liquidated at any time during the Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Shares; provided further, however, that if, within six months after the Company consummates an initial Business Combination, the Company (or the surviving entity) subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders of such entity having the right to exchange their shares of Common Stock for cash, securities or other property, then the Escrow Agent will, upon receipt of a notice executed by the Chairman of the Board, Chief Executive Officer or other authorized officer of the Company, in form reasonably acceptable to the Escrow Agent, certifying that such transaction is then being consummated or such conditions have been achieved, as applicable, release the Escrow Shares to the Sponsor and Incentive LLC, as applicable. The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this Section 3.1.
3.2 Notwithstanding Section 3.1, if the Underwriters do not exercise their over-allotment option to purchase an additional 1,500,000 Units of the Company in full within 45 days of the date of the Prospectus (as described in the Underwriting Agreement), the Sponsor agrees that the Escrow Agent shall return to the Company for cancellation, at no cost, the number of Escrow Shares determined by multiplying (a) the product of (i) 375,000 multiplied by (ii) a fraction, (i) the numerator of which is 1,500,000 minus the number of shares of Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,500,000. The Company shall promptly provide notice to the Escrow Agent of the expiration or termination of the Underwriters over-allotment option and the number of Units, if any, purchased by the Underwriters in connection with their exercise thereof.
4. Rights of Sponsor and Incentive LLC in Escrow Shares.
4.1 Voting Rights as a Shareholder. Subject to the terms of the Insider Letters described in Section 4.4 hereof and except as herein provided, the Sponsor and Incentive LLC, as applicable, shall retain all of its rights as a shareholder of the Company during the Escrow Period, including, without limitation, the right to vote such shares.
4.2 Dividends and Other Distributions in Respect of the Escrow Shares. During the Escrow Period, all dividends payable in cash with respect to the Escrow Shares shall be paid to the Sponsor and Incentive LLC, as applicable, but all dividends payable in stock or other non-cash property (Non-Cash Dividends) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term Escrow Shares shall be deemed to include the Non-Cash Dividends distributed thereon, if any.
4.3 Restrictions on Transfer. During the Escrow Period, the only permitted transfers of the Escrow Shares will be to (1) the Company or the Sponsor and their respective affiliates, officers, directors, stockholders, employees and members, (2) to the Companys pre-IPO stockholders or their respective affiliates, or to the Companys offices, directors, advisors and employees (3) as a distribution to the Sponsors partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the immediate family of the Sponsors partners, stockholders or members or to a trust, the beneficiary of which is a member of the immediate family of the Sponsors partners, stockholders or members for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death of the any permitted transferee, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of the Companys securities, (8) by private sales at prices no greater than the price at which the Insider Shares were originally purchased or (9) for the cancellation of up to 375,000 shares of Common Stock subject to forfeiture to the extent that the Underwriters over-allotment is not exercised in full or in part or in connection with the consummation of our initial Business Combination, in each case (except for clause 9 or with our prior consent) on the condition that such transfers may be implemented only upon the respective transferees written agreement to be bound by the terms and conditions of this Agreement and of the Insider Letter (as defined below) signed by the Sponsor or Incentive LLC, as applicable, transferring the Escrow Shares.
4.4 Insider Letter. The Sponsor has executed a letter agreement with Chardan and the Company, dated as of [_____], 2020, and the form of which is filed as an exhibit to the Registration Statement (Insider Letter), respecting the rights and obligations of the Sponsor in certain events, including but not limited to the liquidation of the Company.