or material discussions regarding the possible supply of products or services for compensation and with whom the Employee had direct contact, or provided services to on behalf of the Company (or, if following the Termination Date, then as of such Termination Date or at any time during the 12-month period immediately preceding the Termination Date).

 

(f) “Restricted Period” means the Term and for a period of twelve (12) months after the Termination Date.

 

(g) “Restricted Territory” means the United States.

 

7.2. Non-Competition. During the Restricted Period, the Employee shall not (and shall cause the Employee’s controlled affiliates not to) directly or indirectly (including through the Employee’s respective controlled affiliates or otherwise, including as a director, officer, equityholder, partner, consultant, employer, employee, proprietor, principal, agent, manager, franchisee, franchisor, distributor, advisor, consultant, lender, representative or otherwise), either for the Employee or for any other Person in the Restricted Territory, (a) perform duties, carry out activities, provide services, or otherwise engage in, for the Employee’s own benefit or for the benefit of any third party, any Competing Business in the Restricted Territory (i) in a position or capacity that is the same or substantially similar to the position the Employee held at, or the capacity in which the Employee performed duties for, the Company, or (ii) in a position or capacity in which the Employee is likely to use or disclose the Company’s confidential information or trade secrets to or on behalf of such Competing Business, (b) otherwise own, manage, operate, control, advise, or participate in the ownership, management, operation or control of, or be connected in any manner with (where such connection is competitive with the business of the Company), any Competing Business, or (c) acquire (through merger, stock purchase or purchase of all or substantially all of the assets or otherwise) the ownership of, or any equity interest in, any Person if the annual revenues of such Person from a Competing Business (or Competing Businesses) are more than five percent (5%), individually or in the aggregate, of such Person’s or entity’s total consolidated annual sales (based on the most recent full fiscal year revenues of such person or entity). Notwithstanding the foregoing, if the Employee holds a passive investment representing no more than two percent (2%) of the issued and outstanding shares in a company listed on a recognized exchange that operates, in whole or in part, directly or indirectly as a Competing Business, this shall not constitute a breach of this Section 7.2.

 

7.3. Non-Solicitation of Customers/Clients. The Employee shall not (and shall cause the Employee’s controlled affiliates not to), during the Restricted Period, directly or indirectly solicit, divert, or interfere with the Company’s relationship with, any of the Company’s Customers or Prospective Customers that the Employee had direct contact with, provided services to, or had confidential information about, in order to offer them goods and/or services competitive with those provided by the Company, or influence any Person to end or to curtail any business they are currently, or have been, transacting with the Company or otherwise negatively reduce his/her/its business relationship with the Company.

 

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7.4. Non-Solicitation of Company Employees. The Employee recognizes that the Employee possesses confidential information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and interpersonal relationships with Customers and Prospective Customers of the Company. The Employee recognizes that the information the Employee possesses about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining Customers, and will be acquired by the Employee because of the Employee’s business position with the Company. The Employee agrees that, during the Restricted Period, the Employee will not (and will cause the Employee’s controlled affiliates not to) (i) recruit or employ or otherwise solicit, entice, or induce any Person that is or has been an employee, officer or consultant of the Company in the twelve (12) months immediately prior to such action (or, if following the Termination Date, then as of such Termination Date and at any time during the twelve (12) months immediately preceding the Employee’s Termination Date) to become employed by, engaged by, or establish a business relationship with any Person other than the Company or its affiliated or related companies, or (ii) approach any such employee, consultant or officer for such purpose or authorize or participate in the taking of such actions by any other Person, or assist or participate with any such Person in taking such action. The restriction set forth in this paragraph does not apply to a general employment solicitation to the public that is not directed towards one of the Company’s employees or consultants.

 

7.5. Non-Disparagement. The Employee shall not (and shall cause the Employee’s controlled affiliates not to) during the Term and at any time thereafter make, publish, encourage or support, any false, misleading or disparaging written, oral or electronic statements about the Company or any of its affiliates, including the Company’s or its applicable affiliate’s (i) predecessors, members, present or former directors, managers, employees, consultants, officers, partners, attorneys or other representatives, individually and in their official capacities, or (ii) products, services, practices or operations. However, nothing in this Agreement shall prevent the Employee from testifying truthfully under oath if compelled by law to do so in a deposition, lawsuit, or similar legal or dispute resolution proceeding; making or publishing any such statements the Employee or the Employee’s controlled affiliate, as applicable, reasonably believes in good faith to be necessary in responding to or initiating a bona fide legal claim involving the Employee’s or the Employee’s controlled affiliate, as applicable; filing a complaint, participating in an investigation, or otherwise cooperating with any federal, state, or local fair employment agency or other government or law enforcement agency.

 

7.6. Performance of Duties Not Affected. For the avoidance of doubt, this Agreement shall not restrict the Employee from performing his duties as an officer, director, or employee of the Company or any of its affiliates.

 

8. Miscellaneous Provisions Governing Restrictive Covenants.

 

8.1. Reasonableness of Restrictions and Covenants. The Employee hereby confirms that the Employee was informed of the time, territory, scope and other essential requirements of the restrictions set forth in Section 7 of this Agreement when the Employee agreed to become employed with the Company under the terms set forth in this Agreement and the Employee acknowledges that the Company would not have entered into this Agreement had the Employee not agreed to the restrictions set forth in Section 7 of the Agreement. The Employee further acknowledges that the Employee has received sufficient and valuable consideration for the Employee’s agreement to such restrictions. The Employee also agrees that the covenants and restrictions contained in this Agreement are reasonable and valid and hereby agrees that the Company would suffer irreparable injury in the event of any breach by the Employee of the Employee’s obligations under any such covenant or restriction. Accordingly, the Employee hereby agrees that damages would be an inadequate remedy at law in connection with any such breach and that the Company shall therefore be entitled, in addition to any other right or remedy which it may have at law, in equity or otherwise, to temporary and permanent injunctive relief enjoining and restraining the Employee from any such breach. The Employee further consents and stipulates to the entry of such injunctive relief without the need to post any bond or other security.

 

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8.2. Survival. The provisions of Sections 7, 8, 9, 10.2 and 11 of this Agreement shall remain in full force and effect notwithstanding the termination of the Employee’s employment and regardless of the circumstances that result in such termination. This provision shall not be construed to limit the survival of any other provisions that also survive the termination of this Agreement by the express or implied terms of such provisions.

 

8.3. Enforcement, Severability, and Modification. If, at the time of enforcement of any provision of Section 7 of this Agreement, a court or arbitrator holds that the restrictions stated in Section 7 of this Agreement are unreasonable or unenforceable under the circumstances then existing, the Parties agree that (i) the court/arbitrator should first reform the provisions of Section 7 prior to severing any provisions, and if the court/arbitrator will not or cannot reform such provisions, then the court/arbitrator may sever provisions as described in this paragraph, (ii) the provisions of Section 7 of this Agreement shall be severable in the event that any of such provisions are, for any reason whatsoever, deemed invalid, void or otherwise unenforceable, (iii) such invalid, void or otherwise unenforceable provisions in Section 7 of this Agreement shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (iv) the remaining provisions in Section 7 of this Agreement shall remain enforceable to the fullest extent permitted by law.

 

9. Post-Termination Cooperation

 

For a period of two (2) years following the Termination Date, the Employee agrees to be reasonably available to assist and cooperate with the Company in connection with any litigation, administrative proceedings, audits or other governmental or regulatory inquiries. Such assistance and cooperation will, when under the control of the Company, be at a mutually convenient time and location and may include, without limitation, appearing for meetings, consultations, depositions, hearings, or trials. The Company will reimburse the Employee for reasonable, pre-approved travel, lodging and meal expenses incurred in connection with providing such assistance and cooperation.

 

10. Disclosures

 

10.1. Upon Employment. In entering into this Agreement, the Employee represents and warrants that the Employee does not have any obligation, whether express or implied, to any third party that would interfere with, hamper, or limit the Employee’s ability to provide any employment services or to otherwise comply with the Employee’s obligations under this Agreement. The Employee explicitly represents and warrants to the Company that the Employee is not a party to any confidentiality, non-competition, non-solicitation or similar agreements with any third party, or to any agreement the terms of which could prohibit the Employee from performing the Employee’s employment duties for the Company, or to any agreement which could be breached by the Employee’s entry into this Agreement and/or performance of the Employee’s employment duties for the Company.

 

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10.2. Upon Termination of Employment. For any period of time when the restrictions referenced in Section 7 of this Agreement apply, the Employee shall promptly notify any subsequent employer of the terms of this Agreement to ensure that this Agreement is not breached by the Employee.

 

11. General Provisions

 

11.1. Clawback Provisions. Any amounts payable under this Agreement are subject to any policy (whether in existence as of the Commencement Date or later adopted or modified) established by the Company providing for clawback or recovery of amounts that were paid to the Employee. The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.

 

11.2. Resignation of All Other Positions. Upon termination of the Employee’s employment hereunder for any reason, the Employee agrees to resign and shall be deemed to have resigned from all positions that the Employee holds as an officer of the Company or any of its affiliates or as a member of the Company Board and Parent Board (or a committee thereof) of the Company or any of its affiliates.

 

11.3. Assignment and Successors. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Employee, the Company, and their respective successors and assigns, except that the Employee may not assign any of the Employee’s duties hereunder and the Employee may not assign any of the Employee’s rights hereunder without the prior written consent of the Company. This Agreement is personal to the Employee and shall not be assigned by the Employee. Any purported assignment by the Employee shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any entity which controls, is controlled by, or is under common control with the Company, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and the permitted successors and assigns.

 

11.4. Notices. All notices, requests, demands, or other communications under this Agreement shall be in writing and shall be deemed to be duly given by the Employee to the Company only if provided to the Company, Attention: General Counsel, and shall be deemed to be duly given by the Company to the Employee if provided by mail, email, mail, or nationally or internationally recognized carrier to the Employee at the Employee’s address as shown in the Company’s records.

 

11.5. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any provision or portion of this Agreement shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be ineffective only to the extent of such illegality, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. If any court of competent jurisdiction should deem any covenant herein to be invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

 

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11.6. Code Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (“Section 409A”) or an exemption from Section 409A. The Company shall undertake to administer, interpret, and construe this Agreement in a manner that does not result in the imposition on the Employee of any additional tax, penalty, or interest under Section 409A, provided, however, that the Employee understands and agrees that the Company shall not be held liable or responsible for any taxes, penalties, interests or other expenses incurred by the Employee on account of non-compliance with Section 409A.

 

(a) For purposes of Section 409A, each installment payment or payroll period amount provided under this Agreement shall be treated as a separate payment.

 

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A.

 

(c) If the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A payable on account of a “separation from service,” and that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), such payment or benefit shall not be made or provided until the date which is the earlier of (i) the first regular payroll date following the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, or (ii) the date of the Employee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(d) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, all such payments shall be made on or before the last day of calendar year following the calendar year in which the expense occurred.

 

11.7. Governing Law. The Parties agree that this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Michigan without giving effect to any conflict of law provisions.

 

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11.8. Mandatory Arbitration; Subsequent Court Jurisdiction. The Parties agree that any dispute over this Agreement will be submitted to and settled exclusively by binding arbitration, in accordance with the provisions of this section, subject only to any applicable requirement of law that the Parties engage in a preliminary non-binding mediation or arbitration. Binding arbitration shall be conducted in accordance with the Judicial Arbitration and Mediation Service Streamlined Rules & Procedures (the “JAMS Rules”). Arbitration shall be held in Oakland County, Michigan, before an arbitrator selected pursuant to the JAMS Rules who will have no personal or pecuniary interest, either directly or indirectly, from any business or family relationship with either of the Parties. All decisions of the arbitrator will be final, binding, and conclusive on the Parties.

 

The Parties will equally share the costs of the arbitrator and the arbitration fee (if any). Each Party will bear that Party’s own attorneys’ fees and costs, and the prevailing Party will not be entitled to reimbursement by the other Party of any of its fees or costs incurred in connection with the arbitration hereunder, regardless of any rule to the contrary in the applicable arbitration rules. Either Party may seek confirmation of the arbitration award in the federal or state courts with jurisdiction over Auburn Hills, Michigan and such court shall be the sole, exclusive, and mandatory venue and jurisdiction for any disputes between the Parties arising from or relating to this Agreement. If any action is filed, by any party, relating to a breach of this Agreement and/or enforcement of this Agreement, each Party hereby consents to the exclusive jurisdiction and venue of the federal and state courts with jurisdiction over Auburn Hills, Michigan in any claim or action arising hereunder and waives any claim that such court is an inconvenient forum.

 

11.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY TO THIS AGREEMENT CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; ACKNOWLEDGES THAT IT AND THE OTHER PARTIES TO THIS AGREEMENT HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION; AND AGREES THAT IF SUCH PARTY SEEKS A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY OTHER PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

11.10. Interpretation. The headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and not strictly for or against any Party. In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

11.11. Non-Waiver of Rights and Breaches. No failure or delay of any Party in the exercise of any right given to such Party under this Agreement shall constitute a waiver unless the time specified for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver by a Party of any default of any other Party shall not be deemed to be a waiver of any subsequent default or other default by such Party.

 

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11.12. Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder shall be subject to withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes as permitted by law, provided it is satisfied in its sole discretion that all requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

 

11.13. Representation by Counsel; No Strict Construction. Each Party acknowledges that such Party has been represented by independent counsel of such Party’s choice with respect to this Agreement, including throughout all negotiations that have preceded the execution of this Agreement and that each Party has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted this Agreement is of no application and is hereby expressly waived by the Parties.

 

11.14. Attorneys’ Fees. Each Party shall bear its own attorneys’ fees and other reasonably related costs and expenses (“Fees”) associated with any claim asserted under this Agreement; provided, however, that if either Party asserts a claim which is finally determined by a court of competent jurisdiction to have been asserted frivolously or in bad faith, the Party against whom such claim was brought shall be entitled to recovery of its Fees from the Party bringing such claim.

 

11.15. Headings. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

11.16. Integration, Amendment and Waiver. This Agreement and the CIIAA constitute the entire understanding and agreement between the Company and the Employee, superseding all prior arrangements, understandings, and agreements, oral or otherwise, among the Parties with respect to the subject matter hereof. All negotiations by the Parties concerning the subject matter hereof are merged into this Agreement and the CIIAA, and there are no representations, warranties, covenants, understandings or agreements, oral or otherwise, by the Parties in relation to this Agreement or the CIIAA other than those incorporated herein or in the CIIAA. No supplement, modification, waiver, or amendment of this Agreement or the CIIAA shall be binding unless executed in writing and signed by both Parties.

 

11.17. Counterparts; Original. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. Any facsimile, photocopy, pdf copy, or electronic copy of any Party’s executed counterpart of this Agreement will be deemed to be an executed original thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to be duly executed as of the date first written above.

 

EMPLOYEE:   THE COMPANY:
       
  ELECTRIC LAST MILE, INC.
                                      
/s/ Jason Luo   By: /s/ Benjamin Wu
Jason Luo   Name:   Benjamin Wu
    Title: Secretary

 

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Exhibit A to Employment Agreement
Confidentiality, Inventions, and Non-Solicitation Agreement

 

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CONFIDENTIALITY, INVENTIONS, AND

NON-SOLICITATION AGREEMENT

 

This Confidentiality, Inventions and Non-Solicitation Agreement (this “Agreement”) is entered into by and between Electric Last Mile, Inc. and its successors and assigns (the “Company”), a Delaware corporation and Jason Luo (“Employee”).

 

RECITALS

 

WHEREAS, the Company has offered to employ or to continue to employ Employee in a position of trust, in which Employee acknowledges Employee will obtain new or updated Confidential Information (as defined below) about the business of the Company and the Company Affiliates (as defined below) to or for whom Employee provides services;

 

WHEREAS, in the course of Employee’s employment with the Company, Employee may Create Inventions (as such terms are defined below);

 

WHEREAS, the Company and the Company Affiliates collaborate in the course of business such that Employee has obtained, or will obtain, Confidential Information about both the Company and the Company Affiliates; and

 

WHEREAS, the Company and Employee agree that some of the purposes of this Agreement are to memorialize the parties’ respective ownership and rights to Inventions (as defined below) and to prevent irreparable harm to the Company and the Company Affiliates and that any restrictions set forth herein are reasonable and necessary to protect Confidential Information, goodwill, existing business relationships and other legitimate business interests.

 

NOW, THEREFORE, in consideration of Employee’s employment or continued employment and the Company’s entrusting to Employee confidential information relating to the Company Affiliates’ business, and for the mutual promises and covenants in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby mutually agree as follows:

 

1. Definitions.

 

a. “Company Affiliates” means (i) all Persons controlling, controlled by or under common control with, the Company (including, without limitation, its parent, brother-sister companies, other affiliates, subsidiaries, and joint ventures), (ii) all Persons in which the Company owns an equity interest and (iii) all predecessors, successors and assigns of those affiliates identified in (i) and (ii). As used in this definition, “control” (including, with correlative meanings, “controlling”, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies (whether through ownership of securities, partnership or other ownership interests, by contract or otherwise).

 

 

 

b. “Confidential Information” means any and all confidential, proprietary or trade secret information not generally known or available outside the Company and/or the Company Affiliates, and/or information entrusted to the Company and/or the Company Affiliates in confidence by third parties, in each case, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is Created by Employee. Confidential Information includes, without limitation, all Work Products (as defined below), technical data, trade secrets, know-how, improvements, research, product or service ideas or plans, software (whether in source code or object code), designs, developments, processes, formulas, techniques, biological materials, mask works, designs and drawings, hardware configuration information, information relating to existing or potential employees, consultants, clients, suppliers, vendors, or other service providers of the Company and the Company Affiliates (including, but not limited to, their names, contact information, jobs, compensation and expertise), information relating to suppliers and customers, information relating to stockholders or lenders, price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, financial statements, profit margins, sales information, historical financial data, budgets or other business information. Confidential Information also means all similar information disclosed to the Company by third parties, which is subject to confidentiality obligations. Confidential Information shall not include information that is generally available to and known by the public, provided that such disclosure to the public is through no direct or indirect fault of the Employee or Person(s) acting on the Employee’s behalf.

 

c. “Create” means make, create, author, discover, develop, invent, conceive, or reduce to practice.

 

d. “Inventions” means any and all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto, in each case, whether or not patentable, copyrightable or otherwise legally protectable, as well as any and all rights in and to patents, copyright, trademark, trade secret or other intellectual property rights (in the United States or elsewhere), including all pending and future applications and registrations therefor. This includes, but is not limited to, any new product, machine, article of manufacture, biological material, method, procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon.

 

e. “Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture, entity, association or other organization, whether or not a legal entity, or a governmental entity.

 

f. “Tangible Embodiments” means any and all tangible documents, materials, records, notebooks, tapes, disks, drives, software (whether in source code, object code or machine- readable copies), work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence, results or other embodiments.

 

 

 

g. “Work Product” means any and all Inventions that Employee, solely or jointly with others, Creates, in whole or in part, during the period of Employee’s employment or within one (1) year following termination of such employment, including those that relate to or result from the actual or anticipated business, work, research, or investigation of the Company or any of the Company Affiliates or which are suggested by, relate to, or result from any task assigned to or performed by Employee for the Company or any of the Company Affiliates.

 

2. Confidential Information.

 

a. Employee acknowledges that all Confidential Information constitutes a protectable business interest of the Company, and covenants and agrees that at all times during the period of Employee’s employment and thereafter, Employee agrees (i) to hold in strictest confidence the Confidential Information, (ii) not to, directly or indirectly, disclose, furnish, or make available to any Person any Confidential Information without prior written authorization from the Company, and (iii) not to use any Confidential Information except during the term of Employee’s employment in the course of performing Employee’s duties as an employee of the Company. Employee will abide by the Company’s policies and rules as may be established from time to time by it for the protection of its Confidential Information and will not make any copies of Confidential Information except as authorized by the Company. Employee agrees that in the course of employment with the Company, Employee will not bring to the Company’s offices nor use for the Company’s benefit, nor disclose, furnish or make available to the Company or any Company Affiliate, or induce the Company or any Company Affiliate to use, any confidential or proprietary information or Tangible Embodiments belonging to others. Employee’s obligations under this Section 2(a) with respect to particular Confidential Information will survive expiration or termination of this Agreement and Employee’s employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes publicly and widely known to the public other than as a result of any wrongful act of Employee or Employee’s breach of this Agreement (or a breach by those acting in concert with the Employee or on the Employee’s behalf) or wrongful act of any other Person who was under confidentiality obligations as to the item or items involved.

 

b. For clarity, Employee’s agreements in this Section 2 are intended to be for the benefit of the Company, the Company Affiliates, and any third party that has entrusted information or Tangible Embodiments to the Company or the Company Affiliates in confidence. This Agreement is intended to supplement, and not to supersede, any rights the Company or the Company Affiliates may have with respect to the protection of trade secrets or confidential or proprietary information.

 

c. Notwithstanding any other provision of this Agreement, an individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual (including Employee) who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with federal law protecting confidential disclosures of a trade secret to the government or in a court filing, 18 U.S.C. § 1833(b), or to create liability for disclosures of Confidential Information that are expressly allowed by 18 U.S.C. § 1833(b).

 

 

 

3. Return of Materials. Upon termination of employment with the Company or otherwise upon the Company’s request, and regardless of the reason for such termination, Employee agrees to promptly return to the Company or destroy all Tangible Embodiments of the foregoing in Employee’s possession, custody, or control that contain, summarize, abstract, or in any way reflect, relate to, or embody any Confidential Information or any other information concerning the Company, any of the Company Affiliates or any of its or their products, services or clients, whether prepared by the Employee or others. At the time Employee returns or destroys these materials (or otherwise upon the Company’s request), Employee will acknowledge to the Company, in writing and under oath, in the form attached as Exhibit A, that Employee has complied with the terms of this Section 3.

 

4. Work Product.

 

a. Employee agrees to promptly and fully disclose in writing to the Company all Work Product (including all original works of authorship and all work product relating thereto). This disclosure will include complete and accurate copies of all Tangible Embodiments of such Work Product.

 

b. Employee covenants and agrees that all Work Product and Tangible Embodiments are and shall be the sole and exclusive property of the Company. Employee acknowledges that all Work Product that are original works of authorship Created by Employee (solely or jointly) within the scope of Employee’s employment are “works made for hire” to the maximum extent permitted under applicable law and as that term is under the United States Copyright Act (17 U.S.C., et seq.). Without limiting the foregoing, Employee hereby agrees to hold in trust for the sole right and benefit of the Company and hereby assigns (and without limiting the foregoing, agrees in the future to assign) to the Company all of the entire worldwide right, title, and interest in and to all Work Product (and Tangible Embodiments thereof) throughout the world, without any requirement of further documentation or consideration, including, for clarity, any and all patent rights, copyrights, trademark rights, mask work rights, moral rights, sui generis database rights, and all other intellectual property rights therein or pertaining thereto and all rights to prosecute, enforce, and sue for past, present and future infringements, misappropriations or other violations thereof, throughout the universe in perpetuity or for the longest period permitted by law. Employee hereby waives and irrevocably quitclaims to the Company or its designee any and all claims, of any nature whatsoever, that Employee now has or may hereafter have for infringement of any and all Work Product and/or Tangible Embodiments and intellectual property rights related thereto.

 

 

 

c. At any time during or after Employee’s employment with the Company, at the request of the Company or any of the Company Affiliates, Employee agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company’s expense, in registering, recording, obtaining, maintaining, defending, perfecting, enforcing, and/or assigning any Work Product and Tangible Embodiments in any and all countries. In the event Employee refuses or fails to perform such acts, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and in Employee’s behalf and instead of Employee, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Employee; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest.

 

d. To the extent that such an assignment of any Work Product and/or Tangible Embodiment is not permitted under applicable law, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive (even as to Employee), royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Work Product or Tangible Embodiment for any commercial or internal business purposes and all other purposes. To the extent not assignable, Employee hereby irrevocably waives, to the extent permitted by applicable law, any and all claims Employee may now or hereafter have in any jurisdiction to any so-called “moral rights” in connection with the Work Product and acknowledges and agrees that the Company may use, exploit, distribute, reproduce, advertise, promote, publicize, alter, modify or edit the Work Product or combine the Work Product with other works, in the Company’s sole discretion, in any format or medium hereafter devised.

 

e. Without limiting the generality of any other provision of this Section 4, Employee hereby authorizes the Company and each of the Company Affiliates to make any desired changes to any part of any Work Product, to combine it with other materials in any manner desired, and to withhold Employee’s identity in connection with any distribution or use thereof alone or in combination with other materials.

 

f. The obligations of Employee set forth in this Section 4 (including, but not limited to, the assignment obligations) will continue beyond the termination of Employee’s employment with respect to Work Product Created by Employee alone or jointly with others during Employee’s employment with the Company and for one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Employee and Employee’s executors, administrators and other representatives.

 

 

 

g. Employee agrees that Employee will register all domains, usernames, handles, social media accounts and similar online accounts which Employee registers on behalf of the Company and which relate to the Company or its intellectual property rights (the “Online Accounts”) in the name of the Company, except to the extent that such requests by the Company are prohibited by law. If any Online Account that is not (or by the terms of such Online Account cannot be) registered in the name of the Company is registered in Employee’s name or under Employee’s control, Employee agrees to assign ownership and control of such Online Account to any Person designated by the Company upon the Company’s request. Employee agrees to use any Online Account, whether registered in Employee’s name or the name of the Company, in compliance with any applicable policies or guidelines of the Company.

 

h. Notwithstanding anything to the contrary herein, this Agreement does not apply to any Invention which qualifies as a non-assignable Invention under the provisions of California Labor Code Section 2870 (“Section 2870”), a copy of which is attached as Exhibit B. Employee will advise the Company promptly in writing of any Inventions that Employee believes fully qualify for protection under Section 2870; and Employee will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without Employee’s consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under the provisions of Section 2870. Employee will preserve the confidentiality of any Invention that does not fully qualify for protection under Section 2870. BY SIGNING THIS AGREEMENT, EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED EXHIBIT B, WHICH SHALL CONSTITUTE WRITTEN NOTICE OF THE PROVISIONS OF SECTION 2870.

 

5. Excluded IP.

 

a. As a matter of record, Employee has set forth on Exhibit C hereto a list with non-confidential descriptions of any and all proprietary information, works of authorship, ideas, reports, creative works, intellectual property or other Inventions which have been made by Employee prior to employment with the Company and which are excluded from the scope of this Agreement (collectively, the “Excluded IP”). Employee hereby represents and warrants that such list is accurate and complete. If no list is attached (or if the list is empty), then Employee hereby represents and warrants that there is no Excluded IP. Employee will not assert any right, title or interest in or to any Work Product nor claim that Employee Created any Work Product before Employee’s employment with the Company unless Employee has specifically identified that Invention as an Excluded IP on the attached Exhibit C prior to the execution of this Agreement.

 

b. If in the course of Employee’s employment, Employee uses or incorporates into any Work Product or Tangible Embodiment any Inventions (including any Excluded IP) in which Employee or a third Person has any interest and which is not covered by Section 4(b) hereof, Employee will promptly so inform the Company. Whether or not Employee gives such notice, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive, royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Invention (including such Excluded IP) for any commercial or internal business purposes and all other purposes.

 

 

 

6. Representations and Warranties.

 

a. No Conflicts. Employee hereby represents and warrants that Employee is not subject to any obligation to any third Person, including any former employer, that would be inconsistent with any provision of this Agreement, including with respect to any Excluded IP, and that Employee has the right to grant the license and rights granted in Section 5(b).

 

b. No Infringement. Employee hereby represents and warrants that all Excluded IP licensed to the Employer pursuant to Section 5(b) do not (and all Work Product will not) infringe, misappropriate, dilute, or otherwise violate any third Person’s patents, copyrights, trademarks, trade secrets, or other intellectual property rights or other rights.

 

7. Equitable Remedies. Employee acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of the Company’s and the Company Affiliates’ business interests, that irreparable injury will result to the Company and the Company Affiliates if Employee breaches any of the terms of said covenants, and that in the event of Employee’s actual or threatened breach of any such covenants, the Company and the Company Affiliates will have no adequate remedy at law. Employee accordingly agrees that, in the event of any actual or threatened breach by Employee of any of said covenants, the Company or any of the Company Affiliates, as applicable, will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 7 will be construed as prohibiting the Company or any of the Company Affiliates from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.

 

8. No Right to Employment. No provision of this Agreement shall give Employee any right to continue in the employ of the Company or any of the Company Affiliates, create any inference as to the length of employment of Employee, affect the right of the Company or the Company Affiliates to terminate the employment of Employee, with or without cause, or give Employee any right to participate in any employee welfare or benefit plan or other program of the Company or any of the Company Affiliates. Notwithstanding the foregoing, in the event Employee has executed a written employment agreement with the Company, in the event of any direct and irresolvable conflict between the terms of this Agreement and such employment agreement, the terms of this Agreement shall control with respect to all Inventions and Confidential Information, but otherwise the terms of the employment agreement shall control.

 

 

 

9. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

10. Severability. Employee acknowledges that the agreements and covenants contained in this Agreement are essential to protect the Company and the Company Affiliates and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy or any of the covenants set forth in this Agreement not fully enforceable, the other provisions of this Agreement will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent.

 

11. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) five (5) days after sent by certified mail, return receipt requested; or (c) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses set forth below:

 

If to the Company: the address of the Company’s current headquarters, Attention: General Counsel.

 

If to Employee: to the last-known address of the Employee as shown in the Company’s records.

 

Each party will be entitled to provide a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 11.

 

12. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement.

 

13. Governing Law. This Agreement has been executed in the State of Michigan, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. The parties hereby consent to the exclusive jurisdiction of the federal or state courts with jurisdiction over Auburn Hills, Michigan in any action or claim arising out of, under or in connection with this Agreement, or the relationship between the parties hereto.

 

 

 

14. Binding Effect. This Agreement will be binding upon and inure to the benefit of Employee, the Company, the Company Affiliates, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement, without the Employee’s prior consent. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void ab initio.

 

15. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person.

 

16. Waiver of Jury. THE COMPANY AND THE EMPLOYEE KNOWINGLY AND VOLUNTARILY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES HERETO.

 

17. Voluntary Execution. Employee acknowledges and agrees that Employee has carefully read all of the provisions of this Agreement, that Employee understands and has voluntarily accepted such provisions, and that Employee will fully and faithfully comply with such provisions.

 

18. Advice of Counsel. EMPLOYEE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, EMPLOYEE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND EMPLOYEE HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart’s signature page of this Agreement by facsimile, email in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document has the same effect as delivery of an executed original of this Agreement

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Employee has signed this Agreement, as of the date written below.

 

  EMPLOYEE
   
   
  Name:  
   
  Date:  
  State of Residence:
   
  COMPANY
   
   
  Electric Last Mile, Inc.
   
  Name:  
   
  Date:  

 

 

 

 

EXHIBIT A

 

My engagement by Electric Last Mile, Inc., (the “Company”) is now terminated. I have reviewed my Confidentiality, Inventions and Non-Solicitation Agreement with the Company, dated ________________ ___, 20__ (the “Agreement”), and I hereby swear, under penalty of perjury, that:

 

● I have complied and will continue to comply with all of the provisions of the Agreement.

 

● I understand that all of the Company’s materials (including without limitation, written or printed documents, email and computer disks or tapes, whether machine or user readable, computer memory, and other information reduced to any recorded format or medium), whether or not they contain Confidential Information (as that phrase is defined in the Agreement), are and remain the property of the Company. I have delivered to authorized Company personnel, or have destroyed, all of those documents and all other Company materials in my possession.

 

● Any breach of my declarations hereunder would cause irreparable injury to the Company for which monetary damages would not be an adequate remedy and, therefore, will entitle the Company to injunctive relief (including specific performance). The rights and remedies provided to the Company hereunder are cumulative and in addition to any other rights and remedies available to the Company at law or in equity. I hereby acknowledge that the Company shall be entitled to recover its reasonable attorneys’ fees and litigation expenses incurred in any action to enforce its rights in the event of a breach of my declarations hereunder.

 

  Employee:
     
Date:      
     
  Name:
     
     

 

 

 

 

EXHIBIT B

 

California Labor Code Section 2870

 

Invention On Own Time – Exemption From Agreement

 

“(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

 

 

 

 

EXHIBIT C

 

I hereby represent and warrant that I have disclosed on this Exhibit all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto and other intellectual property (including all Excluded IP) that I have made, created, authored, discovered, developed, invented, conceived, or reduced to practice, prior to employment with the Company. I agree that any present or future patent, idea, copyright, writing, computer program, or other Invention that is not listed on this Exhibit is a Work Product is subject to (and assigned by) the assignment under the attached Confidentiality, Inventions and Non-Solicitation Agreement to which this is an Exhibit. I further agree that under no circumstances will I incorporate in any work that I perform for the Company any of the Excluded IP that I have disclosed on this Exhibit without the prior written consent of the Company.

 

Brief Description of Excluded IP (e.g., inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto inventions, proprietary information, works of authorship, computer programs, know-how, trade secrets, ideas, reports, creative works, and other intellectual property)

Right, Title or Interest and Date Acquired
   
   
   
   

 

    Employee:
     
Date:      

 

  Name:

 

 

 

 

 

 

Exhibit 10.12

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is agreed upon and entered into this 10th day of December, 2020, by and between James Taylor (the “Employee”) and Electric Last Mile, Inc., a Delaware corporation, together with its affiliates, successors and assigns (the “Company”) (each individually a “Party” and collectively the “Parties”).

 

RECITALS

 

A. Pursuant to that Agreement and Plan of Merger by and among Forum Merger III Corporation, ELMS Merger Corp. (the “Merger Sub”), the Company, and Jason Luo, in the capacity as the initial Stockholder Representative thereto, dated on or about December 10, 2020 (the “Merger Agreement”), the Company intends to merge with and into the Merger Sub with the Company surviving the merger (the “Merger”) upon the Effective Time (as such term in defined the Merger Agreement); and

 

B. The Company desires to employ the Employee, and the Employee desires to be employed by the Company and any publicly-traded parent entity of the Company, to the extent applicable (the “Parent”), to be effective as of the first business day immediately following the Effective Time.

 

AGREEMENTS

 

In consideration of the mutual covenants and agreements set forth in this Agreement and for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties, each intending to be legally bound hereby, agree as follows:

 

1. Employment

 

1.1. Duties. The Employee shall serve as Chief Executive Officer of the Company and any Parent, as applicable in its discretion, and will, under the direction of the Board of Directors of the Company (the “Company Board”) and any Board of Directors of the Parent (the “Parent Board”), faithfully and to the best of the Employee’s ability perform the duties assigned by the Company Board and any Parent Board in its discretion from time to time. The Employee shall, if requested, also serve as a member of the Company Board and Parent Board or as a director or officer of any affiliate of the Company for no additional compensation.

 

1.2. Best Efforts. The Employee agrees to devote the Employee’s entire business time, and best effort, skill and attention to the discharge of the Employee’s duties while employed by the Company.

 

1.3. Duty to Act in the Best Interest of the Company. The Employee shall not, directly or indirectly, act in any manner which may damage the business of the Company or which would adversely affect the goodwill, reputation or business relations of the Company with its customers, the public generally, or with any of its other employees. The Employee shall act in the best interest of the Company at all times. The Employee will not engage in any other business, profession, or occupation for compensation or otherwise that would conflict or interfere with the performance of the Employee’s services under the Agreement either directly or indirectly without the prior written consent of the Company Board and any Parent Board.

 

 

 

 

1.4. Place of Performance; Required Travel. The Employee’s principal place of employment shall be the Company’s office as of the Effective Time that is located in Auburn Hills, MI or the metropolitan area of Detroit, MI, provided that the Employee will be required to travel as needed on Company business during the Term (as such term is defined in Section 2.1 below). Required travel is anticipated to occupy up to 40% of Employee’s working time on average but may occupy more or less time depending on business needs.

 

2. Term of Employment

 

2.1. Term. The Employee’s employment with the Company shall commence on the day that is the first business day immediately following the Effective Time of the Merger (the “Commencement Date”) and shall, subject to Section 2.2, continue until the Company or the Employee terminate the Agreement in accordance with the terms herein (the “Term”).

 

2.2. “At Will” Employment Status. Notwithstanding any term or provision of this Agreement, at all times the Employee shall be employed by Company on an “at will” basis, subject to termination in accordance with Section 5.

 

3. Base Compensation and Incentive Compensation.

 

3.1. Base Compensation. During the Term, the Company shall pay to the Employee an annual base salary in the amount of $480,000.00 (the “Base Compensation”). The Base Compensation shall be paid in periodic installments in accordance with the Company’s normal payroll procedures, subject to all applicable taxes and withholdings. The Base Compensation may be increased from time-to-time by the Company in accordance with the regular compensation review practices of the Company Board and any Parent Board or the Compensation Committee of the Company Board and any Parent Board (the “Compensation Committee”), as applicable, and may be decreased from time-to-time by the Company, but only to the extent such decrease is part of an across-the-board salary reduction that applies in a consistent manner to similarly-situated executives of the Company.

 

3.2. Annual Bonus. The Employee shall be eligible to participate in a Company annual cash incentive plan, as established by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time for similarly-situated executives of the Company, and through which the Company awards performance-based cash bonuses on an annual basis, subject to the Company achieving performance targets as approved by the independent directors on the Company Board and Parent Board or by the Compensation Committee. The Employee shall be eligible to participate in any such plan at a target bonus level as determined by the Compensation Committee from time to time, but such target bonus level shall be no less than 100% of the Employee’s Base Compensation (as then in effect from time to time). The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and the decision to provide any bonus opportunity and the amount and terms of any annual bonus shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee. The Company’s payment of any such bonus pursuant to such plan to the Employee shall be subject to the Employee’s employment with the Company on the applicable bonus payment date.

 

2

 

 

3.3. Long-Term Incentive Compensation/Equity Awards. The Employee shall be eligible to participate in a Company long-term incentive compensation plan, through which the Company grants equity awards to its key employees, pursuant to the separate terms and conditions of such plan. The Employee shall be eligible to participate in any such plan at a target award level as determined by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time. The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and any applicable award agreements, and the decision to provide any award and the amount and terms of any award shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee.

 

4. Benefits.

 

4.1. Employee Benefits. During the Term, the Employee shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time to the extent consistent with applicable law and the terms of the applicable benefit plan, practice or program. Notwithstanding anything otherwise provided under this Agreement, nothing contained herein shall obligate the Company to continue or maintain any particular benefit plan or program on an ongoing basis and the Company reserves the right to amend, establish or terminate any benefit plan, practice or program at any time in its sole discretion.

 

4.2. Paid Time Off. During the Term, the Employee will be entitled to paid time off on a substantially-similar basis as other similarly-situated executives of the Company in accordance with the Company’s policies as such policies may exist from time to time.

 

4.3. Business Expenses. The Employee shall be entitled to reimbursement for reasonable and necessary out-of-pocket business expenses incurred by the Employee in connection with the performance of the Employee’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures (including the requirement to provide appropriate documentation of such expenses), as in effect from time to time.

 

5. Termination of Employment

 

5.1. Termination for Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment with the Company at any time for any of the following causes (each a “Cause”):

 

(a) Any act of fraud, dishonesty, gross negligence, misrepresentation, or embezzlement, misappropriation, or conversion of assets of the Company or any of its affiliates (or attempt to do any of the foregoing);

 

(b) Subject to any protections set forth under applicable laws, commission of, indictment for, conviction of, pleading guilty or nolo contendere to, or engaging in any crime that constitutes a felony or any crime or other act involving fraud, theft, embezzlement, or moral turpitude;

 

3

 

 

(c) Subject to any protections set forth under applicable laws, commission of, conviction of, pleading guilty or nolo contendere to, or engaging in any crime or other act that violates any other law, rule, or regulation that the Company Board and Parent Board reasonably determines is job-related and/or is likely to have an adverse impact on the performance of the Employee’s duties under this Agreement;

 

(d) Willful or material violation of any federal, state, or foreign securities laws;

 

(e) Conduct or omission which the Company Board and Parent Board reasonably determines is or is reasonably likely to be detrimental to the reputation, goodwill, public image, or business operations of the Company;

 

(f)   Continued failure by the Employee to perform the Employee’s duties or responsibilities to the Company or its affiliates (other than absence due to bona fide illness or Disability as defined herein);

 

(g) The Employee’s failure or refusal to comply with the lawful directions of the Company Board and Parent Board;

 

(h) Making of threats or engaging in acts of violence in the workplace;

 

(i) Engaging in sexual, racial, or other forms of harassment or discrimination in violation of the law or Company policies;

 

(j) Breach of the Employee’s fiduciary duties or confidentiality obligations or engaging in any other act of material dishonesty or disloyalty toward the Company;

 

(k) Violating any of the Company’s written policies or codes of conduct including, but not limited to, written policies related to equal employment opportunity, performance of illegal or unethical activities, and ethical misconduct;

 

(l) Repeatedly reporting to work under the influence of alcohol or drugs in a manner that impacts the Employee’s ability to perform the duties of the Employee’s job or the obligations under this Agreement;

 

(m) The Employee’s failure to obtain and/or maintain proper authorization to work in the United States commensurate with the needs of the Company;

 

(n) The Employee’s voluntary resignation or other termination of employment effected by the Employee at any time when the Company could effect a termination for Cause pursuant to this Agreement; and/or

 

(o) The Employee’s material breach of any term of this Agreement or any other agreement with the Company or any of its affiliates or failure to perform any of the Employee’s duties to the satisfaction of the Company Board and Parent Board.

 

4

 

 

The Company Board and Parent Board shall, in its sole discretion, have the authority to make the determination that the Employee has been terminated for Cause. Upon the effectiveness of any termination for Cause by the Company, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for (i) any payment of compensation accrued but unpaid through the date of such termination for Cause, (ii) any vested employee benefits covered by the Employee Retirement Income Security Act of 1974, as amended, to which the Employee is entitled upon termination of employment with the Company in accordance with the terms and conditions of the applicable plans of the Company, as applicable, and (iii) reimbursement for any unreimbursed business expenses incurred by the Employee on or prior to the Employee’s last date of employment with the Company pursuant to Section 4.3 (collectively, the “Accrued Amounts”). In the event that (1) the Employee’s employment with the Company terminates for any reason other than for Cause and (2) any of the facts and circumstances described in the definition of Cause existed as of the date of such termination (whether or not known by the Company Board and Parent Board or the Company or any of its affiliates as of the time of such termination or discovered after any such termination), then, the Company may deem such termination of employment to have been for Cause, and such termination shall be treated as a termination by the Company for Cause and the Employee acknowledges that the Employee’s compensation may also be subject to any clawback provisions required by law, rule, regulation or Company policy (as in effect upon the Commencement Date or any time thereafter), as well as any other agreement between the Company and the Employee that provides for clawback of any compensation or equity in the Company (including any equity related awards).

 

5.2. Termination by the Company Without Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment without Cause, at any time, and for any reason or no reason at all, subject to the following:

 

(a) If the Company terminates this Agreement and the Employee’s employment and such termination is not a termination for Cause under Section 5.1, then the Employee shall receive the Accrued Amounts and a cash payment from the Company as severance (the “Severance Payment”) equal to twelve (12) months of Base Compensation as in effect at the time of the termination, subject to all applicable federal, state, local and other withholdings. The Severance Payment shall be paid in substantially equal installments with the Company’s regular payroll over the twelve (12) month period (the “Severance Pay Period”) following the effective date of termination of employment and commencing on the first administratively practicable payroll date on or next following the date the Release Agreement becomes effective and fully irrevocable in accordance with Section 5.2(c) (provided that the initial and final payments may be a greater or lesser amount so as to conform with the Company’s regular payroll period); provided that any amounts that would be payable prior to the effectiveness of the Release Agreement (as defined below) shall be delayed until the Release Agreement is effective and fully irrevocable.

 

(b) The Severance Payment will be subject to offset by the amount of any compensation earned by the Employee or to which the Employee is entitled during the Severance Pay Period (regardless of when any such amount is paid by a subsequent employer or by the Company): (i) from any subsequent employer following the termination of the Employee’s employment with the Company, or (ii) from the Company under any contingent employment agreement between the Company and the Employee. In the event the Employee obtains other employment before the end of the Severance Pay Period, the Employee shall immediately notify the Company of such employment in writing.  The Employee expressly agrees that failure to immediately advise Company of the Employee’s new employment shall constitute a material breach of this Agreement, and the Employee will forfeit all Severance Payment amounts paid or that otherwise would be paid by the Company under this Section 5 from the date of the Employee’s new employment until the end of the Severance Pay Period.  The Employee shall immediately repay to the Company all amounts paid by the Company as a Severance Payment applicable to the period commencing on the date of the Employee’s new employment through the end of the Severance Pay Period.  Notwithstanding such forfeiture, the remaining provisions of this Agreement shall remain in full force and effect. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company to substantiate the Employee’s new employment and all compensation and rights under the Employee’s new employment.

 

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(c) Before receiving the Severance Payment set forth in Section 5.2(a), and as a condition to receiving the same, the Employee shall sign, and not revoke, a release of any and all claims or potential claims against the Company which the Employee has or may have, whether known or unknown, as of the date of execution of the release by the Employee (the “Release Agreement”). The Company must provide the form of Release Agreement to the Employee within fifteen (15) days after the Employee’s separation from service and the Employee must sign the Release Agreement and provide it to the Company within twenty-one (21) days (or forty-five (45) days, if applicable under applicable law) after receiving it from the Company and not revoke such release during any applicable revocation period. The Release Agreement shall be in the form as determined by the Company, in its sole discretion. To the extent the Severance Payment is subject to Section 409A and the period for executing (and not revoking) the Release Agreement begins in one taxable year and ends in another taxable year, the Severance Payment shall not begin until the beginning of the second taxable year; provided that, the first installment payment shall include all amounts that would otherwise have been paid to the Employee during the period beginning on the date of the Employee’s termination and ending on the first payment date if no delay had been imposed.

 

5.3. Termination by the Employee for Good Reason. The Employee may terminate this Agreement and/or the Employee’s employment with the Company for Good Reason, as defined below. If the Employee terminates this Agreement for Good Reason, then the Employee shall receive the Accrued Amounts and the Severance Payment as set forth in Section 5.2(a), subject to the requirements of Sections 5.2(b) and (c). For purposes of this Agreement, “Good Reason” shall mean:

 

(a) a material diminution in the Employee’s authority, duties or responsibilities;

 

(b) a material diminution in the Employee’s Base Compensation except for across-the-board salary reductions similarly affecting other similarly-situated executives of the Company or due to unforeseeable business circumstances, pandemics, natural disasters or similar circumstances;

 

(c) a change that would require the Employee to relocate to a primary office that is more than fifty (50) miles from the location of the Company’s then principal offices unless such relocation is closer to the Employee’s personal residence; or

 

(d) a material breach by the Company of any of its obligations under this Agreement.

 

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Notwithstanding the foregoing, no such event described above shall constitute Good Reason unless: (1) the Employee gives written notice to the Company specifying the condition or event relied upon for such termination within thirty (30) days of the initial existence of such event; and (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of the Employee’s written notice. If the Employee does not terminate his or her employment for Good Reason within sixty (60) days after the end of such thirty (30)-day cure period, then the Employee will be deemed to have waived his or her right to terminate for Good Reason with respect to such grounds. If the Company cures the Good Reason condition during such cure period, Good Reason will be deemed not to have occurred.

 

5.4. Termination by Employee Without Good Reason. The Employee may resign from employment without Good Reason by providing sixty (60) days’ advance, written notice of the Employee’s intent to resign from employment. Upon the effectiveness of such resignation, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts. With respect to any notice period pursuant to the immediately preceding sentence, the Company may in its sole discretion (a) place the Employee on a paid, non-working, garden leave during some or all of such notice period (and, for the avoidance of doubt, relieve the Employee of the Employee’s title and duties during such period), and/or (b) waive such notice, in whole or in part, by accelerating the Employee’s termination date and paying the Employee the Employee’s base salary in lieu of the portion of the notice period waived by the Company and without affecting the voluntary nature of the Employee’s termination.

 

5.5. Termination Due to Disability or Death. The Company shall have the right to terminate this Agreement and the Employee’s employment, at any time, upon the occurrence of the Employee’s death or Disability. If the Employee’s employment is terminated during the Term on account of the Employee’s death or Disability, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts through the date of such termination due to death or Disability. The term “Disability” as used in this Agreement shall mean that the Employee is entitled to receive long-term disability benefits under the Company’s long-term disability plan or, if there is no such plan, the Employee has incurred (1) a permanent and total disability within the meaning of Section 22(e)(3) of the Internal Revenue Code or any successor provision, or (2) a physical or mental disability that renders the Employee unable to perform the required functions of the Employee’s position, duties, and responsibilities under this Agreement, and which, in either case, has existed for at least ninety (90) consecutive days or one hundred and twenty (120) non-consecutive days during any three hundred sixty-five (365) day period as determined by the Company Board and Parent Board.

 

5.6. COBRA Coverage. Solely in the event of a termination by the Company without Cause pursuant to Section 5.2 and subject to the execution of the Release Agreement by the Employee and the Release Agreement becoming effective and fully irrevocable pursuant to Section 5.2(c), if the Employee timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse the Employee for the difference between the monthly COBRA premium actually paid by the Employee for the Employee and the Employee’s dependents and the monthly premium amount paid by similarly-situated active executives of the Company during the same period. Such reimbursement shall be paid to the Employee in the month immediately following the month in which the Employee timely remits the premium payment and the Employee provides proof of payment of such premium. The Employee shall be eligible to receive such reimbursement until the earliest of: (i) the end of the Severance Period; (ii) the date the Employee is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Employee becomes eligible to receive substantially similar coverage from another employer or other source. Notwithstanding the foregoing, the Company may, in its sole discretion, elect to provide a cash payment to the Employee in lieu of providing reimbursement as described herein in an amount reasonably determined by the Company to be equivalent to the amount of COBRA premium reimbursements that would otherwise be due by the Company under this Section 5.6 for the Severance Period, without regard to any effect of taxation of such cash payment to the Employee. If the Employee obtains other employment prior to the end of the Severance Period which offers any of such insurance coverage, the Company’s obligation to reimburse the Employee for COBRA payments will be immediately terminated. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company regarding subsequent benefit eligibility.

 

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5.7. Incentive Compensation. In the event of any termination of employment, any equity-based or cash incentive awards shall be treated as provided in the applicable plan document.

 

6. Confidentiality, Inventions, and Non-Solicitation Agreement. Prior to the Effective Time, the Employee shall enter into with the Company a Confidentiality, Inventions, and Non-Solicitation Agreement in substantially the form set forth under Exhibit A hereto (the “CIIAA”). Notwithstanding anything to the contrary herein, this Agreement shall have no force or effect and be null and void ab initio if the Employee fails to execute the CIIAA prior to the Effective Time.

 

7. Non-Competition, Non-Solicitation, and Non-Disparagement.

 

7.1. Definitions. As used in this Agreement, the following terms shall have the following specified meanings:

 

(a) “Business” means any business engaged in the manufacture, import, distribution and/or sale or resale of electric commercial delivery vehicles. A Business includes any business pursuing research and development, products or services in competition with the products or services which are, during and at the end of the Term, either (a) produced, marketed, distributed, sourced or otherwise commercially exploited by the Company or (b) in actual or demonstrably anticipated research or development by the Company.

 

(b) “Competing Business” means any Person, business, or subdivision of a business engaged in Business in competition with the Company or, to the Employee’s actual knowledge, any such Persons who are actively pursuing or otherwise affirmatively planning to engage in competition with the Company.

 

(c) “Customer” means a Person to whom the Company provided products or services for compensation at any time during the Term and with whom the Employee had direct contact, or provided services to, on behalf of the Company (or, if following the Employee’s last day of employment with the Company (such day, the “Termination Date”), then as of such Termination Date or at any time during the twelve (12) month period immediately preceding the Termination Date).

 

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(d) “Person” shall be construed broadly to mean an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization, an educational entity, a governmental entity or any department, agency, or political subdivision thereof, and any other entity.

 

(e) “Prospective Customer” shall mean a Person with whom the Company has had any negotiations or material discussions regarding the possible supply of products or services for compensation and with whom the Employee had direct contact, or provided services to on behalf of the Company (or, if following the Termination Date, then as of such Termination Date or at any time during the 12-month period immediately preceding the Termination Date).

 

(f) “Restricted Period” means the Term and for a period of twelve (12) months after the Termination Date.

 

(g) “Restricted Territory” means the United States.

 

7.2. Non-Competition. During the Restricted Period, the Employee shall not (and shall cause the Employee’s controlled affiliates not to) directly or indirectly (including through the Employee’s respective controlled affiliates or otherwise, including as a director, officer, equityholder, partner, consultant, employer, employee, proprietor, principal, agent, manager, franchisee, franchisor, distributor, advisor, consultant, lender, representative or otherwise), either for the Employee or for any other Person in the Restricted Territory, (a) perform duties, carry out activities, provide services, or otherwise engage in, for the Employee’s own benefit or for the benefit of any third party, any Competing Business in the Restricted Territory (i) in a position or capacity that is the same or substantially similar to the position the Employee held at, or the capacity in which the Employee performed duties for, the Company, or (ii) in a position or capacity in which the Employee is likely to use or disclose the Company’s confidential information or trade secrets to or on behalf of such Competing Business, (b) otherwise own, manage, operate, control, advise, or participate in the ownership, management, operation or control of, or be connected in any manner with (where such connection is competitive with the business of the Company), any Competing Business, or (c) acquire (through merger, stock purchase or purchase of all or substantially all of the assets or otherwise) the ownership of, or any equity interest in, any Person if the annual revenues of such Person from a Competing Business (or Competing Businesses) are more than five percent (5%), individually or in the aggregate, of such Person’s or entity’s total consolidated annual sales (based on the most recent full fiscal year revenues of such person or entity). Notwithstanding the foregoing, if the Employee holds a passive investment representing no more than two percent (2%) of the issued and outstanding shares in a company listed on a recognized exchange that operates, in whole or in part, directly or indirectly as a Competing Business, this shall not constitute a breach of this Section 7.2.

 

7.3. Non-Solicitation of Customers/Clients. The Employee shall not (and shall cause the Employee’s controlled affiliates not to), during the Restricted Period, directly or indirectly solicit, divert, or interfere with the Company’s relationship with, any of the Company’s Customers or Prospective Customers that the Employee had direct contact with, provided services to, or had confidential information about, in order to offer them goods and/or services competitive with those provided by the Company, or influence any Person to end or to curtail any business they are currently, or have been, transacting with the Company or otherwise negatively reduce his/her/its business relationship with the Company.

 

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7.4. Non-Solicitation of Company Employees. The Employee recognizes that the Employee possesses confidential information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and interpersonal relationships with Customers and Prospective Customers of the Company. The Employee recognizes that the information the Employee possesses about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining Customers, and will be acquired by the Employee because of the Employee’s business position with the Company. The Employee agrees that, during the Restricted Period, the Employee will not (and will cause the Employee’s controlled affiliates not to) (i) recruit or employ or otherwise solicit, entice, or induce any Person that is or has been an employee, officer or consultant of the Company in the twelve (12) months immediately prior to such action (or, if following the Termination Date, then as of such Termination Date and at any time during the twelve (12) months immediately preceding the Employee’s Termination Date) to become employed by, engaged by, or establish a business relationship with any Person other than the Company or its affiliated or related companies, or (ii) approach any such employee, consultant or officer for such purpose or authorize or participate in the taking of such actions by any other Person, or assist or participate with any such Person in taking such action. The restriction set forth in this paragraph does not apply to a general employment solicitation to the public that is not directed towards one of the Company’s employees or consultants.

 

7.5. Non-Disparagement. The Employee shall not (and shall cause the Employee’s controlled affiliates not to) during the Term and at any time thereafter make, publish, encourage or support, any false, misleading or disparaging written, oral or electronic statements about the Company or any of its affiliates, including the Company’s or its applicable affiliate’s (i) predecessors, members, present or former directors, managers, employees, consultants, officers, partners, attorneys or other representatives, individually and in their official capacities, or (ii) products, services, practices or operations. However, nothing in this Agreement shall prevent the Employee from testifying truthfully under oath if compelled by law to do so in a deposition, lawsuit, or similar legal or dispute resolution proceeding; making or publishing any such statements the Employee or the Employee’s controlled affiliate, as applicable, reasonably believes in good faith to be necessary in responding to or initiating a bona fide legal claim involving the Employee’s or the Employee’s controlled affiliate, as applicable; filing a complaint, participating in an investigation, or otherwise cooperating with any federal, state, or local fair employment agency or other government or law enforcement agency.

 

7.6. Performance of Duties Not Affected. For the avoidance of doubt, this Agreement shall not restrict the Employee from performing his duties as an officer, director, or employee of the Company or any of its affiliates.

 

8. Miscellaneous Provisions Governing Restrictive Covenants.

 

8.1. Reasonableness of Restrictions and Covenants. The Employee hereby confirms that the Employee was informed of the time, territory, scope and other essential requirements of the restrictions set forth in Section 7 of this Agreement when the Employee agreed to become employed with the Company under the terms set forth in this Agreement and the Employee acknowledges that the Company would not have entered into this Agreement had the Employee not agreed to the restrictions set forth in Section 7 of the Agreement. The Employee further acknowledges that the Employee has received sufficient and valuable consideration for the Employee’s agreement to such restrictions. The Employee also agrees that the covenants and restrictions contained in this Agreement are reasonable and valid and hereby agrees that the Company would suffer irreparable injury in the event of any breach by the Employee of the Employee’s obligations under any such covenant or restriction. Accordingly, the Employee hereby agrees that damages would be an inadequate remedy at law in connection with any such breach and that the Company shall therefore be entitled, in addition to any other right or remedy which it may have at law, in equity or otherwise, to temporary and permanent injunctive relief enjoining and restraining the Employee from any such breach. The Employee further consents and stipulates to the entry of such injunctive relief without the need to post any bond or other security.

 

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8.2. Survival. The provisions of Sections 7, 8, 9, 10.2, 11, and 12 of this Agreement shall remain in full force and effect notwithstanding the termination of the Employee’s employment and regardless of the circumstances that result in such termination. This provision shall not be construed to limit the survival of any other provisions that also survive the termination of this Agreement by the express or implied terms of such provisions.

 

8.3. Enforcement, Severability, and Modification. If, at the time of enforcement of any provision of Section 7 of this Agreement, a court or arbitrator holds that the restrictions stated in Section 7 of this Agreement are unreasonable or unenforceable under the circumstances then existing, the Parties agree that (i) the court/arbitrator should first reform the provisions of Section 7 prior to severing any provisions, and if the court/arbitrator will not or cannot reform such provisions, then the court/arbitrator may sever provisions as described in this paragraph, (ii) the provisions of Section 7 of this Agreement shall be severable in the event that any of such provisions are, for any reason whatsoever, deemed invalid, void or otherwise unenforceable, (iii) such invalid, void or otherwise unenforceable provisions in Section 7 of this Agreement shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (iv) the remaining provisions in Section 7 of this Agreement shall remain enforceable to the fullest extent permitted by law.

 

9. Post-Termination Cooperation

 

For a period of two (2) years following the Termination Date, the Employee agrees to be reasonably available to assist and cooperate with the Company in connection with any litigation, administrative proceedings, audits or other governmental or regulatory inquiries. Such assistance and cooperation will, when under the control of the Company, be at a mutually convenient time and location and may include, without limitation, appearing for meetings, consultations, depositions, hearings, or trials. The Company will reimburse the Employee for reasonable, pre-approved travel, lodging and meal expenses incurred in connection with providing such assistance and cooperation.

 

10. Disclosures

 

10.1. Upon Employment. In entering into this Agreement, the Employee represents and warrants that the Employee does not have any obligation, whether express or implied, to any third party that would interfere with, hamper, or limit the Employee’s ability to provide any employment services or to otherwise comply with the Employee’s obligations under this Agreement. The Employee explicitly represents and warrants to the Company that the Employee is not a party to any confidentiality, non-competition, non-solicitation or similar agreements with any third party, or to any agreement the terms of which could prohibit the Employee from performing the Employee’s employment duties for the Company, or to any agreement which could be breached by the Employee’s entry into this Agreement and/or performance of the Employee’s employment duties for the Company.

 

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10.2. Upon Termination of Employment. For any period of time when the restrictions referenced in Section 7 of this Agreement apply, the Employee shall promptly notify any subsequent employer of the terms of this Agreement to ensure that this Agreement is not breached by the Employee.

 

11. Indemnification

 

The Employee agrees that the Employee shall indemnify and hold the Company, its subsidiaries and any affiliates thereof (the “Indemnified Parties”) harmless from and against any Taxes (as defined herein) imposed upon or otherwise required to be paid by any Indemnified Party with respect to any payments, rights or other transfers provided to the Employee by or with respect to an Indemnified Party (including for the avoidance of doubt any person who was an Indemnified Party prior to the Effective Time) on or prior to the Effective Time.  For purposes of the precedent sentence, “Taxes” shall mean taxes or other governmental charges (including any withholding, employment, payroll, social security or other similar taxes) and any penalties, interest, surcharges, additional to tax and deficiency assessments with respect thereto. The Employee shall provide such security for the foregoing indemnity obligations as the Company may reasonably request from time to time.

 

12. General Provisions

 

12.1. Clawback Provisions. Any amounts payable under this Agreement are subject to any policy (whether in existence as of the Commencement Date or later adopted or modified) established by the Company providing for clawback or recovery of amounts that were paid to the Employee. The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.

 

12.2. Resignation of All Other Positions. Upon termination of the Employee’s employment hereunder for any reason, the Employee agrees to resign and shall be deemed to have resigned from all positions that the Employee holds as an officer of the Company or any of its affiliates or as a member of the Company Board and Parent Board (or a committee thereof) of the Company or any of its affiliates.

 

12.3. Assignment and Successors. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Employee, the Company, and their respective successors and assigns, except that the Employee may not assign any of the Employee’s duties hereunder and the Employee may not assign any of the Employee’s rights hereunder without the prior written consent of the Company. This Agreement is personal to the Employee and shall not be assigned by the Employee. Any purported assignment by the Employee shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any entity which controls, is controlled by, or is under common control with the Company, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and the permitted successors and assigns.

 

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12.4. Notices. All notices, requests, demands, or other communications under this Agreement shall be in writing and shall be deemed to be duly given by the Employee to the Company only if provided to the Company, Attention: General Counsel, and shall be deemed to be duly given by the Company to the Employee if provided by mail, email, mail, or nationally or internationally recognized carrier to the Employee at the Employee’s address as shown in the Company’s records.

 

12.5. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any provision or portion of this Agreement shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be ineffective only to the extent of such illegality, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. If any court of competent jurisdiction should deem any covenant herein to be invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

 

12.6. Code Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (“Section 409A”) or an exemption from Section 409A. The Company shall undertake to administer, interpret, and construe this Agreement in a manner that does not result in the imposition on the Employee of any additional tax, penalty, or interest under Section 409A, provided, however, that the Employee understands and agrees that the Company shall not be held liable or responsible for any taxes, penalties, interests or other expenses incurred by the Employee on account of non-compliance with Section 409A.

 

(a) For purposes of Section 409A, each installment payment or payroll period amount provided under this Agreement shall be treated as a separate payment.

 

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A.

 

(c) If the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A payable on account of a “separation from service,” and that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), such payment or benefit shall not be made or provided until the date which is the earlier of (i) the first regular payroll date following the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, or (ii) the date of the Employee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

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(d) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, all such payments shall be made on or before the last day of calendar year following the calendar year in which the expense occurred.

 

12.7. Governing Law. The Parties agree that this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Michigan without giving effect to any conflict of law provisions.

 

12.8. Mandatory Arbitration; Subsequent Court Jurisdiction. The Parties agree that any dispute over this Agreement will be submitted to and settled exclusively by binding arbitration, in accordance with the provisions of this section, subject only to any applicable requirement of law that the Parties engage in a preliminary non-binding mediation or arbitration. Binding arbitration shall be conducted in accordance with the Judicial Arbitration and Mediation Service Streamlined Rules & Procedures (the “JAMS Rules”). Arbitration shall be held in Oakland County, Michigan, before an arbitrator selected pursuant to the JAMS Rules who will have no personal or pecuniary interest, either directly or indirectly, from any business or family relationship with either of the Parties. All decisions of the arbitrator will be final, binding, and conclusive on the Parties.

 

The Parties will equally share the costs of the arbitrator and the arbitration fee (if any). Each Party will bear that Party’s own attorneys’ fees and costs, and the prevailing Party will not be entitled to reimbursement by the other Party of any of its fees or costs incurred in connection with the arbitration hereunder, regardless of any rule to the contrary in the applicable arbitration rules. Either Party may seek confirmation of the arbitration award in the federal or state courts with jurisdiction over Auburn Hills, Michigan and such court shall be the sole, exclusive, and mandatory venue and jurisdiction for any disputes between the Parties arising from or relating to this Agreement. If any action is filed, by any party, relating to a breach of this Agreement and/or enforcement of this Agreement, each Party hereby consents to the exclusive jurisdiction and venue of the federal and state courts with jurisdiction over Auburn Hills, Michigan in any claim or action arising hereunder and waives any claim that such court is an inconvenient forum.

 

12.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY TO THIS AGREEMENT CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; ACKNOWLEDGES THAT IT AND THE OTHER PARTIES TO THIS AGREEMENT HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION; AND AGREES THAT IF SUCH PARTY SEEKS A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY OTHER PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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12.10. Interpretation. The headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and not strictly for or against any Party. In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

12.11. Non-Waiver of Rights and Breaches. No failure or delay of any Party in the exercise of any right given to such Party under this Agreement shall constitute a waiver unless the time specified for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver by a Party of any default of any other Party shall not be deemed to be a waiver of any subsequent default or other default by such Party.

 

12.12. Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder shall be subject to withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes as permitted by law, provided it is satisfied in its sole discretion that all requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

 

12.13. Representation by Counsel; No Strict Construction. Each Party acknowledges that such Party has been represented by independent counsel of such Party’s choice with respect to this Agreement, including throughout all negotiations that have preceded the execution of this Agreement and that each Party has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted this Agreement is of no application and is hereby expressly waived by the Parties.

 

12.14. Attorneys’ Fees. Each Party shall bear its own attorneys’ fees and other reasonably related costs and expenses (“Fees”) associated with any claim asserted under this Agreement; provided, however, that if either Party asserts a claim which is finally determined by a court of competent jurisdiction to have been asserted frivolously or in bad faith, the Party against whom such claim was brought shall be entitled to recovery of its Fees from the Party bringing such claim.

 

12.15. Headings. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

12.16. Integration, Amendment and Waiver. This Agreement and the CIIAA constitute the entire understanding and agreement between the Company and the Employee, superseding all prior arrangements, understandings, and agreements, oral or otherwise, among the Parties with respect to the subject matter hereof. All negotiations by the Parties concerning the subject matter hereof are merged into this Agreement and the CIIAA, and there are no representations, warranties, covenants, understandings or agreements, oral or otherwise, by the Parties in relation to this Agreement or the CIIAA other than those incorporated herein or in the CIIAA. No supplement, modification, waiver, or amendment of this Agreement or the CIIAA shall be binding unless executed in writing and signed by both Parties.

 

12.17. Counterparts; Original. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. Any facsimile, photocopy, pdf copy, or electronic copy of any Party’s executed counterpart of this Agreement will be deemed to be an executed original thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to be duly executed as of the date first written above.

 

EMPLOYEE:   THE COMPANY:
       
    ELECTRIC LAST MILE, INC.
       
/s/ James Taylor   By: /s/ Benjamin Wu
James Taylor   Name:  Benjamin Wu
    Title: Secretary

 

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Exhibit A to Employment Agreement
Confidentiality, Inventions, and Non-Solicitation Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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CONFIDENTIALITY, INVENTIONS, AND

NON-SOLICITATION AGREEMENT

 

This Confidentiality, Inventions and Non-Solicitation Agreement (this “Agreement”) is entered into by and between Electric Last Mile, Inc. and its successors and assigns (the “Company”), a Delaware corporation and James Taylor (“Employee”).

 

RECITALS

 

WHEREAS, the Company has offered to employ or to continue to employ Employee in a position of trust, in which Employee acknowledges Employee will obtain new or updated Confidential Information (as defined below) about the business of the Company and the Company Affiliates (as defined below) to or for whom Employee provides services;

 

WHEREAS, in the course of Employee’s employment with the Company, Employee may Create Inventions (as such terms are defined below);

 

WHEREAS, the Company and the Company Affiliates collaborate in the course of business such that Employee has obtained, or will obtain, Confidential Information about both the Company and the Company Affiliates; and

 

WHEREAS, the Company and Employee agree that some of the purposes of this Agreement are to memorialize the parties’ respective ownership and rights to Inventions (as defined below) and to prevent irreparable harm to the Company and the Company Affiliates and that any restrictions set forth herein are reasonable and necessary to protect Confidential Information, goodwill, existing business relationships and other legitimate business interests.

 

NOW, THEREFORE, in consideration of Employee’s employment or continued employment and the Company’s entrusting to Employee confidential information relating to the Company Affiliates’ business, and for the mutual promises and covenants in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby mutually agree as follows:

 

1. Definitions.

 

a. “Company Affiliates” means (i) all Persons controlling, controlled by or under common control with, the Company (including, without limitation, its parent, brother-sister companies, other affiliates, subsidiaries, and joint ventures), (ii) all Persons in which the Company owns an equity interest and (iii) all predecessors, successors and assigns of those affiliates identified in (i) and (ii). As used in this definition, “control” (including, with correlative meanings, “controlling”, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies (whether through ownership of securities, partnership or other ownership interests, by contract or otherwise).

 

 

 

b. “Confidential Information” means any and all confidential, proprietary or trade secret information not generally known or available outside the Company and/or the Company Affiliates, and/or information entrusted to the Company and/or the Company Affiliates in confidence by third parties, in each case, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is Created by Employee. Confidential Information includes, without limitation, all Work Products (as defined below), technical data, trade secrets, know-how, improvements, research, product or service ideas or plans, software (whether in source code or object code), designs, developments, processes, formulas, techniques, biological materials, mask works, designs and drawings, hardware configuration information, information relating to existing or potential employees, consultants, clients, suppliers, vendors, or other service providers of the Company and the Company Affiliates (including, but not limited to, their names, contact information, jobs, compensation and expertise), information relating to suppliers and customers, information relating to stockholders or lenders, price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, financial statements, profit margins, sales information, historical financial data, budgets or other business information. Confidential Information also means all similar information disclosed to the Company by third parties, which is subject to confidentiality obligations. Confidential Information shall not include information that is generally available to and known by the public, provided that such disclosure to the public is through no direct or indirect fault of the Employee or Person(s) acting on the Employee’s behalf.

 

c. “Create” means make, create, author, discover, develop, invent, conceive, or reduce to practice.

 

d. “Inventions” means any and all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto, in each case, whether or not patentable, copyrightable or otherwise legally protectable, as well as any and all rights in and to patents, copyright, trademark, trade secret or other intellectual property rights (in the United States or elsewhere), including all pending and future applications and registrations therefor. This includes, but is not limited to, any new product, machine, article of manufacture, biological material, method, procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon.

 

e. “Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture, entity, association or other organization, whether or not a legal entity, or a governmental entity.

 

f. “Tangible Embodiments” means any and all tangible documents, materials, records, notebooks, tapes, disks, drives, software (whether in source code, object code or machine- readable copies), work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence, results or other embodiments.

 

g. “Work Product” means any and all Inventions that Employee, solely or jointly with others, Creates, in whole or in part, during the period of Employee’s employment or within one (1) year following termination of such employment, including those that relate to or result from the actual or anticipated business, work, research, or investigation of the Company or any of the Company Affiliates or which are suggested by, relate to, or result from any task assigned to or performed by Employee for the Company or any of the Company Affiliates.

 

 

 

2. Confidential Information.

 

a. Employee acknowledges that all Confidential Information constitutes a protectable business interest of the Company, and covenants and agrees that at all times during the period of Employee’s employment and thereafter, Employee agrees (i) to hold in strictest confidence the Confidential Information, (ii) not to, directly or indirectly, disclose, furnish, or make available to any Person any Confidential Information without prior written authorization from the Company, and (iii) not to use any Confidential Information except during the term of Employee’s employment in the course of performing Employee’s duties as an employee of the Company. Employee will abide by the Company’s policies and rules as may be established from time to time by it for the protection of its Confidential Information and will not make any copies of Confidential Information except as authorized by the Company. Employee agrees that in the course of employment with the Company, Employee will not bring to the Company’s offices nor use for the Company’s benefit, nor disclose, furnish or make available to the Company or any Company Affiliate, or induce the Company or any Company Affiliate to use, any confidential or proprietary information or Tangible Embodiments belonging to others. Employee’s obligations under this Section 2(a) with respect to particular Confidential Information will survive expiration or termination of this Agreement and Employee’s employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes publicly and widely known to the public other than as a result of any wrongful act of Employee or Employee’s breach of this Agreement (or a breach by those acting in concert with the Employee or on the Employee’s behalf) or wrongful act of any other Person who was under confidentiality obligations as to the item or items involved.

 

b. For clarity, Employee’s agreements in this Section 2 are intended to be for the benefit of the Company, the Company Affiliates, and any third party that has entrusted information or Tangible Embodiments to the Company or the Company Affiliates in confidence. This Agreement is intended to supplement, and not to supersede, any rights the Company or the Company Affiliates may have with respect to the protection of trade secrets or confidential or proprietary information.

 

c. Notwithstanding any other provision of this Agreement, an individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual (including Employee) who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with federal law protecting confidential disclosures of a trade secret to the government or in a court filing, 18 U.S.C. § 1833(b), or to create liability for disclosures of Confidential Information that are expressly allowed by 18 U.S.C. § 1833(b).

 

 

 

3. Return of Materials. Upon termination of employment with the Company or otherwise upon the Company’s request, and regardless of the reason for such termination, Employee agrees to promptly return to the Company or destroy all Tangible Embodiments of the foregoing in Employee’s possession, custody, or control that contain, summarize, abstract, or in any way reflect, relate to, or embody any Confidential Information or any other information concerning the Company, any of the Company Affiliates or any of its or their products, services or clients, whether prepared by the Employee or others. At the time Employee returns or destroys these materials (or otherwise upon the Company’s request), Employee will acknowledge to the Company, in writing and under oath, in the form attached as Exhibit A, that Employee has complied with the terms of this Section 3.

 

4. Work Product.

 

a. Employee agrees to promptly and fully disclose in writing to the Company all Work Product (including all original works of authorship and all work product relating thereto). This disclosure will include complete and accurate copies of all Tangible Embodiments of such Work Product.

 

b. Employee covenants and agrees that all Work Product and Tangible Embodiments are and shall be the sole and exclusive property of the Company. Employee acknowledges that all Work Product that are original works of authorship Created by Employee (solely or jointly) within the scope of Employee’s employment are “works made for hire” to the maximum extent permitted under applicable law and as that term is under the United States Copyright Act (17 U.S.C., et seq.). Without limiting the foregoing, Employee hereby agrees to hold in trust for the sole right and benefit of the Company and hereby assigns (and without limiting the foregoing, agrees in the future to assign) to the Company all of the entire worldwide right, title, and interest in and to all Work Product (and Tangible Embodiments thereof) throughout the world, without any requirement of further documentation or consideration, including, for clarity, any and all patent rights, copyrights, trademark rights, mask work rights, moral rights, sui generis database rights, and all other intellectual property rights therein or pertaining thereto and all rights to prosecute, enforce, and sue for past, present and future infringements, misappropriations or other violations thereof, throughout the universe in perpetuity or for the longest period permitted by law. Employee hereby waives and irrevocably quitclaims to the Company or its designee any and all claims, of any nature whatsoever, that Employee now has or may hereafter have for infringement of any and all Work Product and/or Tangible Embodiments and intellectual property rights related thereto.

 

 

 

c. At any time during or after Employee’s employment with the Company, at the request of the Company or any of the Company Affiliates, Employee agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company’s expense, in registering, recording, obtaining, maintaining, defending, perfecting, enforcing, and/or assigning any Work Product and Tangible Embodiments in any and all countries. In the event Employee refuses or fails to perform such acts, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and in Employee’s behalf and instead of Employee, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Employee; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest.

 

d. To the extent that such an assignment of any Work Product and/or Tangible Embodiment is not permitted under applicable law, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive (even as to Employee), royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Work Product or Tangible Embodiment for any commercial or internal business purposes and all other purposes. To the extent not assignable, Employee hereby irrevocably waives, to the extent permitted by applicable law, any and all claims Employee may now or hereafter have in any jurisdiction to any so-called “moral rights” in connection with the Work Product and acknowledges and agrees that the Company may use, exploit, distribute, reproduce, advertise, promote, publicize, alter, modify or edit the Work Product or combine the Work Product with other works, in the Company’s sole discretion, in any format or medium hereafter devised.

 

e. Without limiting the generality of any other provision of this Section 4, Employee hereby authorizes the Company and each of the Company Affiliates to make any desired changes to any part of any Work Product, to combine it with other materials in any manner desired, and to withhold Employee’s identity in connection with any distribution or use thereof alone or in combination with other materials.

 

f. The obligations of Employee set forth in this Section 4 (including, but not limited to, the assignment obligations) will continue beyond the termination of Employee’s employment with respect to Work Product Created by Employee alone or jointly with others during Employee’s employment with the Company and for one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Employee and Employee’s executors, administrators and other representatives.

 

 

 

g. Employee agrees that Employee will register all domains, usernames, handles, social media accounts and similar online accounts which Employee registers on behalf of the Company and which relate to the Company or its intellectual property rights (the “Online Accounts”) in the name of the Company, except to the extent that such requests by the Company are prohibited by law. If any Online Account that is not (or by the terms of such Online Account cannot be) registered in the name of the Company is registered in Employee’s name or under Employee’s control, Employee agrees to assign ownership and control of such Online Account to any Person designated by the Company upon the Company’s request. Employee agrees to use any Online Account, whether registered in Employee’s name or the name of the Company, in compliance with any applicable policies or guidelines of the Company.

 

h. Notwithstanding anything to the contrary herein, this Agreement does not apply to any Invention which qualifies as a non-assignable Invention under the provisions of California Labor Code Section 2870 (“Section 2870”), a copy of which is attached as Exhibit B. Employee will advise the Company promptly in writing of any Inventions that Employee believes fully qualify for protection under Section 2870; and Employee will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without Employee’s consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under the provisions of Section 2870. Employee will preserve the confidentiality of any Invention that does not fully qualify for protection under Section 2870. BY SIGNING THIS AGREEMENT, EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED EXHIBIT B, WHICH SHALL CONSTITUTE WRITTEN NOTICE OF THE PROVISIONS OF SECTION 2870.

 

5. Excluded IP.

 

a. As a matter of record, Employee has set forth on Exhibit C hereto a list with non-confidential descriptions of any and all proprietary information, works of authorship, ideas, reports, creative works, intellectual property or other Inventions which have been made by Employee prior to employment with the Company and which are excluded from the scope of this Agreement (collectively, the “Excluded IP”). Employee hereby represents and warrants that such list is accurate and complete. If no list is attached (or if the list is empty), then Employee hereby represents and warrants that there is no Excluded IP. Employee will not assert any right, title or interest in or to any Work Product nor claim that Employee Created any Work Product before Employee’s employment with the Company unless Employee has specifically identified that Invention as an Excluded IP on the attached Exhibit C prior to the execution of this Agreement.

 

 

 

b. If in the course of Employee’s employment, Employee uses or incorporates into any Work Product or Tangible Embodiment any Inventions (including any Excluded IP) in which Employee or a third Person has any interest and which is not covered by Section 4(b) hereof, Employee will promptly so inform the Company. Whether or not Employee gives such notice, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive, royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Invention (including such Excluded IP) for any commercial or internal business purposes and all other purposes.

 

6. Representations and Warranties.

 

a. No Conflicts. Employee hereby represents and warrants that Employee is not subject to any obligation to any third Person, including any former employer, that would be inconsistent with any provision of this Agreement, including with respect to any Excluded IP, and that Employee has the right to grant the license and rights granted in Section 5(b).

 

b. No Infringement. Employee hereby represents and warrants that all Excluded IP licensed to the Employer pursuant to Section 5(b) do not (and all Work Product will not) infringe, misappropriate, dilute, or otherwise violate any third Person’s patents, copyrights, trademarks, trade secrets, or other intellectual property rights or other rights.

 

7. Equitable Remedies. Employee acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of the Company’s and the Company Affiliates’ business interests, that irreparable injury will result to the Company and the Company Affiliates if Employee breaches any of the terms of said covenants, and that in the event of Employee’s actual or threatened breach of any such covenants, the Company and the Company Affiliates will have no adequate remedy at law. Employee accordingly agrees that, in the event of any actual or threatened breach by Employee of any of said covenants, the Company or any of the Company Affiliates, as applicable, will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 7 will be construed as prohibiting the Company or any of the Company Affiliates from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.

 

8. No Right to Employment. No provision of this Agreement shall give Employee any right to continue in the employ of the Company or any of the Company Affiliates, create any inference as to the length of employment of Employee, affect the right of the Company or the Company Affiliates to terminate the employment of Employee, with or without cause, or give Employee any right to participate in any employee welfare or benefit plan or other program of the Company or any of the Company Affiliates. Notwithstanding the foregoing, in the event Employee has executed a written employment agreement with the Company, in the event of any direct and irresolvable conflict between the terms of this Agreement and such employment agreement, the terms of this Agreement shall control with respect to all Inventions and Confidential Information, but otherwise the terms of the employment agreement shall control.

 

 

 

9. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

10. Severability. Employee acknowledges that the agreements and covenants contained in this Agreement are essential to protect the Company and the Company Affiliates and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy or any of the covenants set forth in this Agreement not fully enforceable, the other provisions of this Agreement will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent.

 

11. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) five (5) days after sent by certified mail, return receipt requested; or (c) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses set forth below:

 

If to the Company: the address of the Company’s current headquarters, Attention: General Counsel.

 

If to Employee: to the last-known address of the Employee as shown in the Company’s records.

 

Each party will be entitled to provide a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 11.

 

12. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement.

 

13. Governing Law. This Agreement has been executed in the State of Michigan, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. The parties hereby consent to the exclusive jurisdiction of the federal or state courts with jurisdiction over Auburn Hills, Michigan in any action or claim arising out of, under or in connection with this Agreement, or the relationship between the parties hereto.

 

 

 

14. Binding Effect. This Agreement will be binding upon and inure to the benefit of Employee, the Company, the Company Affiliates, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement, without the Employee’s prior consent. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void ab initio.

 

15. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person.

 

16. Waiver of Jury. THE COMPANY AND THE EMPLOYEE KNOWINGLY AND VOLUNTARILY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES HERETO.

 

17. Voluntary Execution. Employee acknowledges and agrees that Employee has carefully read all of the provisions of this Agreement, that Employee understands and has voluntarily accepted such provisions, and that Employee will fully and faithfully comply with such provisions.

 

18. Advice of Counsel. EMPLOYEE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, EMPLOYEE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND EMPLOYEE HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart’s signature page of this Agreement by facsimile, email in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document has the same effect as delivery of an executed original of this Agreement

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Employee has signed this Agreement, as of the date written below.

 

  EMPLOYEE
     
   
  Name:              
     
  Date:   
  State of Residence:
     
  COMPANY
   
   
     
  Electric Last Mile, Inc.
     
  Name:  
  Date:  

 

 

 

 

EXHIBIT A

 

My engagement by Electric Last Mile, Inc., (the “Company”) is now terminated. I have reviewed my Confidentiality, Inventions and Non-Solicitation Agreement with the Company, dated ________________ ___, 20__ (the “Agreement”), and I hereby swear, under penalty of perjury, that:

 

● I have complied and will continue to comply with all of the provisions of the Agreement.

 

● I understand that all of the Company’s materials (including without limitation, written or printed documents, email and computer disks or tapes, whether machine or user readable, computer memory, and other information reduced to any recorded format or medium), whether or not they contain Confidential Information (as that phrase is defined in the Agreement), are and remain the property of the Company. I have delivered to authorized Company personnel, or have destroyed, all of those documents and all other Company materials in my possession.

 

● Any breach of my declarations hereunder would cause irreparable injury to the Company for which monetary damages would not be an adequate remedy and, therefore, will entitle the Company to injunctive relief (including specific performance). The rights and remedies provided to the Company hereunder are cumulative and in addition to any other rights and remedies available to the Company at law or in equity. I hereby acknowledge that the Company shall be entitled to recover its reasonable attorneys’ fees and litigation expenses incurred in any action to enforce its rights in the event of a breach of my declarations hereunder.

 

    Employee:
     
Date:      
     
    Name:
     
     

 

 

 

 

EXHIBIT B

 

California Labor Code Section 2870

 

Invention On Own Time – Exemption From Agreement

 

“(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

 

 

 

 

EXHIBIT C

 

I hereby represent and warrant that I have disclosed on this Exhibit all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto and other intellectual property (including all Excluded IP) that I have made, created, authored, discovered, developed, invented, conceived, or reduced to practice, prior to employment with the Company. I agree that any present or future patent, idea, copyright, writing, computer program, or other Invention that is not listed on this Exhibit is a Work Product is subject to (and assigned by) the assignment under the attached Confidentiality, Inventions and Non-Solicitation Agreement to which this is an Exhibit. I further agree that under no circumstances will I incorporate in any work that I perform for the Company any of the Excluded IP that I have disclosed on this Exhibit without the prior written consent of the Company.

 

Brief Description of Excluded IP (e.g., inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto inventions, proprietary information, works of authorship, computer programs, know-how, trade secrets, ideas, reports, creative works, and other intellectual property) Right, Title or Interest and Date Acquired
   
   
   
   

 

    Employee:
       
Date:        
       
    Name:          

 

 

 

 

 

Exhibit 10.13

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is agreed upon and entered into this 10th day of December, 2020, by and between Hailiang Hu (the “Employee”) and Electric Last Mile, Inc., a Delaware corporation, together with its affiliates, successors and assigns (the “Company”) (each individually a “Party” and collectively the “Parties”).

 

RECITALS

 

A. Pursuant to that Agreement and Plan of Merger by and among Forum Merger III Corporation, ELMS Merger Corp. (the “Merger Sub”), the Company, and Jason Luo, in the capacity as the initial Stockholder Representative thereto, dated on or about December 10, 2020 (the “Merger Agreement”), the Company intends to merge with and into the Merger Sub with the Company surviving the merger (the “Merger”) upon the Effective Time (as such term in defined the Merger Agreement); and

 

B. The Company desires to employ the Employee, and the Employee desires to be employed by the Company and any publicly-traded parent entity of the Company, to the extent applicable (the “Parent”), to be effective as of the first business day immediately following the Effective Time.

 

AGREEMENTS

 

In consideration of the mutual covenants and agreements set forth in this Agreement and for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties, each intending to be legally bound hereby, agree as follows:

 

1. Employment

 

1.1. Duties. The Employee shall serve as Chief Operating Officer of the Company and any Parent, as applicable in its discretion, and will, under the direction of the Chief Executive Officer of the Company (the “CEO”), faithfully and to the best of the Employee’s ability perform the duties assigned by the CEO or Board of Directors of the Company (the “Company Board”) and any Board of Directors of the Parent (the “Parent Board”) in his/her or its discretion from time to time. The Employee shall, if requested, also serve as a director or officer of any affiliate of the Company for no additional compensation.

 

1.2. Best Efforts. The Employee agrees to devote the Employee’s entire business time, and best effort, skill and attention to the discharge of the Employee’s duties while employed by the Company.

 

1.3. Duty to Act in the Best Interest of the Company. The Employee shall not, directly or indirectly, act in any manner which may damage the business of the Company or which would adversely affect the goodwill, reputation or business relations of the Company with its customers, the public generally, or with any of its other employees. The Employee shall act in the best interest of the Company at all times. The Employee will not engage in any other business, profession, or occupation for compensation or otherwise that would conflict or interfere with the performance of the Employee’s services under the Agreement either directly or indirectly without the prior written consent of the Company Board and any Parent Board.

 

 

 

1.4. Place of Performance; Required Travel. The Employee’s principal place of employment shall be the Company’s office as of the Effective Time that is located in Auburn Hills, MI or the metropolitan area of Detroit, MI, provided that the Employee will be required to travel as needed on Company business during the Term (as such term is defined in Section 2.1 below). Required travel is anticipated to occupy up to 40% of Employee’s working time on average but may occupy more or less time depending on business needs.

 

2. Term of Employment

 

2.1. Term. The Employee’s employment with the Company shall commence on the day that is the first business day immediately following the Effective Time of the Merger (the “Commencement Date”) and shall, subject to Section 2.2, continue until the Company or the Employee terminate the Agreement in accordance with the terms herein (the “Term”).

 

2.2. “At Will” Employment Status. Notwithstanding any term or provision of this Agreement, at all times the Employee shall be employed by Company on an “at will” basis, subject to termination in accordance with Section 5.

 

3. Base Compensation and Incentive Compensation.

 

3.1. Base Compensation. During the Term, the Company shall pay to the Employee an annual base salary in the amount of $310,000.00 (the “Base Compensation”). The Base Compensation shall be paid in periodic installments in accordance with the Company’s normal payroll procedures, subject to all applicable taxes and withholdings. The Base Compensation may be increased from time-to-time by the Company in accordance with the regular compensation review practices of the Company Board and any Parent Board or the Compensation Committee of the Company Board and any Parent Board (the “Compensation Committee”), as applicable, and may be decreased from time-to-time by the Company, but only to the extent such decrease is part of an across-the-board salary reduction that applies in a consistent manner to similarly-situated executives of the Company.

 

3.2. Annual Bonus. The Employee shall be eligible to participate in a Company annual cash incentive plan, as established by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time for similarly-situated executives of the Company, and through which the Company awards performance-based cash bonuses on an annual basis, subject to the Company achieving performance targets as approved by the independent directors on the Company Board and Parent Board or by the Compensation Committee. The Employee shall be eligible to participate in any such plan at a target bonus level as determined by the Compensation Committee from time to time, but such target bonus level shall be no less than 50% of the Employee’s Base Compensation (as then in effect from time to time). The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and the decision to provide any bonus opportunity and the amount and terms of any annual bonus shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee. The Company’s payment of any such bonus pursuant to such plan to the Employee shall be subject to the Employee’s employment with the Company on the applicable bonus payment date.

 

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3.3. Long-Term Incentive Compensation/Equity Awards. The Employee shall be eligible to participate in a Company long-term incentive compensation plan, through which the Company grants equity awards to its key employees, pursuant to the separate terms and conditions of such plan. The Employee shall be eligible to participate in any such plan at a target award level as determined by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time. The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and any applicable award agreements, and the decision to provide any award and the amount and terms of any award shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee.

 

4. Benefits.

 

4.1. Employee Benefits. During the Term, the Employee shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time to the extent consistent with applicable law and the terms of the applicable benefit plan, practice or program. Notwithstanding anything otherwise provided under this Agreement, nothing contained herein shall obligate the Company to continue or maintain any particular benefit plan or program on an ongoing basis and the Company reserves the right to amend, establish or terminate any benefit plan, practice or program at any time in its sole discretion.

 

4.2. Paid Time Off. During the Term, the Employee will be entitled to paid time off on a substantially-similar basis as other similarly-situated executives of the Company in accordance with the Company’s policies as such policies may exist from time to time.

 

4.3. Business Expenses. The Employee shall be entitled to reimbursement for reasonable and necessary out-of-pocket business expenses incurred by the Employee in connection with the performance of the Employee’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures (including the requirement to provide appropriate documentation of such expenses), as in effect from time to time.

 

5. Termination of Employment

 

5.1. Termination for Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment with the Company at any time for any of the following causes (each a “Cause”):

 

(a) Any act of fraud, dishonesty, gross negligence, misrepresentation, or embezzlement, misappropriation, or conversion of assets of the Company or any of its affiliates (or attempt to do any of the foregoing);

 

(b) Subject to any protections set forth under applicable laws, commission of, indictment for, conviction of, pleading guilty or nolo contendere to, or engaging in any crime that constitutes a felony or any crime or other act involving fraud, theft, embezzlement, or moral turpitude;

 

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(c) Subject to any protections set forth under applicable laws, commission of, conviction of, pleading guilty or nolo contendere to, or engaging in any crime or other act that violates any other law, rule, or regulation that the Company Board and Parent Board reasonably determines is job-related and/or is likely to have an adverse impact on the performance of the Employee’s duties under this Agreement;

 

(d) Willful or material violation of any federal, state, or foreign securities laws;

 

(e) Conduct or omission which the Company Board and Parent Board reasonably determines is or is reasonably likely to be detrimental to the reputation, goodwill, public image, or business operations of the Company;

 

(f) Continued failure by the Employee to perform the Employee’s duties or responsibilities to the Company or its affiliates (other than absence due to bona fide illness or Disability as defined herein);

 

(g) The Employee’s failure or refusal to comply with the lawful directions of the CEO or the Company Board and Parent Board;

 

(h) Making of threats or engaging in acts of violence in the workplace;

 

(i) Engaging in sexual, racial, or other forms of harassment or discrimination in violation of the law or Company policies;

 

(j) Breach of the Employee’s fiduciary duties or confidentiality obligations or engaging in any other act of material dishonesty or disloyalty toward the Company;

 

(k) Violating any of the Company’s written policies or codes of conduct including, but not limited to, written policies related to equal employment opportunity, performance of illegal or unethical activities, and ethical misconduct;

 

(l) Repeatedly reporting to work under the influence of alcohol or drugs in a manner that impacts the Employee’s ability to perform the duties of the Employee’s job or the obligations under this Agreement;

 

(m) The Employee’s failure to obtain and/or maintain proper authorization to work in the United States commensurate with the needs of the Company;

 

(n) The Employee’s voluntary resignation or other termination of employment effected by the Employee at any time when the Company could effect a termination for Cause pursuant to this Agreement; and/or

 

(o) The Employee’s material breach of any term of this Agreement or any other agreement with the Company or any of its affiliates or failure to perform any of the Employee’s duties to the satisfaction of the Company Board and Parent Board.

 

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The Company Board and Parent Board shall, in its sole discretion, have the authority to make the determination that the Employee has been terminated for Cause. Upon the effectiveness of any termination for Cause by the Company, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for (i) any payment of compensation accrued but unpaid through the date of such termination for Cause, (ii) any vested employee benefits covered by the Employee Retirement Income Security Act of 1974, as amended, to which the Employee is entitled upon termination of employment with the Company in accordance with the terms and conditions of the applicable plans of the Company, as applicable, and (iii) reimbursement for any unreimbursed business expenses incurred by the Employee on or prior to the Employee’s last date of employment with the Company pursuant to Section 4.3 (collectively, the “Accrued Amounts”). In the event that (1) the Employee’s employment with the Company terminates for any reason other than for Cause and (2) any of the facts and circumstances described in the definition of Cause existed as of the date of such termination (whether or not known by the Company Board and Parent Board or the Company or any of its affiliates as of the time of such termination or discovered after any such termination), then, the Company may deem such termination of employment to have been for Cause, and such termination shall be treated as a termination by the Company for Cause and the Employee acknowledges that the Employee’s compensation may also be subject to any clawback provisions required by law, rule, regulation or Company policy (as in effect upon the Commencement Date or any time thereafter), as well as any other agreement between the Company and the Employee that provides for clawback of any compensation or equity in the Company (including any equity related awards).

 

5.2. Termination by the Company Without Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment without Cause, at any time, and for any reason or no reason at all, subject to the following:

 

(a) If the Company terminates this Agreement and the Employee’s employment and such termination is not a termination for Cause under Section 5.1, then the Employee shall receive the Accrued Amounts and a cash payment from the Company as severance (the “Severance Payment”) equal to six (6) months of Base Compensation as in effect at the time of the termination, subject to all applicable federal, state, local and other withholdings. The Severance Payment shall be paid in substantially equal installments with the Company’s regular payroll over the six (6) month period (the “Severance Pay Period”) following the effective date of termination of employment and commencing on the first administratively practicable payroll date on or next following the date the Release Agreement becomes effective and fully irrevocable in accordance with Section 5.2(c) (provided that the initial and final payments may be a greater or lesser amount so as to conform with the Company’s regular payroll period); provided that any amounts that would be payable prior to the effectiveness of the Release Agreement (as defined below) shall be delayed until the Release Agreement is effective and fully irrevocable.

 

(b) The Severance Payment will be subject to offset by the amount of any compensation earned by the Employee or to which the Employee is entitled during the Severance Pay Period (regardless of when any such amount is paid by a subsequent employer or by the Company): (i) from any subsequent employer following the termination of the Employee’s employment with the Company, or (ii) from the Company under any contingent employment agreement between the Company and the Employee. In the event the Employee obtains other employment before the end of the Severance Pay Period, the Employee shall immediately notify the Company of such employment in writing.  The Employee expressly agrees that failure to immediately advise Company of the Employee’s new employment shall constitute a material breach of this Agreement, and the Employee will forfeit all Severance Payment amounts paid or that otherwise would be paid by the Company under this Section 5 from the date of the Employee’s new employment until the end of the Severance Pay Period.  The Employee shall immediately repay to the Company all amounts paid by the Company as a Severance Payment applicable to the period commencing on the date of the Employee’s new employment through the end of the Severance Pay Period.  Notwithstanding such forfeiture, the remaining provisions of this Agreement shall remain in full force and effect. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company to substantiate the Employee’s new employment and all compensation and rights under the Employee’s new employment.

 

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(c) Before receiving the Severance Payment set forth in Section 5.2(a), and as a condition to receiving the same, the Employee shall sign, and not revoke, a release of any and all claims or potential claims against the Company which the Employee has or may have, whether known or unknown, as of the date of execution of the release by the Employee (the “Release Agreement”). The Company must provide the form of Release Agreement to the Employee within fifteen (15) days after the Employee’s separation from service and the Employee must sign the Release Agreement and provide it to the Company within twenty-one (21) days (or forty-five (45) days, if applicable under applicable law) after receiving it from the Company and not revoke such release during any applicable revocation period. The Release Agreement shall be in the form as determined by the Company, in its sole discretion. To the extent the Severance Payment is subject to Section 409A and the period for executing (and not revoking) the Release Agreement begins in one taxable year and ends in another taxable year, the Severance Payment shall not begin until the beginning of the second taxable year; provided that, the first installment payment shall include all amounts that would otherwise have been paid to the Employee during the period beginning on the date of the Employee’s termination and ending on the first payment date if no delay had been imposed.

 

5.3. Termination by the Employee for Good Reason. The Employee may terminate this Agreement and/or the Employee’s employment with the Company for Good Reason, as defined below. If the Employee terminates this Agreement for Good Reason, then the Employee shall receive the Accrued Amounts and the Severance Payment as set forth in Section 5.2(a), subject to the requirements of Sections 5.2(b) and (c). For purposes of this Agreement, “Good Reason” shall mean:

 

(a) a material diminution in the Employee’s authority, duties or responsibilities;

 

(b) a material diminution in the Employee’s Base Compensation except for across-the-board salary reductions similarly affecting other similarly-situated executives of the Company or due to unforeseeable business circumstances, pandemics, natural disasters or similar circumstances;

 

(c) a change that would require the Employee to relocate to a primary office that is more than fifty (50) miles from the location of the Company’s then principal offices unless such relocation is closer to the Employee’s personal residence; or

 

(d) a material breach by the Company of any of its obligations under this Agreement.

 

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Notwithstanding the foregoing, no such event described above shall constitute Good Reason unless: (1) the Employee gives written notice to the Company specifying the condition or event relied upon for such termination within thirty (30) days of the initial existence of such event; and (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of the Employee’s written notice. If the Employee does not terminate his or her employment for Good Reason within sixty (60) days after the end of such thirty (30)-day cure period, then the Employee will be deemed to have waived his or her right to terminate for Good Reason with respect to such grounds. If the Company cures the Good Reason condition during such cure period, Good Reason will be deemed not to have occurred.

 

5.4. Termination by Employee Without Good Reason. The Employee may resign from employment without Good Reason by providing sixty (60) days’ advance, written notice of the Employee’s intent to resign from employment. Upon the effectiveness of such resignation, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts. With respect to any notice period pursuant to the immediately preceding sentence, the Company may in its sole discretion (a) place the Employee on a paid, non-working, garden leave during some or all of such notice period (and, for the avoidance of doubt, relieve the Employee of the Employee’s title and duties during such period), and/or (b) waive such notice, in whole or in part, by accelerating the Employee’s termination date and paying the Employee the Employee’s base salary in lieu of the portion of the notice period waived by the Company and without affecting the voluntary nature of the Employee’s termination.

 

5.5. Termination Due to Disability or Death. The Company shall have the right to terminate this Agreement and the Employee’s employment, at any time, upon the occurrence of the Employee’s death or Disability. If the Employee’s employment is terminated during the Term on account of the Employee’s death or Disability, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts through the date of such termination due to death or Disability. The term “Disability” as used in this Agreement shall mean that the Employee is entitled to receive long-term disability benefits under the Company’s long-term disability plan or, if there is no such plan, the Employee has incurred (1) a permanent and total disability within the meaning of Section 22(e)(3) of the Internal Revenue Code or any successor provision, or (2) a physical or mental disability that renders the Employee unable to perform the required functions of the Employee’s position, duties, and responsibilities under this Agreement, and which, in either case, has existed for at least ninety (90) consecutive days or one hundred and twenty (120) non-consecutive days during any three hundred sixty-five (365) day period as determined by the Company Board and Parent Board.

 

5.6. COBRA Coverage. Solely in the event of a termination by the Company without Cause pursuant to Section 5.2 and subject to the execution of the Release Agreement by the Employee and the Release Agreement becoming effective and fully irrevocable pursuant to Section 5.2(c), if the Employee timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse the Employee for the difference between the monthly COBRA premium actually paid by the Employee for the Employee and the Employee’s dependents and the monthly premium amount paid by similarly-situated active executives of the Company during the same period. Such reimbursement shall be paid to the Employee in the month immediately following the month in which the Employee timely remits the premium payment and the Employee provides proof of payment of such premium. The Employee shall be eligible to receive such reimbursement until the earliest of: (i) the end of the Severance Period; (ii) the date the Employee is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Employee becomes eligible to receive substantially similar coverage from another employer or other source. Notwithstanding the foregoing, the Company may, in its sole discretion, elect to provide a cash payment to the Employee in lieu of providing reimbursement as described herein in an amount reasonably determined by the Company to be equivalent to the amount of COBRA premium reimbursements that would otherwise be due by the Company under this Section 5.6 for the Severance Period, without regard to any effect of taxation of such cash payment to the Employee. If the Employee obtains other employment prior to the end of the Severance Period which offers any of such insurance coverage, the Company’s obligation to reimburse the Employee for COBRA payments will be immediately terminated. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company regarding subsequent benefit eligibility.

 

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5.7. Incentive Compensation. In the event of any termination of employment, any equity-based or cash incentive awards shall be treated as provided in the applicable plan document.

 

6. Confidentiality, Inventions, and Non-Solicitation Agreement. Prior to the Effective Time, the Employee shall enter into with the Company a Confidentiality, Inventions, and Non-Solicitation Agreement in substantially the form set forth under Exhibit A hereto (the “CIIAA”). Notwithstanding anything to the contrary herein, this Agreement shall have no force or effect and be null and void ab initio if the Employee fails to execute the CIIAA prior to the Effective Time.

 

7.  Non-Competition, Non-Solicitation, and Non-Disparagement.

 

7.1. Definitions. As used in this Agreement, the following terms shall have the following specified meanings:

 

(a) “Business” means any business engaged in the manufacture, import, distribution and/or sale or resale of electric commercial delivery vehicles. A Business includes any business pursuing research and development, products or services in competition with the products or services which are, during and at the end of the Term, either (a) produced, marketed, distributed, sourced or otherwise commercially exploited by the Company or (b) in actual or demonstrably anticipated research or development by the Company.

 

(b) “Competing Business” means any Person, business, or subdivision of a business engaged in Business in competition with the Company or, to the Employee’s actual knowledge, any such Persons who are actively pursuing or otherwise affirmatively planning to engage in competition with the Company.

 

(c) “Customer” means a Person to whom the Company provided products or services for compensation at any time during the Term and with whom the Employee had direct contact, or provided services to, on behalf of the Company (or, if following the Employee’s last day of employment with the Company (such day, the “Termination Date”), then as of such Termination Date or at any time during the twelve (12) month period immediately preceding the Termination Date).

 

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(d) “Person” shall be construed broadly to mean an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization, an educational entity, a governmental entity or any department, agency, or political subdivision thereof, and any other entity.

 

(e)  “Prospective Customer” shall mean a Person with whom the Company has had any negotiations or material discussions regarding the possible supply of products or services for compensation and with whom the Employee had direct contact, or provided services to on behalf of the Company (or, if following the Termination Date, then as of such Termination Date or at any time during the 12-month period immediately preceding the Termination Date).

 

(f) “Restricted Period” means the Term and for a period of six (6) months after the Termination Date.

 

(g) “Restricted Territory” means the United States.

 

7.2. Non-Competition. During the Restricted Period, the Employee shall not (and shall cause the Employee’s controlled affiliates not to) directly or indirectly (including through the Employee’s respective controlled affiliates or otherwise, including as a director, officer, equityholder, partner, consultant, employer, employee, proprietor, principal, agent, manager, franchisee, franchisor, distributor, advisor, consultant, lender, representative or otherwise), either for the Employee or for any other Person in the Restricted Territory, (a) perform duties, carry out activities, provide services, or otherwise engage in, for the Employee’s own benefit or for the benefit of any third party, any Competing Business in the Restricted Territory (i) in a position or capacity that is the same or substantially similar to the position the Employee held at, or the capacity in which the Employee performed duties for, the Company, or (ii) in a position or capacity in which the Employee is likely to use or disclose the Company’s confidential information or trade secrets to or on behalf of such Competing Business, (b) otherwise own, manage, operate, control, advise, or participate in the ownership, management, operation or control of, or be connected in any manner with (where such connection is competitive with the business of the Company), any Competing Business, or (c) acquire (through merger, stock purchase or purchase of all or substantially all of the assets or otherwise) the ownership of, or any equity interest in, any Person if the annual revenues of such Person from a Competing Business (or Competing Businesses) are more than five percent (5%), individually or in the aggregate, of such Person’s or entity’s total consolidated annual sales (based on the most recent full fiscal year revenues of such person or entity). Notwithstanding the foregoing, if the Employee holds a passive investment representing no more than two percent (2%) of the issued and outstanding shares in a company listed on a recognized exchange that operates, in whole or in part, directly or indirectly as a Competing Business, this shall not constitute a breach of this Section 7.2.

 

7.3. Non-Solicitation of Customers/Clients. The Employee shall not (and shall cause the Employee’s controlled affiliates not to), during the Restricted Period, directly or indirectly solicit, divert, or interfere with the Company’s relationship with, any of the Company’s Customers or Prospective Customers that the Employee had direct contact with, provided services to, or had confidential information about, in order to offer them goods and/or services competitive with those provided by the Company, or influence any Person to end or to curtail any business they are currently, or have been, transacting with the Company or otherwise negatively reduce his/her/its business relationship with the Company.

 

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7.4. Non-Solicitation of Company Employees. The Employee recognizes that the Employee possesses confidential information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and interpersonal relationships with Customers and Prospective Customers of the Company. The Employee recognizes that the information the Employee possesses about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining Customers, and will be acquired by the Employee because of the Employee’s business position with the Company. The Employee agrees that, during the Restricted Period, the Employee will not (and will cause the Employee’s controlled affiliates not to) (i) recruit or employ or otherwise solicit, entice, or induce any Person that is or has been an employee, officer or consultant of the Company in the twelve (12) months immediately prior to such action (or, if following the Termination Date, then as of such Termination Date and at any time during the twelve (12) months immediately preceding the Employee’s Termination Date) to become employed by, engaged by, or establish a business relationship with any Person other than the Company or its affiliated or related companies, or (ii) approach any such employee, consultant or officer for such purpose or authorize or participate in the taking of such actions by any other Person, or assist or participate with any such Person in taking such action. The restriction set forth in this paragraph does not apply to a general employment solicitation to the public that is not directed towards one of the Company’s employees or consultants.

 

7.5. Non-Disparagement. The Employee shall not (and shall cause the Employee’s controlled affiliates not to) during the Term and at any time thereafter make, publish, encourage or support, any false, misleading or disparaging written, oral or electronic statements about the Company or any of its affiliates, including the Company’s or its applicable affiliate’s (i) predecessors, members, present or former directors, managers, employees, consultants, officers, partners, attorneys or other representatives, individually and in their official capacities, or (ii) products, services, practices or operations. However, nothing in this Agreement shall prevent the Employee from testifying truthfully under oath if compelled by law to do so in a deposition, lawsuit, or similar legal or dispute resolution proceeding; making or publishing any such statements the Employee or the Employee’s controlled affiliate, as applicable, reasonably believes in good faith to be necessary in responding to or initiating a bona fide legal claim involving the Employee’s or the Employee’s controlled affiliate, as applicable; filing a complaint, participating in an investigation, or otherwise cooperating with any federal, state, or local fair employment agency or other government or law enforcement agency.

 

7.6. Performance of Duties Not Affected. For the avoidance of doubt, this Agreement shall not restrict the Employee from performing his duties as an officer, director, or employee of the Company or any of its affiliates.

 

8. Miscellaneous Provisions Governing Restrictive Covenants.

 

8.1. Reasonableness of Restrictions and Covenants. The Employee hereby confirms that the Employee was informed of the time, territory, scope and other essential requirements of the restrictions set forth in Section 7 of this Agreement when the Employee agreed to become employed with the Company under the terms set forth in this Agreement and the Employee acknowledges that the Company would not have entered into this Agreement had the Employee not agreed to the restrictions set forth in Section 7 of the Agreement. The Employee further acknowledges that the Employee has received sufficient and valuable consideration for the Employee’s agreement to such restrictions. The Employee also agrees that the covenants and restrictions contained in this Agreement are reasonable and valid and hereby agrees that the Company would suffer irreparable injury in the event of any breach by the Employee of the Employee’s obligations under any such covenant or restriction. Accordingly, the Employee hereby agrees that damages would be an inadequate remedy at law in connection with any such breach and that the Company shall therefore be entitled, in addition to any other right or remedy which it may have at law, in equity or otherwise, to temporary and permanent injunctive relief enjoining and restraining the Employee from any such breach. The Employee further consents and stipulates to the entry of such injunctive relief without the need to post any bond or other security.

 

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8.2. Survival. The provisions of Sections 7, 8, 9, 10.2, 11, and 12 of this Agreement shall remain in full force and effect notwithstanding the termination of the Employee’s employment and regardless of the circumstances that result in such termination. This provision shall not be construed to limit the survival of any other provisions that also survive the termination of this Agreement by the express or implied terms of such provisions.

 

8.3. Enforcement, Severability, and Modification. If, at the time of enforcement of any provision of Section 7 of this Agreement, a court or arbitrator holds that the restrictions stated in Section 7 of this Agreement are unreasonable or unenforceable under the circumstances then existing, the Parties agree that (i) the court/arbitrator should first reform the provisions of Section 7 prior to severing any provisions, and if the court/arbitrator will not or cannot reform such provisions, then the court/arbitrator may sever provisions as described in this paragraph, (ii) the provisions of Section 7 of this Agreement shall be severable in the event that any of such provisions are, for any reason whatsoever, deemed invalid, void or otherwise unenforceable, (iii) such invalid, void or otherwise unenforceable provisions in Section 7 of this Agreement shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (iv) the remaining provisions in Section 7 of this Agreement shall remain enforceable to the fullest extent permitted by law.

 

9. Post-Termination Cooperation

 

For a period of two (2) years following the Termination Date, the Employee agrees to be reasonably available to assist and cooperate with the Company in connection with any litigation, administrative proceedings, audits or other governmental or regulatory inquiries. Such assistance and cooperation will, when under the control of the Company, be at a mutually convenient time and location and may include, without limitation, appearing for meetings, consultations, depositions, hearings, or trials. The Company will reimburse the Employee for reasonable, pre-approved travel, lodging and meal expenses incurred in connection with providing such assistance and cooperation.

 

10. Disclosures

 

10.1. Upon Employment. In entering into this Agreement, the Employee represents and warrants that the Employee does not have any obligation, whether express or implied, to any third party that would interfere with, hamper, or limit the Employee’s ability to provide any employment services or to otherwise comply with the Employee’s obligations under this Agreement. The Employee explicitly represents and warrants to the Company that the Employee is not a party to any confidentiality, non-competition, non-solicitation or similar agreements with any third party, or to any agreement the terms of which could prohibit the Employee from performing the Employee’s employment duties for the Company, or to any agreement which could be breached by the Employee’s entry into this Agreement and/or performance of the Employee’s employment duties for the Company.

 

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10.2. Upon Termination of Employment. For any period of time when the restrictions referenced in Section 7 of this Agreement apply, the Employee shall promptly notify any subsequent employer of the terms of this Agreement to ensure that this Agreement is not breached by the Employee.

 

11. Indemnification

 

The Employee agrees that the Employee shall indemnify and hold the Company, its subsidiaries and any affiliates thereof (the “Indemnified Parties”) harmless from and against any Taxes (as defined herein) imposed upon or otherwise required to be paid by any Indemnified Party with respect to any payments, rights or other transfers provided to the Employee by or with respect to an Indemnified Party (including for the avoidance of doubt any person who was an Indemnified Party prior to the Effective Time) on or prior to the Effective Time.  For purposes of the precedent sentence, “Taxes” shall mean taxes or other governmental charges (including any withholding, employment, payroll, social security or other similar taxes) and any penalties, interest, surcharges, additional to tax and deficiency assessments with respect thereto. The Employee shall provide such security for the foregoing indemnity obligations as the Company may reasonably request from time to time.

 

12. General Provisions

 

12.1. Clawback Provisions. Any amounts payable under this Agreement are subject to any policy (whether in existence as of the Commencement Date or later adopted or modified) established by the Company providing for clawback or recovery of amounts that were paid to the Employee. The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.

 

12.2. Resignation of All Other Positions. Upon termination of the Employee’s employment hereunder for any reason, the Employee agrees to resign and shall be deemed to have resigned from all positions that the Employee holds as an officer of the Company or any of its affiliates or as a member of the Company Board and Parent Board (or a committee thereof) of the Company or any of its affiliates.

 

12.3. Assignment and Successors. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Employee, the Company, and their respective successors and assigns, except that the Employee may not assign any of the Employee’s duties hereunder and the Employee may not assign any of the Employee’s rights hereunder without the prior written consent of the Company. This Agreement is personal to the Employee and shall not be assigned by the Employee. Any purported assignment by the Employee shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any entity which controls, is controlled by, or is under common control with the Company, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and the permitted successors and assigns.

 

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12.4. Notices. All notices, requests, demands, or other communications under this Agreement shall be in writing and shall be deemed to be duly given by the Employee to the Company only if provided to the Company, Attention: General Counsel, and shall be deemed to be duly given by the Company to the Employee if provided by mail, email, mail, or nationally or internationally recognized carrier to the Employee at the Employee’s address as shown in the Company’s records.

 

12.5. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any provision or portion of this Agreement shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be ineffective only to the extent of such illegality, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. If any court of competent jurisdiction should deem any covenant herein to be invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

 

12.6. Code Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (“Section 409A”) or an exemption from Section 409A. The Company shall undertake to administer, interpret, and construe this Agreement in a manner that does not result in the imposition on the Employee of any additional tax, penalty, or interest under Section 409A, provided, however, that the Employee understands and agrees that the Company shall not be held liable or responsible for any taxes, penalties, interests or other expenses incurred by the Employee on account of non-compliance with Section 409A.

 

(a) For purposes of Section 409A, each installment payment or payroll period amount provided under this Agreement shall be treated as a separate payment.

 

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A.

 

(c) If the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A payable on account of a “separation from service,” and that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), such payment or benefit shall not be made or provided until the date which is the earlier of (i) the first regular payroll date following the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, or (ii) the date of the Employee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

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(d) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, all such payments shall be made on or before the last day of calendar year following the calendar year in which the expense occurred.

 

12.7. Governing Law. The Parties agree that this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Michigan without giving effect to any conflict of law provisions.

 

12.8. Mandatory Arbitration; Subsequent Court Jurisdiction. The Parties agree that any dispute over this Agreement will be submitted to and settled exclusively by binding arbitration, in accordance with the provisions of this section, subject only to any applicable requirement of law that the Parties engage in a preliminary non-binding mediation or arbitration. Binding arbitration shall be conducted in accordance with the Judicial Arbitration and Mediation Service Streamlined Rules & Procedures (the “JAMS Rules”). Arbitration shall be held in Oakland County, Michigan, before an arbitrator selected pursuant to the JAMS Rules who will have no personal or pecuniary interest, either directly or indirectly, from any business or family relationship with either of the Parties. All decisions of the arbitrator will be final, binding, and conclusive on the Parties.

 

The Parties will equally share the costs of the arbitrator and the arbitration fee (if any). Each Party will bear that Party’s own attorneys’ fees and costs, and the prevailing Party will not be entitled to reimbursement by the other Party of any of its fees or costs incurred in connection with the arbitration hereunder, regardless of any rule to the contrary in the applicable arbitration rules. Either Party may seek confirmation of the arbitration award in the federal or state courts with jurisdiction over Auburn Hills, Michigan and such court shall be the sole, exclusive, and mandatory venue and jurisdiction for any disputes between the Parties arising from or relating to this Agreement. If any action is filed, by any party, relating to a breach of this Agreement and/or enforcement of this Agreement, each Party hereby consents to the exclusive jurisdiction and venue of the federal and state courts with jurisdiction over Auburn Hills, Michigan in any claim or action arising hereunder and waives any claim that such court is an inconvenient forum.

 

12.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY TO THIS AGREEMENT CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; ACKNOWLEDGES THAT IT AND THE OTHER PARTIES TO THIS AGREEMENT HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION; AND AGREES THAT IF SUCH PARTY SEEKS A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY OTHER PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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12.10. Interpretation. The headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and not strictly for or against any Party. In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

12.11. Non-Waiver of Rights and Breaches. No failure or delay of any Party in the exercise of any right given to such Party under this Agreement shall constitute a waiver unless the time specified for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver by a Party of any default of any other Party shall not be deemed to be a waiver of any subsequent default or other default by such Party.

 

12.12. Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder shall be subject to withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes as permitted by law, provided it is satisfied in its sole discretion that all requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

 

12.13. Representation by Counsel; No Strict Construction. Each Party acknowledges that such Party has been represented by independent counsel of such Party’s choice with respect to this Agreement, including throughout all negotiations that have preceded the execution of this Agreement and that each Party has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted this Agreement is of no application and is hereby expressly waived by the Parties.

 

12.14. Attorneys’ Fees. Each Party shall bear its own attorneys' fees and other reasonably related costs and expenses (“Fees”) associated with any claim asserted under this Agreement; provided, however, that if either Party asserts a claim which is finally determined by a court of competent jurisdiction to have been asserted frivolously or in bad faith, the Party against whom such claim was brought shall be entitled to recovery of its Fees from the Party bringing such claim.

 

12.15. Headings. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

12.16. Integration, Amendment and Waiver. This Agreement and the CIIAA constitute the entire understanding and agreement between the Company and the Employee, superseding all prior arrangements, understandings, and agreements, oral or otherwise, among the Parties with respect to the subject matter hereof. All negotiations by the Parties concerning the subject matter hereof are merged into this Agreement and the CIIAA, and there are no representations, warranties, covenants, understandings or agreements, oral or otherwise, by the Parties in relation to this Agreement or the CIIAA other than those incorporated herein or in the CIIAA. No supplement, modification, waiver, or amendment of this Agreement or the CIIAA shall be binding unless executed in writing and signed by both Parties.

 

12.17. Counterparts; Original. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. Any facsimile, photocopy, pdf copy, or electronic copy of any Party’s executed counterpart of this Agreement will be deemed to be an executed original thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to be duly executed as of the date first written above.

 

EMPLOYEE:   THE COMPANY:
       
    ELECTRIC LAST MILE, INC.
                
 /s/ Hailiang Hu   By: /s/ Benjamin Wu
Hailiang Hu   Name:  Benjamin Wu
    Title: Secretary

 

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Exhibit A to Employment Agreement
Confidentiality, Inventions, and Non-Solicitation Agreement

 

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CONFIDENTIALITY, INVENTIONS, AND

NON-SOLICITATION AGREEMENT

 

This Confidentiality, Inventions and Non-Solicitation Agreement (this “Agreement”) is entered into by and between Electric Last Mile, Inc. and its successors and assigns (the “Company”), a Delaware corporation and Hailiang Hu (“Employee”).

 

RECITALS

 

WHEREAS, the Company has offered to employ or to continue to employ Employee in a position of trust, in which Employee acknowledges Employee will obtain new or updated Confidential Information (as defined below) about the business of the Company and the Company Affiliates (as defined below) to or for whom Employee provides services;

 

WHEREAS, in the course of Employee’s employment with the Company, Employee may Create Inventions (as such terms are defined below);

 

WHEREAS, the Company and the Company Affiliates collaborate in the course of business such that Employee has obtained, or will obtain, Confidential Information about both the Company and the Company Affiliates; and

 

WHEREAS, the Company and Employee agree that some of the purposes of this Agreement are to memorialize the parties’ respective ownership and rights to Inventions (as defined below) and to prevent irreparable harm to the Company and the Company Affiliates and that any restrictions set forth herein are reasonable and necessary to protect Confidential Information, goodwill, existing business relationships and other legitimate business interests.

 

NOW, THEREFORE, in consideration of Employee’s employment or continued employment and the Company’s entrusting to Employee confidential information relating to the Company Affiliates’ business, and for the mutual promises and covenants in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby mutually agree as follows:

 

1. Definitions.

 

a. “Company Affiliates” means (i) all Persons controlling, controlled by or under common control with, the Company (including, without limitation, its parent, brother-sister companies, other affiliates, subsidiaries, and joint ventures), (ii) all Persons in which the Company owns an equity interest and (iii) all predecessors, successors and assigns of those affiliates identified in (i) and (ii). As used in this definition, “control” (including, with correlative meanings, “controlling”, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies (whether through ownership of securities, partnership or other ownership interests, by contract or otherwise).

 

 

 

b. “Confidential Information” means any and all confidential, proprietary or trade secret information not generally known or available outside the Company and/or the Company Affiliates, and/or information entrusted to the Company and/or the Company Affiliates in confidence by third parties, in each case, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is Created by Employee. Confidential Information includes, without limitation, all Work Products (as defined below), technical data, trade secrets, know-how, improvements, research, product or service ideas or plans, software (whether in source code or object code), designs, developments, processes, formulas, techniques, biological materials, mask works, designs and drawings, hardware configuration information, information relating to existing or potential employees, consultants, clients, suppliers, vendors, or other service providers of the Company and the Company Affiliates (including, but not limited to, their names, contact information, jobs, compensation and expertise), information relating to suppliers and customers, information relating to stockholders or lenders, price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, financial statements, profit margins, sales information, historical financial data, budgets or other business information. Confidential Information also means all similar information disclosed to the Company by third parties, which is subject to confidentiality obligations. Confidential Information shall not include information that is generally available to and known by the public, provided that such disclosure to the public is through no direct or indirect fault of the Employee or Person(s) acting on the Employee’s behalf.

 

c. “Create” means make, create, author, discover, develop, invent, conceive, or reduce to practice.

 

d. “Inventions” means any and all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto, in each case, whether or not patentable, copyrightable or otherwise legally protectable, as well as any and all rights in and to patents, copyright, trademark, trade secret or other intellectual property rights (in the United States or elsewhere), including all pending and future applications and registrations therefor. This includes, but is not limited to, any new product, machine, article of manufacture, biological material, method, procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon.

 

e. “Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture, entity, association or other organization, whether or not a legal entity, or a governmental entity.

 

f. “Tangible Embodiments” means any and all tangible documents, materials, records, notebooks, tapes, disks, drives, software (whether in source code, object code or machine- readable copies), work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence, results or other embodiments.

 

 

 

g. “Work Product” means any and all Inventions that Employee, solely or jointly with others, Creates, in whole or in part, during the period of Employee’s employment or within one (1) year following termination of such employment, including those that relate to or result from the actual or anticipated business, work, research, or investigation of the Company or any of the Company Affiliates or which are suggested by, relate to, or result from any task assigned to or performed by Employee for the Company or any of the Company Affiliates.

 

2. Confidential Information.

 

a. Employee acknowledges that all Confidential Information constitutes a protectable business interest of the Company, and covenants and agrees that at all times during the period of Employee’s employment and thereafter, Employee agrees (i) to hold in strictest confidence the Confidential Information, (ii) not to, directly or indirectly, disclose, furnish, or make available to any Person any Confidential Information without prior written authorization from the Company, and (iii) not to use any Confidential Information except during the term of Employee’s employment in the course of performing Employee’s duties as an employee of the Company. Employee will abide by the Company’s policies and rules as may be established from time to time by it for the protection of its Confidential Information and will not make any copies of Confidential Information except as authorized by the Company. Employee agrees that in the course of employment with the Company, Employee will not bring to the Company’s offices nor use for the Company’s benefit, nor disclose, furnish or make available to the Company or any Company Affiliate, or induce the Company or any Company Affiliate to use, any confidential or proprietary information or Tangible Embodiments belonging to others. Employee’s obligations under this Section 2(a) with respect to particular Confidential Information will survive expiration or termination of this Agreement and Employee’s employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes publicly and widely known to the public other than as a result of any wrongful act of Employee or Employee’s breach of this Agreement (or a breach by those acting in concert with the Employee or on the Employee’s behalf) or wrongful act of any other Person who was under confidentiality obligations as to the item or items involved.

 

b. For clarity, Employee’s agreements in this Section 2 are intended to be for the benefit of the Company, the Company Affiliates, and any third party that has entrusted information or Tangible Embodiments to the Company or the Company Affiliates in confidence. This Agreement is intended to supplement, and not to supersede, any rights the Company or the Company Affiliates may have with respect to the protection of trade secrets or confidential or proprietary information.

 

 

 

c. Notwithstanding any other provision of this Agreement, an individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual (including Employee) who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with federal law protecting confidential disclosures of a trade secret to the government or in a court filing, 18 U.S.C. § 1833(b), or to create liability for disclosures of Confidential Information that are expressly allowed by 18 U.S.C. § 1833(b).

 

3. Return of Materials. Upon termination of employment with the Company or otherwise upon the Company’s request, and regardless of the reason for such termination, Employee agrees to promptly return to the Company or destroy all Tangible Embodiments of the foregoing in Employee’s possession, custody, or control that contain, summarize, abstract, or in any way reflect, relate to, or embody any Confidential Information or any other information concerning the Company, any of the Company Affiliates or any of its or their products, services or clients, whether prepared by the Employee or others. At the time Employee returns or destroys these materials (or otherwise upon the Company’s request), Employee will acknowledge to the Company, in writing and under oath, in the form attached as Exhibit A, that Employee has complied with the terms of this Section 3.

 

4. Work Product.

 

a. Employee agrees to promptly and fully disclose in writing to the Company all Work Product (including all original works of authorship and all work product relating thereto). This disclosure will include complete and accurate copies of all Tangible Embodiments of such Work Product.

 

b. Employee covenants and agrees that all Work Product and Tangible Embodiments are and shall be the sole and exclusive property of the Company. Employee acknowledges that all Work Product that are original works of authorship Created by Employee (solely or jointly) within the scope of Employee’s employment are “works made for hire” to the maximum extent permitted under applicable law and as that term is under the United States Copyright Act (17 U.S.C., et seq.). Without limiting the foregoing, Employee hereby agrees to hold in trust for the sole right and benefit of the Company and hereby assigns (and without limiting the foregoing, agrees in the future to assign) to the Company all of the entire worldwide right, title, and interest in and to all Work Product (and Tangible Embodiments thereof) throughout the world, without any requirement of further documentation or consideration, including, for clarity, any and all patent rights, copyrights, trademark rights, mask work rights, moral rights, sui generis database rights, and all other intellectual property rights therein or pertaining thereto and all rights to prosecute, enforce, and sue for past, present and future infringements, misappropriations or other violations thereof, throughout the universe in perpetuity or for the longest period permitted by law. Employee hereby waives and irrevocably quitclaims to the Company or its designee any and all claims, of any nature whatsoever, that Employee now has or may hereafter have for infringement of any and all Work Product and/or Tangible Embodiments and intellectual property rights related thereto.

 

 

 

c. At any time during or after Employee’s employment with the Company, at the request of the Company or any of the Company Affiliates, Employee agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company’s expense, in registering, recording, obtaining, maintaining, defending, perfecting, enforcing, and/or assigning any Work Product and Tangible Embodiments in any and all countries. In the event Employee refuses or fails to perform such acts, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and in Employee’s behalf and instead of Employee, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Employee; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest.

 

d. To the extent that such an assignment of any Work Product and/or Tangible Embodiment is not permitted under applicable law, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive (even as to Employee), royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Work Product or Tangible Embodiment for any commercial or internal business purposes and all other purposes. To the extent not assignable, Employee hereby irrevocably waives, to the extent permitted by applicable law, any and all claims Employee may now or hereafter have in any jurisdiction to any so-called “moral rights” in connection with the Work Product and acknowledges and agrees that the Company may use, exploit, distribute, reproduce, advertise, promote, publicize, alter, modify or edit the Work Product or combine the Work Product with other works, in the Company’s sole discretion, in any format or medium hereafter devised.

 

e. Without limiting the generality of any other provision of this Section 4, Employee hereby authorizes the Company and each of the Company Affiliates to make any desired changes to any part of any Work Product, to combine it with other materials in any manner desired, and to withhold Employee’s identity in connection with any distribution or use thereof alone or in combination with other materials.

 

f. The obligations of Employee set forth in this Section 4 (including, but not limited to, the assignment obligations) will continue beyond the termination of Employee’s employment with respect to Work Product Created by Employee alone or jointly with others during Employee’s employment with the Company and for one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Employee and Employee’s executors, administrators and other representatives.

 

 

 

g. Employee agrees that Employee will register all domains, usernames, handles, social media accounts and similar online accounts which Employee registers on behalf of the Company and which relate to the Company or its intellectual property rights (the “Online Accounts”) in the name of the Company, except to the extent that such requests by the Company are prohibited by law. If any Online Account that is not (or by the terms of such Online Account cannot be) registered in the name of the Company is registered in Employee’s name or under Employee’s control, Employee agrees to assign ownership and control of such Online Account to any Person designated by the Company upon the Company’s request. Employee agrees to use any Online Account, whether registered in Employee’s name or the name of the Company, in compliance with any applicable policies or guidelines of the Company.

 

h. Notwithstanding anything to the contrary herein, this Agreement does not apply to any Invention which qualifies as a non-assignable Invention under the provisions of California Labor Code Section 2870 (“Section 2870”), a copy of which is attached as Exhibit B. Employee will advise the Company promptly in writing of any Inventions that Employee believes fully qualify for protection under Section 2870; and Employee will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without Employee’s consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under the provisions of Section 2870. Employee will preserve the confidentiality of any Invention that does not fully qualify for protection under Section 2870. BY SIGNING THIS AGREEMENT, EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED EXHIBIT B, WHICH SHALL CONSTITUTE WRITTEN NOTICE OF THE PROVISIONS OF SECTION 2870.

 

5. Excluded IP.

 

a. As a matter of record, Employee has set forth on Exhibit C hereto a list with non-confidential descriptions of any and all proprietary information, works of authorship, ideas, reports, creative works, intellectual property or other Inventions which have been made by Employee prior to employment with the Company and which are excluded from the scope of this Agreement (collectively, the “Excluded IP”). Employee hereby represents and warrants that such list is accurate and complete. If no list is attached (or if the list is empty), then Employee hereby represents and warrants that there is no Excluded IP. Employee will not assert any right, title or interest in or to any Work Product nor claim that Employee Created any Work Product before Employee’s employment with the Company unless Employee has specifically identified that Invention as an Excluded IP on the attached Exhibit C prior to the execution of this Agreement.

 

 

 

b. If in the course of Employee’s employment, Employee uses or incorporates into any Work Product or Tangible Embodiment any Inventions (including any Excluded IP) in which Employee or a third Person has any interest and which is not covered by Section 4(b) hereof, Employee will promptly so inform the Company. Whether or not Employee gives such notice, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive, royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Invention (including such Excluded IP) for any commercial or internal business purposes and all other purposes.

 

6. Representations and Warranties.

 

a. No Conflicts. Employee hereby represents and warrants that Employee is not subject to any obligation to any third Person, including any former employer, that would be inconsistent with any provision of this Agreement, including with respect to any Excluded IP, and that Employee has the right to grant the license and rights granted in Section 5(b).

 

b. No Infringement. Employee hereby represents and warrants that all Excluded IP licensed to the Employer pursuant to Section 5(b) do not (and all Work Product will not) infringe, misappropriate, dilute, or otherwise violate any third Person’s patents, copyrights, trademarks, trade secrets, or other intellectual property rights or other rights.

 

7. Equitable Remedies. Employee acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of the Company’s and the Company Affiliates’ business interests, that irreparable injury will result to the Company and the Company Affiliates if Employee breaches any of the terms of said covenants, and that in the event of Employee’s actual or threatened breach of any such covenants, the Company and the Company Affiliates will have no adequate remedy at law. Employee accordingly agrees that, in the event of any actual or threatened breach by Employee of any of said covenants, the Company or any of the Company Affiliates, as applicable, will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 7 will be construed as prohibiting the Company or any of the Company Affiliates from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.

 

8. No Right to Employment. No provision of this Agreement shall give Employee any right to continue in the employ of the Company or any of the Company Affiliates, create any inference as to the length of employment of Employee, affect the right of the Company or the Company Affiliates to terminate the employment of Employee, with or without cause, or give Employee any right to participate in any employee welfare or benefit plan or other program of the Company or any of the Company Affiliates. Notwithstanding the foregoing, in the event Employee has executed a written employment agreement with the Company, in the event of any direct and irresolvable conflict between the terms of this Agreement and such employment agreement, the terms of this Agreement shall control with respect to all Inventions and Confidential Information, but otherwise the terms of the employment agreement shall control.

 

 

 

9. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

10. Severability. Employee acknowledges that the agreements and covenants contained in this Agreement are essential to protect the Company and the Company Affiliates and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy or any of the covenants set forth in this Agreement not fully enforceable, the other provisions of this Agreement will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent.

 

11. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) five (5) days after sent by certified mail, return receipt requested; or (c) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses set forth below:

 

If to the Company: the address of the Company’s current headquarters, Attention: General Counsel.

 

If to Employee: to the last-known address of the Employee as shown in the Company’s records.

 

Each party will be entitled to provide a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 11.

 

12. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement.

 

13. Governing Law. This Agreement has been executed in the State of Michigan, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. The parties hereby consent to the exclusive jurisdiction of the federal or state courts with jurisdiction over Auburn Hills, Michigan in any action or claim arising out of, under or in connection with this Agreement, or the relationship between the parties hereto.

 

 

 

14. Binding Effect. This Agreement will be binding upon and inure to the benefit of Employee, the Company, the Company Affiliates, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement, without the Employee’s prior consent. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void ab initio.

 

15. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person.

 

16. Waiver of Jury. THE COMPANY AND THE EMPLOYEE KNOWINGLY AND VOLUNTARILY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES HERETO.

 

17. Voluntary Execution. Employee acknowledges and agrees that Employee has carefully read all of the provisions of this Agreement, that Employee understands and has voluntarily accepted such provisions, and that Employee will fully and faithfully comply with such provisions.

 

18. Advice of Counsel. EMPLOYEE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, EMPLOYEE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND EMPLOYEE HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart's signature page of this Agreement by facsimile, email in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document has the same effect as delivery of an executed original of this Agreement

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Employee has signed this Agreement, as of the date written below.

 

  EMPLOYEE
     
   
  Name:  
  Date:  
     
  State of Residence:
     
  COMPANY
     
   
   
  Electric Last Mile, Inc.
     
  Name:  
  Date:  

 

 

 

EXHIBIT A

 

My engagement by Electric Last Mile, Inc., (the “Company”) is now terminated. I have reviewed my Confidentiality, Inventions and Non-Solicitation Agreement with the Company, dated ________________ ___, 20__ (the “Agreement”), and I hereby swear, under penalty of perjury, that:

 

● I have complied and will continue to comply with all of the provisions of the Agreement.

 

● I understand that all of the Company’s materials (including without limitation, written or printed documents, email and computer disks or tapes, whether machine or user readable, computer memory, and other information reduced to any recorded format or medium), whether or not they contain Confidential Information (as that phrase is defined in the Agreement), are and remain the property of the Company. I have delivered to authorized Company personnel, or have destroyed, all of those documents and all other Company materials in my possession.

 

● Any breach of my declarations hereunder would cause irreparable injury to the Company for which monetary damages would not be an adequate remedy and, therefore, will entitle the Company to injunctive relief (including specific performance). The rights and remedies provided to the Company hereunder are cumulative and in addition to any other rights and remedies available to the Company at law or in equity. I hereby acknowledge that the Company shall be entitled to recover its reasonable attorneys’ fees and litigation expenses incurred in any action to enforce its rights in the event of a breach of my declarations hereunder.

 

      Employee:
       
Date:        
                                 
      Name: 
         
       

 

 

 

EXHIBIT B

 

California Labor Code Section 2870

 

Invention On Own Time – Exemption From Agreement

 

“(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

 

 

 

EXHIBIT C

 

I hereby represent and warrant that I have disclosed on this Exhibit all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto and other intellectual property (including all Excluded IP) that I have made, created, authored, discovered, developed, invented, conceived, or reduced to practice, prior to employment with the Company. I agree that any present or future patent, idea, copyright, writing, computer program, or other Invention that is not listed on this Exhibit is a Work Product is subject to (and assigned by) the assignment under the attached Confidentiality, Inventions and Non-Solicitation Agreement to which this is an Exhibit. I further agree that under no circumstances will I incorporate in any work that I perform for the Company any of the Excluded IP that I have disclosed on this Exhibit without the prior written consent of the Company.

 

Brief Description of Excluded IP (e.g., inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto inventions, proprietary information, works of authorship, computer programs, know-how, trade secrets, ideas, reports, creative works, and other intellectual property) Right, Title or Interest and Date Acquired
   
   
   
   

 

      Employee:
       
Date:        
                                      
      Name: 

 

 

 

 

 

 

Exhibit 10.14

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is agreed upon and entered into this 10th day of December, 2020, by and between Benjamin Wu (the “Employee”) and Electric Last Mile, Inc., a Delaware corporation, together with its affiliates, successors and assigns (the “Company”) (each individually a “Party” and collectively the “Parties”).

 

RECITALS

 

A. Pursuant to that Agreement and Plan of Merger by and among Forum Merger III Corporation, ELMS Merger Corp. (the “Merger Sub”), the Company, and Jason Luo, in the capacity as the initial Stockholder Representative thereto, dated on or about December 10, 2020 (the “Merger Agreement”), the Company intends to merge with and into the Merger Sub with the Company surviving the merger (the “Merger”) upon the Effective Time (as such term in defined the Merger Agreement); and

 

B. The Company desires to employ the Employee, and the Employee desires to be employed by the Company and any publicly-traded parent entity of the Company, to the extent applicable (the “Parent”), to be effective as of the first business day immediately following the Effective Time.

 

AGREEMENTS

 

In consideration of the mutual covenants and agreements set forth in this Agreement and for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties, each intending to be legally bound hereby, agree as follows:

 

1. Employment

 

1.1. Duties. The Employee shall serve as General Counsel of the Company and any Parent, as applicable in its discretion, and will, under the direction of the Chief Executive Officer of the Company (the “CEO”), faithfully and to the best of the Employee’s ability perform the duties assigned by the CEO or the Board of Directors of the Company (“Company Board”) and any Board of Directors of the Parent (the “Parent Board”) in his/her or its discretion from time to time. The Employee shall, if requested, also serve as a director or officer of any affiliate of the Company for no additional compensation.

 

1.2. Best Efforts. The Employee agrees to devote the Employee’s entire business time, and best effort, skill and attention to the discharge of the Employee’s duties while employed by the Company.

 

1.3. Duty to Act in the Best Interest of the Company. The Employee shall not, directly or indirectly, act in any manner which may damage the business of the Company or which would adversely affect the goodwill, reputation or business relations of the Company with its customers, the public generally, or with any of its other employees. The Employee shall act in the best interest of the Company at all times. The Employee will not engage in any other business, profession, or occupation for compensation or otherwise that would conflict or interfere with the performance of the Employee’s services under the Agreement either directly or indirectly without the prior written consent of the Company Board and any Parent Board.

 

 

 

 

1.4. Place of Performance; Required Travel. The Employee’s principal place of employment shall be the Company’s office as of the Effective Time that is located in Auburn Hills, MI or the metropolitan area of Detroit, MI, provided that the Employee will be required to travel as needed on Company business during the Term (as such term is defined in Section 2.1 below). Required travel is anticipated to occupy up to 40% of Employee’s working time on average but may occupy more or less time depending on business needs.

 

2. Term of Employment

 

2.1. Term. The Employee’s employment with the Company shall commence on the day that is the first business day immediately following the Effective Time of the Merger (the “Commencement Date”) and shall, subject to Section 2.2, continue until the Company or the Employee terminate the Agreement in accordance with the terms herein (the “Term”).

 

2.2. “At Will” Employment Status. Notwithstanding any term or provision of this Agreement, at all times the Employee shall be employed by Company on an “at will” basis, subject to termination in accordance with Section 5.

 

3. Base Compensation and Incentive Compensation.

 

3.1. Base Compensation. During the Term, the Company shall pay to the Employee an annual base salary in the amount of $310,000.00 (the “Base Compensation”). The Base Compensation shall be paid in periodic installments in accordance with the Company’s normal payroll procedures, subject to all applicable taxes and withholdings. The Base Compensation may be increased from time-to-time by the Company in accordance with the regular compensation review practices of the Company Board and any Parent Board or the Compensation Committee of the Company Board and any Parent Board (the “Compensation Committee”), as applicable, and may be decreased from time-to-time by the Company, but only to the extent such decrease is part of an across-the-board salary reduction that applies in a consistent manner to similarly-situated executives of the Company.

 

3.2. Annual Bonus. The Employee shall be eligible to participate in a Company annual cash incentive plan, as established by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time for similarly-situated executives of the Company, and through which the Company awards performance-based cash bonuses on an annual basis, subject to the Company achieving performance targets as approved by the independent directors on the Company Board and Parent Board or by the Compensation Committee. The Employee shall be eligible to participate in any such plan at a target bonus level as determined by the Compensation Committee from time to time, but such target bonus level shall be no less than 50% of the Employee’s Base Compensation (as then in effect from time to time). The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and the decision to provide any bonus opportunity and the amount and terms of any annual bonus shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee. The Company’s payment of any such bonus pursuant to such plan to the Employee shall be subject to the Employee’s employment with the Company on the applicable bonus payment date.

 

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3.3. Long-Term Incentive Compensation/Equity Awards. The Employee shall be eligible to participate in a Company long-term incentive compensation plan, through which the Company grants equity awards to its key employees, pursuant to the separate terms and conditions of such plan. The Employee shall be eligible to participate in any such plan at a target award level as determined by the independent directors on the Company Board and Parent Board or the Compensation Committee from time to time. The Employee’s participation in any such plan shall be governed by the terms and conditions of such plan as then in effect and any applicable award agreements, and the decision to provide any award and the amount and terms of any award shall be in the sole and absolute discretion of the independent directors on the Company Board and Parent Board or the Compensation Committee.

 

4. Benefits.

 

4.1. Employee Benefits. During the Term, the Employee shall be entitled to participate in all employee benefit plans, practices, and programs maintained by the Company, as in effect from time to time to the extent consistent with applicable law and the terms of the applicable benefit plan, practice or program. Notwithstanding anything otherwise provided under this Agreement, nothing contained herein shall obligate the Company to continue or maintain any particular benefit plan or program on an ongoing basis and the Company reserves the right to amend, establish or terminate any benefit plan, practice or program at any time in its sole discretion.

 

4.2. Paid Time Off. During the Term, the Employee will be entitled to paid time off on a substantially-similar basis as other similarly-situated executives of the Company in accordance with the Company’s policies as such policies may exist from time to time.

 

4.3. Business Expenses. The Employee shall be entitled to reimbursement for reasonable and necessary out-of-pocket business expenses incurred by the Employee in connection with the performance of the Employee’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures (including the requirement to provide appropriate documentation of such expenses), as in effect from time to time.

 

5. Termination of Employment

 

5.1. Termination for Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment with the Company at any time for any of the following causes (each a “Cause”):

 

(a) Any act of fraud, dishonesty, gross negligence, misrepresentation, or embezzlement, misappropriation, or conversion of assets of the Company or any of its affiliates (or attempt to do any of the foregoing);

 

(b) Subject to any protections set forth under applicable laws, commission of, indictment for, conviction of, pleading guilty or nolo contendere to, or engaging in any crime that constitutes a felony or any crime or other act involving fraud, theft, embezzlement, or moral turpitude;

 

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(c) Subject to any protections set forth under applicable laws, commission of, conviction of, pleading guilty or nolo contendere to, or engaging in any crime or other act that violates any other law, rule, or regulation that the Company Board and Parent Board reasonably determines is job-related and/or is likely to have an adverse impact on the performance of the Employee’s duties under this Agreement;

 

(d) Willful or material violation of any federal, state, or foreign securities laws;

 

(e) Conduct or omission which the Company Board and Parent Board reasonably determines is or is reasonably likely to be detrimental to the reputation, goodwill, public image, or business operations of the Company;

 

(f) Continued failure by the Employee to perform the Employee’s duties or responsibilities to the Company or its affiliates (other than absence due to bona fide illness or Disability as defined herein);

 

(g) The Employee’s failure or refusal to comply with the lawful directions of the CEO or the Company Board and Parent Board;

 

(h) Making of threats or engaging in acts of violence in the workplace;

 

(i) Engaging in sexual, racial, or other forms of harassment or discrimination in violation of the law or Company policies;

 

(j) Breach of the Employee’s fiduciary duties or confidentiality obligations or engaging in any other act of material dishonesty or disloyalty toward the Company;

 

(k) Violating any of the Company’s written policies or codes of conduct including, but not limited to, written policies related to equal employment opportunity, performance of illegal or unethical activities, and ethical misconduct;

 

(l) Repeatedly reporting to work under the influence of alcohol or drugs in a manner that impacts the Employee’s ability to perform the duties of the Employee’s job or the obligations under this Agreement;

 

(m) The Employee’s failure to obtain and/or maintain proper authorization to work in the United States commensurate with the needs of the Company;

 

(n) The Employee’s voluntary resignation or other termination of employment effected by the Employee at any time when the Company could effect a termination for Cause pursuant to this Agreement; and/or

 

(o) The Employee’s material breach of any term of this Agreement or any other agreement with the Company or any of its affiliates or failure to perform any of the Employee’s duties to the satisfaction of the Company Board and Parent Board.

 

The Company Board and Parent Board shall, in its sole discretion, have the authority to make the determination that the Employee has been terminated for Cause. Upon the effectiveness of any termination for Cause by the Company, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for (i) any payment of compensation accrued but unpaid through the date of such termination for Cause, (ii) any vested employee benefits covered by the Employee Retirement Income Security Act of 1974, as amended, to which the Employee is entitled upon termination of employment with the Company in accordance with the terms and conditions of the applicable plans of the Company, as applicable, and (iii) reimbursement for any unreimbursed business expenses incurred by the Employee on or prior to the Employee’s last date of employment with the Company pursuant to Section 4.3 (collectively, the “Accrued Amounts”). In the event that (1) the Employee’s employment with the Company terminates for any reason other than for Cause and (2) any of the facts and circumstances described in the definition of Cause existed as of the date of such termination (whether or not known by the Company Board and Parent Board or the Company or any of its affiliates as of the time of such termination or discovered after any such termination), then, the Company may deem such termination of employment to have been for Cause, and such termination shall be treated as a termination by the Company for Cause and the Employee acknowledges that the Employee’s compensation may also be subject to any clawback provisions required by law, rule, regulation or Company policy (as in effect upon the Commencement Date or any time thereafter), as well as any other agreement between the Company and the Employee that provides for clawback of any compensation or equity in the Company (including any equity related awards).

 

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5.2. Termination by the Company Without Cause. The Company shall have the right to immediately terminate this Agreement and the Employee’s employment without Cause, at any time, and for any reason or no reason at all, subject to the following:

 

(a) If the Company terminates this Agreement and the Employee’s employment and such termination is not a termination for Cause under Section 5.1, then the Employee shall receive the Accrued Amounts and a cash payment from the Company as severance (the “Severance Payment”) equal to six (6) months of Base Compensation as in effect at the time of the termination, subject to all applicable federal, state, local and other withholdings. The Severance Payment shall be paid in substantially equal installments with the Company’s regular payroll over the six (6) month period (the “Severance Pay Period”) following the effective date of termination of employment and commencing on the first administratively practicable payroll date on or next following the date the Release Agreement becomes effective and fully irrevocable in accordance with Section 5.2(c) (provided that the initial and final payments may be a greater or lesser amount so as to conform with the Company’s regular payroll period); provided that any amounts that would be payable prior to the effectiveness of the Release Agreement (as defined below) shall be delayed until the Release Agreement is effective and fully irrevocable.

 

(b) The Severance Payment will be subject to offset by the amount of any compensation earned by the Employee or to which the Employee is entitled during the Severance Pay Period (regardless of when any such amount is paid by a subsequent employer or by the Company): (i) from any subsequent employer following the termination of the Employee’s employment with the Company, or (ii) from the Company under any contingent employment agreement between the Company and the Employee. In the event the Employee obtains other employment before the end of the Severance Pay Period, the Employee shall immediately notify the Company of such employment in writing.  The Employee expressly agrees that failure to immediately advise Company of the Employee’s new employment shall constitute a material breach of this Agreement, and the Employee will forfeit all Severance Payment amounts paid or that otherwise would be paid by the Company under this Section 5 from the date of the Employee’s new employment until the end of the Severance Pay Period.  The Employee shall immediately repay to the Company all amounts paid by the Company as a Severance Payment applicable to the period commencing on the date of the Employee’s new employment through the end of the Severance Pay Period.  Notwithstanding such forfeiture, the remaining provisions of this Agreement shall remain in full force and effect. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company to substantiate the Employee’s new employment and all compensation and rights under the Employee’s new employment.

 

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(c) Before receiving the Severance Payment set forth in Section 5.2(a), and as a condition to receiving the same, the Employee shall sign, and not revoke, a release of any and all claims or potential claims against the Company which the Employee has or may have, whether known or unknown, as of the date of execution of the release by the Employee (the “Release Agreement”). The Company must provide the form of Release Agreement to the Employee within fifteen (15) days after the Employee’s separation from service and the Employee must sign the Release Agreement and provide it to the Company within twenty-one (21) days (or forty-five (45) days, if applicable under applicable law) after receiving it from the Company and not revoke such release during any applicable revocation period. The Release Agreement shall be in the form as determined by the Company, in its sole discretion. To the extent the Severance Payment is subject to Section 409A and the period for executing (and not revoking) the Release Agreement begins in one taxable year and ends in another taxable year, the Severance Payment shall not begin until the beginning of the second taxable year; provided that, the first installment payment shall include all amounts that would otherwise have been paid to the Employee during the period beginning on the date of the Employee’s termination and ending on the first payment date if no delay had been imposed.

 

5.3. Termination by the Employee for Good Reason. The Employee may terminate this Agreement and/or the Employee’s employment with the Company for Good Reason, as defined below. If the Employee terminates this Agreement for Good Reason, then the Employee shall receive the Accrued Amounts and the Severance Payment as set forth in Section 5.2(a), subject to the requirements of Sections 5.2(b) and (c). For purposes of this Agreement, “Good Reason” shall mean:

 

(a) a material diminution in the Employee’s authority, duties or responsibilities;

 

(b) a material diminution in the Employee’s Base Compensation except for across-the-board salary reductions similarly affecting other similarly-situated executives of the Company or due to unforeseeable business circumstances, pandemics, natural disasters or similar circumstances;

 

(c) a change that would require the Employee to relocate to a primary office that is more than fifty (50) miles from the location of the Company’s then principal offices unless such relocation is closer to the Employee’s personal residence; or

 

(d) a material breach by the Company of any of its obligations under this Agreement.

 

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Notwithstanding the foregoing, no such event described above shall constitute Good Reason unless: (1) the Employee gives written notice to the Company specifying the condition or event relied upon for such termination within thirty (30) days of the initial existence of such event; and (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of the Employee’s written notice. If the Employee does not terminate his or her employment for Good Reason within sixty (60) days after the end of such thirty (30)-day cure period, then the Employee will be deemed to have waived his or her right to terminate for Good Reason with respect to such grounds. If the Company cures the Good Reason condition during such cure period, Good Reason will be deemed not to have occurred.

 

5.4. Termination by Employee Without Good Reason. The Employee may resign from employment without Good Reason by providing sixty (60) days’ advance, written notice of the Employee’s intent to resign from employment. Upon the effectiveness of such resignation, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts. With respect to any notice period pursuant to the immediately preceding sentence, the Company may in its sole discretion (a) place the Employee on a paid, non-working, garden leave during some or all of such notice period (and, for the avoidance of doubt, relieve the Employee of the Employee’s title and duties during such period), and/or (b) waive such notice, in whole or in part, by accelerating the Employee’s termination date and paying the Employee the Employee’s base salary in lieu of the portion of the notice period waived by the Company and without affecting the voluntary nature of the Employee’s termination.

 

5.5. Termination Due to Disability or Death. The Company shall have the right to terminate this Agreement and the Employee’s employment, at any time, upon the occurrence of the Employee’s death or Disability. If the Employee’s employment is terminated during the Term on account of the Employee’s death or Disability, the Company shall have no further obligation under this Agreement and payment of all compensation to the Employee under this Agreement shall cease immediately, except for the Accrued Amounts through the date of such termination due to death or Disability. The term “Disability” as used in this Agreement shall mean that the Employee is entitled to receive long-term disability benefits under the Company’s long-term disability plan or, if there is no such plan, the Employee has incurred (1) a permanent and total disability within the meaning of Section 22(e)(3) of the Internal Revenue Code or any successor provision, or (2) a physical or mental disability that renders the Employee unable to perform the required functions of the Employee’s position, duties, and responsibilities under this Agreement, and which, in either case, has existed for at least ninety (90) consecutive days or one hundred and twenty (120) non-consecutive days during any three hundred sixty-five (365) day period as determined by the Company Board and Parent Board.

 

5.6. COBRA Coverage. Solely in the event of a termination by the Company without Cause pursuant to Section 5.2 and subject to the execution of the Release Agreement by the Employee and the Release Agreement becoming effective and fully irrevocable pursuant to Section 5.2(c), if the Employee timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse the Employee for the difference between the monthly COBRA premium actually paid by the Employee for the Employee and the Employee’s dependents and the monthly premium amount paid by similarly-situated active executives of the Company during the same period. Such reimbursement shall be paid to the Employee in the month immediately following the month in which the Employee timely remits the premium payment and the Employee provides proof of payment of such premium. The Employee shall be eligible to receive such reimbursement until the earliest of: (i) the end of the Severance Period; (ii) the date the Employee is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Employee becomes eligible to receive substantially similar coverage from another employer or other source. Notwithstanding the foregoing, the Company may, in its sole discretion, elect to provide a cash payment to the Employee in lieu of providing reimbursement as described herein in an amount reasonably determined by the Company to be equivalent to the amount of COBRA premium reimbursements that would otherwise be due by the Company under this Section 5.6 for the Severance Period, without regard to any effect of taxation of such cash payment to the Employee. If the Employee obtains other employment prior to the end of the Severance Period which offers any of such insurance coverage, the Company’s obligation to reimburse the Employee for COBRA payments will be immediately terminated. The Employee agrees to furnish promptly to the Company all documentation required and/or reasonably requested by the Company regarding subsequent benefit eligibility.

 

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5.7. Incentive Compensation. In the event of any termination of employment, any equity-based or cash incentive awards shall be treated as provided in the applicable plan document.

 

6. Confidentiality, Inventions, and Non-Solicitation Agreement. Prior to the Effective Time, the Employee shall enter into with the Company a Confidentiality, Inventions, and Non-Solicitation Agreement in substantially the form set forth under Exhibit A hereto (the “CIIAA”). Notwithstanding anything to the contrary herein, this Agreement shall have no force or effect and be null and void ab initio if the Employee fails to execute the CIIAA prior to the Effective Time.

 

7. Non-Competition, Non-Solicitation, and Non-Disparagement.

 

7.1. Definitions. As used in this Agreement, the following terms shall have the following specified meanings:

 

(a) “Business” means any business engaged in the manufacture, import, distribution and/or sale or resale of electric commercial delivery vehicles. A Business includes any business pursuing research and development, products or services in competition with the products or services which are, during and at the end of the Term, either (a) produced, marketed, distributed, sourced or otherwise commercially exploited by the Company or (b) in actual or demonstrably anticipated research or development by the Company.

 

(b) “Competing Business” means any Person, business, or subdivision of a business engaged in Business in competition with the Company or, to the Employee’s actual knowledge, any such Persons who are actively pursuing or otherwise affirmatively planning to engage in competition with the Company.

 

(c) “Customer” means a Person to whom the Company provided products or services for compensation at any time during the Term and with whom the Employee had direct contact, or provided services to, on behalf of the Company (or, if following the Employee’s last day of employment with the Company (such day, the “Termination Date”), then as of such Termination Date or at any time during the twelve (12) month period immediately preceding the Termination Date).

 

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(d) “Person” shall be construed broadly to mean an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization, an educational entity, a governmental entity or any department, agency, or political subdivision thereof, and any other entity.

 

(e) “Prospective Customer” shall mean a Person with whom the Company has had any negotiations or material discussions regarding the possible supply of products or services for compensation and with whom the Employee had direct contact, or provided services to on behalf of the Company (or, if following the Termination Date, then as of such Termination Date or at any time during the 12-month period immediately preceding the Termination Date).

 

(f) “Restricted Period” means the Term and for a period of six (6) months after the Termination Date.

 

(g) “Restricted Territory” means the United States.

 

7.2. Non-Competition. During the Restricted Period, the Employee shall not (and shall cause the Employee’s controlled affiliates not to) directly or indirectly (including through the Employee’s respective controlled affiliates or otherwise, including as a director, officer, equityholder, partner, consultant, employer, employee, proprietor, principal, agent, manager, franchisee, franchisor, distributor, advisor, consultant, lender, representative or otherwise), either for the Employee or for any other Person in the Restricted Territory, (a) perform duties, carry out activities, provide services, or otherwise engage in, for the Employee’s own benefit or for the benefit of any third party, any Competing Business in the Restricted Territory (i) in a position or capacity that is the same or substantially similar to the position the Employee held at, or the capacity in which the Employee performed duties for, the Company, or (ii) in a position or capacity in which the Employee is likely to use or disclose the Company’s confidential information or trade secrets to or on behalf of such Competing Business, (b) otherwise own, manage, operate, control, advise, or participate in the ownership, management, operation or control of, or be connected in any manner with (where such connection is competitive with the business of the Company), any Competing Business, or (c) acquire (through merger, stock purchase or purchase of all or substantially all of the assets or otherwise) the ownership of, or any equity interest in, any Person if the annual revenues of such Person from a Competing Business (or Competing Businesses) are more than five percent (5%), individually or in the aggregate, of such Person’s or entity’s total consolidated annual sales (based on the most recent full fiscal year revenues of such person or entity). Notwithstanding the foregoing, if the Employee holds a passive investment representing no more than two percent (2%) of the issued and outstanding shares in a company listed on a recognized exchange that operates, in whole or in part, directly or indirectly as a Competing Business, this shall not constitute a breach of this Section 7.2.

 

7.3. Non-Solicitation of Customers/Clients. The Employee shall not (and shall cause the Employee’s controlled affiliates not to), during the Restricted Period, directly or indirectly solicit, divert, or interfere with the Company’s relationship with, any of the Company’s Customers or Prospective Customers that the Employee had direct contact with, provided services to, or had confidential information about, in order to offer them goods and/or services competitive with those provided by the Company, or influence any Person to end or to curtail any business they are currently, or have been, transacting with the Company or otherwise negatively reduce his/her/its business relationship with the Company.

 

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7.4. Non-Solicitation of Company Employees. The Employee recognizes that the Employee possesses confidential information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and interpersonal relationships with Customers and Prospective Customers of the Company. The Employee recognizes that the information the Employee possesses about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining Customers, and will be acquired by the Employee because of the Employee’s business position with the Company. The Employee agrees that, during the Restricted Period, the Employee will not (and will cause the Employee’s controlled affiliates not to) (i) recruit or employ or otherwise solicit, entice, or induce any Person that is or has been an employee, officer or consultant of the Company in the twelve (12) months immediately prior to such action (or, if following the Termination Date, then as of such Termination Date and at any time during the twelve (12) months immediately preceding the Employee’s Termination Date) to become employed by, engaged by, or establish a business relationship with any Person other than the Company or its affiliated or related companies, or (ii) approach any such employee, consultant or officer for such purpose or authorize or participate in the taking of such actions by any other Person, or assist or participate with any such Person in taking such action. The restriction set forth in this paragraph does not apply to a general employment solicitation to the public that is not directed towards one of the Company’s employees or consultants.

 

7.5. Non-Disparagement. The Employee shall not (and shall cause the Employee’s controlled affiliates not to) during the Term and at any time thereafter make, publish, encourage or support, any false, misleading or disparaging written, oral or electronic statements about the Company or any of its affiliates, including the Company’s or its applicable affiliate’s (i) predecessors, members, present or former directors, managers, employees, consultants, officers, partners, attorneys or other representatives, individually and in their official capacities, or (ii) products, services, practices or operations. However, nothing in this Agreement shall prevent the Employee from testifying truthfully under oath if compelled by law to do so in a deposition, lawsuit, or similar legal or dispute resolution proceeding; making or publishing any such statements the Employee or the Employee’s controlled affiliate, as applicable, reasonably believes in good faith to be necessary in responding to or initiating a bona fide legal claim involving the Employee’s or the Employee’s controlled affiliate, as applicable; filing a complaint, participating in an investigation, or otherwise cooperating with any federal, state, or local fair employment agency or other government or law enforcement agency.

 

7.6. Performance of Duties and Practice of Law Not Affected. For the avoidance of doubt, this Agreement shall not restrict the Employee from performing his duties as an officer, director, or employee of the Company or any of its affiliates nor shall anything in this Agreement prevent or otherwise restrict the Employee in any way from engaging in the practice of law or the providing of legal services to any person or business.

 

8. Miscellaneous Provisions Governing Restrictive Covenants.

 

8.1. Reasonableness of Restrictions and Covenants. The Employee hereby confirms that the Employee was informed of the time, territory, scope and other essential requirements of the restrictions set forth in Section 7 of this Agreement when the Employee agreed to become employed with the Company under the terms set forth in this Agreement and the Employee acknowledges that the Company would not have entered into this Agreement had the Employee not agreed to the restrictions set forth in Section 7 of the Agreement. The Employee further acknowledges that the Employee has received sufficient and valuable consideration for the Employee’s agreement to such restrictions. The Employee also agrees that the covenants and restrictions contained in this Agreement are reasonable and valid and hereby agrees that the Company would suffer irreparable injury in the event of any breach by the Employee of the Employee’s obligations under any such covenant or restriction. Accordingly, the Employee hereby agrees that damages would be an inadequate remedy at law in connection with any such breach and that the Company shall therefore be entitled, in addition to any other right or remedy which it may have at law, in equity or otherwise, to temporary and permanent injunctive relief enjoining and restraining the Employee from any such breach. The Employee further consents and stipulates to the entry of such injunctive relief without the need to post any bond or other security.

 

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8.2. Survival. The provisions of Sections 7, 8, 9, 10.2, 11, and 12 of this Agreement shall remain in full force and effect notwithstanding the termination of the Employee’s employment and regardless of the circumstances that result in such termination. This provision shall not be construed to limit the survival of any other provisions that also survive the termination of this Agreement by the express or implied terms of such provisions.

 

8.3. Enforcement, Severability, and Modification. If, at the time of enforcement of any provision of Section 7 of this Agreement, a court or arbitrator holds that the restrictions stated in Section 7 of this Agreement are unreasonable or unenforceable under the circumstances then existing, the Parties agree that (i) the court/arbitrator should first reform the provisions of Section 7 prior to severing any provisions, and if the court/arbitrator will not or cannot reform such provisions, then the court/arbitrator may sever provisions as described in this paragraph, (ii) the provisions of Section 7 of this Agreement shall be severable in the event that any of such provisions are, for any reason whatsoever, deemed invalid, void or otherwise unenforceable, (iii) such invalid, void or otherwise unenforceable provisions in Section 7 of this Agreement shall be automatically replaced by other provisions which are as similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are valid and enforceable, and (iv) the remaining provisions in Section 7 of this Agreement shall remain enforceable to the fullest extent permitted by law.

 

9. Post-Termination Cooperation

 

For a period of two (2) years following the Termination Date, the Employee agrees to be reasonably available to assist and cooperate with the Company in connection with any litigation, administrative proceedings, audits or other governmental or regulatory inquiries. Such assistance and cooperation will, when under the control of the Company, be at a mutually convenient time and location and may include, without limitation, appearing for meetings, consultations, depositions, hearings, or trials. The Company will reimburse the Employee for reasonable, pre-approved travel, lodging and meal expenses incurred in connection with providing such assistance and cooperation.

 

10. Disclosures

 

10.1. Upon Employment. In entering into this Agreement, the Employee represents and warrants that the Employee does not have any obligation, whether express or implied, to any third party that would interfere with, hamper, or limit the Employee’s ability to provide any employment services or to otherwise comply with the Employee’s obligations under this Agreement. The Employee explicitly represents and warrants to the Company that the Employee is not a party to any confidentiality, non-competition, non-solicitation or similar agreements with any third party, or to any agreement the terms of which could prohibit the Employee from performing the Employee’s employment duties for the Company, or to any agreement which could be breached by the Employee’s entry into this Agreement and/or performance of the Employee’s employment duties for the Company.

 

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10.2. Upon Termination of Employment. For any period of time when the restrictions referenced in Section 7 of this Agreement apply, the Employee shall promptly notify any subsequent employer of the terms of this Agreement to ensure that this Agreement is not breached by the Employee.

 

11. Indemnification

 

The Employee agrees that the Employee shall indemnify and hold the Company, its subsidiaries and any affiliates thereof (the “Indemnified Parties”) harmless from and against any Taxes (as defined herein) imposed upon or otherwise required to be paid by any Indemnified Party with respect to any payments, rights or other transfers provided to the Employee by or with respect to an Indemnified Party (including for the avoidance of doubt any person who was an Indemnified Party prior to the Effective Time) on or prior to the Effective Time.  For purposes of the precedent sentence, “Taxes” shall mean taxes or other governmental charges (including any withholding, employment, payroll, social security or other similar taxes) and any penalties, interest, surcharges, additional to tax and deficiency assessments with respect thereto. The Employee shall provide such security for the foregoing indemnity obligations as the Company may reasonably request from time to time.

 

12. General Provisions

 

12.1. Clawback Provisions. Any amounts payable under this Agreement are subject to any policy (whether in existence as of the Commencement Date or later adopted or modified) established by the Company providing for clawback or recovery of amounts that were paid to the Employee. The Company will make any determination for clawback or recovery in its sole discretion and in accordance with any applicable law or regulation.

 

12.2. Resignation of All Other Positions. Upon termination of the Employee’s employment hereunder for any reason, the Employee agrees to resign and shall be deemed to have resigned from all positions that the Employee holds as an officer of the Company or any of its affiliates or as a member of the Company Board and Parent Board (or a committee thereof) of the Company or any of its affiliates.

 

12.3. Assignment and Successors. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Employee, the Company, and their respective successors and assigns, except that the Employee may not assign any of the Employee’s duties hereunder and the Employee may not assign any of the Employee’s rights hereunder without the prior written consent of the Company. This Agreement is personal to the Employee and shall not be assigned by the Employee. Any purported assignment by the Employee shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any entity which controls, is controlled by, or is under common control with the Company, or to any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and the permitted successors and assigns.

 

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12.4. Notices. All notices, requests, demands, or other communications under this Agreement shall be in writing and shall be deemed to be duly given by the Employee to the Company only if provided to the Company, Attention: Chief Executive Officer, and shall be deemed to be duly given by the Company to the Employee if provided by mail, email, mail, or nationally or internationally recognized carrier to the Employee at the Employee’s address as shown in the Company’s records.

 

12.5. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any provision or portion of this Agreement shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be ineffective only to the extent of such illegality, invalidity or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. If any court of competent jurisdiction should deem any covenant herein to be invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

 

12.6. Code Section 409A. This Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (“Section 409A”) or an exemption from Section 409A. The Company shall undertake to administer, interpret, and construe this Agreement in a manner that does not result in the imposition on the Employee of any additional tax, penalty, or interest under Section 409A, provided, however, that the Employee understands and agrees that the Company shall not be held liable or responsible for any taxes, penalties, interests or other expenses incurred by the Employee on account of non-compliance with Section 409A.

 

(a) For purposes of Section 409A, each installment payment or payroll period amount provided under this Agreement shall be treated as a separate payment.

 

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A.

 

(c) If the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A, then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A payable on account of a “separation from service,” and that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), such payment or benefit shall not be made or provided until the date which is the earlier of (i) the first regular payroll date following the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, or (ii) the date of the Employee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

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(d) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, all such payments shall be made on or before the last day of calendar year following the calendar year in which the expense occurred.

 

12.7. Governing Law. The Parties agree that this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Michigan without giving effect to any conflict of law provisions.

 

12.8. Mandatory Arbitration; Subsequent Court Jurisdiction. The Parties agree that any dispute over this Agreement will be submitted to and settled exclusively by binding arbitration, in accordance with the provisions of this section, subject only to any applicable requirement of law that the Parties engage in a preliminary non-binding mediation or arbitration. Binding arbitration shall be conducted in accordance with the Judicial Arbitration and Mediation Service Streamlined Rules & Procedures (the “JAMS Rules”). Arbitration shall be held in Oakland County, Michigan, before an arbitrator selected pursuant to the JAMS Rules who will have no personal or pecuniary interest, either directly or indirectly, from any business or family relationship with either of the Parties. All decisions of the arbitrator will be final, binding, and conclusive on the Parties.

 

The Parties will equally share the costs of the arbitrator and the arbitration fee (if any). Each Party will bear that Party’s own attorneys’ fees and costs, and the prevailing Party will not be entitled to reimbursement by the other Party of any of its fees or costs incurred in connection with the arbitration hereunder, regardless of any rule to the contrary in the applicable arbitration rules. Either Party may seek confirmation of the arbitration award in the federal or state courts with jurisdiction over Auburn Hills, Michigan and such court shall be the sole, exclusive, and mandatory venue and jurisdiction for any disputes between the Parties arising from or relating to this Agreement. If any action is filed, by any party, relating to a breach of this Agreement and/or enforcement of this Agreement, each Party hereby consents to the exclusive jurisdiction and venue of the federal and state courts with jurisdiction over Auburn Hills, Michigan in any claim or action arising hereunder and waives any claim that such court is an inconvenient forum.

 

12.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY TO THIS AGREEMENT CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; ACKNOWLEDGES THAT IT AND THE OTHER PARTIES TO THIS AGREEMENT HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION; AND AGREES THAT IF SUCH PARTY SEEKS A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY OTHER PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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12.10. Interpretation. The headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement. The language in all parts of this Agreement shall in all cases be construed according to its fair meaning, and not strictly for or against any Party. In this Agreement, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

 

12.11. Non-Waiver of Rights and Breaches. No failure or delay of any Party in the exercise of any right given to such Party under this Agreement shall constitute a waiver unless the time specified for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver by a Party of any default of any other Party shall not be deemed to be a waiver of any subsequent default or other default by such Party.

 

12.12. Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder shall be subject to withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes as permitted by law, provided it is satisfied in its sole discretion that all requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

 

12.13. Representation by Counsel; No Strict Construction. Each Party acknowledges that such Party has been represented by independent counsel of such Party’s choice with respect to this Agreement, including throughout all negotiations that have preceded the execution of this Agreement and that each Party has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted this Agreement is of no application and is hereby expressly waived by the Parties.

 

12.14. Attorneys’ Fees. Each Party shall bear its own attorneys’ fees and other reasonably related costs and expenses (“Fees”) associated with any claim asserted under this Agreement; provided, however, that if either Party asserts a claim which is finally determined by a court of competent jurisdiction to have been asserted frivolously or in bad faith, the Party against whom such claim was brought shall be entitled to recovery of its Fees from the Party bringing such claim.

 

12.15. Headings. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

 

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12.16. Integration, Amendment and Waiver. This Agreement and the CIIAA constitute the entire understanding and agreement between the Company and the Employee, superseding all prior arrangements, understandings, and agreements, oral or otherwise, among the Parties with respect to the subject matter hereof. All negotiations by the Parties concerning the subject matter hereof are merged into this Agreement and the CIIAA, and there are no representations, warranties, covenants, understandings or agreements, oral or otherwise, by the Parties in relation to this Agreement or the CIIAA other than those incorporated herein or in the CIIAA. No supplement, modification, waiver, or amendment of this Agreement or the CIIAA shall be binding unless executed in writing and signed by both Parties.

 

12.17. Counterparts; Original. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. Any facsimile, photocopy, pdf copy, or electronic copy of any Party’s executed counterpart of this Agreement will be deemed to be an executed original thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to be duly executed as of the date first written above.

 

EMPLOYEE:   THE COMPANY:
       
    ELECTRIC LAST MILE, INC.
                                
/s/ Benjamin Wu   By:  /s/ Jason Luo
Benjamin Wu   Name:  Jason Luo
    Title: President

 

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Exhibit A to Employment Agreement
Confidentiality, Inventions, and Non-Solicitation Agreement

 

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CONFIDENTIALITY, INVENTIONS, AND

NON-SOLICITATION AGREEMENT

 

This Confidentiality, Inventions and Non-Solicitation Agreement (this “Agreement”) is entered into by and between Electric Last Mile, Inc. and its successors and assigns (the “Company”), a Delaware corporation and Benjamin Wu (“Employee”).

 

RECITALS

 

WHEREAS, the Company has offered to employ or to continue to employ Employee in a position of trust, in which Employee acknowledges Employee will obtain new or updated Confidential Information (as defined below) about the business of the Company and the Company Affiliates (as defined below) to or for whom Employee provides services;

 

WHEREAS, in the course of Employee’s employment with the Company, Employee may Create Inventions (as such terms are defined below);

 

WHEREAS, the Company and the Company Affiliates collaborate in the course of business such that Employee has obtained, or will obtain, Confidential Information about both the Company and the Company Affiliates; and

 

WHEREAS, the Company and Employee agree that some of the purposes of this Agreement are to memorialize the parties’ respective ownership and rights to Inventions (as defined below) and to prevent irreparable harm to the Company and the Company Affiliates and that any restrictions set forth herein are reasonable and necessary to protect Confidential Information, goodwill, existing business relationships and other legitimate business interests.

 

NOW, THEREFORE, in consideration of Employee’s employment or continued employment and the Company’s entrusting to Employee confidential information relating to the Company Affiliates’ business, and for the mutual promises and covenants in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby mutually agree as follows:

 

1. Definitions.

 

a. “Company Affiliates” means (i) all Persons controlling, controlled by or under common control with, the Company (including, without limitation, its parent, brother-sister companies, other affiliates, subsidiaries, and joint ventures), (ii) all Persons in which the Company owns an equity interest and (iii) all predecessors, successors and assigns of those affiliates identified in (i) and (ii). As used in this definition, “control” (including, with correlative meanings, “controlling”, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies (whether through ownership of securities, partnership or other ownership interests, by contract or otherwise).

 

 

 

b. “Confidential Information” means any and all confidential, proprietary or trade secret information not generally known or available outside the Company and/or the Company Affiliates, and/or information entrusted to the Company and/or the Company Affiliates in confidence by third parties, in each case, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is Created by Employee. Confidential Information includes, without limitation, all Work Products (as defined below), technical data, trade secrets, know-how, improvements, research, product or service ideas or plans, software (whether in source code or object code), designs, developments, processes, formulas, techniques, biological materials, mask works, designs and drawings, hardware configuration information, information relating to existing or potential employees, consultants, clients, suppliers, vendors, or other service providers of the Company and the Company Affiliates (including, but not limited to, their names, contact information, jobs, compensation and expertise), information relating to suppliers and customers, information relating to stockholders or lenders, price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, financial statements, profit margins, sales information, historical financial data, budgets or other business information. Confidential Information also means all similar information disclosed to the Company by third parties, which is subject to confidentiality obligations. Confidential Information shall not include information that is generally available to and known by the public, provided that such disclosure to the public is through no direct or indirect fault of the Employee or Person(s) acting on the Employee’s behalf.

 

c. “Create” means make, create, author, discover, develop, invent, conceive, or reduce to practice.

 

d. “Inventions” means any and all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto, in each case, whether or not patentable, copyrightable or otherwise legally protectable, as well as any and all rights in and to patents, copyright, trademark, trade secret or other intellectual property rights (in the United States or elsewhere), including all pending and future applications and registrations therefor. This includes, but is not limited to, any new product, machine, article of manufacture, biological material, method, procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon.

 

e. “Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture, entity, association or other organization, whether or not a legal entity, or a governmental entity.

 

f. “Tangible Embodiments” means any and all tangible documents, materials, records, notebooks, tapes, disks, drives, software (whether in source code, object code or machine- readable copies), work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence, results or other embodiments.

 

 

 

g. “Work Product” means any and all Inventions that Employee, solely or jointly with others, Creates, in whole or in part, during the period of Employee’s employment or within one (1) year following termination of such employment, including those that relate to or result from the actual or anticipated business, work, research, or investigation of the Company or any of the Company Affiliates or which are suggested by, relate to, or result from any task assigned to or performed by Employee for the Company or any of the Company Affiliates.

 

2. Confidential Information.

 

a. Employee acknowledges that all Confidential Information constitutes a protectable business interest of the Company, and covenants and agrees that at all times during the period of Employee’s employment and thereafter, Employee agrees (i) to hold in strictest confidence the Confidential Information, (ii) not to, directly or indirectly, disclose, furnish, or make available to any Person any Confidential Information without prior written authorization from the Company, and (iii) not to use any Confidential Information except during the term of Employee’s employment in the course of performing Employee’s duties as an employee of the Company. Employee will abide by the Company’s policies and rules as may be established from time to time by it for the protection of its Confidential Information and will not make any copies of Confidential Information except as authorized by the Company. Employee agrees that in the course of employment with the Company, Employee will not bring to the Company’s offices nor use for the Company’s benefit, nor disclose, furnish or make available to the Company or any Company Affiliate, or induce the Company or any Company Affiliate to use, any confidential or proprietary information or Tangible Embodiments belonging to others. Employee’s obligations under this Section 2(a) with respect to particular Confidential Information will survive expiration or termination of this Agreement and Employee’s employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes publicly and widely known to the public other than as a result of any wrongful act of Employee or Employee’s breach of this Agreement (or a breach by those acting in concert with the Employee or on the Employee’s behalf) or wrongful act of any other Person who was under confidentiality obligations as to the item or items involved.

 

b. For clarity, Employee’s agreements in this Section 2 are intended to be for the benefit of the Company, the Company Affiliates, and any third party that has entrusted information or Tangible Embodiments to the Company or the Company Affiliates in confidence. This Agreement is intended to supplement, and not to supersede, any rights the Company or the Company Affiliates may have with respect to the protection of trade secrets or confidential or proprietary information.

 

c. Notwithstanding any other provision of this Agreement, an individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual (including Employee) shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual (including Employee) who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with federal law protecting confidential disclosures of a trade secret to the government or in a court filing, 18 U.S.C. § 1833(b), or to create liability for disclosures of Confidential Information that are expressly allowed by 18 U.S.C. § 1833(b).

 

 

 

3. Return of Materials. Upon termination of employment with the Company or otherwise upon the Company’s request, and regardless of the reason for such termination, Employee agrees to promptly return to the Company or destroy all Tangible Embodiments of the foregoing in Employee’s possession, custody, or control that contain, summarize, abstract, or in any way reflect, relate to, or embody any Confidential Information or any other information concerning the Company, any of the Company Affiliates or any of its or their products, services or clients, whether prepared by the Employee or others. At the time Employee returns or destroys these materials (or otherwise upon the Company’s request), Employee will acknowledge to the Company, in writing and under oath, in the form attached as Exhibit A, that Employee has complied with the terms of this Section 3.

 

4. Work Product.

 

a. Employee agrees to promptly and fully disclose in writing to the Company all Work Product (including all original works of authorship and all work product relating thereto). This disclosure will include complete and accurate copies of all Tangible Embodiments of such Work Product.

 

b. Employee covenants and agrees that all Work Product and Tangible Embodiments are and shall be the sole and exclusive property of the Company. Employee acknowledges that all Work Product that are original works of authorship Created by Employee (solely or jointly) within the scope of Employee’s employment are “works made for hire” to the maximum extent permitted under applicable law and as that term is under the United States Copyright Act (17 U.S.C., et seq.). Without limiting the foregoing, Employee hereby agrees to hold in trust for the sole right and benefit of the Company and hereby assigns (and without limiting the foregoing, agrees in the future to assign) to the Company all of the entire worldwide right, title, and interest in and to all Work Product (and Tangible Embodiments thereof) throughout the world, without any requirement of further documentation or consideration, including, for clarity, any and all patent rights, copyrights, trademark rights, mask work rights, moral rights, sui generis database rights, and all other intellectual property rights therein or pertaining thereto and all rights to prosecute, enforce, and sue for past, present and future infringements, misappropriations or other violations thereof, throughout the universe in perpetuity or for the longest period permitted by law. Employee hereby waives and irrevocably quitclaims to the Company or its designee any and all claims, of any nature whatsoever, that Employee now has or may hereafter have for infringement of any and all Work Product and/or Tangible Embodiments and intellectual property rights related thereto.

 

 

 

c. At any time during or after Employee’s employment with the Company, at the request of the Company or any of the Company Affiliates, Employee agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company’s expense, in registering, recording, obtaining, maintaining, defending, perfecting, enforcing, and/or assigning any Work Product and Tangible Embodiments in any and all countries. In the event Employee refuses or fails to perform such acts, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agents and attorneys-in-fact to act for and in Employee’s behalf and instead of Employee, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Employee; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest.

 

d. To the extent that such an assignment of any Work Product and/or Tangible Embodiment is not permitted under applicable law, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive (even as to Employee), royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Work Product or Tangible Embodiment for any commercial or internal business purposes and all other purposes. To the extent not assignable, Employee hereby irrevocably waives, to the extent permitted by applicable law, any and all claims Employee may now or hereafter have in any jurisdiction to any so-called “moral rights” in connection with the Work Product and acknowledges and agrees that the Company may use, exploit, distribute, reproduce, advertise, promote, publicize, alter, modify or edit the Work Product or combine the Work Product with other works, in the Company’s sole discretion, in any format or medium hereafter devised.

 

e. Without limiting the generality of any other provision of this Section 4, Employee hereby authorizes the Company and each of the Company Affiliates to make any desired changes to any part of any Work Product, to combine it with other materials in any manner desired, and to withhold Employee’s identity in connection with any distribution or use thereof alone or in combination with other materials.

 

f. The obligations of Employee set forth in this Section 4 (including, but not limited to, the assignment obligations) will continue beyond the termination of Employee’s employment with respect to Work Product Created by Employee alone or jointly with others during Employee’s employment with the Company and for one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Employee and Employee’s executors, administrators and other representatives.

 

 

 

g. Employee agrees that Employee will register all domains, usernames, handles, social media accounts and similar online accounts which Employee registers on behalf of the Company and which relate to the Company or its intellectual property rights (the “Online Accounts”) in the name of the Company, except to the extent that such requests by the Company are prohibited by law. If any Online Account that is not (or by the terms of such Online Account cannot be) registered in the name of the Company is registered in Employee’s name or under Employee’s control, Employee agrees to assign ownership and control of such Online Account to any Person designated by the Company upon the Company’s request. Employee agrees to use any Online Account, whether registered in Employee’s name or the name of the Company, in compliance with any applicable policies or guidelines of the Company.

 

h. Notwithstanding anything to the contrary herein, this Agreement does not apply to any Invention which qualifies as a non-assignable Invention under the provisions of California Labor Code Section 2870 (“Section 2870”), a copy of which is attached as Exhibit B. Employee will advise the Company promptly in writing of any Inventions that Employee believes fully qualify for protection under Section 2870; and Employee will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without Employee’s consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under the provisions of Section 2870. Employee will preserve the confidentiality of any Invention that does not fully qualify for protection under Section 2870. BY SIGNING THIS AGREEMENT, EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED EXHIBIT B, WHICH SHALL CONSTITUTE WRITTEN NOTICE OF THE PROVISIONS OF SECTION 2870.

 

5. Excluded IP.

 

a. As a matter of record, Employee has set forth on Exhibit C hereto a list with non-confidential descriptions of any and all proprietary information, works of authorship, ideas, reports, creative works, intellectual property or other Inventions which have been made by Employee prior to employment with the Company and which are excluded from the scope of this Agreement (collectively, the “Excluded IP”). Employee hereby represents and warrants that such list is accurate and complete. If no list is attached (or if the list is empty), then Employee hereby represents and warrants that there is no Excluded IP. Employee will not assert any right, title or interest in or to any Work Product nor claim that Employee Created any Work Product before Employee’s employment with the Company unless Employee has specifically identified that Invention as an Excluded IP on the attached Exhibit C prior to the execution of this Agreement.

 

 

 

b. If in the course of Employee’s employment, Employee uses or incorporates into any Work Product or Tangible Embodiment any Inventions (including any Excluded IP) in which Employee or a third Person has any interest and which is not covered by Section 4(b) hereof, Employee will promptly so inform the Company. Whether or not Employee gives such notice, Employee hereby grants to (and without limiting the foregoing, agrees in the future to grant to) the Company an exclusive, royalty-free, fully paid up, irrevocable, perpetual, worldwide, sublicenseable and transferable license to make, have made, copy, modify, make derivative works of, use, publicly perform, display, sell, offer for sale, import, distribute, and/or otherwise exploit such Invention (including such Excluded IP) for any commercial or internal business purposes and all other purposes.

 

6. Representations and Warranties.

 

a. No Conflicts. Employee hereby represents and warrants that Employee is not subject to any obligation to any third Person, including any former employer, that would be inconsistent with any provision of this Agreement, including with respect to any Excluded IP, and that Employee has the right to grant the license and rights granted in Section 5(b).

 

b. No Infringement. Employee hereby represents and warrants that all Excluded IP licensed to the Employer pursuant to Section 5(b) do not (and all Work Product will not) infringe, misappropriate, dilute, or otherwise violate any third Person’s patents, copyrights, trademarks, trade secrets, or other intellectual property rights or other rights.

 

7. Equitable Remedies. Employee acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of the Company’s and the Company Affiliates’ business interests, that irreparable injury will result to the Company and the Company Affiliates if Employee breaches any of the terms of said covenants, and that in the event of Employee’s actual or threatened breach of any such covenants, the Company and the Company Affiliates will have no adequate remedy at law. Employee accordingly agrees that, in the event of any actual or threatened breach by Employee of any of said covenants, the Company or any of the Company Affiliates, as applicable, will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 7 will be construed as prohibiting the Company or any of the Company Affiliates from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove.

 

8. No Right to Employment. No provision of this Agreement shall give Employee any right to continue in the employ of the Company or any of the Company Affiliates, create any inference as to the length of employment of Employee, affect the right of the Company or the Company Affiliates to terminate the employment of Employee, with or without cause, or give Employee any right to participate in any employee welfare or benefit plan or other program of the Company or any of the Company Affiliates. Notwithstanding the foregoing, in the event Employee has executed a written employment agreement with the Company, in the event of any direct and irresolvable conflict between the terms of this Agreement and such employment agreement, the terms of this Agreement shall control with respect to all Inventions and Confidential Information, but otherwise the terms of the employment agreement shall control.

 

 

 

9. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

10. Severability. Employee acknowledges that the agreements and covenants contained in this Agreement are essential to protect the Company and the Company Affiliates and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy or any of the covenants set forth in this Agreement not fully enforceable, the other provisions of this Agreement will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent.

 

11. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) five (5) days after sent by certified mail, return receipt requested; or (c) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses set forth below:

 

If to the Company: the address of the Company’s current headquarters, Attention: General Counsel.

 

If to Employee: to the last-known address of the Employee as shown in the Company’s records.

 

Each party will be entitled to provide a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 11.

 

12. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement.

 

13. Governing Law. This Agreement has been executed in the State of Michigan, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. The parties hereby consent to the exclusive jurisdiction of the federal or state courts with jurisdiction over Auburn Hills, Michigan in any action or claim arising out of, under or in connection with this Agreement, or the relationship between the parties hereto.

 

 

 

14. Binding Effect. This Agreement will be binding upon and inure to the benefit of Employee, the Company, the Company Affiliates, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement, without the Employee’s prior consent. Employee may not assign this Agreement or any part hereof. Any purported assignment by Employee shall be null and void ab initio.

 

15. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person.

 

16. Waiver of Jury. THE COMPANY AND THE EMPLOYEE KNOWINGLY AND VOLUNTARILY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES HERETO.

 

17. Voluntary Execution. Employee acknowledges and agrees that Employee has carefully read all of the provisions of this Agreement, that Employee understands and has voluntarily accepted such provisions, and that Employee will fully and faithfully comply with such provisions.

 

18. Advice of Counsel. EMPLOYEE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, EMPLOYEE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND EMPLOYEE HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart’s signature page of this Agreement by facsimile, email in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document has the same effect as delivery of an executed original of this Agreement

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Employee has signed this Agreement, as of the date written below.

 

  EMPLOYEE
   
   
  Name:  
   
  Date:  
  State of Residence:
   
  COMPANY
   
   
  Electric Last Mile, Inc.
   
  Name:  
   
  Date:  

  

 

 

 

EXHIBIT A

 

My engagement by Electric Last Mile, Inc., (the “Company”) is now terminated. I have reviewed my Confidentiality, Inventions and Non-Solicitation Agreement with the Company, dated ________________ ___, 20__ (the “Agreement”), and I hereby swear, under penalty of perjury, that:

 

● I have complied and will continue to comply with all of the provisions of the Agreement.

 

● I understand that all of the Company’s materials (including without limitation, written or printed documents, email and computer disks or tapes, whether machine or user readable, computer memory, and other information reduced to any recorded format or medium), whether or not they contain Confidential Information (as that phrase is defined in the Agreement), are and remain the property of the Company. I have delivered to authorized Company personnel, or have destroyed, all of those documents and all other Company materials in my possession.

 

● Any breach of my declarations hereunder would cause irreparable injury to the Company for which monetary damages would not be an adequate remedy and, therefore, will entitle the Company to injunctive relief (including specific performance). The rights and remedies provided to the Company hereunder are cumulative and in addition to any other rights and remedies available to the Company at law or in equity. I hereby acknowledge that the Company shall be entitled to recover its reasonable attorneys’ fees and litigation expenses incurred in any action to enforce its rights in the event of a breach of my declarations hereunder.

 

      Employee:
         
Date:      
       
      Name:                      
         
       

 

 

 

 

EXHIBIT B

 

California Labor Code Section 2870

 

Invention On Own Time – Exemption From Agreement

 

“(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

 

 

 

 

EXHIBIT C

 

I hereby represent and warrant that I have disclosed on this Exhibit all inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto and other intellectual property (including all Excluded IP) that I have made, created, authored, discovered, developed, invented, conceived, or reduced to practice, prior to employment with the Company. I agree that any present or future patent, idea, copyright, writing, computer program, or other Invention that is not listed on this Exhibit is a Work Product is subject to (and assigned by) the assignment under the attached Confidentiality, Inventions and Non-Solicitation Agreement to which this is an Exhibit. I further agree that under no circumstances will I incorporate in any work that I perform for the Company any of the Excluded IP that I have disclosed on this Exhibit without the prior written consent of the Company.

 

Brief Description of Excluded IP (e.g., inventions, discoveries, developments, concepts, designs, ideas, know how, improvements, trade secrets, code, algorithms, works of authorship, and/or expressions thereof and any technology relating thereto inventions, proprietary information, works of authorship, computer programs, know-how, trade secrets, ideas, reports, creative works, and other intellectual property)

Right, Title or Interest and Date Acquired
   
   
   
   

 

    Employee:
     
Date:      

 

  Name:  

 

 

 

 

Exhibit 10.15

 

2851 High Meadow Circle Suite 170
Auburn Hills, MI 48326

 

December 18, 2020

 

[Name]
VIA EMAIL: email@address

 

Dear Mr. [Name],

 

As discussed, Electric Last Mile, Inc., a Delaware corporation (“ELM”), intends to enter into a business combination transaction with Forum Merger III Corporation, a Delaware corporation (“Forum”), pursuant to which Forum will be the surviving parent company (and will be renamed “Electric Last Mile Solutions, Inc.”), ELM will be the wholly owned surviving subsidiary of Forum, and the stockholders of ELM will receive as consideration shares of common stock of Forum, which are expected to continue to be traded on The Nasdaq Stock Market (the “Business Combination”). In connection with the Business Combination, Forum and ELM have agreed that: (i) ELM has the right to nominate a mutually agreed upon number of directors to serve on the board of directors of Forum, as the surviving parent company (the “Board”), upon the Closing of the Business Combination, (ii) the election of those directors will be voted upon by the stockholders of Forum at the special meeting at which the stockholders will vote on the Business Combination, and (iii) following the election of those directors by the stockholders of Forum at the special meeting, those directors will become directors of Forum upon the closing of the Business Combination (the “Closing” and such date of the Closing, the “Closing Date”). Accordingly, on behalf of ELM, I am pleased to invite you to join Forum’s Board as a non-employee director, effective upon the Closing, provided that this invitation and your future service as a member of the Board (if any) is contingent upon the Closing and subject to the approval of the stockholders of Forum (as described above) and the terms of this letter. If all of these contingencies and conditions are satisfied and if you accept this position as a member of the Board, this letter shall constitute an agreement between you and Forum (the “Agreement”), effective upon the Closing, which contains the basic terms and conditions relating to the services you are to provide.

 

1.       Term. Following the Closing, the Board will be a classified board of directors, consisting of three classes of directors. The term of the first class of directors will expire at the first annual meeting of Forum’s stockholders following the Closing (which is expected to be held in 2022), the term of the second class of directors will expire at the second annual meeting of Forum’s stockholders following the Closing (which is expected to be held in 2023), and the term of the third class of directors will expire at the third annual meeting of Forum’s stockholders following the Closing (which is expected to be held in 2024). Your first term is expected to commence on the Closing Date. The class to which you are appointed will be agreed upon by Forum and ELM and approved by the existing members of the Board prior to the Closing Date. Notwithstanding the foregoing or anything else to the contrary in this Agreement, your retainers, fees, equity awards and other Board compensation shall at all times be subject to modification by the Board or a committee thereof to conform to any director compensation policy or program of the Board or a committee thereof that governs the compensation of Forum’s non-employee directors generally.

 

2.       Services. You will be required to render services as a member of the Board. As a member of the Board, you shall attend and participate in all regular and special meetings of the Board and of all committees of the Board of which you are a member. Subject to any attendance policy maintained by the Board from time to time, you may attend and participate in each such meeting via teleconference, video conference or in person. You shall consult with the other members of the Board regularly and as necessary via telephone, electronic mail or other forms of correspondence.

 

3.       Annual Retainer. In consideration for your service as a member of the Board, you shall receive director fees of $100,000 per annum, which amount is payable in cash in four equal quarterly installments and is to be pro-rated for any partial year of service.

 

 

 

 

2851 High Meadow Circle Suite 170
Auburn Hills, MI 48326

 

4.       Chairman and Committee Chair Fees. The Chairman of the Board will receive an additional $15,000 per annum, which amount is expected to be payable in cash in four equal quarterly installments and is to be pro-rated for any partial year of service. In addition, the chair of each committee of the Board will receive an additional $15,000 per annum, which amount is expected to be payable in cash in four equal quarterly installments and is to be pro-rated for any partial year of service.

 

5.       Equity Award. In addition to the fees described above, in connection with your appointment to the Board, but contingent upon (a) the approval by the Board of this award, and (b) the approval by the Board and the stockholders of a new equity incentive plan (the “New Plan”), you will receive an award of restricted stock units relating to Forum common stock valued at $100,000. Such award (i) shall be subject to the terms of the New Plan; (ii) shall vest over a one-year period; and (iii) shall be subject to the terms and conditions set forth in the award agreement evidencing this award, as adopted and approved by the Board or a committee of the Board (as applicable).

 

6.       Expenses. Forum will reimburse you for all reasonable travel expenses that you incur in connection with your attendance at meetings of the Board, in accordance with Forum’s expense reimbursement policy as in effect from time to time.

 

7.       Separation from Service Prior to Completion of Term. To the extent you separate from service with the Board prior to completion of your term, you will not be entitled to receive any cash fees described above that are payable on a date following your separation or any equity awards that have not yet vested as of the date you separate from service.

 

8.       Indemnification. You will receive indemnification as a director of Forum to the maximum extent extended to directors of Forum generally, as set forth in Forum’s certificate of incorporation, bylaws, and any director and officer insurance policy Forum may have and maintain from time to time.

 

In accepting this offer, you are representing to us that (i) you are not aware of any conflict which would restrict, or in any way hinder, your service on the Board, and (ii) you will not provide Forum or ELM with any documents, records, or other confidential information belonging to other parties. You also agree to faithfully perform your duties as a director of Forum in full compliance with the fiduciary duties established under Delaware law and to comply with all policies, procedures, codes, rules, standards and guidelines adopted by Forum from time to time and applicable to directors, including, but not limited to, non-disclosure obligations, corporate governance guidelines, codes of business conduct and ethics, committee charters, and insider trading policies.

 

Nothing in this Agreement should be construed as an offer of employment or a guarantee of Board service.

 

Please indicate your agreement with these terms by signing and dating this letter where indicated below and returning one copy of this offer to Erik Grossman (egrossman@electriclastmile.com) by January 15, 2021.

 

Sincerely,

 

Jason Luo
Executive Chairman, Electric Last Mile, Inc.

 

 

 

 

2851 High Meadow Circle Suite 170
Auburn Hills, MI 48326

 

I have read and accept this contingent offer to join the Board.

 

_______________________________________                   Date: ________________

 

Print Name: _____________________________

 

 

 

 

 

Exhibit 10.16

Forum Merger III Corporation 2020 INCENTIVE PLAN

1.     Establishment of the Plan; Effective Date; Duration.

(a)     Establishment of the Plan; Effective Date. Forum Merger III Corporation, a Delaware corporation (the “Company”), hereby establishes this incentive compensation plan to be known as the “Forum Merger III Corporation 2020 Incentive Plan,” as amended from time to time (the “Plan”). The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Other Cash-Based Awards and Dividend Equivalents. If the Plan is not approved by the stockholders of the Company on or prior to the Effective Date, then the Plan will be null and void in its entirety. The Plan shall remain in effect as provided in Section 1(b) of the Plan. Capitalized but undefined terms shall have the meaning set forth in Section 3 of the Plan.

(b)     Duration of the Plan. The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Section 13. However, in no event may an Award be granted under the Plan on or after ten years from the Effective Date.

2.     Purpose. The purpose of the Plan is to provide a means through which the Company and its Affiliates may attract and retain key personnel and to provide a means whereby certain directors, officers, employees, consultants and advisors (and certain prospective directors, officers, employees, consultants, and advisors) of the Company and its Affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may be measured by reference to the value of Common Stock, thereby strengthening their commitment to the welfare of the Company and its Affiliates and aligning their interests with those of the Company’s stockholders.

3.     Definitions. Certain terms used herein have the definitions given to them in the first instance in which they are used. In addition, for purposes of the Plan, the following terms are defined as set forth below:

(a)     “Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.

(b)     “Applicable Laws” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted, and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted, as are in effect from time to time.

(c)     “Award” means, individually or collectively, any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Awards, Other Cash-Based Awards, and/or Dividend Equivalents, granted under the Plan.

(d)     “Award Agreement” means a written agreement between a Participant and the Company which sets out the terms of the grant of an Award.

(e)     “Board” means the Board of Directors of the Company.

(f)     “Cause” means, in the case of a particular Award, unless the applicable Award Agreement states otherwise, (i) the Company or an Affiliate having “cause” to terminate a Participant’s employment or service, as defined in any employment or consulting or similar agreement between the Participant and the Company or an Affiliate in effect at the time of such termination, or (ii) in the absence of any such employment or consulting or similar agreement (or the absence of any definition of “Cause” contained therein), a Participant’s (A) conviction of, or the entry of a plea of guilty or no contest to, a felony or any other crime that causes the Company or its Affiliates public disgrace or disrepute, or materially and adversely affects the Company’s or its Affiliates’ operations or financial performance or the relationship the Company has with its customers; (B) gross negligence or willful misconduct with respect to the Company or any of its Affiliates, including, without limitation, fraud, embezzlement, theft or proven dishonesty in the course of his employment or other service to the Company or an Affiliate; (C) alcohol abuse or use of controlled substances other than in accordance with a physician’s prescription; (D) refusal to perform any lawful, material obligation or fulfill any

1

duty (other than any duty or obligation of the type described in clause (F) below) to the Company or its Affiliates (other than due to a disability, as determined by the Committee), which refusal, if curable, is not cured within 15 days after delivery of written notice thereof; (E) material breach of any agreement with or duty owed to the Company or any of its Affiliates, which breach, if curable, is not cured within 15 days after the delivery of written notice thereof; or (F) any breach of any obligation or duty to the Company or any of its Affiliates (whether arising by statute, common law or agreement) relating to confidentiality, noncompetition, nonsolicitation and/or proprietary rights.

(g)     “Change in Control” shall, in the case of a particular Award, unless the applicable Award Agreement states otherwise or contains a different definition of “Change in Control,” be deemed to occur upon any of the following events:

(i)     any “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (A) the Company or any of its Affiliates, (B) any trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its Affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) an entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, by way of merger, consolidation, recapitalization, reorganization or otherwise, of fifty percent (50%) or more of the total voting power of the then outstanding voting securities of the Company;

(ii)     the cessation of control (by virtue of their not constituting a majority of directors) of the Board by the individuals who (x) were directors on the Effective Date or (y) become directors after Effective Date and whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then in office who were directors on the Effective Date or whose election or nomination for election was previously so approved;

(iii)     the consummation of a merger or consolidation of the Company with any other company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

(iv)     the consummation of a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all the Company’s assets; or

(v)     any other event specified as a “Change in Control” in an applicable Award Agreement.

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the deferral of compensation that is subject to Section 409A of the Code, to the extent required to avoid the imposition of additional taxes under Section 409A of the Code, the transaction or event described in subsection (i), (ii), (iii), (iv), or (v) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).

(h)     “Claim” means any claim, liability or obligation of any nature, arising out of or relating to the Plan or an alleged breach of the Plan or an Award Agreement.

(i)     “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto. Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.

(j)     “Committee” means a committee of at least two people as the Board may appoint to administer the Plan or, if no such committee has been appointed by the Board, the Board.

(k)     “Common Stock” means the common stock of the Company, par value $0.0001 per share.

(l)     “Closing Date” means the date of the closing of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of December 10, 2020, by and among the Company and the other parties thereto.

(m)     “Company” means Forum Merger III Corporation, a Delaware corporation.

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(n)     “Date of Grant” means the date on which the granting of an Award is authorized, or such other date as may be specified in such authorization or applicable Award Agreement.

(o)     “Dividend Equivalent” means a right awarded under Section 11 to receive the equivalent value (in cash or Common Stock) of ordinary dividends that would otherwise be paid on the Common Stock subject to an Award that is a full-value award but that have not been issued or delivered.

(p)     “Effective Date” means the later of (i) the date that the Company’s stockholders approve the Plan and (ii) the Closing Date.

(q)     “Eligible Director” means a person who is a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.

(r)     “Eligible Person” with respect to an Award denominated in Common Stock, means any (i) individual employed by the Company or an Affiliate; (ii) director of the Company or an Affiliate; (iii) consultant or advisor to the Company or an Affiliate; provided, that, if the Securities Act applies, such persons must be eligible to be offered securities registrable on Form S-8 under the Securities Act; or (iv) prospective employees, directors, officers, consultants or advisors who have accepted offers of employment or consultancy from the Company or its Affiliates (and would satisfy the provisions of clauses (i) through (iii) above once he or she begins employment with or begins providing services to the Company or its Affiliates, provided, that, the Date of Grant of any Award to such individual shall not be prior to the date he begins employment with or begins providing services to the Company or its Affiliates).

(s)     “Exchange Act” means the U.S. Securities Exchange Act of 1934, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.

(t)     “Exercise Price” has the meaning given such term in Section 7(b) of the Plan.

(u)     “Fair Market Value” means, as of any date, the value of a share of Common Stock determined as follows:

(i)     If the Common Stock is listed on any established stock exchange or a national market system, the per share closing sales price for shares of Common Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable;

(ii)     If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a share of Common Stock will be the mean between the high bid and low asked per share prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

(iii)     In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Committee (acting on the advice of an Independent Third Party, should the Committee elect in its sole discretion to utilize an Independent Third Party for this purpose).

(iv)     Notwithstanding the foregoing, the determination of Fair Market Value in all cases shall be in accordance with the requirements set forth under Section 409A of the Code to the extent necessary for an Award to comply with, or be exempt from, Section 409A of the Code.

(v)     “Immediate Family Members” shall have the meaning set forth in Section 14(b)(ii).

(w)     “Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option as described in Section 422 of the Code and otherwise meets the requirements set forth in the Plan for incentive stock options.

(x)     “Indemnifiable Person” shall have the meaning set forth in Section 4(e) of the Plan.

(y)     “Independent Third Party” means an individual or entity independent of the Company having experience in providing investment banking or similar appraisal or valuation services and with expertise generally in the valuation of securities or other property for purposes of this Plan. The Committee may utilize one or more Independent Third Parties.

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(z)     “Mature Shares” means Common Stock owned by a Participant that are not subject to any pledge or security interest and that have been either previously acquired by the Participant on the open market or meet such other requirements, if any, as the Committee may determine are necessary in order to avoid an accounting earnings charge on account of the use of such shares to pay the Exercise Price or satisfy a tax or deduction obligation of the Participant.

(aa)     “Nonqualified Stock Option” means an Option that is not designated by the Committee as an Incentive Stock Option.

(bb)     “Option” means an Award granted under Section 7 of the Plan.

(cc)     “Option Period” has the meaning given such term in Section 7(c) of the Plan.

(dd)     “Other Cash-Based Award” means a cash Award granted to a Participant under Section 10 of the Plan, including cash awarded as a bonus or upon the attainment of Performance Goals or otherwise as permitted under the Plan.

(ee)     “Other Stock-Based Award” means an equity-based or equity-related Award, other than an Option, SAR, Restricted Stock, Restricted Stock Unit or Dividend Equivalent, granted in accordance with the terms and conditions set forth under Section 10 of the Plan (including upon the attainment of any Performance Goals or otherwise as permitted under the Plan).

(ff)     “Participant” means an Eligible Person who has been selected by the Committee to participate in the Plan and to receive an Award pursuant to Section 6 of the Plan.

(gg)     “Performance Goals” means any objective or subjective goals the Committee establishes with respect to an Award. Performance Goals may include, but are not limited to, the performance of the Company or any one or more of its Subsidiaries, Affiliates or other business units with respect to the following measures: net sales; cost of sales; gross income; gross revenue; revenue; operating income; earnings before taxes; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings before interest, taxes, depreciation, amortization and exception items; income from continuing operations; net income; earnings per share; diluted earnings per share; total stockholder return; Fair Market Value; cash flow; net cash provided by operating activities; net cash provided by operating activities less net cash used in investing activities; ratio of debt to debt plus equity; return on stockholder equity; return on invested capital; return on average total capital employed; return on net capital employed; return on assets; return on net assets employed before interest and taxes; operating working capital; average accounts receivable (calculated by taking the average of accounts receivable at the end of each month); average inventories (calculated by taking the average of inventories at the end of each month); economic value added; succession planning; manufacturing return on assets; manufacturing margin; and customer satisfaction. Performance Goals may also relate to a Participant’s individual performance and may, unless provided otherwise in the Award Agreement, be adjusted in the Committee’s discretion.

(hh)     “Permitted Transferee” shall have the meaning set forth in Section 14(b)(ii) of the Plan.

(ii)     “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

(jj)     “Plan” means this Forum Merger III Corporation 2020 Incentive Plan, as amended from time to time.

(kk)     “Restricted Period” means the period of time determined by the Committee during which an Award is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.

(ll)     “Restricted Stock Unit” means an unfunded and unsecured promise to deliver Common Stock, cash, other securities or other property, subject to certain performance or time-based restrictions (including, without limitation, a requirement that the Participant remain continuously employed, provide continuous services for a specified period of time, or attain specified performance objectives), granted under Section 9 of the Plan.

(mm)     “Restricted Stock” means Common Stock, subject to certain specified performance or time-based restrictions (including, without limitation, a requirement that the Participant remain continuously employed, provide continuous services for a specified period of time, or attain specified performance objectives), granted under Section 9 of the Plan.

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(nn)      “SAR Period” has the meaning given such term in Section 8(c) of the Plan.

(oo)     “Securities Act” means the Securities Act of 1933, as amended, and any successor thereto. Reference in the Plan to any section of the Securities Act shall be deemed to include any rules, regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, rules, regulations or guidance.

(pp)     “Stock Appreciation Right” or “SAR” means an Award granted under Section 8 of the Plan.

(qq)     “Strike Price” means, except as otherwise provided by the Committee in the case of Substitute Awards, (i) in the case of a SAR granted in tandem with an Option, the Exercise Price of the related Option, or (ii) in the case of a SAR granted independent of an Option, the Fair Market Value on the Date of Grant.

(rr)     “Subsidiary” means, with respect to any specified Person:

(i)     any corporation, association or other business entity of which more than 50% of the total voting power of shares (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(ii)     any partnership (or any comparable foreign entity (A) the sole general partner (or functional equivalent thereof) or the managing general partner of which is such Person or Subsidiary of such Person or (B) the only general partners (or functional equivalents thereof) of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

(ss)     “Substitute Award” has the meaning given such term in Section 5(e).

4.     Administration.

(a)     The Committee shall administer the Plan. To the extent required to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act or Applicable Law (if the Board is not acting as the Committee under the Plan), it is intended that each member of the Committee shall, at the time he takes any action with respect to an Award under the Plan, be an Eligible Director, in the case of Rule 16b-3, or a member of the Board, in the case of Applicable Law. However, the fact that a Committee member shall fail to qualify as an Eligible Director shall not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

(b)     Subject to the provisions of the Plan and Applicable Law, the Committee shall have the sole and plenary authority, in addition to other express powers and authorizations conferred on the Committee by the Plan, to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of shares of Common Stock to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Awards; (iv) determine the terms and conditions of any Award (including any Performance Goals, criteria, and/or periods applicable to Awards); (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Common Stock, other securities, other Awards or other property, or canceled, forfeited, or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances the delivery of cash, Common Stock, other securities, other Awards or other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant or of the Committee; (vii) interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan, including any changes required to comply with Applicable Laws; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan; (ix) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards; (x) modify any Performance Goals, criteria and/or periods; and (y) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan, in each case, to the extent consistent with the terms of the Plan.

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(c)     The Committee may delegate to one or more officers of the Company or any Affiliate the authority to act on behalf of the Committee with respect to any matter, right, obligation, or election that is the responsibility of or that is allocated to the Committee herein, and that may be so delegated as a matter of law, except for grants of Awards to persons subject to Section 16 of the Exchange Act.

(d)     Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award or any documents evidencing Awards granted pursuant to the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all persons or entities, including, without limitation, the Company, any Affiliate, any Participant, any holder or beneficiary of any Award, and any stockholder of the Company.

(e)     No member of the Board, the Committee, delegate of the Committee or any employee or agent of the Company (each such person, an “Indemnifiable Person”) shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder. Each Indemnifiable Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon or incurred by such Indemnifiable Person in connection with or resulting from any action, suit or proceeding to which such Indemnifiable Person may be a party or in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and against and from any and all amounts paid by such Indemnifiable Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment in any such action, suit or proceeding against such Indemnifiable Person, provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to an Indemnifiable Person to the extent that a final judgment or other final adjudication (in either case not subject to further appeal) binding upon such Indemnifiable Person determines that the acts or omissions of such Indemnifiable Person giving rise to the indemnification claim resulted from such Indemnifiable Person’s bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company’s Certificate of Incorporation or Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such Indemnifiable Persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold them harmless.

(f)     Notwithstanding anything to the contrary contained in the Plan, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer the Plan with respect to such Awards. In any such case, the Board shall have all the authority granted to the Committee under the Plan.

5.     Grant of Awards; Shares Subject to the Plan; Limitations.

(a)     The Committee may, from time to time, grant Awards to one or more Eligible Persons.

(b)     Subject to Section 12 of the Plan, Awards granted under the Plan shall be subject to the following limitations: (i) the Committee is authorized to deliver under the Plan an aggregate of 29,200,000 shares of Common Stock; provided, that the total number of shares of Common Stock that will be reserved, and that may be issued, under the Plan will automatically increase on the first trading day of each calendar year, beginning with calendar year 2021, by a number of shares of Common Stock equal to one percent (1%) of the total outstanding shares of Common Stock on the last day of the prior calendar year, and (ii) the maximum number of shares of Common Stock that may be subject to an Award granted under the Plan during any single fiscal year to any Participant who is a non-employee director, when taken together with any cash fees paid to such non-employee director during such year in respect of his service as a non-employee director (including service as a member or chair of any committee of the Board), shall not exceed $500,000 in total value (calculating the value of any such Award based on the Fair Market Value on the Date of Grant of such Award for financial reporting purposes); provided that the non-employee directors who are considered independent (under the rules of NASDAQ or other securities exchange on which the Common Stock is traded) may make exceptions to this limit for a non-executive chair of the Board, if any, in which case the non-employee director receiving such additional compensation may not participate in the decision to award such compensation. Notwithstanding the automatic annual increase set forth in (i) above, the Board may act prior to January 1st of a given year to provide that there will be no such increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the stipulated percentage.

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(c)     In the event that (i) any Option or other Award granted hereunder is exercised through the tendering of Common Stock (either actually or by attestation) or by the withholding of Common Stock by the Company, or (ii) tax or deduction liabilities arising from such Option or other Award are satisfied by the tendering of Common Stock (either actually or by attestation) or by the withholding of Common Stock by the Company, then in each such case the shares of Common Stock so tendered or withheld shall be added to the shares of Common Stock available for grant under the Plan on a one-for-one basis. Shares underlying Awards under this Plan that are forfeited, canceled, expire unexercised, or are settled in cash shall also be available again for issuance as Awards under the Plan.

(d)     Common Stock delivered by the Company in settlement of Awards may be authorized and unissued shares, shares held in the treasury of the Company, shares purchased on the open market or by private purchase, or a combination of the foregoing.

(e)     Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). The number of shares of Common Stock underlying any Substitute Awards shall not be counted against the aggregate number of shares of Common Stock available for Awards under the Plan.

6.     Eligibility. Participation shall be limited to Eligible Persons who have entered into an Award Agreement or who have received written notification from the Committee, or from a person designated by the Committee, that they have been selected to participate in the Plan.

7.     Options.

(a)     Generally. Each Option granted under the Plan shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each Option so granted shall be subject to the conditions set forth in this Section 7 and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock Option. Subject to Section 12, the maximum aggregate number of shares of Common Stock that may be issued through the exercise of Incentive Stock Options granted under the Plan is 29,200,000 shares of Common Stock, and, for the avoidance of doubt, such share limit shall not be subject to the annual adjustment provided in Section 5(b)(i). Incentive Stock Options shall be granted only to Eligible Persons who are employees of the Company and its Affiliates, and no Incentive Stock Option shall be granted to any Eligible Person who is ineligible to receive an Incentive Stock Option under the Code. No Option shall be treated as an Incentive Stock Option unless the Plan has been approved by the stockholders of the Company in a manner intended to comply with the stockholder approval requirements of Section 422(b)(1) of the Code; provided that any Option intended to be an Incentive Stock Option shall not fail to be effective solely on account of a failure to obtain such approval, but rather such Option shall be treated as a Nonqualified Stock Option unless and until such approval is obtained. In the case of an Incentive Stock Option, the terms and conditions of such grant shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code. If for any reason an Option intended to be an Incentive Stock Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option or portion thereof shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan.

(b)     Exercise Price. Except with respect to Substitute Awards, the exercise price (“Exercise Price”) per share of Common Stock for each Option shall not be less than 100% of the Fair Market Value of such share determined as of the Date of Grant (unless such Option is a Nonqualified Stock Option and complies with the requirements of Section 409A of the Code); provided, however, that in the case of an Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns shares representing more than 10% of the total combined voting power of all classes of shares of the Company or any related corporation (as determined in accordance with Treasury Regulation Section 1.422-2(f)), the Exercise Price per share shall not be less than 110% of the Fair Market Value per share on the Date of Grant and provided further, that, notwithstanding any provision herein to the contrary, the Exercise Price shall not be less than the par value per share of Common Stock.

(c)     Vesting and Expiration. Options shall vest and become exercisable in such manner and on such date or dates determined by the Committee (including, if applicable, the attainment of any Performance Goals, as determined by the Committee in the applicable Award Agreement) and shall expire after such period, not to exceed ten years, as may be determined by the Committee (the “Option Period”); provided, however, that the Option Period shall not

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exceed five years from the Date of Grant in the case of an Incentive Stock Option granted to a Participant who on the Date of Grant owns shares representing more than 10% of the total combined voting power of all classes of shares of the Company or any related corporation (as determined in accordance with Treasury Regulation Section 1.422-2(f)); provided, further, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any Option, which acceleration shall not affect the terms and conditions of such Option other than with respect to exercisability. In the event of any termination of employment or service with the Company or its Affiliates thereof of a Participant who has been granted one or more Options, the Options shall be exercisable at the time or times and subject to the terms and conditions set forth in the Award Agreement. If the Option would expire at a time when the exercise of the Option would violate applicable securities laws, the expiration date applicable to the Option will be automatically extended to a date that is 30 calendar days following the date such exercise would no longer violate applicable securities laws (so long as such extension shall not violate Section 409A of the Code); provided, that in no event shall such expiration date be extended beyond the expiration of the Option Period.

(d)     Method of Exercise and Form of Payment. No Common Stock shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price therefor is received by the Company and the Participant has paid to the Company an amount equal to any taxes required to be withheld or paid upon exercise of such Option. Options that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Option, accompanied by payment of the Exercise Price. The Exercise Price shall be payable (i) in cash, check, cash equivalent and/or Common Stock valued at the Fair Market Value at the time the Option is exercised (including, pursuant to procedures approved by the Committee, by means of attestation of ownership of a sufficient number of Common Stock in lieu of actual delivery of such shares to the Company); provided, that, such Common Stock are not subject to any pledge or other security interest and are Mature Shares; and (ii) by such other method as the Committee may permit in accordance with Applicable Law, in its sole discretion, including without limitation: (A) in other property having a Fair Market Value on the date of exercise equal to the Exercise Price, (B) if there is a public market for the Common Stock at such time, by means of a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Common Stock otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price, or (C) by a “net exercise” method whereby the Company withholds from the delivery of the shares of Common Stock for which the Option was exercised that number of shares of Common Stock having a Fair Market Value equal to the aggregate Exercise Price for the shares of Common Stock for which the Option was exercised. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional share of Common Stock, or whether such fractional share of Common Stock or any rights thereto shall be canceled, terminated or otherwise eliminated.

(e)     Notification upon Disqualifying Disposition of an Incentive Stock Option. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company in writing immediately after the date he makes a disqualifying disposition of any Common Stock acquired pursuant to the exercise of such Incentive Stock Option. A disqualifying disposition is any disposition (including, without limitation, any sale) of such Common Stock before the later of (i) two years after the Date of Grant of the Incentive Stock Option or (ii) one year after the date of exercise of the Incentive Stock Option. The Company may, if determined by the Committee and in accordance with procedures established by the Committee, retain possession of any Common Stock acquired pursuant to the exercise of an Incentive Stock Option as agent for the applicable Participant until the end of the period described in the preceding sentence.

(f)     Compliance With Laws, etc. Notwithstanding the foregoing, in no event shall a Participant be permitted to exercise an Option in a manner that the Committee determines would violate the Sarbanes-Oxley Act of 2002, if applicable; any other Applicable Law; the applicable rules and regulations of the Securities and Exchange Commission; or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded.

8.     Stock Appreciation Rights.

(a)     Generally. Each SAR granted under the Plan shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each SAR so granted shall be subject to the conditions set forth in this Section 8 and

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to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Any Option granted under the Plan may include tandem SARs. The Committee also may award SARs to Eligible Persons independent of any Option.

(b)     Strike Price. The Strike Price per share of Common Stock for each SAR shall not be less than 100% of the Fair Market Value of such share determined as of the Date of Grant.

(c)     Vesting and Expiration. A SAR granted in connection with an Option shall become exercisable and shall expire according to the same vesting schedule and expiration provisions as the corresponding Option. A SAR granted independent of an Option shall vest and become exercisable and shall expire in such manner and on such date or dates determined by the Committee (including, if applicable, the attainment of any Performance Goals, as shall be determined by the Committee in the applicable Award Agreement) and shall expire after such period, not to exceed ten years, as may be determined by the Committee (the “SAR Period”); provided, however, that notwithstanding any vesting dates set by the Committee, the Committee may, in its sole discretion, accelerate the exercisability of any SAR, which acceleration shall not affect the terms and conditions of such SAR other than with respect to exercisability. In the event of any termination of employment or service with the Company and its Affiliates thereof of a Participant who has been granted one or more SARs, the SARs shall be exercisable at the time or times and subject to the terms and conditions as set forth in the Award Agreement (or in the underlying Option Award Agreement, as may be applicable). If the SAR would expire at a time when the exercise of the SAR would violate applicable securities laws, the expiration date applicable to the SAR will be automatically extended to a date that is 30 calendar days following the date such exercise would no longer violate applicable securities laws (so long as such extension shall not violate Section 409A of the Code); provided, that, in no event shall such expiration date be extended beyond the expiration of the SAR Period.

(d)     Method of Exercise. SARs that have become exercisable may be exercised by delivery of written or electronic notice of exercise to the Company in accordance with the terms of the Award, specifying the number of SARs to be exercised and the date on which such SARs were awarded.

(e)     Payment. Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of shares subject to the SAR that are being exercised, multiplied by the excess, if any, of the Fair Market Value of one share of Common Stock on the exercise date over the Strike Price, less an amount equal to any taxes required to be withheld or paid. The Company shall pay such amount in cash, in Common Stock having a Fair Market Value equal to such amount, or any combination thereof, as determined by the Committee. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional share of Common Stock, or whether such fractional share of Common Stock or any rights thereto shall be canceled, terminated or otherwise eliminated.

9.     Restricted Stock and Restricted Stock Units.

(a)     Generally. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)). Each such grant shall be subject to the conditions set forth in this Section 9 and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement (including the Performance Goals, if any, upon whose attainment the Restricted Period shall lapse in part or full).

(b)     Restricted Accounts; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, a book entry in a restricted account shall be established in the Participant’s name at the Company’s transfer agent and, if the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than held in such restricted account pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to the Restricted Stock covered by such agreement. If a Participant shall fail to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and blank stock power within the amount of time specified by the Committee, the Award shall be null and void. Subject to the restrictions set forth in this Section 9 and the applicable Award Agreement, the Participant generally shall have the rights and privileges of a stockholder as to such Restricted Stock, including, without limitation, the right to vote such Restricted Stock and the right to receive dividends, if applicable, provided that such dividends may be made subject to vesting or other conditions or may be required to be reinvested into additional shares of Restricted Stock, as determined by the Committee in its discretion. To the extent shares of Restricted Stock are forfeited, any

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share certificates issued to the Participant evidencing such shares shall be returned to the Company, and all rights of the Participant to such shares and as a stockholder with respect thereto shall terminate without further obligation on the part of the Company.

(c)     Vesting. Unless otherwise provided by the Committee in an Award Agreement, the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be forfeited upon termination of employment or service of the Participant granted the applicable Award.

(d)     Delivery of Restricted Stock and Settlement of Restricted Stock Units.

(i)     Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in the applicable Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his beneficiary, without charge, the share certificate evidencing the shares of Restricted Stock that have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full share) or shall register such shares in the Participant’s name without any such restrictions. Dividends, if any, that may have been withheld by the Committee and attributable to any particular share of Restricted Stock shall be distributed to the Participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such dividends, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends (except as otherwise set forth by the Committee in the applicable Award Agreement).

(ii)     Unless otherwise provided by the Committee in an Award Agreement, and subject to any applicable deferral election authorized by the Committee, upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his beneficiary, without charge, one share of Common Stock for each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its sole discretion, elect to (A) pay cash or part cash and part shares of Common Stock in lieu of delivering only Common Stock in respect of such Restricted Stock Units or (B) defer the delivery of Common Stock (or cash or part Common Stock and part cash, as the case may be) beyond the expiration of the Restricted Period if such delivery would result in a violation of Applicable Law until such time as is no longer the case. If a cash payment is made in lieu of delivering Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed with respect to such Restricted Stock Units, less an amount equal to any taxes required to be withheld or paid.

10.     Other Stock-Based Awards and Other Cash-Based Awards.

(a)     Other Stock-Based Awards. The Committee may grant types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Common Stock), in such amounts and subject to such terms and conditions, as the Committee shall determine (including, if applicable, the attainment of any Performance Goals, as set forth in the applicable Award Agreement). Such Other Stock-Based Awards may involve the transfer of actual Common Stock to Participants, or payment in cash or otherwise of amounts based on the value of Common Stock. The terms and conditions of such Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all such Awards or all Participants receiving such Awards.

(b)     Other Cash-Based Awards. The Committee may grant a Participant a cash Award not otherwise described by the terms of the Plan, including cash awarded as a bonus or upon the attainment of Performance Goals or otherwise as permitted under the Plan.

(c)     Value of Awards. Each Other Stock-Based Award shall be expressed in terms of shares of Common Stock or units based on Common Stock, as determined by the Committee, and each Other Cash-Based Award shall be expressed in terms of cash. The Committee may establish Performance Goals in its discretion and any such Performance Goals shall be set forth in the applicable Award Agreement. If the Committee exercises its discretion to establish Performance Goals, the number and/or value of Other Stock-Based Awards or Other Cash-Based Awards that will be paid out to the Participant will depend on the extent to which such Performance Goals are met.

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(d)     Payment of Awards. Payment, if any, with respect to an Other Stock-Based Award or Other Cash-Based Award shall be made in accordance with the terms of the Award, as set forth in the Award Agreement, in cash, Common Stock or a combination of cash and Common Stock, as the Committee determines.

(e)     Vesting. The Committee shall determine the extent to which the Participant shall have the right to receive Other Stock-Based Awards or Other Cash-Based Awards following the Participant’s termination of employment or service (including by reason of such Participant’s death, disability (as determined by the Committee), or termination without Cause). Such provisions shall be determined in the sole discretion of the Committee and will be included in the applicable Award Agreement but need not be uniform among all Other Stock-Based Awards or Other Cash-Based Awards issued pursuant to the Plan and may reflect distinctions based on the reasons for the termination of employment or service.

11.     Dividend Equivalents. Subject to Section 12, no adjustment shall be made in the Common Stock issuable or taken into account under Awards on account of cash dividends that may be paid or other rights that may be issued to the holders of Common Stock prior to issuance of such Common Stock under such Award. The Committee may grant Dividend Equivalents based on the dividends declared on shares of Common Stock that are subject to any Award (other than an Option or Stock Appreciation Right). Any Award of Dividend Equivalents may be credited as of the dividend payment dates, during the period between the Date of Grant of the Award and the date the Award becomes payable or terminates or expires, as determined by the Committee; however, unless otherwise determined by the Committee, Dividend Equivalents shall not be payable unless and until the Award becomes payable, and shall be subject to forfeiture to the same extent as the underlying Award. Dividend Equivalents may be subject to any additional limitations and/or restrictions determined by the Committee. Dividend Equivalents shall be payable in cash or Common Stock or converted to full-value Awards, calculated based on such formula as may be determined by the Committee.

12.     Changes in Capital Structure and Similar Events. In the event of (a) any dividend (other than ordinary cash dividends) or other distribution (whether in the form of cash, Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, amalgamation, consolidation, spin-off, split-up, split-off, combination, repurchase or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to acquire Common Stock or other securities of the Company, or other similar corporate transaction or event (including, without limitation, a Change in Control) that affects the Common Stock, or (b) unusual or infrequently occurring events (including, without limitation, a Change in Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then the Committee shall make any such adjustments in such manner as it may deem equitable, subject to the requirements of Sections 409A, 421, and 422 of the Code, if applicable, including without limitation any or all of the following:

(a)     adjusting any or all of (i) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan (including, without limitation, adjusting any or all of the limitations under Section 5 of the Plan) and (ii) the terms of any outstanding Award, including, without limitation, (A) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (B) the Exercise Price or Strike Price with respect to any Award or (C) any applicable performance measures;

(b)     providing for a substitution or assumption of Awards in a manner that substantially preserves the applicable terms of such Awards;

(c)     accelerating the exercisability or vesting of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event;

(d)     modifying the terms of Awards to add events, conditions or circumstances (including termination of employment within a specified period after a Change in Control) upon which the exercisability or vesting of or lapse of restrictions thereon will accelerate;

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(e)     deeming any performance measures satisfied at target, maximum or actual performance through closing or such other level determined by the Committee in its sole discretion, or providing for the performance measures to continue (as is or as adjusted by the Committee) after closing;

(f)     providing that for a period prior to the Change in Control determined by the Committee in its sole discretion, any Options or SARs that would not otherwise become exercisable prior to the Change in Control will be exercisable as to all Common Stock subject thereto (but any such exercise will be contingent upon and subject to the occurrence of the Change in Control and if the Change in Control does not take place after giving such notice for any reason whatsoever, the exercise will be null and void) and that any Options or SARs not exercised prior to the consummation of the Change in Control will terminate and be of no further force and effect as of the consummation of the Change in Control; and

(g)     canceling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, Common Stock, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Committee (which if applicable may be based upon the price per share of Common Stock received or to be received by other stockholders of the Company in such event), including without limitation, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Common Stock subject to such Option or SAR over the aggregate Exercise Price or Strike Price of such Option or SAR, respectively (it being understood that, in such event, any Option or SAR having a per share Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value of a share of Common Stock subject thereto may be canceled and terminated without any payment or consideration therefor); provided, however, that in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board Accounting Standards Codification Topic 718), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be final, conclusive and binding for all purposes.

13.     Amendments and Termination.

(a)     Amendment and Termination of the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that (i) no amendment to Section 13(b) (to the extent required by the proviso in such Section 13(b)) shall be made without stockholder approval and (ii) no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan (including, without limitation, as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the Common Stock may be listed or quoted); provided, further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary.

(b)     Amendment of Award Agreements. The Committee may, to the extent consistent with the terms of any applicable Award Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award Agreement, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, unless the Committee determines, in its sole discretion, that the amendment is necessary for the Award to comply with Section 409A of the Code; provided, further, that without stockholder approval, except as otherwise permitted under Section 12 of the Plan, (i) no amendment or modification may reduce the Exercise Price of any Option or the Strike Price of any SAR, (ii) the Committee may not cancel any outstanding Option or SAR where the Fair Market Value of the Common Stock underlying such Option or SAR is less than its Exercise Price and replace it with a new Option or SAR, another Award or cash and (iii) the Committee may not take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted.

14.     General.

(a)     Award Agreements. Each Award under the Plan shall be evidenced by an Award Agreement, which shall be delivered to the Participant (whether in paper or electronic medium (including email or the posting on a web site maintained by the Company or a third party under contract with the Company)) and shall specify the terms and

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conditions of the Award and any rules applicable thereto, including, without limitation, the effect on such Award of the death, disability or termination of employment or service of a Participant, or of such other events as may be determined by the Committee. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Committee need not treat Participants or Awards (or portions thereof) uniformly.

(b)     Nontransferability.

(i)     Each Award shall be exercisable only by a Participant during the Participant’s lifetime, or, if permissible under Applicable Law, by the Participant’s legal guardian or representative. No Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or an Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

(ii)     Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Awards (other than Incentive Stock Options) to be transferred by a Participant, without consideration, subject to such rules as the Committee may adopt consistent with any applicable Award Agreement to preserve the purposes of the Plan, to: (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant and his Immediate Family Members; (C) a partnership or limited liability company whose only partners or stockholders are the Participant and his Immediate Family Members; or (D) any other transferee as may be approved either (I) by the Board or the Committee in its sole discretion, or (II) as provided in the applicable Award Agreement (each transferee described in clauses (A), (B), (C) and (D) above is hereinafter referred to as, a “Permitted Transferee”); provided that the Participant gives the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee notifies the Participant in writing that such a transfer would comply with the requirements of the Plan.

(iii)     The terms of any Award transferred in accordance with the immediately preceding sentence shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Award Agreement, to a Participant shall be deemed to refer to the Permitted Transferee, except that (A) Permitted Transferees shall not be entitled to transfer any Award, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Option unless there shall be in effect a registration statement on an appropriate form covering the Common Stock to be acquired pursuant to the exercise of such Option if the Committee determines, consistent with any applicable Award Agreement, that such a registration statement is necessary or appropriate; (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Participant under the Plan or otherwise; and (D) the consequences of the termination of the Participant’s employment by, or services to, the Company or an Affiliate under the terms of the Plan and the applicable Award Agreement shall continue to be applied with respect to the Participant, including, without limitation, that an Option shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Award Agreement.

(c)     Tax Withholding and Deductions.

(i)     A Participant shall be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to deduct and withhold, from any cash, Common Stock, other securities or other property deliverable under any Award or from any compensation or other amounts owing to a Participant, the amount (in cash, Common Stock, other securities or other property) of any required taxes (up to the maximum statutory rate under Applicable Law as in effect from time to time as determined by the Committee) and deduction in respect of an Award, its grant, vesting or exercise, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of such taxes.

(ii)     Without limiting the generality of clause (i) above, the Committee may, in its sole discretion, permit a Participant to satisfy, in whole or in part, the foregoing tax and deduction liability by (A) the delivery of shares of Common Stock (which are not subject to any pledge or other security interest and are Mature

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Shares, except as otherwise determined by the Committee) owned by the Participant having a Fair Market Value equal to such liability or (B) having the Company withhold from the number of shares of Common Stock otherwise issuable or deliverable pursuant to the exercise or settlement of the Award a number of shares with a Fair Market Value equal to such liability.

(d)     No Claim to Awards; No Rights to Continued Employment; Waiver. No employee of the Company or an Affiliate, or other person, shall have any Claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for a grant of any other Award. A Participant’s sole remedy for any Claim related to the Plan or any Award shall be against the Company, and no Participant shall have any Claim or right of any nature against any Subsidiary or Affiliate of the Company or any stockholder or existing or former director, officer or employee of the Company or any Subsidiary of the Company. There is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or an Affiliate, nor shall it be construed as giving any Participant any rights to continued service on the Board. The Company or any of its Affiliates may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any Claim under the Plan, unless otherwise expressly provided in the Plan or any Award Agreement. By accepting an Award under the Plan, a Participant shall thereby be deemed to have waived any Claim to continued exercise or vesting of an Award or to damages or severance entitlement related to non-continuation of the Award beyond the period provided under the Plan or any Award Agreement, notwithstanding any provision to the contrary in any written employment contract or other agreement between the Company and its Affiliates and the Participant, whether any such agreement is executed before, on or after the Date of Grant.

(e)     International Participants. With respect to Participants who reside or work outside of the United States of America, the Committee may in its sole discretion amend the terms of the Plan or outstanding Awards with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Affiliates.

(f)     Designation and Change of Beneficiary. To the extent permitted by the Committee, each Participant may file with the Committee a written designation of one or more persons as the beneficiary(ies) who shall be entitled to receive the amounts payable with respect to an Award, if any, due under the Plan upon his death. A Participant may, from time to time, revoke or change his beneficiary designation without the consent of any prior beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If no beneficiary designation is filed by a Participant, or if the Committee does not permit beneficiary designations, then the beneficiary shall be deemed to be the Participant’s spouse or, if the Participant is unmarried at the time of death, his estate.

(g)     Termination of Employment/Service. Unless determined otherwise by the Committee at any time following such event: (i) neither a temporary absence from employment or service due to illness, vacation or leave of absence nor a transfer from employment or service with the Company to employment or service with an Affiliate (or vice-versa) shall be considered a termination of employment or service with the Company or an Affiliate; and (ii) if a Participant’s employment with the Company and its Affiliates terminates, but such Participant continues to provide services to the Company and its Affiliates in a non-employee capacity (or vice-versa), such change in status shall not be considered a termination of employment with the Company or an Affiliate.

(h)     No Rights as a Stockholder. Except as otherwise specifically provided in the Plan or any Award Agreement, no person shall be entitled to the privileges of ownership in respect of Common Stock or other securities that are subject to Awards hereunder until such shares have been issued or delivered to that person.

(i)     Government and Other Regulations.

(i)     The obligation of the Company to settle Awards in Common Stock or other consideration shall be subject to all Applicable Laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no

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obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Common Stock or other securities pursuant to an Award unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any of the Common Stock or other securities to be offered or sold under the Plan. The Committee shall have the authority to provide that all certificates for Common Stock or other securities of the Company or any Affiliate delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award Agreement, the federal securities laws, or the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or inter-dealer quotation system upon which such shares or other securities are then listed or quoted and any other applicable federal, state, local or non-U.S. laws, and, without limiting the generality of Section 9 of the Plan, the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Notwithstanding any provision in the Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award granted under the Plan that it in its sole discretion deems necessary or advisable in order that such Award complies with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.

(ii)     The Committee may cancel an Award or any portion thereof if the Committee determines, in its sole discretion, that legal or contractual restrictions and/or blockage and/or other market considerations would make the Company’s acquisition of Common Stock from the public markets, the Company’s issuance of Common Stock or other securities to the Participant, the Participant’s acquisition of Common Stock or other securities from the Company and/or the Participant’s sale of Common Stock to the public markets, illegal, impracticable or inadvisable. If the Committee determines to cancel all or any portion of an Award denominated in Common Stock in accordance with the foregoing, the Company shall pay to the Participant an amount equal to the excess of (A) the aggregate Fair Market Value of the Common Stock subject to such Award or portion thereof that is canceled (determined as of the applicable exercise date, or the date that the shares would have been vested or delivered, as applicable), over (B) the aggregate Exercise Price or Strike Price (in the case of an Option or SAR, respectively) or any amount payable as a condition of delivery of Common Stock (in the case of any other Award). Such amount shall be delivered to the Participant as soon as practicable following the cancellation of such Award or portion thereof.

(j)     Payments to Persons Other Than Participants. If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his estate (unless a prior Claim therefor has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.

(k)     Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options or other equity-based awards otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.

(l)     No Trust or Fund Created. The Plan is intended to constitute an “unfunded” plan for incentive compensation. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on the one hand, and a Participant or other person or entity, on the other hand. No provision of the Plan or any Award shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees or service providers under general law.

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(m)     Reliance on Reports. Each member of the Committee and each member of the Board shall be fully justified in acting or failing to act, as the case may be, and shall not be liable for having so acted or failed to act in good faith, in reliance upon any report made by the independent public accountant of the Company and its Affiliates and/or any other information furnished in connection with the Plan by any agent of or service provider to the Company or the Committee or the Board, other than himself.

(n)     Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided in such other plan.

(o)     Governing Law. The Plan shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof.

(p)     Severability. If any provision of the Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the Applicable Laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

(q)     Obligations Binding on Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.

(r)     Section 409A of the Code.

(i)     Notwithstanding any provision of this Plan to the contrary, all Awards made under this Plan are intended to be exempt from or, in the alternative, comply with Section 409A of the Code and the authoritative guidance thereunder, including the exceptions for stock rights and short-term deferrals. The Plan shall be construed and interpreted in accordance with such intent. Each payment under an Award shall be treated as a separate payment for purposes of Section 409A of the Code.

(ii)     If a Participant is a “specified employee” (as such term is defined for purposes of Section 409A of the Code) at the time of his termination of service, no amount that is nonqualified deferred compensation subject to Section 409A of the Code and that becomes payable by reason of such termination of service shall be paid to the Participant (or in the event of the Participant’s death, the Participant’s representative or estate) before the earlier of (x) the first business day after the date that is six months following the date of the Participant’s termination of service, and (y) within 30 days following the date of the Participant’s death. For purposes of Section 409A of the Code, a termination of service shall be deemed to occur only if it is a “separation from service” within the meaning of Section 409A of the Code, and references in the Plan and any Award Agreement to “termination of service” or similar terms shall mean a “separation from service.” If any Award is or becomes subject to Section 409A of the Code, unless the applicable Award Agreement provides otherwise, such Award shall be payable upon the Participant’s “separation from service” within the meaning of Section 409A of the Code. If any Award is or becomes subject to Section 409A of the Code and if payment of such Award would be accelerated or otherwise triggered under a Change in Control, then the definition of Change in Control shall be deemed modified, only to the extent necessary to avoid the imposition of any additional tax under Section 409A of the Code, to mean a “change in control event” as such term is defined for purposes of Section 409A of the Code.

(iii)     Any adjustments made pursuant to Section 12 to Awards that are subject to Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code, and any adjustments made pursuant to Section 12 to Awards that are not subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (x) continue not to be subject to Section 409A of the Code or (y) comply with the requirements of Section 409A of the Code.

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(s)     Notification of Election Under Section 83(b) of the Code. If any Participant, in connection with the acquisition of Common Stock under an Award, makes the election permitted under Section 83(b) of the Code, if applicable, the Participant shall notify the Company of the election within ten days of filing notice of the election with the Internal Revenue Service.

(t)     Expenses; Gender; Titles and Headings; Interpretation. The expenses of administering the Plan shall be borne by the Company and its Affiliates. Masculine pronouns and other words of masculine gender shall refer to both men and women. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control. Unless the context of the Plan otherwise requires, words using the singular or plural number also include the plural or singular number, respectively; derivative forms of defined terms will have correlative meanings; the terms “hereof,” “herein” and “hereunder” and derivative or similar words refer to this entire Plan; the term “Section” refers to the specified Section of this Plan and references to “paragraphs” or “clauses” shall be to separate paragraphs or clauses of the Section or subsection in which the reference occurs; the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; and the word “or” shall be disjunctive but not exclusive

(u)     Other Agreements. Notwithstanding the above, the Committee may require, as a condition to the grant of and/or the receipt of Common Stock or other securities under an Award, that the Participant execute lock-up, stockholder or other agreements, as it may determine in its sole and absolute discretion.

(v)     Payments. Participants shall be required to pay, to the extent required by Applicable Law, any amounts required to receive Common Stock or other securities under any Award made under the Plan.

(w)     Clawback; Erroneously Awarded Compensation. All Awards (including on a retroactive basis) granted under the Plan are subject to the terms of any Company forfeiture, incentive compensation recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of Applicable Laws, as well as any other policy of the Company that may apply to the Awards, such as anti-hedging or pledging policies, as they may be in effect from time to time. In particular, these policies and/or provisions shall include, without limitation, (i) any Company policy established to comply with Applicable Laws (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), and/or (ii) the rules and regulations of the applicable securities exchange or inter-dealer quotation system on which the shares of Common Stock or other securities are listed or quoted, and these requirements shall be deemed incorporated by reference into all outstanding Award Agreements.

(x)     No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of fractional shares or whether fractional shares or any rights thereto shall be forfeited, rounded, or otherwise eliminated.

(y)     Paperless Administration. If the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

(z)     Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 14(z) by and among the Company and its Subsidiaries and Affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan. The Company and its Subsidiaries and Affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Common Stock held in the Company or its Subsidiaries and Affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and Affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and Affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Participant authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any

17

Common Stock. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding the Participant, request additional information about the storage and processing of the Data regarding the Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 14(z) in writing, without cost, by contacting the local human resources representative. The Company may cancel Participant’s ability to participate in the Plan and, in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 14(z).

(aa)     Broker-Assisted Sales. In the event of a broker-assisted sale of Common Stock in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards: (a) any Common Stock to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) the Common Stock may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of the sale that exceed the amount owed, the Company will pay the excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for the sale at any particular price; and (f) if the proceeds of the sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.

18

Exhibit 10.17

FORUM MERGER III CORPORATION 2020 INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Earnout Shares)

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made and entered into as of [•], 20[•], by and between Forum Merger III Corporation, a Delaware corporation (the “Company”), and the employee of the Company or one of its affiliates whose signature is set forth on the signature page hereof (the “Participant”).

W I T N E S S E T H:

WHEREAS, the Company entered into an Agreement and Plan of Merger, dated as of December 10, 2020 (the “Merger Agreement”), with ELMS Merger Corp. (“Merger Sub”), Jason Luo in the capacity as the initial Stockholder Representative thereto and Electric Last Mile, Inc. (“ELMS”), pursuant to which the Merger Sub merged with and into ELMS as of [•];

WHEREAS, pursuant to the Merger Agreement, the Stockholders (as defined in the Merger Agreement) have the contingent right to receive up to 5,000,000 shares of the Company’s common stock if specified share price triggers are achieved as set forth in Section 2.10 of the Merger Agreement (the “Earnout Shares”);

WHEREAS, the Company has adopted the Forum Merger III Corporation 2020 Incentive Plan (the “Plan”), which permits the Company to issue incentive awards to certain of its or its affiliates’ key personnel;

WHEREAS, pursuant to the Merger Agreement and effective as of the Closing Date (as defined in the Merger Agreement), the Company agreed to make certain grants of Restricted Stock Units under the Plan to eligible individuals as specified in the Merger Agreement;

WHEREAS, the Participant is an employee of the Company or one of its affiliates who has been designated under the Merger Agreement to receive a grant of restricted stock units that will vest upon the achievement of the specified share price triggers applicable to the Earnout Shares; and

WHEREAS, the Company desires to grant the Participant restricted stock units under the Plan representing the Participant’s right to receive a specified number of shares of Common Stock if the Participant remains in employment until the applicable share price triggers are achieved.

NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:

1. Award of RSUs. Subject to the terms and conditions set forth herein, the Company hereby awards the Participant restricted stock units (the “RSUs”) relating to ______ shares of Common Stock.

2. Earning and Vesting of RSUs. Subject to Section 4, the percentage of the RSUs indicated in the table below will be deemed earned and vested if the closing price per share of the Common Stock (the “Closing Price”) equals or exceeds the amount indicated in the table below for any twenty (20) trading days in any thirty (30) consecutive day trading period during the thirty-six (36) month period following the Closing Date:

Percentage of RSUs Earned

 

Closing Price Met or Exceeded

50

%

 

$

14

50

%

 

$

16

3. Settlement. As soon as reasonably practicable (but no more than two and one-half (2½) months) after the later of (a) the date on which the applicable Closing Price is met or exceeded, and (b) six (6) months after the Closing Date, the Company will issue to the Participant a number of shares of Common Stock equal to the number of RSUs that were deemed earned and vested as a result of the Closing Price being met or exceeded.

4. Termination of Employment. If the Participant’s employment with the Company and its affiliates is terminated for any reason, then all RSUs that have not become earned and vested as of the date of termination shall be forfeited as of the date on which such termination occurs.

1

5. Rights as a Stockholder; Dividend Equivalents. The Participant shall not have any rights of a stockholder of the Company with respect to the shares of Common Stock underlying the RSUs (including, without limitation, any voting rights or any right to dividends), until the shares have been issued hereunder.

6. Tax Withholding. The Company shall, to the extent it may do so without adverse accounting or legal consequences, satisfy its or its affiliates’ liability to withhold federal, state, or local income or other taxes due by reason of the grant, vesting or settlement of, or by reason of any other event relating to, the RSUs, by withholding a number of shares of Common Stock otherwise issuable hereunder having a Fair Market Value on the date the tax obligation arises equal to the amount to be withheld; provided, however, that the amount to be withheld may not exceed the total maximum statutory tax rates associated with the transaction to the extent needed for the Company to avoid adverse accounting treatment; and provided, further, that, in the event the Company cannot for any reason withhold shares to satisfy such withholding obligations, the Participant agrees to pay to the Company upon demand such amount as may be requested by the Company for the purpose of satisfying such withholding obligations, and the Company may withhold any amounts necessary to satisfy its or its affiliates’ withholding obligations from other amounts owed to the Participant.

7. No Right to Employment or Service; Clawback/Forfeiture/Recoupment of Awards for Breach of Contract. Nothing in this Agreement shall confer upon the Participant any right to continue in the employment or service of the Company or any affiliate, or interfere with or limit in any way the right of the Company or an affiliate to terminate the Participant’s employment or service at any time. Notwithstanding anything to the contrary in this Agreement, if, after the Participant’s employment or service is terminated for any reason, the Participant breaches any material provision of any applicable confidentiality, non-compete, non-solicit, general release, covenant not-to-sue or other similar agreement with the Company or any affiliate, then the Participant will forfeit any compensation, gain or other value realized on the vesting or settlement of any award granted under this Agreement or the sale or other transfer of any award granted under this Agreement and must promptly repay such amounts to the Company.

8. Interpretation by Committee. The Participant agrees that any dispute or disagreement which may arise in connection with this Agreement shall be resolved by the Committee, in its sole discretion, and that any interpretation by the Committee of the terms of this Agreement or the Plan and any determination made by the Committee under this Agreement or the Plan may be made in the sole discretion of the Committee and shall be final, binding and conclusive. Any such determination need not be uniform and may be made differently among Participants awarded restricted stock units.

9. Transferability. The Participant may not transfer any interest in the RSUs other than under the Participant’s will or as required by the laws of descent and distribution. The RSUs also may not be pledged, attached, or otherwise encumbered. Any purported assignment, alienation, sale, transfer, pledge, attachment or encumbrance of the RSUs in violation of the terms of this Agreement shall be null and void and unenforceable against the Company or its successors. In addition, notwithstanding anything to the contrary herein, the Participant agrees and acknowledges with respect to any shares of Common Stock issued hereunder that have not been registered under the Securities Act: (a) he or she will not sell or otherwise dispose of such shares except pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or in a transaction which, in the opinion of counsel for the Company, is exempt from such registration, and (b) a legend will be placed on the certificates for the shares to such effect.

10. Miscellaneous.

(a) Capitalized terms used and not defined herein shall have the meanings provided in the Plan.

(b) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and to be performed therein between residents thereof.

(c) This Agreement may not be amended or modified except by the written consent of the parties hereto.

(d) The captions of this Agreement are inserted for convenience of reference only and shall not be taken into account in construing this Agreement.

2

(e) Any notice, filing or delivery hereunder or with respect to the RSUs shall be given to the Participant at either his or her usual work location or his or her home address as indicated in the records of the Company, and shall be given to the Committee or the Company at [•], [•], Attention: Corporate Secretary. All such notices shall be given by first class mail, postage prepaid or by personal delivery.

(f) This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns and shall be binding upon and inure to the benefit of the Participant and the Participant’s heirs and legal representatives.

(g) This Agreement is subject in all respects to the terms and conditions of the Plan.

11. Change in Control. Notwithstanding any other provision to the contrary contained in this Agreement, effective upon a Change in Control following the Grant Date, any RSUs that have not yet become earned or vested, or for which the applicable Closing Price has been met or exceeded but for which shares have not yet been issued, shall be deemed earned and vested and settled by the issuance of one share per earned RSU immediately prior to the consummation of the Change in Control.

[Signature page follows]

3

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer and the Participant has hereunto affixed his or her signature, all as of the day and year first set forth above.

COMPANY

     

PARTICIPANT

Forum Merger III Corporation

       

By:

 

 

     

 

       

No. of Restricted Stock Units:

 

 

       

Grant Date:

 

 

 

4

Exhibit 10.18

FORUM MERGER III CORPORATION 2020 INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT

(Time-Vesting)

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made and entered into as of [•], 20[•] (the “Grant Date”), by and between Forum Merger III Corporation, a Delaware corporation (the “Company”), and the employee of the Company or one of its affiliates whose signature is set forth on the signature page hereof (the “Participant”).

W I T N E S S E T H:

WHEREAS, the Company has adopted the Forum Merger III Corporation 2020 Incentive Plan (the “Plan”), which permits the Company to issue incentive awards to certain of its or its affiliates’ key personnel; and

WHEREAS, the Participant is an employee of the Company or one of its affiliates whom the Company wishes to provide with the opportunity to receive restricted stock units representing the right to receive a specified number of shares of Common Stock if the Participant remains in employment until the applicable vesting date.

NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:

1. Award of RSUs. Subject to the terms and conditions set forth herein, the Company hereby awards the Participant restricted stock units (the “RSUs”) relating to ______ shares of Common Stock.

2. Vesting. Subject to Section 4, ____% of the total RSUs shall vest on each of the first ____ anniversaries of the Grant Date.

3. Settlement. As soon as reasonably practicable (but no more than two and one-half (2½) months) after each vesting date, the Company will issue to the Participant a number of shares of Common Stock equal to the number of RSUs that vested on such date.

4. Termination of Employment. If the Participant’s employment with the Company and its affiliates is terminated for any reason, then all RSUs that have not become vested as of the date of termination shall be forfeited as of the date on which such termination occurs.

5. No Rights as a Stockholder. The Participant shall not have any rights of a stockholder of the Company with respect to the shares of Common Stock underlying the RSUs (including, without limitation, any voting rights or any right to dividends), until the shares have been issued hereunder.

6. Tax Withholding. As a condition of receiving this award of RSUs, the Participant agrees to pay to the Company upon demand such amount as may be requested by the Company for the purpose of satisfying its liability to withhold federal, state, or local income or other taxes due by reason of the grant, vesting or settlement of, or by reason of any other event relating to, the RSUs. If the Participant does not make such payment, then the Company or an affiliate may withhold such taxes from other amounts owed to the Participant or may choose to satisfy such withholding obligations by withholding a number of shares of Common Stock otherwise issuable hereunder having a Fair Market Value on the date the tax obligation arises equal to the amount to be withheld; provided, however, that the amount to be withheld may not exceed the total maximum statutory tax rates associated with the transaction to the extent needed for the Company to avoid adverse accounting treatment. The Committee may, in its sole discretion, permit net settlement.

7. No Right to Employment or Service; Clawback/Forfeiture/Recoupment of Awards for Breach of Contract. Nothing in this Agreement shall confer upon the Participant any right to continue in the employment or service of the Company or any affiliate, or interfere with or limit in any way the right of the Company or an affiliate to terminate the Participant’s employment or service at any time. Notwithstanding anything to the contrary in this Agreement, if, after the Participant’s employment or service is terminated for any reason, the Participant breaches any material provision of any applicable confidentiality, non-compete, non-solicit, general release, covenant not-to-sue or other

1

similar agreement with the Company or any affiliate, then the Participant will forfeit any compensation, gain or other value realized on the vesting or settlement of any award granted under this Agreement or the sale or other transfer of any award granted under this Agreement and must promptly repay such amounts to the Company.

8. Interpretation by Committee. The Participant agrees that any dispute or disagreement which may arise in connection with this Agreement shall be resolved by the Committee, in its sole discretion, and that any interpretation by the Committee of the terms of this Agreement or the Plan and any determination made by the Committee under this Agreement or the Plan may be made in the sole discretion of the Committee and shall be final, binding and conclusive. Any such determination need not be uniform and may be made differently among Participants awarded restricted stock units.

9. Transferability. The Participant may not transfer any interest in the RSUs other than under the Participant’s will or as required by the laws of descent and distribution. The RSUs also may not be pledged, attached, or otherwise encumbered. Any purported assignment, alienation, sale, transfer, pledge, attachment or encumbrance of the RSUs in violation of the terms of this Agreement shall be null and void and unenforceable against the Company or its successors. In addition, notwithstanding anything to the contrary herein, the Participant agrees and acknowledges with respect to any shares of Common Stock issued hereunder that have not been registered under the Securities Act: (a) he or she will not sell or otherwise dispose of such shares except pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or in a transaction which, in the opinion of counsel for the Company, is exempt from such registration, and (b) a legend will be placed on the certificates for the shares to such effect.

10. Miscellaneous.

(a) Capitalized terms used and not defined herein shall have the meanings provided in the Plan.

(b) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and to be performed therein between residents thereof.

(c) This Agreement may not be amended or modified except by the written consent of the parties hereto.

(d) The captions of this Agreement are inserted for convenience of reference only and shall not be taken into account in construing this Agreement.

(e) Any notice, filing or delivery hereunder or with respect to the RSUs shall be given to the Participant at either his or her usual work location or his or her home address as indicated in the records of the Company, and shall be given to the Committee or the Company at [•], [•], Attention: Corporate Secretary. All such notices shall be given by first class mail, postage prepaid or by personal delivery.

(f) This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns and shall be binding upon and inure to the benefit of the Participant and the Participant’s heirs and legal representatives.

(g) This Agreement is subject in all respects to the terms and conditions of the Plan.

[Signature page follows]

2

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer and the Participant has hereunto affixed his or her signature, all as of the day and year first set forth above.

COMPANY

     

PARTICIPANT

Forum Merger III Corporation

       

By:

 

 

     

 

       

No. of Restricted Stock Units:

 

 

       

Grant Date:

 

 

 

3

Exhibit 10.19

FORUM MERGER III CORPORATION 2020 INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Performance-Vesting)

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) is made and entered into as of [•], 20[•] (the “Grant Date”), by and between Forum Merger III Corporation, a Delaware corporation (the “Company”), and the employee of the Company or one of its affiliates whose signature is set forth on the signature page hereof (the “Participant”).

W I T N E S S E T H:

WHEREAS, the Company has adopted the Forum Merger III Corporation 2020 Incentive Plan (the “Plan”), which permits the Company to issue incentive awards to certain of its or its affiliates’ key personnel; and

WHEREAS, the Participant is an employee of the Company or one of its affiliates whom the Company wishes to provide with the opportunity to receive restricted stock units representing the right to receive a specified number of shares of Common Stock if the Participant remains in employment and certain performance goals are achieved.

NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein set forth, the parties hereby mutually covenant and agree as follows:

1. Award of RSUs. Subject to the terms and conditions set forth herein, the Company hereby awards the Participant restricted stock units (the “RSUs”) relating to ______ shares of Common Stock.

2. Earning and Vesting. Subject to Section 4, the percentage of the RSUs indicated in the table below will be deemed earned and vested if the performance goals indicated are achieved within the applicable performance period:

Percentage of RSUs Earned

 

Performance Goal

 

Performance Period

3. Settlement. As soon as reasonably practicable (but no more than two and one-half (2½) months) after the date on which the applicable performance goal is achieved, as determined by the Company in its sole and absolute discretion, the Company will issue to the Participant a number of shares of Common Stock equal to the number of RSUs that were deemed earned and vested as a result of such event.

4. Termination of Employment or Lapse of Performance Period. If the Participant’s employment with the Company and its affiliates is terminated for any reason, then all RSUs that have not become earned and vested as of the date of termination shall be forfeited as of the date on which such termination occurs. In addition, if the performance period applicable to RSUs ends without the applicable performance goals having been achieved, such RSUs will be forfeited as of the last day of such performance period.

5. No Rights as a Stockholder. The Participant shall not have any rights of a stockholder of the Company with respect to the shares of Common Stock underlying the RSUs (including, without limitation, any voting rights or any right to dividends), until the shares have been issued hereunder.

6. Tax Withholding. As a condition of receiving this award of RSUs, the Participant agrees to pay to the Company upon demand such amount as may be requested by the Company for the purpose of satisfying its liability to withhold federal, state, or local income or other taxes due by reason of the grant, vesting or settlement of, or by reason of any other event relating to, the RSUs. If the Participant does not make such payment, then the Company or an affiliate may withhold such taxes from other amounts owed to the Participant or may choose to satisfy such withholding obligations by withholding a number of shares of Common Stock otherwise issuable hereunder having a Fair Market Value on the date the tax obligation arises equal to the amount to be withheld; provided, however, that the amount to be withheld may not exceed the total maximum statutory tax rates associated with the transaction to the extent needed for the Company to avoid adverse accounting treatment. The Committee may, in its sole discretion, permit net settlement.

7. No Right to Employment or Service; Clawback/Forfeiture/Recoupment of Awards for Breach of Contract. Nothing in this Agreement shall confer upon the Participant any right to continue in the employment or service of the Company or any affiliate, or interfere with or limit in any way the right of the Company or an affiliate to terminate the Participant’s employment or service at any time. Notwithstanding anything to the contrary in this Agreement,

1

if, after the Participant’s employment or service is terminated for any reason, the Participant breaches any material provision of any applicable confidentiality, non-compete, non-solicit, general release, covenant not-to-sue or other similar agreement with the Company or any affiliate, then the Participant will forfeit any compensation, gain or other value realized on the vesting or settlement of any award granted under this Agreement or the sale or other transfer of any award granted under this Agreement and must promptly repay such amounts to the Company.

8. Interpretation by Committee. The Participant agrees that any dispute or disagreement which may arise in connection with this Agreement shall be resolved by the Committee, in its sole discretion, and that any interpretation by the Committee of the terms of this Agreement or the Plan and any determination made by the Committee under this Agreement or the Plan may be made in the sole discretion of the Committee and shall be final, binding and conclusive. Any such determination need not be uniform and may be made differently among Participants awarded restricted stock units.

9. Transferability. The Participant may not transfer any interest in the RSUs other than under the Participant’s will or as required by the laws of descent and distribution. The RSUs also may not be pledged, attached, or otherwise encumbered. Any purported assignment, alienation, sale, transfer, pledge, attachment or encumbrance of the RSUs in violation of the terms of this Agreement shall be null and void and unenforceable against the Company or its successors. In addition, notwithstanding anything to the contrary herein, the Participant agrees and acknowledges with respect to any shares of Common Stock issued hereunder that have not been registered under the Securities Act: (a) he or she will not sell or otherwise dispose of such shares except pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or in a transaction which, in the opinion of counsel for the Company, is exempt from such registration, and (b) a legend will be placed on the certificates for the shares to such effect.

10. Miscellaneous.

(a) Capitalized terms used and not defined herein shall have the meanings provided in the Plan.

(b) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and to be performed therein between residents thereof.

(c) This Agreement may not be amended or modified except by the written consent of the parties hereto.

(d) The captions of this Agreement are inserted for convenience of reference only and shall not be taken into account in construing this Agreement.

(e) Any notice, filing or delivery hereunder or with respect to the RSUs shall be given to the Participant at either his or her usual work location or his or her home address as indicated in the records of the Company, and shall be given to the Committee or the Company at [•], [•], Attention: Corporate Secretary. All such notices shall be given by first class mail, postage prepaid or by personal delivery.

(f) This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns and shall be binding upon and inure to the benefit of the Participant and the Participant’s heirs and legal representatives.

(g) This Agreement is subject in all respects to the terms and conditions of the Plan.

[Signature page follows]

2

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer and the Participant has hereunto affixed his or her signature, all as of the day and year first set forth above.

COMPANY

     

PARTICIPANT

Forum Merger III Corporation

       

By:

 

 

     

 

       

No. of Restricted Stock Units:

 

 

       

Grant Date:

 

 

 

3

Exhibit 21.1

 

ELECTRIC LAST MILE SOLUTIONS, INC.

 

SUBSIDIARIES

 

Entity Name   Country or State of Organization
     
Electric Last Mile, Inc.   Delaware

 

 

Exhibit 99.1

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Current Report on Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached (the “Form 8-K”) or, if such terms are not defined in the Form 8-K, then such terms shall have the meanings ascribed to them in the Definitive Proxy Statement filed with the Securities and Exchange Commission (the “SEC”) by Forum on June 9, 2021 (the “Proxy Statement”).

 

Introduction

 

The Company is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the transaction in which Merger Sub, a subsidiary of Forum, merged with and into ELM. The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes to the financial statements, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached.

 

The unaudited pro forma condensed combined balance sheet as of March 31, 2021 combines the unaudited condensed consolidated balance sheet of Forum as of March 31, 2021 with the unaudited condensed balance sheet of ELM as of March 31, 2021 and the unaudited condensed combined carve-out balance sheet of EVAP Operations, a wholly owned component of SERES, as of March 31, 2021, giving effect to the business combination, the acquisition by ELM of the Mishawaka, Indiana manufacturing facility pursuant to the SERES Asset Purchase Agreement, the PIPE Investment and related adjustments as if the business combination and the Carveout Transaction had been consummated on that date. Upon the Closing on June 25, 2021, the separate corporate existence of Merger Sub ceased and ELM survived and became a wholly owned subsidiary of Forum.

 

The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 combines the unaudited condensed consolidated statement of operations of Forum for the three months ended March 31, 2021 with the unaudited condensed statement of operations of ELM for the three months ended March 31, 2021 and the unaudited combined carve-out statement of operations of EVAP Operations for the three months ended March 31, 2021. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 combines the audited statement of operations of Forum for the year ended December 31, 2020 with the audited statement of operations of ELM for the period from inception to December 31, 2020 and the audited combined carve-out statement of operations of EVAP Operations for the year ended December 31, 2020. The unaudited pro forma condensed combined statements of operations give effect to the business combination and the Carveout Transaction as if they had been consummated on January 1, 2020, the beginning of the earliest period presented.

 

The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached:

 

● The historical unaudited condensed consolidated financial statements of Forum as of and for the three months ended March 31, 2021, and the historical audited consolidated financial statements of Forum as of and for the year ended December 31, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached;

 

● The historical unaudited condensed financial statements of ELM as of and for the three months ended March 31, 2021, and the historical audited financial statements of ELM as of and for the period from August 20, 2020 (inception) to December 31, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached; and

 

 

 

 

● The historical unaudited condensed combined carve-out financial statements of EVAP Operations as of and for the three months ended March 31, 2021, and the historical audited combined carve-out financial statements of EVAP Operations as of and for the year ended December 31, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached.

  

The foregoing historical financial statements have been prepared in accordance with GAAP. The unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments described in the notes to the unaudited pro forma condensed combined financial information. The pro forma adjustments are based upon available information and reflect transaction accounting adjustments related to the business combination, which is discussed in further detail below. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent the Company’s consolidated results of operations or consolidated financial position that would actually have occurred had the business combination been consummated on the dates assumed or to project the Company’s consolidated results of operations or consolidated financial position for any future date or period.

 

The unaudited pro forma condensed combined financial information should also be read together with the sections of the Proxy Statement entitled “Forum’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “ELM Management’s Discussion and Analysis of Financial Condition and Results of Operations of ELM and EVAP Operations” and other financial information included in the Proxy Statement, all of which is incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached.

 

Description of the Merger

 

On December 10, 2020, Forum, Merger Sub, ELM, and Jason Luo, in his capacity as the initial stockholder representative of ELM, entered into the Merger Agreement, and, on May 7, 2021, the same parties entered into the First Amendment. Pursuant to the Merger Agreement, as amended by the First Amendment, the aggregate consideration payable at the Closing to the ELM securityholders is payable solely in shares of common stock, valued at $10.00 per share, and is calculated as follows: $1,300,000,000, plus the amount of Estimated Closing Date Cash, plus the Pre-Paid Company Transaction Expense Amount, minus the Estimated Closing Date Indebtedness, minus the Convertible Note Adjustment Amount, minus $292,000,000, which represents the value of the 29,200,000 shares of common stock reserved under the Incentive Plan ($150,000,000 of which represents the value of restricted stock units with vesting terms substantially similar to the Earnout Shares), minus $2,500,000, which represents the value of the Adjustment Escrow Stock, minus $50,000,000, which represents the value of the Earnout Shares, minus $50,000,000, which represents the value of the 5,000,000 shares of common stock to be issued to SERES. Pursuant to the Merger Agreement, Merger Sub, a subsidiary of Forum, merged with and into ELM. Upon the Closing, the separate corporate existence of Merger Sub ceased and ELM survived and became a wholly owned subsidiary of Forum.

 

The Closing Merger Consideration was paid in the form of common stock, valued at $10.00 per share at the Closing, and the contingent right to receive (1) the Earnout Shares, if any, and (2) the Adjustment Escrow Stock, if any, after the Closing is subject to, and, if payable, will be payable in accordance with, the terms and conditions set forth in the Merger Agreement. Five million shares of common stock are payable after the Closing to the ELM securityholders upon satisfaction, during the 36-month period after the Closing (the “Earnout Period”), of the following conditions: (i) if the closing price of the common stock equals or exceeds $14.00 on any 20 trading days in any 30-consecutive day trading period, then 2,500,000 Earnout Shares will be released to the ELM securityholders, and (ii) if the closing price of the common stock equals or exceeds $16.00 on any 20 trading days in any 30-consecutive day trading period, then the remaining 2,500,000 Earnout Shares will be released to the ELM securityholders. Subject to the terms and conditions set forth in the Merger Agreement, if a qualifying Change in Control (as defined in the Merger Agreement) occurs during the Earnout Period, all Earnout Shares not previously released will be released to the ELM securityholders. For more information about the Merger Agreement, please see the section of the Proxy Statement entitled “Proposal No. 1 — The Business Combination Proposal — The Merger Agreement.”

 

2

 

 

In addition, pursuant to the terms of the First Amendment, the Company issued, at Closing, 5,000,000 shares of common stock to SERES in satisfaction of ELM’s obligation under the SERES Asset Purchase Agreement to deliver shares of common stock to SERES as compensation for strategic cooperation, consulting services and technical support provided by SERES to ELM prior to the Closing. As a result of such issuance, there was a corresponding reduction in the aggregate consideration to be paid to the ELM securityholders at Closing (as reflected in the definition of “Closing Merger Consideration” within the Proxy Statement) in an amount equal to the aggregate value of such issued shares.

 

In connection with the transactions contemplated by the Merger Agreement, Forum entered into Subscription Agreements with the PIPE Investors pursuant to which Forum issued and sold to the PIPE Investors in private placements that closed immediately prior to the Closing, an aggregate of 13 million shares of common stock at $10.00 per share, for an aggregate purchase price of $130,000,000. At the Closing, the PIPE Investors and Forum consummated the PIPE Investment pursuant to and in accordance with the terms of the Subscription Agreements.

 

On December 10, 2020, ELM issued the ELM Convertible Notes to certain investors in an aggregate principal amount of $25 million. Forum entered into a joinder to the ELM Convertible Notes with the holders thereof, pursuant to which the outstanding principal and accrued interest on the ELM Convertible Notes converted at Closing into shares of common stock, at a conversion price per share equal to the product of (i) the price per share paid by the PIPE Investors in the PIPE Investment (i.e., $10.00) multiplied by (ii) 0.90909, and Forum provided registration rights to the holders of the ELM Convertible Notes.

 

On April 9, 2021, ELM entered into the SERES Asset Purchase Agreement for the purchase of certain assets of EVAP Operations, the SERES Exclusive Intellectual Property License Agreement and the Sokon Supply Agreement.

 

Upon Closing, the ownership of the Company was as follows:

 

Total Capitalization (in millions)   Shares     %  
ELM securityholders     77.1       65.0  
Public shareholders(1)     14.0       11.8  
Founders (founder shares)(2)     6.9       5.8  
ELM Convertible Note holders(3)     2.8       2.3  
PIPE Investors     13.0       10.9  
SERES(4)     5.0       4.2  
Total Class A Shares(5)     118.8       100.0  

 

 

(1) Includes 125,000 private placement shares held by the IPO underwriter.
(2) Includes the Sponsor and Forum’s current officers and directors. Founder shares are shares of Class B common stock that converted into shares of Class A common stock at the Closing on a one-for-one basis.
(3) Includes accrued interest on the ELM Convertible Notes, which also converted into shares of common stock at the Closing.
(4) Pursuant to the First Amendment, the Company issued, at Closing, 5,000,000 shares of common stock to SERES in satisfaction of ELM’s obligation under the SERES Asset Purchase Agreement to deliver shares of common stock to SERES as compensation for strategic cooperation, consulting services and technical support provided by SERES to ELM prior to the Closing.
(5) Does not include 5.25 million shares held in escrow pursuant to the Merger Agreement in relation to share price vesting requirements and merger consideration adjustments.

 

Accounting for the Business Combination

 

The business combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Forum will be treated as the “acquired” company for financial reporting purposes. This preliminary determination was primarily based on the ELM securityholders having a relative majority of the voting power of the combined entity (which is referred to herein as the Company), ELM having the authority to appoint the majority of the directors on the Board, and senior management of ELM comprising all of the senior management of the Company. Accordingly, for accounting purposes, the financial statements of the Company will represent a continuation of the financial statements of ELM, with the acquisition being treated as the equivalent of ELM issuing stock for the net assets of Forum, accompanied by a recapitalization. The net assets of Forum will be stated at historical cost, with no goodwill or other intangible assets recorded.

 

3

 

 

Accounting for SERES Asset Purchase Agreement

 

The SERES Asset Purchase Agreement, in combination with the other Key Contracts, is expected to be accounted for as an asset acquisition in accordance with GAAP. Accordingly, for accounting purposes, the manufacturing facility, related equipment, land, pension obligation, and other intangible assets associated with the other Key Contracts, will be recorded at an amount equal to the fair value of the consideration transferred. The acquired assets will be measured and recognized at their allocated relative fair values as of the transaction date. The fair value of consideration transferred and the resulting allocation are preliminary, subject to further revision as additional information becomes available and additional analyses are performed, and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information. Differences between these preliminary estimates and the final accounting, expected to be completed after the Closing of the business combination, will occur and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial information and the Company’s future results of operations and financial position.

 

Accounting for the Earnout Shares

 

Five million Earnout Shares are payable after the Closing to the ELM securityholders upon satisfaction, during the 36-month period after the Closing, of certain stock price performance conditions. As the business combination will be accounted for as a reverse recapitalization, the issuance of the Earnout Shares to the ELM securityholders is anticipated to be accounted for as an equity transaction. Since the Earnout Shares are payable to the ELM securityholders (i.e., the accounting acquirer in the business combination), the accounting for the Earnout Shares arrangement does not fall under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations.

 

The accounting for the Earnout Shares was also evaluated under ASC Topic 480, Distinguishing Liabilities from Equity, to determine if the arrangement should be classified as a liability. As part of that preliminary analysis, it was determined that the Earnout Shares are freestanding and will not be classified as a liability. Therefore, an adjustment to recognize the Earnout Shares would have no net impact on any financial statement line item as it would simultaneously increase and decrease additional paid-in capital. Thus, no adjustment has been applied to the unaudited pro forma combined financial information related to the Earnout Shares.

 

Basis of Pro Forma Presentation

 

The historical financial information has been adjusted to give pro forma effect to the transaction accounting required for the business combination, the PIPE Investment and the Carveout Transaction. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the Company upon the Closing.

 

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the Company will experience. Forum and ELM have not had any historical relationship prior to the business combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different.

 

4

 

 

Unaudited Pro Forma Condensed Combined Balance Sheet
as of March 31, 2021

 

    ELM
Historical 		  EVAP
Operations
Historical 		  ELM
Pro Forma
Adjustments 		      Pro Forma
ELM 		  Forum
Historical 		  Pro Forma
Adjustments 		      Pro Forma
Combined 		 
Assets                                                    
Current assets                                                    
Cash and cash equivalents   16,388,316     —   (35,000,000 )   (A )   (18,611,684 )   1,038,353     139,232,311     (C )   225,644,143  
                                      130,000,000     (D )      
                                      (26,014,837 )   (F )      
Prepaid expenses and other current assets   491,365     23,932   (23,932 )   (A )   491,365     174,124                 665,489  
Total current assets   16,879,681     23,932   (35,023,932 )         (18,120,319 )   1,212,477     243,217,474           226,309,632  
Property, Plant, and Equipment, net   196,692     131,895,779   (131,895,779 )   (A )   145,708,692     —                 145,708,692  
              145,512,000     (A )                              
Other assets:                                                    
Cash and investments held in trust account   —     —                     250,004,042     (250,004,042 )   (C )   —  
Other long-term assets   73,724     —   51,984,000     (A )   52,057,724     —                 52,057,724  
Total other assets   73,724     —   51,984,000           52,057,724     250,004,042     (250,004,042 )         52,057,724  
Total assets   17,150,097     131,919,711   30,576,289           179,646,097     251,216,519     (6,786,568)           424,076,048  
Liabilities and Shareholders’ Equity                                                    
Current liabilities                                                    
Accounts payable   1,395,799     39,949   (39,949 )   (A )   1,395,799     —                 1,395,799  
Accrued expenses   508,586     1,009,793   (1,009,793 )   (A )   508,586     3,815,030                 4,323,616  
Current portion of debt   —     —   60,000,000     (A )   60,000,000                       60,000,000  
Total current liabilities   1,904,385     1,049,742   58,950,258           61,904,385     3,815,030                 65,719,415  
Other liabilities                                                    
Long term debt, net of deferred financing costs   —     —   52,436,000     (A )   52,436,000     —                 52,436,000  
Warrant liabilities   —     —   —           —     16,325,028                 16,325,028  
Deferred underwriting fee payable   —     —                     8,750,000     (8,750,000 )   (F )   —  
Convertible promissory notes   25,500,832                     25,500,832           (25,500,832 )   (E )      
Pension benefit obligations   —     118,393               118,393     —     —           118,393  
Other long-term liabilities   1,371     —   —           1,371     —                 1,371  
Total other liabilities   25,502,203     118,393   52,436,000           78,056,596     25,075,028     (34,250,832 )         68,880,792  
Common stock subject to possible redemption   —     —                     217,326,460     (217,326,460 )   (B )   —  
Shareholders’ equity                                                    
Class A Common stock   10     —   500     (A )   510     401     (1,108)     (C )   10,793  
                                      1,004     (B )      
                                      1,300     (D )      
                                      275     (E )      
                                      13     (F )      
                                      7,711     (G )      
                                      687     (H )      
Class B Common stock   —     —                     625     (625 )   (H )   —  
Paid-in capital   999,990     130,751,576   (80,810,469)     (A )   50,941,097     21,875,691     (110,770,623)     (C )   300,721,539  
                                      217,325,456     (B )      
                                      129,998,700     (D )      
                                      25,500,557     (E )      
                                      (17,264,850 )   (F )      
                                      (7,711 )   (G )      
                                      (62 )   (H )      
                                      (16,876,716 )   (I )      
Retained earnings   (11,256,491 )   —               (11,256,491 )   (16,876,716 )   16,876,716     (I )   (11,256,491)  
Total shareholders’ equity   (10,256,491 )   130,751,576   (80,809,969)           39,685,116     5,000,001     244,790,724           289,475,841  
Total liabilities and
shareholders’ equity 		  17,150,097     131,919,711   30,576,289           179,646,097     251,216,519     (6,786,568)           424,076,048  

 

5

 

 

Unaudited Pro Forma Condensed Combined Statement of Operations
for the Three Months Ended March 31, 2021

 

    ELM Historical   EVAP
Operations
Historical 		  ELM Pro
Forma
Adjustments 		      Pro Forma
ELM 		  Forum
Historical 		  Pro Forma
Adjustments 		      Pro Forma
Combined 		     
Formation and operating costs   —     —                     1,054,321               1,054,321        
Personnel expense   —     378,110     —         378,110     —               378,110        
General and administrative expense   3,124,188     511,068     2,599,200     (AA)   8,753,138     —               8,753,138        
                2,518,682     (BB)                                  
Total operating expense   3,124,188     889,178     5,117,882         9,131,248     1,054,321               10,185,569        
Operating income (loss)   (3,124,188 )   (889,178 )   (5,117,882 )       (9,131,248 )   (1,054,321 )             (10,185,569 )      
Change in fair value of warrant liability   —     —     —         —     13,534,820               13,534,820        
Interest income (expense)   (406,744 )   —     (1,337,739 )   (CC)   (1,744,483 )   6,166     (6,166 )   (DD)   (1,744,483 )      
Investment income (loss)   2,878                     2,878                     2,878        
Other income (expense), net   —     (800 )             (800 )   —     —         (800 )      
Net income (loss)   (3,528,054 )   (889,978 )   (6,455,621 )       (10,873,653 )   12,486,665     (6,166 )       1,606,846        
Net earnings:                                                        
Weighted average shares outstanding of Class A redeemable common stock                               25,000,000                        
Basic and diluted income per share – Class A redeemable common stock                               0.00                        
Weighted average shares outstanding of Class A and Class B non-redeemable common stock                               6,991,250                        
Basic and diluted income per share – Class A and Class B non-redeemable common stock                               1.79                        
Weighted average shares outstanding of Class A common stock   100,000                                           118,777,017     (EE)  
Basic and diluted income (loss) per share – Class A common stock   (35.28 )                                         0.01     (EE)  
Diluted weighted average shares outstanding of Class A and Class B non-redeemable common stock and non-redeemable warrants                               7,152,316                        
Diluted net loss per share, Class A and Class B non-redeemable common stock and non-redeemable warrants                               (0.15 )                      

 

6

 

 

Unaudited Pro Forma Condensed Combined Statement of Operations
for the Year Ended December 31, 2020

 

    ELM Historical   EVAP
Operations
Historical 		  ELM Pro
Forma
Adjustments 		      Pro Forma
ELM 		  Forum
Historical 		  Pro Forma
Adjustments 		      Pro Forma
Combined 		     
Formation and operating costs   —     —                       3,617,022                 3,617,022          
Personnel expense   —     2,870,234     210,486     (FF )   3,080,720     —                 3,080,720          
General and administrative expense   7,633,994     4,758,663     176,040     (GG )   31,440,223     —                 31,440,223          
                (1,600,000 )   (HH )                                      
                10,396,800     (II )                                      
                10,074,726     (JJ )                                      
Total operating expense   7,633,994     7,628,897     19,258,052           34,520,943     3,617,022                 38,137,965          
Operating income (loss)   (7,633,994 )   (7,628,897 )   (19,258,052 )         (34,520,943 )   (3,617,022 )               (38,137,965 )        
Change in fair value of warrant liability   —     —     —           —     (25,574,581 )               (25,574,581 )        
Transaction costs – warrants   —     —     —           —     (236,212 )               (236,212 )        
Interest income (expense)   (94,088 )   —     (1,337,739 )   (KK )   (1,431,827)     66,590     (66,590 )   (LL )   (1,431,827)          
Investment loss   (355 )                     (355 )                     (355 )        
Other income (expense), net   —     (24,695 )               (24,695 )   —     —           (24,695 )        
Net loss   (7,728,437 )   (7,653,592 )   (20,595,791 )         (35,977,820 )   (29,361,225 )   (66,590 )         (65,405,635 )        
Net earnings:                                                              
Weighted average shares outstanding of Class A redeemable common stock                                 25,000,000                            
Basic and diluted loss per share – Class A redeemable common stock                                 (1.17 )                          
Weighted average shares outstanding of Class A and Class B non-redeemable common stock                                 6,518,068                            
Basic and diluted loss per share – Class A and Class B non-redeemable common stock                                 (4.50 )                          
Weighted average shares outstanding of Class A common stock   40,400                                               117,214,000     (MM )  
Basic and diluted loss per share – Class A common stock   (191.30 )                                             (0.5 5)   (MM )  

 

7

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

1. Basis of Presentation

 

The pro forma adjustments have been prepared as if the business combination, the PIPE Investment and the Carveout Transaction had been consummated on March 31, 2021, in the case of the unaudited pro forma condensed combined balance sheet, and as if the business combination and the Carveout Transaction had been consummated on January 1, 2020, the beginning of the earliest period presented in the unaudited pro forma condensed combined statement of operations.

 

The unaudited pro forma condensed financial information has been prepared using the following:

 

● The historical unaudited condensed financial statements of Forum as of and for the three months ended March 31, 2021, and the historical audited financial statements of Forum as of and for the year ended December 31, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached;

 

● The historical unaudited condensed financial statements of ELM as of and for the three months ended March 31, 2021, and the historical audited financial statements of ELM as of and for the period from August 20, 2020 (inception) to December 31, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached; and

 

● The historical unaudited condensed combined carve-out financial statements of EVAP Operations as of and for the three months ended March 31, 2021, and the historical audited combined carve-out financial statements of EVAP Operations as of and for the year ended December 31, 2020, which are included in the Proxy Statement and incorporated by reference into the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached.

 

The unaudited pro forma condensed combined financial information has been prepared assuming the following methods of accounting in accordance with GAAP.

 

The SERES Asset Purchase Agreement is expected to be accounted for as an asset acquisition in accordance with GAAP. Accordingly, we first combined the historical financial statements of ELM with the carve-out financial statements of EVAP Operations and applied pro forma adjustments to arrive at the appropriate combined pro forma financial statements for ELM following the purchase of the plant from SERES. For accounting purposes, the manufacturing facility, related equipment, land, pension obligation, and other intangible assets associated with the other Key Contracts, have been recorded at an amount equal to the fair value of the consideration transferred. The acquired assets have been measured and recognized at their allocated relative preliminary fair values as of the transaction date.

 

The business combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP. Accordingly, for accounting purposes, the financial statements of the Company will represent a continuation of the financial statements of ELM with the acquisition being treated as the equivalent of ELM issuing stock for the net assets of Forum, accompanied by a recapitalization. The net assets of Forum will be stated at historical cost, with no goodwill or other intangible assets recorded.

 

The pro forma adjustments are preliminary and represent management’s estimates based on information available as of the date of the Form 8-K to which this Unaudited Pro Forma Condensed Combined Financial Information is attached and are subject to change as additional information becomes available and additional analyses are performed. The Company’s management considers this basis of presentation to be reasonable under the circumstances.

 

One-time direct and incremental transaction costs incurred prior to, or concurrent with, the Closing have been reflected in the unaudited pro forma condensed combined balance sheet as a direct reduction to the Company’s additional paid-in capital and are assumed to be cash settled.

 

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2. Adjustments and Assumptions to the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2021

 

The adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2021 are as follows:

 

(A) Represents the pro forma adjustment to reflect the purchase of certain manufacturing plant assets from SERES and the removal of all other assets, liabilities and related equity of EVAP Operations that ELM did not acquire under the SERES Asset Purchase Agreement. EVAP Operations balances that were not acquired under the SERES Asset Purchase Agreement consist of all prepaid assets ($23,932), accounts payable ($39,949), accrued expenses ($1,009,793), and the historical net carrying value of property, plant and equipment ($131,895,779), as well as the net equivalent offset to equity ($130,869,969). Long-term assets purchased under the SERES Asset Purchase Agreement were valued at preliminary estimates of the fair market value of the assets as of June 25, 2021. The estimated fair market value of land, buildings, and machinery and equipment acquired under the SERES Asset Purchase Agreement have been preliminarily estimated based on observable inputs for similar assets in active marketplaces for fixed assets. The Company’s evaluation of the accounting for the SERES Asset Purchase Agreement, the SERES Exclusive Intellectual Property License Agreement, and the Sokon Supply Agreement is in process, including the determination and measurement of a potential asset that could be identified specifically related to such agreements. The recognition and allocation of purchase price to Other Long-Term Assets reflect the Company’s preliminary evaluation and estimate, but is subject to change. The preliminary purchase price was allocated among the identified assets, based on a preliminary analysis, acquired on a relative fair value basis. The allocation of purchase consideration based on the relative fair value of the assets acquired, based on preliminary valuation, are presented below. ELM’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

 

The total purchase consideration has been reflected in an amount equal to the estimated present value of the Promissory Note payments associated with the SERES Asset Purchase Agreement and additional consideration paid at or near Closing. The SERES Asset Purchase Agreement requires total payments of $145.0 million, with $30.0 million paid at the closing of the transactions contemplated by the SERES Asset Purchase Agreement and 23 monthly installment payments of $5.0 million each. In addition, $5.0 million will be paid within 30 days of Closing for certain intellectual property under the SERES Exclusive Intellectual Property License Agreement and 5.0 million shares of common stock were issued to SERES at the Closing. The shares are not the settlement of a preexisting relationship, have been considered as part of the asset purchase consideration and were valued at $50.0 million based on the closing price of common stock on June 24, 2021.

 

Assets Identified   Allocation
based on
Relative
Fair Value 		 
Other long-term assets   $ 51,984,000  
Land   $ 996,000  
Ground lease   $ 117,000  
Buildings and improvements   $ 89,627,000  
Machinery and Equipment   $ 54,772,000  
Pension liability assumed   $ (109,000 )
Total Estimated Purchase Price   $ 197,387,000  

 

Purchase Price

     
Fair value of Promissory Note   $ 112,436,000  
Cash payment at closing   $ 30,000,000  
Licensing fees   $ 5,000,000  
Stock issuance   $ 49,950,000  
Total   $ 197,387,000  

 

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(B) Reflects the reclassification of $217.3 million of Class A common stock subject to possible redemption, net of actual redemptions of 11.1 million shares redeemed as a result of public stockholders electing to redeem their public shares.

  

(C) Reflects the release of cash and marketable securities held in the trust account that became available in conjunction with the business combination net of the impact of actual redemptions of 11.1 million shares of common stock at $110.8 million as a result of public stockholders electing to redeem their public shares.

 

(D) Represents the pro forma adjustment to record the net proceeds of $130.0 million from the PIPE Investment and the issuance of 13.0 million shares of common stock to the PIPE Investors.

 

(E) Represents the pro forma adjustment to record the conversion of $25.5 million of ELM Convertible Notes into 2.8 million shares of common stock at the Closing of the business combination. This includes the accrued interest under the ELM Convertible Notes, which was also converted into common stock at the Closing of the business combination.

 

(F) Represents estimated transaction costs of $17.3 million, including $0.1 million of underwriting fees in satisfaction of which Forum issued 0.1 million shares of Class A common stock. These transaction costs are direct and incremental transaction costs related to the business combination that would not otherwise have been incurred, and, as such, these transaction costs are treated as a reduction of Forum’s cash proceeds and are deducted from Additional paid in capital. Of the total amount shown, $8.8 million of deferred underwriting fees related to the business combination were incurred and accrued for during the year ended December 31, 2020.

 

(G) Represents the issuance by Forum of 77.1 million shares of common stock to the ELM securityholders as consideration in the business combination.

 

(H) Represents the issuance of 0.6 million shares of Class B common stock through a private placement purchase by the Sponsor, and the conversion of the remaining 6.9 million shares of Class B common stock owned by the Sponsor into 6.9 million shares of Class A common stock. According to Forum’s Organizational Documents, shares of Class B common stock converted automatically into shares of Class A common stock upon Closing, and this was a non-cash transaction.

 

(I) Reflects the elimination of the Forum’s historical accumulated deficit.

 

3. Adjustments and Assumptions to the Unaudited Pro Forma Condensed Combined Statement of Operations for the Three Months Ended March 31, 2021

 

The adjustments included in the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 are as follows:

 

(AA) Reflects the pro forma adjustment to record the amortization expense, on a straight-line basis, associated with other assets preliminarily recorded via adjustment (A). The preliminary amortization period assigned to this asset is 5 years, which is equal to the shortest contractual term of the SERES Asset Purchase Agreement, the SERES Exclusive Intellectual Property License Agreement, and the Sokon Supply Agreement. Based on the potential other assets’ value of $52.0 million, this results in monthly amortization of $0.9 million, or total amortization expense of $2.6 million for the three months ended March 31, 2021.

 

(BB) Reflects the pro forma adjustment to record the incremental depreciation expense, on a straight-line basis, associated with new valuation of plant assets via adjustment (A). The preliminary useful life assigned to the machinery and equipment is 7 years, and the preliminary useful life assigned to the buildings and improvements is 39 years. Based on the identified asset values of $54.8 million and $89.6 million for machinery and equipment and buildings and improvements, respectively, this results in combined monthly depreciation of $0.8 million, or total incremental depreciation expense of $2.5 million for the three months ended March 31, 2021.

 

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(CC) Reflects the pro forma adjustment to account for interest expense for the three months ended March 31, 2021 related to the amortization of the discount associated with the SERES Asset Purchase Agreement. The discount was calculated as the net present value of payments, which were discounted using a variable incremental borrowing rate of 1.42% to 3.43% over the repayment period of the Promissory Note associated with the SERES Asset Purchase Agreement, detailed at (A).

 

(DD) Reflects the elimination of interest earned on marketable securities held in the trust account.

 

(EE) Represents net loss per share computed by dividing net loss by the weighted average number of common shares outstanding for the three months ended March 31, 2021.

 

4. Adjustments and Assumptions to the Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2020

 

The adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 are as follows:

 

(FF) Represents the pro forma adjustment for additional payroll expense expected to be wholly absorbed by ELM going forward compared to the payroll expense that was partially allocated to EVAP Operations for the year ended December 31, 2020.

 

(GG) Represents the pro forma adjustment for additional lease expense incurred related to newly leased property compared to the prior lease expense reflected for EVAP Operations.

 

(HH) Reflects the elimination of incremental rent expense paid by ELM to SERES for the use of the plant for the year ended December 31, 2020.

 

(II) Reflects the pro forma adjustment to record the amortization expense, on a straight-line basis, associated with other assets preliminarily recorded via adjustment (A). The preliminary amortization period assigned to this asset is 5 years, which is equal to the shortest contractual term of the SERES Asset Purchase Agreement, the SERES Exclusive Intellectual Property License Agreement, and the Sokon Supply Agreement. Based on the potential other assets’ value of $52.0 million, this results in monthly amortization of $0.9 million, or total amortization expense of $10.4 million for the year ended December 31, 2020.

 

(JJ) Reflects the pro forma adjustment to record the incremental depreciation expense, on a straight-line basis, associated with new valuation of plant assets via adjustment (A). The preliminary useful life assigned to the machinery and equipment is 7 years, and the preliminary useful life assigned to the buildings and improvements is 39 years. Based on the identified asset values of $54.8 million and $89.6 million for machinery and equipment and buildings and improvements, respectively, this results in combined monthly depreciation of $0.8 million, or total incremental depreciation expense of $10.1 million for the year ended December 31, 2020.

 

(KK) Reflects the pro forma adjustment to account for interest expense for the year ended December 31, 2020 related to the amortization of the discount associated with the SERES Asset Purchase Agreement. The discount was calculated as the net present value of payments, which were discounted using a variable incremental borrowing rate of 1.42% to 3.43% over the repayment period of the Promissory Note associated with the SERES Asset Purchase Agreement, detailed at (A).

 

(LL) Reflects the elimination of interest earned on marketable securities held in the trust account.

 

(MM) Represents net loss per share computed by dividing net loss by the weighted average number of common shares outstanding for the year ended December 31, 2020.

 

 

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