Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders. 4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder. 4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder). 4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4. 4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative. 4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall. 4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Share Purchase Agreement (Oddity Tech LTD), Share Purchase Agreement (Oddity Tech LTD)
Shareholder Representative. 4.1. By virtue of the execution or adoption and delivery of -------------------------- this Agreement, including counterparts hereof, each Shareholder irrevocably approves the constitution and appointment of, and Stockholder hereby irrevocably constitutes and appoints N▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 III as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for (referred to in this Agreement as the "Representative") of such Stockholder with full powers of substitution to act in the name, place and stead of such Stockholder with respect to the performance on behalf of all Shareholderssuch Stockholder under the terms and provisions of this Agreement, as the same may be from time to time amended, and each of themto do or refrain from doing all such further acts and things, with respect and to any and execute all matters arising out of such documents, as the Representative shall deem necessary or appropriate in connection with any of the transactions contemplated under this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, including without limitation the Escrow Agreement power:
(i) to receive, hold and deliver to Central any of the agreements ancillary hereto following certificates representing the Closing Shares and taking any action or omitting to take action other documents relating thereto on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or such Stockholder;
(ii) to receive on behalf of the Shareholders in accordance herewith shall be given such Stockholder any shares of Central Common Stock issued or made by the Shareholder Representative cash paid to such Stockholder pursuant to this Agreement;
(iii) to execute and deliver all such actionsAncillary Agreements, noticescertificates, and determinations by documents which the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deems necessary or appropriate in connection with the Transaction Documents; consummation of the transactions contemplated by the terms and provisions of this Agreement;
(iv) to act for such Stockholder with respect to all indemnification matters referred to in this Agreement, including the right to compromise or settle any such claims on behalf of such Stockholder;
(v) to amend or waive any provision of this Agreement (including any condition to Closing) in any manner which does not differentiate among the Stockholders;
(vi) to employ and obtain the advice of legal counsel, accountants and other professional advisors as the Representative, in his sole discretion, deems necessary or advisable in the performance of his duties as Representative and to prosecuterely on their advice and counsel;
(vii) to incur any expenses, defend to liquidate and settle withhold assets received on behalf of the Stockholders prior to their distribution to the Stockholders to the extent of any amount which the Representative deems necessary for payment of or as a reserve against expenses, and to pay such expenses or to deposit the same in the Shareholder Representative’s discretion all indemnification disputes an interest-bearing bank account established for such purpose;
(including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingviii) and to receive all notices, requests communications and demands deliveries hereunder on behalf of such Stockholder under this Agreement; and
(ix) to do or refrain from doing any further act or deed on behalf of such Stockholder which the Representative deems necessary or appropriate in his sole discretion relating to the subject matter of this Agreement as fully and completely as any of the Stockholders could do if personally present and acting and as though any reference to a Stockholder or the Stockholders in this Agreement were a reference to the Representative. The appointment of the Representative shall be deemed coupled with an interest and shall be irrevocable, and Central and any other person may conclusively and absolutely rely, without inquiry, upon any action of the Representative as the act of the Stockholders in all matters referred to in this Agreement. Each Stockholder hereby ratifies and confirms all that the Representative shall do or cause to be done by virtue of his appointment as Representative of such Stockholder. The Representative shall act for the Stockholders on all of the matters set forth in this Agreement in the manner the Representative believes to be in the best interest of the Stockholders, but the Representative shall not be responsible to any Stockholder for any loss or damage any Stockholder may be made suffer by reason of the performance by the Representative of his duties under and pursuant to this Agreement, other than loss or damage arising from willful misconduct in the Paying Agent Agreement and the Escrow performance of his duties under this Agreement. From Each of the Stockholders hereby expressly acknowledges and after agrees that the ClosingRepresentative is authorized to act on behalf of such Stockholder notwithstanding any dispute or disagreement among the Stockholders, the Purchaser and that Central shall be entitled to deal exclusively with the Shareholder Representative in respect of rely on any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise under this Agreement without liability to, or obligation to inquire of, any of the power of attorney granted Stockholders. If the Representative resigns or ceases to function in such capacity for any reason whatsoever, then the Shareholder Representative pursuant to this Section 4.2, Stockholder which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the held a majority of the voting power of Shares on the Company on an as converted basis date hereof shall designate in writing to Purchaser appoint a successor; provided, however, that if for any reason no successor has been appointed within five thirty (530) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designateddays, then Purchaser may any Stockholder shall have the right to petition a court of competent jurisdiction to appoint for appointment of a Shareholder to act as new Shareholder Representative hereundersuccessor. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect Stockholders do hereby jointly and severally agree to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless from and against any loss, and all liability, deficiency, damageloss, cost, claim, penalty, fine, forfeiture, damage or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), without limitation attorneys' fees) reasonably incurred or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event performance of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required except for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallwillful misconduct.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Agreement and Plan of Reorganization (Pennington Brooks Iii), Agreement and Plan of Reorganization (Central Garden & Pet Company)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement(a) The Shareholders agree to appoint one Person to act as their representative, each Shareholder irrevocably approves the constitution attorney in fact and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, proxy with respect to any and all certain matters arising out of or specified in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the "Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices"). The parties have designated Goelet, requests and demands that may be made under and pursuant to this Agreement, LLC as the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the initial Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any time, and a Shareholder Representative may be removed at any time by the vote of Shareholders who collectively own more than 50% of the Registrable Securities at such time (the "Majority Holders"). Should In the event of the death, resignation or removal of the Shareholder Representative, a new Shareholder Representative shall be appointed by a vote of Majority Holders, such appointment to become effective upon the written acceptance thereof by the new Shareholder Representative. Any failure by the Majority Holders to appoint a new Shareholder Representative upon the death, resignation or removal of the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, shall not have the effect of releasing the Shareholders who from any liability under this Agreement.
(b) The Shareholder Representative shall have held, immediately prior such powers and authority as are necessary to carry out the functions assigned to the ClosingShareholder Representative under this Agreement; provided, however, that the majority Shareholder Representative will have no obligation to act on behalf of the voting power of the Company on an Shareholders, except as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4expressly provided herein. The Shareholder Representative shall not will at all times be liable entitled to rely on any directions received from the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faithMajority Holders. In all questions arising in respect of any matter arising under this Agreement, the The Shareholder Representative may rely on shall, at the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate expense of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum Shareholders, be entitled to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any lossengage such counsel, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs other agents and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or consultants as they shall deem necessary in connection with the acceptance, performance or administration of the Shareholder Representative’s duties exercising their powers and performing their function hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or absence of bad faith on the part of the Shareholder Representative) shall be entitled to conclusively rely on the opinions and advice of such Persons.
(c) The Shareholder Representative shall not be entitled to any fee, commission or other compensation for the performance of its services hereunder, but shall be entitled to the reimbursement by the Shareholders of all his, her or its fees and expenses incurred as the Shareholder Representative pursuant to Section 4.2 hereof. In connection with this Agreement, and any instrument, agreement or document relating hereto or thereto, and in exercising or failing to exercise all or any of the powers conferred upon the Shareholder Representative hereunder, the Shareholder Representative will reimburse shall incur no responsibility whatsoever to any Shareholder by reason of any error in judgment or other act or omission performed or omitted hereunder or any such other agreement, instrument or document, excepting only responsibility for any act or failure to act which represents willful misconduct. Each Shareholder shall indemnify, pro rata based upon such holder's percentage interest, the Shareholder Representative against all losses, damages, liabilities, claims, obligations, costs and expenses, including reasonable attorneys', accountants' and other experts' or consultant's fees and the amount of any judgment against the Shareholder Representative, of any nature whatsoever, arising out of or in connection with any claim, investigation, challenge, action or proceeding or in connection with any appeal thereof, relating to the acts or omissions of the Shareholder Representative hereunder. The foregoing indemnification shall not apply in the event of any action or proceeding which finally adjudicates the liability of the Shareholder Representative hereunder for his or her gross negligence or willful misconduct. In the event of any indemnification hereunder, upon written notice from Shareholder Representative to the Shareholders as to the existence of a deficiency toward the payment of any such indemnification amount, each such holder shall promptly deliver to the Shareholder Representative full payment of his or her ratable share of the amount of such indemnified Representative Loss to the extent attributable to deficiency, in accordance with such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseShareholder's percentage interest. In no event will shall the Shareholder Representative Company be required to advance its own funds on behalf of the Shareholders responsible for any reimbursement or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal indemnification of the Shareholder Representative or Representative.
(d) All of the termination of this Agreement. For the avoidance of doubt indemnities, immunities and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided powers granted to the Shareholder Representative under this Section 4.4Agreement shall survive the termination of this Agreement.
4.5. The Purchaser (e) Notwithstanding anything herein to the contrary, each Shareholder hereby acknowledges that the Company shall not be liable have any responsibility or obligation whatsoever to any such Shareholder for or to any act done other party with respect to or omitted hereunder arising out of any actions taken or any inaction by the Shareholder Representative.
4.6. A total of US$100,000 (f) The Company shall have the right to rely conclusively upon all instructions, requests, consents, elections and other actions taken or omitted to be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred taken by the Shareholder Representative in performing its duties under pursuant to this Agreement and the agreements ancillary any instrument, agreement or document relating hereto; provided that any portion , all of the Expense Fund not ultimately required for the payment of such fees and expenses which actions or omissions shall be delivered by legally binding upon all the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholders.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Registration Rights Agreement (Goelet LLC), Registration Rights Agreement (Pogo Producing Co)
Shareholder Representative. 4.1. By virtue (a) The Shareholder shall have the right, exercisable by delivering notice to the Company, to designate one individual to attend all meetings of the execution Board in a non-voting, observer capacity (the “Shareholder Representative”) for so long as (i) the Shareholder and its Affiliates beneficially own in the aggregate at least the Shareholder Representative Threshold Shareholding in the Company, and (ii) the Shareholder and its Affiliates comply in all material respects with the provisions of Sections 2.1 (Standstill), 3.2 (Investment Restrictions) and 3.3 (Transfer Restrictions).
(b) The Company shall (i) provide to the Shareholder Representative notice of all Board meetings and a copy of all materials provided to the members of the Board in their capacity as such at the same time such materials are provided to the members of the Board, and (ii) take reasonable measures to facilitate the Shareholder Representative’s attendance of any such meeting in accordance with this Section 3.1(b); provided, that, notwithstanding any other provision of this Section 3.1, (A) the Shareholder Representative shall agree to hold in confidence all information provided (provided that the Shareholder Representative shall not be restricted in any confidential communications or adoption discussions with or the confidential provision of information to the Shareholder and its Affiliates and their respective directors, officers, employees, accountants, agents, counsel and other representatives), (B) such Shareholder Representative, the Shareholder and its Affiliates shall, in each case to the sole extent that (x) the Shareholder is entitled to designate and has designated the Shareholder Representative pursuant to Section 3.1(a) and (y) such Shareholder Representative has all the rights and benefits under this Agreement, each Shareholder irrevocably approves be subject to the constitution and appointment of, and hereby irrevocably constitutes and appoints NCompany’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policies and procedures and shall sign an acknowledgement form stating the agreement to comply with such policies and procedures (it being understood that such ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policies and procedures shall not restrict the Shareholder or its Affiliates from purchasing ADSs or Ordinary Shares during any “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorneyblackout” or similar non-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding trading period if such purchases are made pursuant to Section 10.2), a purchase plan established in accordance with Rule 10b5-1 of the Paying Agent Agreement, Exchange Act) and (C) the Escrow Agreement and Shareholder Representative may be excluded from all or a portion of any meeting or from receiving all or a portion of any materials provided to the agreements ancillary hereto following member of the Closing and taking Board (x) to the extent that the presence of the Shareholder Representative at such meeting or any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement portion thereof or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made receipt by the Shareholder Representative and all of such actionsmaterials or any portion thereof, noticesas the case may be, could reasonably be expected to result in, based on the advice of the Company’s external counsel, the loss of attorney-client privilege in relation to the Company, its Subsidiaries or its Affiliates, or (y) to the extent the subject matter to be discussed at the meeting concerns (1) the Company’s rights under agreements with the Shareholder or its Affiliates or (2) matters related to business competition between the Company or its Subsidiaries, on the one hand, and determinations by the Shareholder or its Affiliates, on the other hand; it being understood that the Shareholder Representative shall conclusively be deemed to have been authorized by, not constitute a member of the Board and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall not be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documentsvote on, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirmsconsent to, any action taken by the Shareholder Representative in the exercise of the power of attorney granted matters presented to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Board. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for For the avoidance of doubt, in all cases subject to the aggregate first sentence of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipmentSection 3.1(b), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence regular or bad faith on the part special meeting of the Shareholder RepresentativeBoard is convened, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may Company shall be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative deemed to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection full compliance with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 3.1(b), if the Shareholder Representative is given notice in the same form and manner as, and a copy of the same materials as and when provided to, the members of the Board and the Company takes reasonable measures to facilitate the Shareholder Representative’s attendance of any such meeting in accordance with this Section 3.1(b).
(c) The Company acknowledges and agrees that the Shareholder Representative shall applynot, mutatis mutandisacting solely in the capacity of an observer of the Board and in compliance with this Section 3.2, owe to the Company (as if it was a Shareholder Representative)any fiduciary duty.
Appears in 2 contracts
Sources: Cooperation Agreement (Naspers LTD), Share Purchase Agreement (Naspers LTD)
Shareholder Representative. 4.1. By (a) Each of the Equityholders, by virtue of the execution or adoption of this AgreementAgreement and thereby the Merger by the Company Shareholder Approval, each hereby appoints GF Private Equity Group, LLC and shall have irrevocably constituted and appointed (and by its execution of this Agreement as Shareholder irrevocably approves Representative, GF Private Equity Group, LLC hereby accepts its appointment) as the constitution true, exclusive and appointment of, lawful agent and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ attorney-in-fact (the “Shareholder Representative”) ), of the Equityholders receiving consideration hereunder to act in the name, place and stead of the Equityholders in connection with all the rights, powers and obligations transactions contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions provisions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, and to act on behalf of the Payment Agent Equityholders in any Proceeding involving this Agreement, share transfer deeds to do or refrain from doing all such further acts and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); things, and to grant, provide, negotiate and sign execute all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be such documents as the Shareholder Representative shall deem necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to transactions contemplated by this Agreement, including the Paying Agent power:
(i) to act for the Equityholders with regard to matters pertaining to indemnification referred to in this Agreement, including the power to compromise any indemnity claim on behalf of the Company Shareholders and to transact matters of litigation or other Proceedings;
(ii) to execute and deliver all amendments, waivers, ancillary agreements, stock powers, certificates and documents that the Shareholder Representative deems necessary or appropriate in connection with the consummation of the transactions contemplated by this Agreement;
(iii) to execute and deliver all amendments and waivers to this Agreement and that the Escrow Agreement. From and Shareholder Representative deems necessary or appropriate, whether prior to, at or after the Closing;
(iv) to receive funds for the payment of expenses of the Equityholders and apply such funds in payment for such expenses;
(v) to do or refrain from doing any further act or deed on behalf of the Equityholders that the Shareholder Representative deems necessary or appropriate in its sole discretion relating to the subject matter of this Agreement as fully and completely as the Equityholders could do if personally present; and
(vi) to receive service of process in connection with any claims under this Agreement.
(b) The Shareholder Representative may be removed or replaced only upon delivery of written notice to the Surviving Corporation by the Company Shareholders holding at least a majority of outstanding shares of Company Common Stock as of immediately prior to the Effective Time. Parent, the Purchaser shall be entitled to deal exclusively with Surviving Corporation and any other Person may conclusively and absolutely rely, without inquiry, upon any action, decision, consent or instruction of the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees matters referred to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3herein. The Shareholder Representative may resign at act in reliance upon any time. Should instruction, notice, certification, demand, consent, authorization, receipt, power of attorney or other writing delivered to it by any other person other than itself without being required to determine the Shareholder Representative die, become legally incapacitated authenticity or bankrupt, dissolve, liquidate validity thereof or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadthe correctness of any fact stated therein, the Shareholders who have held, immediately prior to the Closing, the majority propriety or validity of the voting power service thereof, or the jurisdiction of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased court issuing any judgment or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunderorder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect Representative may act in reliance upon any signature believed by it to potential or contingent liabilities of the Shareholders hereunder).
4.4be genuine, and may assume that such person has been properly authorized to do so. The Shareholder Representative shall not be liable to act for the Shareholders for any act done or omitted hereunder Equityholders on all of the matters set forth in its capacity as this Agreement in the manner the Shareholder Representative, except Representative believes to be in the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect best interests of any matter arising the Equityholders and consistent with the obligations under this Agreement, but the Shareholder Representative shall not be responsible to the Equityholders for any Damages the Equityholders may rely on suffer by the advice performance of counsel and any action based upon such reliance shall relieve its duties under this Agreement, other than Damage arising from willful violation of the law or gross negligence in the performance of its duties under this Agreement as determined by a non-appealable order or judgment of a court or tribunal of competent jurisdiction. Each of the Equityholders agrees that the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from entitled to recover any indemnifiable amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest hereunder or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees out-of-pocket costs and expenses reasonably incurred by the Shareholder Representative on demand in performing connection with actions taken by the Shareholder Representative pursuant to the terms hereof (including the hiring of legal counsel or advisors and the incurring of legal fees and other costs) from the Shareholder Representative Expense Fund. In the event such recovery is precluded or unattainable for over thirty days after demand thereof from the Shareholder Representative Expense Fund, each of the Equityholders severally shall indemnify and hold harmless and shall reimburse Shareholder Representatives from and against such Equityholder’s ratable share of any and all liabilities, losses, damages, claims, costs or expenses suffered or incurred by the Shareholder Representative arising out of or resulting from any action taken or omitted to be taken by the Shareholder Representative under this Agreement or the Escrow Agreement, other than such liabilities, losses, damages, claims, costs or expenses determined by a non-appealabe order or judgment of a court or tribunal of competent jurisdiction arising out of or resulting from the Shareholder Representative’s willful violation of the law or gross negligence in the performance of its duties under this Agreement and Agreement. The Shareholder Representative may consult with legal counsel of its selection in the agreements ancillary hereto; provided that event of any portion dispute or question as to the meaning or construction of any of the Expense Fund not ultimately required for provisions hereof or its duties hereunder, and it shall incur no liability to the payment Equityholders in acting in accordance with the opinion and instructions of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcounsel.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Merger Agreement (Mellanox Technologies, Ltd.), Merger Agreement
Shareholder Representative. 4.1. By virtue (a) Each of the execution Parties agrees that the Shareholder Representative may enforce, on behalf of the Company, the Company’s rights under Section 4.7. The Shareholder Representative is also entitled to initiate or adoption otherwise file any Action in the courts contemplated by Section 9.5 with respect thereto on behalf of this Agreementthe Company. Each of the Parties acknowledges and agrees that the Shareholder Representative shall be entitled to receive at the same time as received by the Company any notices required to be delivered to the Company with respect to Section 4.7, each Shareholder including, but not limited to, the Adjustment Dispute Notice.
(b) To the maximum extent permitted by applicable Law, the Company irrevocably approves appoints and grants the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) , in its capacity as a Shareholder Representative, with all the rightsfull power, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, Company’s true and lawful agentrepresentative, representative agent and attorney-in-fact for fact, in the Company’s name, place and stead, with full power of substitution, to, from and after the Closing, (i) negotiate any disputes with the Parent with respect to the Disputed Merger Consideration, including on behalf of holders of Company Stock and Company Equity Awards, (ii) bring any claim or Action on behalf of the Company against the Parent with respect to Section 4.7, (iii) defend any claim or action by Parent, on behalf of the Company with respect to the Disputed Merger Consideration or otherwise exercise or enforce any of the Company’s rights under Section 4.7 against the Seller, including on behalf of holders of Company Stock and Company Equity Awards, (iv) execute and deliver all Shareholdersinstruments, deeds, agreements, documents and certificates necessary, advisable or appropriate in the discretion of the Shareholder Representative, as the case may be, to effectuate any of the foregoing, and each (v) direct the Escrow Agent to pay all or a portion of themthe Disputed Merger Consideration in accordance with Section 4.7(h)(iii). The agency and powers of attorney granted herein shall be deemed to be coupled with an interest, shall be irrevocable except that such grant shall automatically terminate with respect to a Person when it is no longer serving as a Shareholder Representative.
(c) Any decision, act, consent, approval or instruction of the Shareholder Representative (then serving at such time) properly given or made pursuant to this Section 9.19 shall constitute a decision, act, consent, approval or instruction of the Company and shall be final, binding and conclusive upon Parent, and the other Parties hereto shall be entitled to conclusively rely upon any representation of the Shareholder Representative with respect to any act, decision, consent, approval or instruction of the Shareholder Representative. Neither the Shareholder Representative, nor any of its officers, directors, employees, partners (general or limited), members, managers or advisors will have any liability to Parent, Merger Subs, or the Company, or any of their respective Affiliates, or any Person acting on behalf of the foregoing, with respect to any and all matters arising out of actions taken, or omitted to be taken, by the Shareholder Representative in such capacity (or its officers, directors, employees, partners (general or limited), members, managers or advisors in connection with this Agreement (excluding pursuant to Section 10.2therewith), the Paying Agent Agreementexcept that a Shareholder Representative will be liable for its fraud as finally determined by a court of competent jurisdiction. The Shareholder shall be entitled to full reimbursement from Parent for all reasonable and documented expenses, the Escrow Agreement disbursements and the agreements ancillary hereto following the Closing advances (including fees and taking any action or omitting to take action on behalf disbursements of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations its external advisors) incurred by or on behalf of the Shareholders Shareholder Representative in accordance herewith shall be given or made by such capacity.
(d) In the event that the Shareholder Representative and all resigns, such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized byautomatically removed and the Company, and shall be binding upon, any and all Shareholders.
4.2. Without limiting on the generality recommendation of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the PurchaserSpecial Committee, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to promptly appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The such Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).[Signature Page Follows]
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Vacasa, Inc.), Agreement and Plan of Merger (Vacasa, Inc.)
Shareholder Representative. 4.1(a) D. E. Shaw Composite Side Pocket Series I, L.L.C. is hereby appointed to serve as the initial Shareholder Representative with respect to the matters expressly set forth in this Article X and by its signature below it hereby acknowledges such appointment and agrees to serve in such capacity on the terms and subject to the conditions set forth herein. By virtue Effective only upon the Effective Time, the Shareholder Representative (including any successor or successors thereto) shall act as the representative of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment ofFormer Company Stockholders, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and shall be authorized to act on behalf of the Former Company Stockholders and to take any and all Shareholders, and each of them, actions required or permitted to be taken by the Shareholder Representative under this Article X with respect to any and all matters arising out of or in connection with this Agreement claims (excluding including the settlement thereof) made by any Buyer Indemnitee for indemnification pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing Article X (including, without limitation, Escrow Agreementthe exercise of the power to agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to, any claims for indemnification). The Shareholder Representative shall be the Payment Agent Agreement, share transfer deeds only party entitled to assert the rights of the Former Company Stockholders hereunder and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion Representative shall perform all indemnification disputes of the obligations (including hiring counsel and other litigation assistance and including in court than payment) of law or any other legal proceeding) and to receive all notices, requests and demands that may be made the Former Company Stockholders under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser Article X. Any Person shall be entitled to deal exclusively with rely on all statements, representations and decisions of the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, Representative.
(b) The Former Company Stockholders shall be bound by all actions taken by the Shareholder Representative in connection with such mattershis, her or its capacity thereof. By virtue of executing or adopting this Agreement, each The Shareholder agrees to ratify and confirmRepresentative shall promptly, and hereby ratifies and confirmsin any event within 10 Business Days, provide written notice to the Former Company Stockholders of any action taken on behalf of them by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided authority delegated to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser Article X. Neither the Shareholder Representative nor any of its directors, officers, agents or employees, if any, shall not be liable to any Shareholder person for any act done error of judgment, or any action taken, suffered or omitted hereunder by to be taken under this Agreement, except in the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result case of its gross negligence or willful misconduct. The Shareholder Representative will shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement.
(c) Each Former Company Stockholder shall, severally and not jointly, hold these funds separate harmless and reimburse the Shareholder Representative from its corporate fundsand against such Former Company Stockholder’s ratable share of any and all liabilities, will not use these funds for its operating losses, damages, claims, costs or expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in (including the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all reasonable fees and expenses reasonably of any legal counsel retained by the Shareholder Representative) suffered or incurred by the Shareholder Representative in performing its duties arising out of or resulting from any action taken or omitted to be taken by the Shareholder Representative under this Agreement and the agreements ancillary heretoAgreement; provided provided, however, that any no such Former Company Stockholder shall be so liable in excess of such Former Company Stockholder’s pro rata portion of the Expense Fund Merger Consideration. The Shareholder Representative shall not ultimately required be entitled to any compensation for the payment of his, her or its services in such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcapacity.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Merger Agreement (Babyuniverse, Inc.), Merger Agreement (eToys Direct, Inc.)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the requisite vote of the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholders shall be deemed to have agreed to appoint Magnum Communications Fund L.P. as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Shareholders (i) to give and receive notices and communications, to authorize payment to any Indemnified Party directly against the Shareholders in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to any such claims, to negotiate, investigate and resolve all matters arising out relating to ARTICLE VIII and ARTICLE IX hereof, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices(ii) to agree to, communications negotiate, execute and determinations by or distribute the Earnout Warrants and deliver the Earnout Warrants to the Shareholders as provided therein, to fulfill all of its obligations thereunder and EXECUTION COPY resolve all matters relating thereto, act on behalf of the Shareholders in accordance herewith shall be given or made by connection therewith, (iii) to prepare the Shareholder Representative Payment Schedules and to direct the payment of all such actions, noticesMerger Consideration payable hereunder, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and iv) to take all other actions called for under or contemplated by or that may otherwise be are either (A) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (B) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless Shareholders holding a majority of Company Shares agree to such removal and to prosecute, defend and settle in the identity of the substituted agent. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused legal counsel retained by the fraudShareholder Representative ("SHAREHOLDER REPRESENTATIVE EXPENSES"). A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse including but not limited to an amendment, extension or waiver of this Agreement, shall constitute a decision of the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraudand shall be final, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, binding and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to conclusive upon the Shareholders; providedand Parent may rely upon any such decision, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of fundsact, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered consent or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal instruction of the Shareholder Representative as being the decision, act, consent or instruction of the termination of this AgreementShareholders. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on Parent is hereby relieved from any liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder person for any act acts done by it in accordance with such decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of signing this Agreement, each Parent Shareholder shall have irrevocably approves authorized and appointed the constitution and appointment ofShareholder Representative as such Person’s representative, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative exclusive agent and attorney-in-fact for and to act on behalf of all Shareholders, and each of them, such Person with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, and the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of any and all Shareholders actions and make any decisions required or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall permitted to be given or made taken by the Shareholder Representative pursuant to this Agreement or the Escrow Agreement, including the exercise of the power to, at or after the Closing:
(i) give and all such actionsreceive notices and communications;
(ii) authorize disbursements of cash from the Escrow Amount and direct distributions from the Seller;
(iii) agree to, noticesnegotiate, enter into settlements and compromises of, and determinations by comply with or otherwise handle any matters described in Section 2.06;
(iv) agree to, negotiate, enter into settlements and compromises of, litigate and comply with or otherwise handle any matters described in Article VIII;
(v) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and the Escrow Agreement;
(vi) engage, employ, or appoint any agents or representatives (including attorneys, accountants, and consultants) to assist it in complying with its duties and obligations; and
(vii) take all actions necessary or appropriate in the good faith judgment of the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2for the accomplishment of the following. Without limiting the generality of Notwithstanding the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent no obligation to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion act on behalf of the Escrow Amount Parent Shareholders, except as is remaining at the end of the escrow period contemplated under Section 2.8, expressly provide in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; .
(b) The Shareholder Representative shall be entitled to negotiate rely upon any signature believed by it to be genuine and reasonably assume that a signatory has proper authorization to sign all documents in connection with the Transaction and amendments thereto, whether before on behalf of a Parent Shareholder or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreementparty. From and after the Closing, the Purchaser Buyer shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement, as described herein (including Section 2.06 and Article VIII) and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Parent Shareholder, and the Shareholders, in their relationship with the Purchaser, shall on any other action taken or purported to be bound by all actions taken on behalf of any Parent Shareholder by the Shareholder Representative in connection with Representative, as being fully binding upon such mattersPerson and such Person’s successors. By virtue No Parent Shareholder shall have the right to object to, dissent from, protest, or otherwise contest the same and all defenses which may be available to any Parent Shareholder to contest, negate, or disaffirm the action of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative taken in good faith under this Agreement or the exercise Escrow Agreement are hereby waived. The provisions of this Section, including the power of attorney granted hereby, and the powers, immunities and rights to indemnification granted to the Shareholder Representative pursuant to this Section 4.2hereunder: (i) are independent and severable, which power of attorney, being are irrevocable and coupled with an interestinterest and shall not be terminated by any act of any one or more Parent Shareholders or by operation of Law, is irrevocable whether by death or other event; and (ii) shall survive the deathdelivery of an assignment by any Parent Shareholder of the whole or any fraction of his, incapacity her, or incompetence of each such Shareholderits interest in the Escrow Amount.
4.3. (c) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the vote or written consent of a majority in interest of the Parent Shareholders according to each Parent Shareholder’s Pro Rata Fraction (the “Majority Holders”); provided, however, in no event shall the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removed without the Shareholders who have held, Majority Holders having first appointed a new Shareholder Representative which shall assume such duties immediately prior to upon the Closing, the majority removal of the voting power Shareholder Representative. In the event of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days death, incapacity, resignation, dissolution, or removal of the Shareholder Representative, a single Person to replace the deceased or legally incapacitated or otherwise similarly unable new Shareholder Representative as shall be appointed by the successor vote or written consent of the Majority Holders. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative hereundershall be sent to Buyer, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Buyer; provided, however, that until such notice is received, Buyer shall be entitled to rely on the decisions and actions of the prior Shareholder Representative. If at any time there The immunities and rights to indemnification shall not be a survive the resignation or removal of the Shareholder Representative and the Closing and/or any termination of this Agreement and the Escrow Agreement.
(d) The parties hereto and the Parent Shareholders fail to designate in writing a successor acknowledge and agree that the Shareholder Representative within five (5) Business Days after receipt will have no Liability to, and will not be liable for any Losses of, any party or any Parent Shareholder for any actions, omissions or obligations of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including or in connection with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representativetransactions described herein, except to the extent caused by its such Losses are proven and adjudicated to be the direct result of willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred misconduct by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties its obligations hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseAgreement. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Parent Shareholders or otherwise. The Shareholders acknowledge and agree that Nothing herein shall limit the foregoing indemnities will survive the resignation or removal liability of the any person serving as Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything for liability such person may have in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders their capacity as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallParent Shareholder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Asset Purchase Agreement (Hunt J B Transport Services Inc)
Shareholder Representative. 4.1. By virtue (a) The Employers written notice delivered to the Employers Shareholders, and the resolutions adopted by the required number of Employers Shareholders to approve the Merger, whether at a special meeting of the execution Employers Shareholders or adoption by written consents signed by the Employers Shareholders, shall state that by voting in favor of this Agreementthe Merger, each Employers Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ the Person designated in the resolutions as attorney-in-fact and agent for and on behalf of the Employers Shareholders, both individually and collectively (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them), with respect the power and authority to any take all actions and make all matters arising out decisions required or permitted by the Shareholder Representative under the terms of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and all other documents, exhibits, and agreements related to such agreements or the Merger, including (i) authorization of the release or delivery to any Eastern Indemnified Person of all or any portion of the Escrow Amount as Holdback in satisfaction of indemnification claims for which such Person is remaining at the end entitled to indemnification under Article VIII; (ii) agreeing to, negotiating, entering into settlements and compromises of, and complying with orders of the escrow period contemplated courts with respect to, any claim for indemnification under Section 2.8Article VIII; (iii) litigation, resolution, settlement or compromise of any claim for indemnification made by any Eastern Indemnified Person pursuant to Article VIII; (iv) receiving all notices on behalf of each Employers Shareholder in accordance connection with the Waterfall and in accordance with the terms and conditions of any claims or matters under this Agreement and or the Escrow Agreement; to negotiate and sign all documents in connection with (v) the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all taking of such other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative determines in respect his judgment are necessary in connection with, or for the effective exercise of, any of any matter arising under the Transaction Documentsforegoing powers and authority. Each Employers Shareholder’s appointment of the Shareholder Representative as provided in this Section 5.16 shall be deemed coupled with an interest surviving the death or disability of such Employers Shareholder to the extent applicable.
(b) Each Employers Shareholder, and by the Shareholders, in their relationship with approval of the PurchaserMerger, shall be bound by all actions taken and documents executed by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmthe Escrow Agreement, and hereby ratifies all other documents, exhibits and confirmsagreements related to such agreements or the Merger. Eastern, its Affiliates and any Eastern Indemnified Person shall be entitled to rely on any such action or document taken or executed by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderRepresentative.
4.3. The Shareholder Representative may resign at any time. Should (c) As between the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Employers Shareholders:
(i) In exercising the power and authority of the Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to as provided in this Agreement, the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Employers Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, absence of recklessness or willful misconduct, gross negligence or bad faith misconduct on the part of the Shareholder Representative, the .
(ii) The Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss shall be entitled to the extent attributable to such fraudrely, willful misconductand shall be fully protected in relying, gross negligence or bad faith. If not paid directly upon any statements furnished to the Shareholder Representative by the Shareholdersany Employers Shareholder, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) or any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows evidence determined by the Shareholder Representative to be paid from the aforementioned sources of fundsreliable, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent and the Shareholder Representative from seeking any remedies available shall be entitled to it at law or otherwise. In no event will act on the Shareholder Representative be required to advance its own funds on behalf advice of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder counsel selected by the Shareholder Representative.
4.6. A total of US$100,000 (iii) The Shareholder Representative shall be withheld from amounts otherwise payable at Closing fully justified in failing or refusing to take any action under this Agreement, the Escrow Agreement or any other document relating to the Merger unless the Shareholder Representative shall have received such advice or concurrence of such Employers Shareholders contributed as the Shareholder Representative determines appropriate or the Shareholder Representative shall have been expressly indemnified to the Shareholder Representative’s satisfaction by the Purchaser Employers Shareholders severally (based upon their respective Pro Rata Shares), against all liability and expense (including reasonable attorney fees) that the Shareholder Representative may incur by reason of taking or continuing to take any such action.
(iv) The Shareholder Representative shall be entitled to retain professional advisors, including accountants and legal counsel, and to incur such other expenses as the Shareholder Representative determines to be necessary or appropriate in connection with acting as the attorney-in-fact and agent on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Employers Shareholders as a fund for the authorized under Section 5.16(a), and all such professional and other fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and acting in such capacity shall be borne by the agreements ancillary hereto; provided that any portion of Employers Shareholders severally in proportion to their respective Pro Rata Shares.
(v) The Employers Shareholders shall indemnify the Expense Fund not ultimately required for the payment of such fees Shareholder Representative, severally in proportion to their respective Pro Rata Shares, against all losses, liabilities, damages and expenses shall be delivered (including reasonable attorney fees) incurred by the Shareholder Representative in such capacity relating to or arising out of actions or failures to take action pursuant to or in connection with this Agreement, the Escrow Agent Agreement or any other document relating to the Paying Agent for further distribution Merger, except to the Shareholders based on the Waterfall following the completion extent such losses, liabilities, damages and expenses are incurred as a result of the Shareholder Representative’s responsibilitiesrecklessness or willful misconduct.
(vi) Each Person appointed as the Shareholder Representative shall serve in such capacity until the earlier of such Person’s resignation or removal (with or without cause) by Employers Shareholders having more than 50% of the total Pro Rata Shares (the “Majority Employers Shareholders”). All amounts remaining Upon the resignation or removal of a Person as the Shareholder Representative, the Majority Employers Shareholders shall appoint another Person to serve in such capacity. Each Person appointed as a Shareholder Representative shall accept such position in writing.
(d) Prior to the Expense Fund upon termination Effective Time, the Majority Employers Shareholders shall give Eastern written notice of the Person initially appointed as the Shareholder Representative, together with such Person’s notice address, telephone number and telecopy number. Promptly after any change of the Shareholder Representative, the Majority Employers Shareholders shall give Eastern written notice setting forth the name, notice address, telephone number and telecopy number of the new Shareholder Representative. Until notified in writing of such a change, Eastern shall be entitled to assume that the most recent incumbent Shareholder Representative of which Eastern has written notice is the duly authorized Shareholder Representative.
(e) In exercising the Shareholder Representative’s engagement (power and following authority as provided in this Agreement, the completion Shareholder Representative shall not be liable to Eastern or any other Eastern Indemnified Person in the absence of recklessness or willful misconduct on the part of the Shareholder Representative’s responsibilities) ; provided, however, that nothing contained in this Section 5.16 shall also be delivered in any way limit or prejudice the enforcement by Eastern against the Employers Shareholders or the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise Holdback of Eastern’s rights on behalf of the Shareholders prior to Closing pursuant to under this Agreement, including the exercise of the right to waive rights Escrow Agreement or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, any other document relating to the Company (as if it was a Shareholder Representative)Merger, upon and subject to the terms and conditions of each such agreement or document.
Appears in 1 contract
Sources: Merger Agreement (Eastern Insurance Holdings, Inc.)
Shareholder Representative. 4.1. (a) By virtue approving this Agreement and the transactions contemplated hereby or by executing and delivering a Letter of the execution or adoption of this AgreementTransmittal, each Shareholder shall have irrevocably approves the constitution authorized and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “appointed Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, such Person’s representative and attorney-in-fact for and to act on behalf of all Shareholders, and each of them, such Person with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; Agreement and to negotiate take any and sign all documents in connection with actions and make any decisions required or permitted to be taken by Shareholder Representative pursuant to this Agreement or the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, including the Payment Agent exercise of the power to:
(i) give and receive notices and communications;
(ii) authorize delivery to Parent of cash from the Purchase Price Adjustment Escrow Fund (or, if necessary, the Indemnification Escrow Fund) in satisfaction of any amounts owed to Parent pursuant to Section 2.12(f) or from the Indemnification Escrow Fund in satisfaction of claims for indemnification made by Parent pursuant to Article VIII;
(iii) agree to, negotiate, enter into settlements and compromises of, and comply with orders or otherwise handle any other matters described in Section 2.12(f);
(iv) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Parent pursuant to Article VIII;
(v) litigate, arbitrate, resolve, settle or compromise any claim for indemnification pursuant to Article VIII;
(vi) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any Ancillary Document (including the Escrow Agreement);
(vii) make all elections or decisions contemplated by this Agreement and any Ancillary Document (including the Escrow Agreement);
(viii) engage, share transfer deeds employ or appoint any agents or representatives (including attorneys, accountants and endorsements consultants) to assist Shareholder Representative in complying with its duties and termination instruments and including amendments that may require price reductions or holdbacks)obligations; and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to and
(ix) take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in good faith judgment of Shareholder Representative for the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court accomplishment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreementforegoing. From and after the Closing, the Purchaser Parent shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement (including Article VIII) and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder by Shareholder Representative, as being fully binding upon such Person. Notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Parent relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder, shall constitute a decision or action of all Shareholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any one or more Shareholders, incapacity or incompetence by operation of each such ShareholderLaw.
4.3. (b) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the vote or written consent of a majority in interest of the Shareholders according to each Shareholder’s Pro Rata Share (the “Majority Holders”); provided, however, in no event shall Shareholder Representative die, become legally incapacitated resign or bankrupt, dissolve, liquidate be removed without the Majority Holders having first appointed a new Shareholder Representative who shall assume such duties immediately upon the resignation or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removal of Shareholder Representative. In the Shareholders who have held, immediately prior to the Closing, the majority event of the voting power death, incapacity, resignation or removal of Shareholder Representative, a new Shareholder Representative shall be appointed by the vote or written consent of the Company Majority Holders. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Parent, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Parent; provided, that until such notice is received, Parent, Merger Sub and the Surviving Corporation shall be entitled to rely on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable decisions and actions of the prior Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate described in writing a successor Shareholder Representative within five (5Section 9.01(a) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)above.
4.4. (c) The Shareholder Representative shall not be liable to the Shareholders for actions taken pursuant to this Agreement or the Escrow Agreement, except to the extent such actions shall have been determined by a court of competent jurisdiction to have constituted gross negligence or involved fraud, intentional misconduct or bad faith (it being understood that any act done or omitted hereunder in its capacity as the Shareholder Representative, except pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel counsel, accountants and any action based upon such reliance shall relieve the other professionals and experts retained by Shareholder Representative shall be conclusive evidence of any liability hereundergood faith). The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thattheir Pro Rata Shares), for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the hold harmless Shareholder Representative from and hold the Shareholder Representative harmless against against, compensate it for, reimburse it for and pay any lossand all losses, liabilityliabilities, deficiencyclaims, damageactions, costdamages and expenses, claim, penalty, fine, forfeiture, or expense (including the reasonable attorneys’ fees and expenses of counsel and experts and their staffs and all expense of document locationdisbursements, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or and in connection with its activities as Shareholder Representative under this Agreement and the acceptance, performance or administration of Escrow Agreement (the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss it is finally adjudicated to have been directly that a Representative Loss or any portion thereof was primarily caused by the gross negligence, fraud, willful misconduct, gross negligence intentional misconduct or bad faith on the part of the Shareholder Representative, the Shareholder Representative will shall reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, fraud, willful misconduct, gross negligence intentional misconduct or bad faith. If not paid directly to The Representative Losses shall be satisfied: (i) from the Shareholder Representative by Expense Fund; and (ii) to the extent the amount of the Representative Losses exceeds amounts available to Shareholder Representative under (i), from the Shareholders, any such Representative Losses may be recovered by severally and not jointly (in accordance with their Pro Rata Shares). As soon as practicable after the date on which the final obligation of Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of Escrow Agreement have been discharged or such fees and expenses shall be delivered by other date as Shareholder Representative deems appropriate, the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All shall pay any amounts remaining in the Expense Shareholder Representative Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on in accordance with their Pro Rata Shares, as set forth in the WaterfallEscrow Agreement.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Northwest Pipe Co)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Catapult Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints Nconfirms the appointment of D▇▇▇▇ ▇▇▇▇▇ (as the “Shareholder Representative”) with all the rights, powers ” and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative his/its agent and attorney-in-fact for with full power of substitution to act from and after the date of this Agreement and to do any and all things and execute any and all documents on behalf of all Shareholderssuch Catapult Shareholder that may be necessary, convenient or appropriate to facilitate the consummation of the transactions contemplated by this Agreement, including but not limited to: (i) execution of the other documents and each certificates pursuant to this Agreement; (ii) receipt of thempayments under or pursuant to this Agreement, with respect to any and all matters arising out of or in connection accordance with this Agreement Agreement, subject to the terms hereof; (excluding iii) receipt and forwarding of notices and communications pursuant to Section 10.2)this Agreement; (iv) administration of the provisions of this Agreement; (v) giving or agreeing to, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding uponCatapult Shareholder, any and all Shareholders.
4.2. Without limiting the generality of the foregoingconsents, waivers, amendments or modifications deemed by the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8Representative, in accordance with the Waterfall his sole and in accordance with the terms and conditions of absolute discretion, to be necessary or appropriate under this Agreement and the Escrow Agreement; to negotiate and sign all execution or delivery of any documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documentstherewith; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law vi) amending (or waiving any provisions of) this Agreement or any other legal proceeding) and document contemplated hereby to receive all notices, requests and demands that may be made under and delivered to Cerberus pursuant to this Agreement; (vii) taking actions the Shareholder Representative is expressly authorized to take pursuant to the other provisions of this Agreement; (viii) disputing or refraining from disputing, the Paying Agent on behalf of such Catapult Shareholder relative to any amounts to be received or paid by such Catapult Shareholder under this Agreement, any claim made by Cerberus under this Agreement; (ix) negotiating and compromising, on behalf of such Catapult Shareholder, any dispute that may arise under, and exercising or refraining from exercising any remedies available under, this Agreement; (x) executing, on behalf of such Catapult Shareholder, any settlement agreement, release or other document with respect to such dispute or remedy; and (xi) engaging attorneys, accountants, agents or consultants on behalf of such Catapult Shareholder in connection with this Agreement and the Escrow Agreement. From and after the Closing, the Purchaser paying any fees related thereto.
(b) Cerberus shall be entitled to deal exclusively fully protected in dealing with the Shareholder Representative in respect under this Agreement and may rely upon the authority of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees capacity to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise act on behalf of the power of attorney granted Catapult Shareholders. Any payment by Cerberus to the Shareholder Representative pursuant to the extent authorized under this Section 4.2Agreement, which power of attorneyshall be considered a payment by Cerberus to the Catapult Shareholders, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholderas applicable.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5c) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Catapult Shareholders in its capacity as such, for any liability of the Catapult Shareholders or for any error of judgment, or any act done or step taken or omitted hereunder by it that it believed to be in good faith or for any mistake in fact or law, or for anything which it may do or refrain from doing in connection with this Agreement. The Shareholder Representative may seek the advice of legal counsel in the event of any dispute or question as to the construction of any of the provisions of this Agreement or its duties hereunder, and, without limiting the foregoing, D▇▇▇▇ ▇▇▇▇ shall incur no Liability in its capacity as the Shareholder Representative, except and shall be fully protected with respect to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share taken, omitted or suffered by it in good faith in accordance with the Waterfall compared advice of such counsel.
(d) Each Catapult Shareholder, severally and not jointly, hereby agrees to indemnify the Shareholder Representative (in its capacity as such) against, and to hold the Shareholder Representative (in its capacity as such) harmless from, its relative pro rata shares percentage of any and all Shareholders signing this Agreement Losses of whatever kind which may at any time be imposed upon, incurred by or otherwise bound hereby; provided that, for asserted against the avoidance of doubt, Shareholder Representative in all cases the aggregate such capacity in any way relating to or arising out of the Shareholder Representative’s indemnity coverage from the Shareholders signing action or failure to take action pursuant to this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance herewith or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), therewith in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4capacity.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Merger (Cerberus Cyber Sentinel Corp)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the requisite vote of the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholders shall be deemed to have agreed to appoint Magnum Communications Fund L.P. as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Shareholders (i) to give and receive notices and communications, to authorize payment to any Indemnified Party directly against the Shareholders in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to any such claims, to negotiate, investigate and resolve all matters arising out relating to ARTICLE VIII and ARTICLE IX hereof, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices(ii) to agree to, communications negotiate, execute and determinations by or distribute the Earnout Warrants and deliver the Earnout Warrants to the Shareholders as provided therein, to fulfill all of its obligations thereunder and resolve all matters relating thereto, act on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, noticesconnection therewith, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and iii) to take all other actions called for under or contemplated by or that may otherwise be are either (A) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (B) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless Shareholders holding a majority of Company Shares agree to such removal and to prosecute, defend and settle in the identity of the substituted agent. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused legal counsel retained by the fraudShareholder Representative ("SHAREHOLDER REPRESENTATIVE EXPENSES"). A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse including but not limited to an amendment, extension or waiver of this Agreement, shall constitute a decision of the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraudand shall be final, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, binding and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to conclusive upon the Shareholders; providedand Parent may rely upon any such decision, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of fundsact, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered consent or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal instruction of the Shareholder Representative as being the decision, act, consent or instruction of the termination of this AgreementShareholders. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on Parent is hereby relieved from any liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder person for any act acts done by it in accordance with such decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Scansoft Inc)
Shareholder Representative. 4.1. By virtue (a) The parties hereto have agreed that it is desirable to designate Sightline Partners LLC to serve, commencing as of the execution or adoption of this AgreementEffective Time, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agentrepresentative, representative agent and attorney-in-fact of each and all of the holders of the Company Stock, Options and Warrants (the "Shareholder Representative") for certain limited purposes as set forth herein. The adoption of this Agreement by the holders of the Company Stock shall constitute ratification and on behalf approval of all Shareholderssuch designation, and each the irrevocable constitution and appointment of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2as set forth herein. Without limiting the generality of the foregoing, the The Shareholder Representative shall have full such power and authority to: from and after necessary to carry out the Closing, direct the Paying Agent to disburse amounts paid functions assigned to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated Shareholder Representative under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; , including but not limited to negotiate the power and sign authority:
(i) to execute and deliver the Escrow Agreement, and to enter into any amendments, modifications and/or waivers in respect thereof;
(ii) to enforce, defend and protect the rights and interests of the holders of the Company Stock following the Closing under this Article VIII and under the Escrow Agreement, and to take any and all documents in connection with actions that the Transaction Shareholder Representative believes are necessary or appropriate under this Article VIII and amendments theretounder the Escrow Agreement for and on behalf of the holders of the Company Stock, whether before or after Closing (including, without limitation, Escrow Agreementasserting, pursuing or defending any claim by or against the Payment Agent AgreementParent or the Surviving Corporation, share transfer deeds consenting to, compromising or settling any such claim, and endorsements conducting negotiations with the Parent or Surviving Corporation; and
(iii) to make, execute, acknowledge and termination instruments and including amendments that may require price reductions or holdbacks); and to grantdeliver all such other agreements, providenotices, negotiate and sign all waivers, consentsrequests, instructions and authorizations other writings, and, in general, to do any and all things and to take any and all other actions called for under or contemplated by or that the Shareholder Representative may otherwise be consider necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made carrying out its responsibilities under and pursuant to this Agreement, the Paying Agent Agreement Article VIII and the Escrow Agreement. From and after the Closing, the Purchaser shall .
(b) The Shareholder Representative will be entitled to deal exclusively with engage such counsel, experts and other agents as the Shareholder Representative deems necessary or proper in respect of any matter arising connection with performing its obligations hereunder and under the Transaction DocumentsEscrow Agreement, and will be promptly reimbursed by amounts in the Shareholders, in their relationship with the Purchaser, shall be bound by Shareholder Representative Escrow Fund for all actions taken reasonable Shareholder Representative Expenses incurred by the Shareholder Representative in connection with such matterscapacity, up to an amount equal to Five Hundred Thousand Dollars ($500,000). By virtue of executing or adopting this AgreementIn addition, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative shall be entitled to receive a fee, in the exercise amount of Four Hundred Dollars ($400) per hour, for the performance of its services hereunder and under the Escrow Agreement following the Closing Date (the "Shareholder Representative Fee"). To the extent not paid out of the power of attorney granted Shareholder Representative Escrow Fund, the Shareholder Representative Fee shall be paid to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive from the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at Escrow Fund following the Escrow Termination Date before any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior distributions therefrom are made to the Closingholders of Company Stock, the majority of the voting power of the Company on an as converted basis shall designate Options and Warrants in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including accordance with respect to potential or contingent liabilities of the Shareholders hereunderSection 8.5(c).
4.4. The Shareholder Representative shall not be liable to any holder of Company Stock, Options or Warrants, and each holder of the Shareholders for any act done or omitted hereunder in its capacity as Company Stock, Options and Warrants shall indemnify and hold harmless the Shareholder Representative, except pro rata based upon, and up to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreementan amount not to exceed, the Shareholder Representative may rely on the advice of counsel and Merger Consideration paid to such holder, from any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions Damages that are incurred by the Shareholder Representative and arising out as a result of actions taken, or actions not taken, by the Shareholder Representative herein, in connection with each case except to the acceptance, performance extent of any gross negligence or administration willful misconduct of the Shareholder Representative’s duties hereunder . In taking any action whatsoever hereunder, the Shareholder Representative shall be entitled to and under the Transaction Documents (collectivelyprotected in relying upon any notice, “Representative Losses”), in each case as such Representative Loss is suffered paper or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused other document believed by the fraudShareholder Representative in good faith to be genuine, willful misconduct, gross negligence or bad upon evidence deemed by the Shareholder Representative in good faith on the part of to be sufficient. With respect to its service as the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of shall have no liability as such indemnified Representative Loss to the extent attributable Parent, the Merger Sub or the Surviving Corporation hereunder.
(c) All amounts received by the Shareholder Representative on behalf of the holders of the Company Stock (whether under this Agreement or the Escrow Agreement), will be promptly paid by (or promptly caused to such fraudbe paid by) the Shareholder Representative to the holders of the Company Stock, willful misconductOptions and Warrants in accordance herewith and the Escrow Agreement. Notwithstanding the foregoing, gross negligence or bad faith. If not paid directly the Shareholder Representative will be entitled to reimbursement of any amounts payable to the Shareholder Representative by the Shareholders, any such under Section 8.10(b) hereof including Shareholder Representative Losses may be recovered by Expenses and Shareholder Representative Fees from the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseAmount. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement herein to the contrary, the limitations on liability or indemnification obligations ofShareholder Representative, or provisions limiting the recourse against non-recourse parties otherwise applicable toat its option, the Shareholders may set forth elsewhere in this Agreement (off any amounts due under Section 8.10(b) including in Section 10.8) are not intended to be applicable to the indemnities provided to Shareholder Representative Expenses and the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from Fees against amounts otherwise payable at Closing to the Shareholders contributed by holders of Company Stock, Options and Warrants from the Purchaser on behalf of the Shareholders Escrow Fund pursuant to the Escrow Agent for an account maintained by the Escrow Agent for the benefit terms of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (Escrow Agreement. In addition, in the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to event the Shareholder Representative any ownership right they receives amounts from holders of Company Stock, Options or Warrants to reimburse or contribute toward Shareholder Representative Expenses, the Shareholder Representative may set off amounts otherwise have had payable to holders of Company Stock, Options and Warrants from the Escrow Fund in order to refund to holders a pro rata portion of such amounts that were reimbursed or contributed, in order to ensure that all holders bear an equal pro rata portion of any such interest or earnings. The Shareholder Representative will Expenses.
(d) The Parent, Surviving Corporation and the Escrow Agent shall each have the right to rely upon all actions taken or not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred taken by the Shareholder Representative in performing its duties under this Agreement pursuant hereto and the agreements ancillary hereto; provided that any portion Escrow Agreement, all of which actions or omissions shall be legally binding upon the holders of the Expense Fund not ultimately required for the payment Company Stock or any of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallthem.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Healthways, Inc)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and The Purchaser hereby irrevocably constitutes and appoints Nappoints, effective as of the date hereof, ▇▇▇▇▇ ▇▇▇▇▇ (the together with his permitted successors, a “Shareholder Representative”) with all the rights), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, Purchaser’s true and lawful agent, representative agent and attorney-in-fact for to enter into any agreement in connection with the transactions contemplated by this Agreement and any transactions relating to the Exchange Transaction, to exercise all or any of the powers, authority and discretion conferred on him under this Agreement or any agreements entered into in connection with the Exchange Transaction, to waive any terms and conditions of any such agreements, to give and receive notices on their behalf of all Shareholders, and each of them, to be their exclusive representative with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)matter, the Paying Agent Agreementaction, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any undertaking, suit, claim, action or omitting proceeding arising with respect to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications any transaction contemplated by any such agreements and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, noticesagrees to act as, and determinations by to undertake the Shareholder Representative shall conclusively be deemed to have been authorized byduties and responsibilities of, such agent and shall be binding upon, any and all Shareholders.
4.2attorney-in-fact. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the This power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being is coupled with an interest, is irrevocable interest and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earningsirrevocable. The Shareholder Representative will not be liable for any loss action taken or not taken by him in connection with his obligations under this Agreement in the absence of principal of the Expense Fund other than as a result of its his own gross negligence or willful misconduct. The Purchaser acknowledges and agrees that the Company and the Shareholder Representative will hold these funds separate from its corporate fundsRepresentative, in effectuating the Exchange Transaction, will not use these funds for its operating expenses or any other corporate purposes be relying upon the representations and will not voluntarily make these funds available to its creditors warranties contained in the event of bankruptcySection 3 hereof. The amounts deposited Purchaser will immediately notify the Stockholder Representative in writing if any of the Expense Fund shall be available for the payment of all fees representations and expenses reasonably incurred by warranties contained in Section 3 hereof become inaccurate in any respect. Unless so notified, the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion Company may rely on the representations and warranties contained in Section 3 hereof as being accurate and true in all respects as of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion date of the Shareholder Representative’s responsibilitiesclosing of the Exchange Transaction. All amounts remaining The Purchaser hereby ratifies and confirms and agrees to ratify and confirm whatever any such attorney as is mentioned in this Clause 5 shall do or purport to do in the Expense Fund upon termination exercise or purported exercise of all or any of the Shareholder Representative’s engagement (powers, authorities and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent discretions referred to the Paying Agent for further distribution to the Shareholders based on the Waterfalltherein.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Restricted Stock Purchase Agreement (Gourmet Herb Growers Inc)
Shareholder Representative. 4.1. By virtue (a) Subject to the terms and conditions of this Section 11.20, the Company hereby designates PaxVax SH Representative LLC as the Shareholder Representative to serve, and Parent and Merger Sub hereby acknowledge that the Shareholder Representative shall serve, as the sole representative of the execution Shareholder, from and after the date hereof with respect to the matters set forth in this Agreement and the Ancillary Agreements, such service to be without compensation except for the reimbursement of out-of-pocket expenses specifically provided herein. The Shareholder Representative has accepted such designation as of the date hereof. Notwithstanding anything to the contrary contained in this Agreement or adoption of this the Escrow Agreement, each the Shareholder irrevocably approves the constitution and appointment ofRepresentative shall have no duties or responsibilities except those expressly set forth herein, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (no implied covenants, functions, responsibilities, duties or Liabilities on behalf of the “Shareholder shall otherwise exist against the Shareholder Representative”.
(b) with all the rights, powers and obligations contemplated by this Section 4, and any successor The Shareholder Representative(s) designated under this Section 4 Representative has been irrevocably appointed as the sole, exclusive, true and lawful agent, representative proxy and attorney-in-fact for the Shareholder for all purposes of this Agreement, has the full power and authority to act on behalf the Shareholder’s behalf, including: (i) to take all actions or refrain from taking any actions which the Shareholder Representative considers necessary or desirable in connection with the defense, pursuit or settlement of all Shareholdersany determinations relating to the payment of the Escrow Amount, and each of them, with respect to any and all matters arising out of or claims in connection with this Agreement (excluding [***] or any Ancillary Agreement, including to ▇▇▇, defend, negotiate, settle and compromise any such claims made by or against, and other disputes with, Parent and Merger Sub pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow this Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf any of the Shareholders in accordance herewith shall be given Ancillary Agreements or made by transactions contemplated hereby or thereby, (ii) execute and deliver all amendments, waivers, Ancillary Agreements, certificates and documents that the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deems necessary or appropriate in connection with the Transaction Documents; consummation of the transactions contemplated by this Agreement, (iii) receive funds, make payments of funds and give receipts of funds, (iv) to prosecute, defend engage and settle in the Shareholder Representative’s discretion all indemnification disputes employ agents and representatives (including hiring accountants, legal counsel and other litigation assistance and including in court of law or any other legal proceedingprofessionals) and to incur such other expenses as it shall deem necessary or prudent in connection with the administration of the foregoing, (v) to take all actions *** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. contemplated by this Section 11.20, (vi) to accept and receive all notices, requests and demands that may be made under and notices to the Shareholder pursuant to this Agreement, the Paying Agent Agreement and (vi) to take or refrain from taking all other actions and exercise all other rights which the Escrow AgreementShareholder Representative (in its sole discretion) considers necessary or appropriate in connection with this Agreement or the any other Ancillary Agreement (including entering into any amendments that the Shareholder Representative deems desirable without the consent of the Shareholder). From The Shareholder, by accepting any portion of the Final Merger Consideration Amount and after Additional Merger Consideration Amount, agreed that such agency and proxy are coupled with an interest, and are therefore irrevocable without the Closingconsent of the Shareholder Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of the Purchaser Shareholder. All decisions and acts by the Shareholder Representative are binding upon the Shareholder, and the Shareholder does not have the right to object, dissent, protest or otherwise contest the same. The terms and conditions of this Agreement are hereby made, and are hereby acknowledged to be, dependent on the determinations and actions that are contemplated or permitted to be made by the Shareholder Representative pursuant to such appointment, and all rights of the Shareholder shall be qualified by and dependent upon such determinations and actions, irrespective of whether the Shareholder Representative is acting as an agent or power of attorney of the Shareholder.
(c) The Shareholder Representative is authorized to act on behalf of the Shareholder, and the other parties hereto shall be entitled to deal exclusively with the Shareholder Representative in respect of rely on any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in without any liability to, or obligation to inquire of, the exercise Shareholder. Each of the power other parties hereto is expressly authorized to rely on the genuineness of attorney granted the signature of the Shareholder Representative and, upon receipt of any writing which reasonably appears to have been signed by the Shareholder Representative, the other parties hereto may act upon the same without any further duty of inquiry as to the genuineness of the writing. For clarity, following Parent’s payment in full to the Shareholder Representative of any amount required to be paid by Parent pursuant to this Agreement, Parent and its Non-Recourse Parties shall have no liability to the Shareholder or any of the Shareholder’s Non-Recourse Parties for such amount, including for the Shareholder Representative’s failure to distribute such amounts in any manner, including in accordance with separate agreements with the Shareholder and the Shareholder’s Non-Recourse Parties.
(d) Neither the Shareholder Representative, nor any agent employed by it, nor Parent or any of its Non-Recourse Parties, shall be liable to the Shareholder relating to the performance of the Shareholder Representative’s duties under this Agreement for any errors in judgment, negligence, oversight, breach of duty or otherwise by the Shareholder Representative, except the Shareholder Representative may be liable to the extent it is finally determined in a court of competent jurisdiction by clear and convincing evidence that the actions taken or not taken by the Shareholder Representative constituted willful misconduct. The Shareholder Representative shall be indemnified and held harmless by the Shareholder against all Losses paid or incurred in connection with any action, suit, proceeding or claim to which the Shareholder Representative is made a party by reason of the fact that it was acting as the Shareholder Representative pursuant to this Section 4.2Agreement; provided, which power of attorneyhowever, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should that the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail entitled to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser indemnification hereunder to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition extent it is finally determined in a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following by clear and convincing evidence that the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential actions taken or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred taken by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or constituted willful misconduct. The Shareholder Representative will hold these funds separate from its corporate fundsshall be protected in acting upon any notice, will not use these funds for its operating expenses statement or certificate believed by him to be genuine and to have been furnished by the appropriate Person and in acting or refusing to act in good faith or any other corporate purposes and matter.
(e) At least three (3) Business Days prior to the Closing Date, the Shareholder Representative shall provide written notice to Parent of the amount of cash (the “Shareholder Representative Expense Amount”) that will not voluntarily make these funds available be retained from the Base Closing Cash Amount by the Shareholder Representative to its creditors in pay (at the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees Shareholder Representative’s sole discretion), (i) any fees, costs and expenses reasonably incurred by the Shareholder Representative related to the negotiation, preparation, execution or delivery of this Agreement or any of the other Ancillary Agreements, or the consummation of the transactions contemplated by this Agreement or any of the other Ancillary Agreements (to the extent not paid at the Closing) and (ii) any fees, expenses, costs, losses or damages it incurs in performing its duties and obligations under this Agreement, including fees, costs and expenses incurred pursuant to the procedures and provisions set forth in Section 2.9, and legal, accounting and consultant fees, expenses and costs for reviewing, analyzing, defending, pursuing, or prosecuting any claim or process arising under or pursuant to this Agreement or any of the other Ancillary Agreements, including amounts owed to the Neutral Firm pursuant to Section Section 2.9.(c). The Shareholder Representative shall be permitted to pay amounts (including to itself) out of the Shareholder Representative Expense Account from time to time in order to perform its duties on behalf of the Shareholder hereunder. The Shareholder Representative may, in its sole and the agreements ancillary hereto; provided that absolute discretion, invest and reinvest all or any portion of the Shareholder Representative Expense Fund not ultimately required for Amount (including any interest earned thereon) in any manner the payment of such fees and expenses shall be delivered by Shareholder Representative so determines or, at the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion sole option of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination , it may elect not to invest or reinvest all or any portion of the Shareholder Representative’s engagement Representative Expense Amount (and following including any interest earned thereon). The Shareholder Representative will retain the completion amounts in the Shareholder Representative Expense Account for so long as it shall determine in its reasonable discretion. After the Shareholder Representative determines in its sole discretion that the Shareholder Representative no longer needs to retain any portion of the Shareholder Representative’s responsibilities) shall also Representative Amount, the balance of the Shareholder Representative Expense Amount, if any, will be delivered by the Escrow Agent distributed to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1(a) The Shareholders herein have and do hereby irrevocably make, constitute and appoint the individuals designated as their agent (the "Shareholder's Representative") and authorize and empower him or her to fulfill the role of Shareholder's Representative hereunder. By virtue In the event of the resignation of the Shareholder's Representative, the resigning Shareholder's Representative shall appoint a successor from among the Shareholders and who shall agree in writing to accept such appointment. If the Shareholder's Representative should die or become incapacitated, his or her successor shall be appointed within 15 days of his or her death or incapacity by a majority of the Shareholders, and such successor shall be an Shareholder. The choice of a successor Shareholder's Representative appointed in any manner permitted above shall be final and binding upon all of the Shareholders. (The decisions and actions of any successor Shareholder's Representative shall be, for all purposes, those of a Shareholder's Representative as if originally named in the Transfer Agreement.)
(b) Each Shareholder has made, constituted and appointed and by the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Agreement hereby irrevocably makes, constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholder's Representative as the sole, exclusive, such person's true and lawful attorney in fact and agent, representative for such person and attorney-in-fact in such person's name, place and stead for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of purposes necessary or desirable in connection with this Agreement (excluding pursuant to Section 10.2), order for the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting Shareholder's Representative to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or actions contemplated by the Paying Agent Agreement. All actions, notices, communications and determinations by or Transaction Documents on behalf of the Shareholders, with the ability to execute and deliver all instruments, certificates and other documents of every kind incident to the foregoing to all intents and purposes and with the same effect as such Shareholder could do personally, and each such Shareholder hereby ratifies and confirms as his, her, or its own act, all that the Shareholder's Representative shall do or cause to be done pursuant to the provisions hereof. All notices and communications directed to Shareholders in accordance herewith under this Agreement shall be given to the Shareholder's Representative.
(c) The death or made by incapacity of any Shareholder shall not terminate the Shareholder authority and agency of the Shareholder's Representative.
(d) The Shareholders hereby agree to indemnify the Shareholder's Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, hold him or her harmless against any and all Shareholders.
4.2. Without limiting loss, liability or expense incurred without bad faith on the generality part of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder 's Representative and arising out of or in connection with the acceptance, performance his or administration of the Shareholder Representative’s her duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Shareholder's Representative, including the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees reasonable costs and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Shareholder's Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that defending against any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining claim or liability in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallconnection herewith.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) The Parties have agreed that it is desirable to designate ▇▇▇▇▇ ▇▇▇▇▇▇ (and if ▇▇▇▇▇ ▇▇▇▇▇▇ is unable or unwilling to serve, then ▇▇▇▇ ▇▇▇▇▇▇) to serve as the representative of the holders of the Company Stock (the “Shareholder Representative”) with all for certain limited purposes as set forth herein. The approval of this Agreement by the rightsholders of the Company Stock will constitute ratification and approval of such designation. The Shareholder Representative will have such power and authority necessary to carry out the functions assigned to the Shareholder Representative under this Agreement and the Escrow Agreement, powers including the power and obligations contemplated by this Section 4authority:
(i) to execute and deliver the Escrow Agreement, and to enter into any successor amendments, modifications and/or waivers in respect thereof;
(ii) to enforce, defend and protect the rights and interests of the holders of the Company Stock following the Closing under Article IX of this Agreement and under the Escrow Agreement, and to take any and all actions that the Shareholder Representative(s) designated Representative believes are necessary or appropriate under Article IX of this Section 4 as Agreement and under the sole, exclusive, true and lawful agent, representative and attorney-in-fact Escrow Agreement for and on behalf of all Shareholdersthe holders of the Company Stock, including, without limitation, asserting, pursuing or defending any claim by or against Parent or the Surviving Corporation, consenting to, compromising or settling any such claim, and each of themconducting negotiations with Parent or Surviving Corporation; and
(iii) to make, with respect execute, acknowledge and deliver all such other agreements, notices, requests, instructions and other writings, and, in general, to do any and all matters arising out of things and to take any and all actions that the Shareholder Representative may consider necessary or proper in connection with this Agreement (excluding pursuant to Section 10.2), carrying out the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf responsibilities of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions Article IX of this Agreement and the Escrow Agreement; .
(b) The Shareholder Representative will be entitled to negotiate engage such counsel, experts and sign all documents other agents as the Shareholder Representative deems necessary or proper in connection with performing its obligations hereunder and under the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, and will be promptly reimbursed by the Payment Agent Agreementholders of the Company Stock for all reasonable expenses, share transfer deeds disbursements and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken advances incurred by the Shareholder Representative in connection with such matterscapacity upon demand, pro rata based upon each such holder’s share of the Company Stock as of the Closing. By virtue Each holder of executing or adopting this Agreementthe Company Stock shall indemnify and hold harmless the Shareholder Representative, each Shareholder agrees to ratify pro rata based upon such holder’s share of all Company Stock as of the Closing, from any and confirm, and hereby ratifies and confirms, any action taken all Damages that are incurred by the Shareholder Representative in as a result of actions taken, or actions not taken, by the exercise Shareholder Representative herein, except to the extent that such Damages arise from the gross negligence or willful misconduct of the power Shareholder Representative.
(c) All amounts received by the Shareholder Representative on behalf of attorney granted the holders of the Company Stock (whether under this Agreement or the Escrow Agreement), will be promptly paid by the Shareholder Representative to the holders of the Company Stock, in accordance with Section 1.7; provided, however, that the Shareholder Representative will be entitled to set off any amounts payable to the Shareholder Representative under Section 10.13(b) against amounts otherwise payable to holders of the Company Stock pursuant to this Section 10.13(c).
(d) Parent and Surviving Corporation shall have the right to rely upon all actions taken or not taken by the Shareholder Representative pursuant to this Section 4.2Agreement and the Escrow Agreement, all of which power of attorney, being coupled with an interest, is irrevocable and actions or omissions shall survive be legally binding upon the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power holders of the Company on an as converted basis shall designate in writing to Purchaser within five Stock.
(5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a the Shareholder Representative and resigns, dies or becomes incapable of acting, the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt holders of a written request delivered by Purchaser to majority of the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court Company Stock as of competent jurisdiction to appoint a Shareholder the Closing shall choose another holder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Agreement.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Goldleaf Financial Solutions Inc.)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes appoints and appoints Ndesignates ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, his or her representative and attorney-in-fact for (the "REPRESENTATIVE).
(b) The Shareholders hereby authorize the Representative (i) to take all action necessary in connection with the waiver of any condition to the obligations of any Shareholder to consummate the transactions contemplated hereby; (ii) to give and on behalf of receive all Shareholdersnotices required or permitted under this Agreement, and each of them, with respect (iii) to take any and all matters arising out of or in connection with this Agreement (excluding pursuant additional action as is contemplated to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations be taken by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder terms of this Agreement.
(c) In the event that the Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, the Shareholders will select another representative to fill each such vacancy and such substituted representative will be irrevocably appointed and designated the Representative for all such actions, notices, purposes of this Agreement.
(d) All decisions and determinations actions by the Shareholder Representative shall conclusively be deemed to have been authorized byRepresentative, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, any agreement between the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement Representative and the Escrow Agreement. From and after Company relating to the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect waiver of any matter arising under condition to the Transaction Documentsobligations of any Shareholder to consummate the transaction contemplated hereby, and will be binding upon all of the Shareholders, in and no Shareholder will have the right to object, dissent, protest or otherwise contest the same.
(e) By their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue execution of executing or adopting this Agreement, each Shareholder agrees of the Shareholders agree that: The Company will be able to ratify rely conclusively on the instructions and confirmdecisions of the Representative as to any actions required to be taken by the Representative hereunder, and hereby ratifies and confirms, no party hereunder will have any cause of action against the Company for any action taken by the Shareholder Representative Company in reliance upon the exercise instructions or decisions of the power Representative; all actions, decisions and instructions of attorney granted to the Shareholder Representative pursuant to this Section 4.2will be conclusive and binding upon all of the Shareholders, which power and no party hereto will have any cause of attorneyaction against the Representative, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadcapacity as a Representative, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done action taken, decision made or omitted hereunder in its capacity as instruction given by the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising Representative under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement except for fraud or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred willful misconduct by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply1.7 are independent and severable, mutatis mutandisare irrevocable and coupled with an interest and will be enforceable notwithstanding any rights or remedies that any Shareholder may have in connection with the transactions contemplated by this Agreement; and the provisions of this Section 1.7 will be binding upon the executors, heirs, legal representatives and successors of each Shareholder, and any references in this Agreement to a Shareholder will mean and include the successors to the Company (as if it was a Shareholder Representative)rights of the Shareholders hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.
Appears in 1 contract
Sources: Merger Agreement (Nicollet Process Engineering Inc)
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Shareholders hereby irrevocably constitutes (except as set forth in Section 1.6(b)) authorizes and appoints NP▇▇▇▇ ▇▇▇▇▇▇▇ and any replacement representative appointed pursuant to Section 1.6(b) (the “Shareholder Representative”) ), with all the rightsfull power of substitution and resubstitution, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, such Shareholder’s representative and attorney-in-fact and agent to act for and on behalf of all Shareholders, and each of them, such Shareholder with respect to any and all matters arising out in connection with this Agreement, including the power and authority, exercisable in the sole discretion of the Shareholder Representative, to (i) take any action contemplated to or that may be taken by the Shareholders under this Agreement, including pursuant to Article VIII, or any other Operative Document; (ii) negotiate, determine, defend and settle any disputes that may arise under or in connection with this Agreement (excluding Agreement, including with respect to the final determination of payments to be made pursuant to Section 10.2)1.2.3 and any Indemnification Claim pursuant to Article VIII, the Paying Agent Agreementor any other Operative Document; and (iii) make, the Escrow Agreement execute, acknowledge and the agreements ancillary hereto following the Closing and taking deliver any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsconsents, releases, assurances, receipts, requests, instructions, notices, communications agreements, certificates and determinations any other documents or instruments, and generally do any and all things and take any and all actions that may be requisite, proper or advisable in connection with this Agreement, including pursuant to Article VIII, or any other Operative Document.
(b) The Shareholder Representative may be removed by or on behalf written agreement among Buyer and a majority in interest of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed calculated with reference to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representativeeach Shareholder’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Pro Rata Share. The Shareholder Representative may resign at any time. Should the Shareholder Representative dietime upon giving 60 days’ prior written notice of such resignation to Buyer, become legally incapacitated or bankruptEscrow Agent and each Shareholder, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis but shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of exercise all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities powers enumerated in Section 1.6(a) until the effective date of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faithsuch resignation. In all questions arising in respect the event of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement removal or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeitureresignation, or expense (including upon the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), death or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part disability of the Shareholder Representative, the Shareholder Representative will reimburse Buyer and a majority in interest of the Shareholders the amount of calculated with reference to each Shareholder’s Pro Rata Share shall agree within 30 days after such indemnified Representative Loss removal, resignation, death or disability upon a replacement Shareholder Representative. Any Survival Period set forth in Section 8.1 and any period in which any Buyer Indemnified Party is required to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly provide notice to the Shareholder Representative with respect to any Indemnification Claim or action to be taken in connection with this Agreement shall be deemed to be extended by the Shareholders, any such Representative Losses may be recovered by number of days that elapses between the Shareholder Representative from Representative’s resignation, death or disability and the appointment of a replacement Shareholder Representative.
(ic) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the The Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done action taken or omitted by him hereunder by or under any other Operative Document or other document or instrument executed or delivered hereunder, or in connection therewith, except that the Shareholder Representative.
4.6Representative shall not be relieved of any liability imposed by Law for willful misconduct or gross negligence. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf Each of the Shareholders acknowledges and agrees that, with respect to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder RepresentativeShareholders, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement shall not be obligated to take any actions and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes entitled to take such actions as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had deems appropriate in any such interest or earnings. The Shareholder Representative’s sole discretion, and the Shareholders, jointly and severally, shall indemnify and hold harmless the Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably Losses incurred by the Shareholder Representative in performing its connection with the performance of his duties hereunder or under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent other Operative Document or in any way relating to him in his capacity as Shareholder Representative hereunder or under any other Operative Document, except to the Paying Agent for further distribution to extent that such Losses are the Shareholders based on the Waterfall following the completion direct result of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of willful misconduct or gross negligence.
(d) Each Shareholder agrees that Buyer shall be entitled to rely on any action taken by the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights Representative on behalf of the Shareholders prior pursuant to Closing Section 1.6(a) above (each, an “Authorized Action”), and that each Authorized Action shall be binding on each such Shareholder as fully as if such Person had taken such Authorized Action. Each Shareholder acknowledges and agrees that any payment made by Buyer on behalf of such Shareholder to the Shareholder Representative pursuant to this Agreement, including the exercise Agreement shall constitute full and complete payment to such Shareholder and Buyer shall have no further liability therefor. No Shareholder shall bring any Claim against Buyer as a result of any actions or inactions of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) ▇▇▇ ▇▇▇▇▇ agrees to act as, and assume the obligations and responsibilities of, the Shareholder Representative under this Agreement (the “Shareholder Representative”). Each Shareholder, as a condition of tendering its Shares for the Per Share Merger Consideration shall, pursuant to its Letter of Transmittal, (i) with all irrevocably appoint the rightsShareholder Representative as its representative, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative proxy, and attorney-in-fact for all purposes under this Agreement, including the full power and authority on behalf of all Shareholderssuch Shareholder’s behalf: (x) to consummate the transactions contemplated by this Agreement, (y) to negotiate disputes arising under, or relating to, this Agreement and the other agreements, certificates, instruments, and each documents contemplated by this Agreement or executed or delivered in connection with this Agreement, and (z) to execute and deliver any amendment or waiver to this Agreement or any of themthe other agreements, with respect to any certificates, instruments, and all matters arising out of documents contemplated by this Agreement or executed or delivered in connection with this Agreement to be executed by such Shareholder; (excluding pursuant ii) consent to Section 10.2), ▇▇▇▇▇▇▇ acting as the Paying Agent Agreement, the Escrow Agreement Shareholder Representative and the agreements ancillary hereto following the Closing and to ▇▇▇▇▇▇▇ taking any action all actions required or omitting permitted to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made taken by the Shareholder Representative pursuant to this Agreement and all such actionsthe other agreements, noticescertificates, instruments, and determinations documents contemplated by this Agreement or executed or delivered in connection with this Agreement and performing the duties of the Shareholder Representative shall conclusively pursuant to the terms hereof or thereof; and (iii) agree to be deemed to have been authorized by, and shall be binding upon, any and all Shareholdersbound by the provisions of this Section 10.5.
4.2. Without limiting the generality of (b) Notwithstanding the foregoing, the Shareholder Representative shall have full power no obligation to take any such action and authority to: from no duties other than actions and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated duties expressly required under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection be complied with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes .
(including hiring counsel c) All decisions and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with actions by the Shareholder Representative shall be binding upon all of the Shareholders, and no Shareholder shall have the right to object, dissent, protest, or otherwise contest the same. The Shareholder Representative shall have no Liability in respect of any matter arising under the Transaction Documentsaction, and the Shareholdersclaim, in their relationship with the Purchaser, shall be bound by all actions taken by or proceeding brought against the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each by any Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by if the Shareholder Representative took or omitted taking any action in good faith or took or omitted to take such action at the exercise direction of the power Shareholders owning a majority of attorney granted the outstanding Preferred Stock immediately prior to the Closing.
(d) The designation of the Shareholder Representative pursuant to this Section 4.2, which power of as attorney, being -in-fact for each Shareholder is coupled with an interest, interest and is irrevocable and shall survive binding upon such Shareholder notwithstanding the death, incapacity or incompetence dissolution of each any such Shareholder.
4.3. The Shareholder Representative may resign at If any time. Should such event shall occur prior to the completion of the transactions contemplated by this Agreement, the Shareholder Representative dieis, become legally incapacitated or bankruptnevertheless, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closingextent that it is legally able to do so, the majority of the voting power of the Company on an authorized and directed to complete all transactions and act pursuant to this authority as converted basis shall designate in writing to Purchaser within five if such event had not occurred.
(5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion acceptance of all the Shareholder Representative’s responsibilities its duties under this Agreement (including is subject to the following terms and conditions, which the Parties hereto agree shall govern and control with respect to potential its rights, duties, liabilities and immunities as the Shareholder Representative (but not in its capacity as a Shareholder):
(i) The Shareholder Representative, in its capacity as Shareholder Representative, makes no representation and has no responsibility as to the validity of this Agreement or contingent liabilities of any other instrument referred to herein, or as to the Shareholders hereunder)correctness of any statement contained herein, and it shall not be required to inquire as to the performance of any obligation under this Agreement by any Party.
4.4. (ii) The Shareholder Representative shall be protected in acting upon written notice, request, waiver, consent, receipt or other paper or document, not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth of any information therein contained, which it in good faith believes to be genuine and what it purports to be.
(iii) The Shareholder Representative, in its capacity as Shareholder Representative, shall not be liable to the Shareholders for any error of judgment, or for any act done or step taken or omitted hereunder by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection therewith, except its own gross negligence or willful misconduct.
(iv) The Shareholder Representative, in its capacity as the Shareholder Representative, except to the extent caused may consult with competent and responsible legal counsel selected by its willful misconductit, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and it shall not be liable for any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share taken or omitted by it in good faith in accordance with the Waterfall compared to the advice of such counsel.
(f) The Shareholders shall bear pro rata shares of (based on the Per Share Merger Consideration owed to each) for all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense expenses (including the fees reasonable attorneys’ fees, transfer Taxes and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions other governmental charges) incurred by the Shareholder Representative in connection with its duties hereunder and arising out all amounts paid by the Shareholder Representative pursuant to the terms of or this Agreement, including without limitation, under Section 2.7, 2.8, 2.9, 2.10, and 8.6 and Article 9, and shall indemnify, defend and hold it harmless against any and all Losses incurred in connection with the acceptanceperformance of this Agreement, performance except as a result of its own gross negligence or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurredwillful misconduct; provided, that in however, (i) the event that obligation of any Shareholder other than ▇▇▇▇▇▇▇ shall be non-recourse to such Representative Loss is finally adjudicated Shareholder and shall be payable solely from the Per Share Merger Consideration and (ii) no Shareholder other than ▇▇▇▇▇▇▇ shall have any obligation to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, reimburse the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative for any Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time pursuant to Article 9 solely as such amounts would otherwise be distributable to the Shareholders, and (iii) a result of any other funds breach by ▇▇▇▇▇▇▇ of its covenants or representations. The Shareholders agree that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative shall have the right from time to be paid from time to direct the aforementioned sources of funds, this does not relieve the Shareholders from their obligation Paying Agent to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available amounts owed to it at law or otherwise. In no event will pursuant to this Section 10.5(f) from amounts then on deposit in the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Paying Agent Account.
(g) Notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to extent the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable has any Liability to any Shareholder Purchaser Party pursuant to this Agreement or any other agreement, certificate, or instrument delivered in connection with this Agreement, ▇▇▇▇▇▇▇ shall have personal Liability to such Purchaser Party for any act done or omitted hereunder by such Liability, regardless of the extent to which the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of Representative is entitled or is able, either as a Shareholder or as the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of enforce its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or rights against any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, and without any further action of any of the Shareholders, including, for the avoidance of doubt, each Shareholder irrevocably approves holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients, Phantom Award Holders or the constitution and appointment ofCompany, and hereby irrevocably constitutes and appoints NGulliver ▇▇▇ ▇▇▇▇▇ is hereby irrevocably nominated, constituted and appointed as the exclusive representative, agent and true and lawful attorney-in-fact of each of the Shareholders, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders (the “Shareholder Representative”), with full power of substitution by the Shareholders or, following the Closing, by the Founders (and, if so substituted, the Shareholder Representative and/or the Founders will promptly notify Parent of such substitution) to act in the name, place and stead of the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders with respect to this Agreement, as the same may be from time to time amended, and with respect to the transactions contemplated hereby; to act as “purchaser representative” (as defined in Rule 501(i) of Regulation D under the Securities Act) for any Shareholder, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient or Phantom Award Holder that is not an Accredited Investor; and to do or refrain from doing all such acts and things, and to execute all such documents (including any amendments to this Agreement and any requests, notices, waivers and consents), in each case as the rightsShareholder Representative shall deem necessary, powers and obligations appropriate or desirable in connection with this Agreement, any agreements contemplated by this Section 4, Agreement or any of the transactions contemplated hereby or thereby; and any successor Shareholder Representative(sto enforce and protect (or refrain from enforcing) designated under this Section 4 as the sole, exclusive, true rights and lawful agent, representative and attorney-in-fact for and on behalf interests of all the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and each of themPhantom Award Holders (including by asserting or defending any claim, with respect to consenting to, compromising or settling any and all matters such claim or conducting any negotiation regarding any such claim) arising out of or under or in connection with any manner relating to this Agreement, any agreements contemplated by this Agreement or any of the transactions contemplated hereby or thereby.
(excluding pursuant b) All decisions, actions (or failures to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any take an action or omitting to take action on behalf omissions of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsan action), notices, instructions and communications and determinations by or on behalf of the Shareholders in accordance herewith Shareholder Representative shall be final, binding and conclusive on the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders and may be relied upon by Parent, Merger Sub and their Affiliates as the decisions, actions (or failures to take an action or omissions of an action), notices, instructions and communications of the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders. The Shareholder Representative and each Shareholder, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient and Phantom Award Holder shall be entitled to disregard any notices or communications given or made by the Shareholder Representative and all such actionsany Shareholder, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitationfor the avoidance of doubt, Escrow Agreementeach holder of unvested Restricted Shares, the Payment Agent AgreementOption Holder, share transfer deeds Transaction Bonus Unit Recipient and endorsements and termination instruments and including amendments that may require price reductions Phantom Award Holder not given or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in made through the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to any of the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder RepresentativeShareholders, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thatincluding, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders for any act done or omitted by the Shareholder Representative in all cases the aggregate good faith pursuant to this Agreement or any agreement ancillary hereto or any mistake of fact or Law unless caused by the Shareholder Representative’s indemnity coverage from knowing and material willful misconduct in the Shareholders signing performance of its duties under this Agreement or otherwise bound hereby shall sum to 100%) indemnify Agreement. The Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders will indemnify, defend and hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any lossand all losses, liabilityliabilities, deficiencydamages, damageclaims, costpenalties, claimfines, penaltyforfeitures, fineactions, forfeiturefees, or expense costs and expenses (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment)) (collectively, or actions incurred by the Shareholder “Representative and Losses”) arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder execution and under the Transaction Documents (collectively, “Representative Losses”)performance of this Agreement and any agreements ancillary hereto, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, knowing and material willful misconduct, gross negligence or bad faith on the part misconduct of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders the amount of such indemnified Representative Loss to the extent attributable to such fraud, knowing and material willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Shareholder Representative Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the ShareholdersAmount; provided, that while this section Section 9.16(b) allows the Shareholder Representative to be paid from the aforementioned sources of fundssource, this does not relieve the Shareholders Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its any of his own funds on behalf of the Shareholders Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement to the contrary, the any restrictions or limitations on liability or indemnification obligations ofof the Shareholders, or provisions limiting including, for the recourse against non-recourse parties otherwise applicable toavoidance of doubt, the Shareholders each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.59.16. The Purchaser foregoing indemnities will survive the Closing, the resignation or removal of the Shareholder Representative or the termination of this Agreement. In taking any action or refraining from taking any action whatsoever the Shareholder Representative shall be protected in relying upon any notice, paper or other document reasonably believed by it to be genuine, or upon any evidence reasonably deemed by it to be sufficient. The Shareholder Representative may consult with counsel in connection with its duties and shall be fully protected in any act taken, suffered or permitted by it in good faith in accordance with the advice of counsel. Parent, Merger Sub and their respective Affiliates shall not be liable to in any Shareholder manner whatsoever for any act done action taken or omitted hereunder not taken in reliance upon the actions taken or not taken or communications or writings given or executed by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative(c) The Shareholders, including, for the Escrow Agent to hold on behalf avoidance of the Shareholders as a fund for the fees doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders Phantom Award Holders will not receive any interest or earnings on the Shareholder Representative Expense Fund Amount and irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Shareholder Representative Expense Fund Amount other than as a result of its gross negligence or knowing and material willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Shareholder Representative Expense Fund Amount shall be available for the payment of all fees and expenses reasonably incurred retained by the Shareholder Representative for such time as the Shareholder Representative shall determine in performing its duties under this Agreement and his sole discretion. Any amounts from the agreements ancillary hereto; provided Shareholder Representative Expense Amount that any portion of remain unused through the Expense Fund not ultimately required for date determined by the payment of such fees and expenses Shareholder Representative pursuant to the preceding sentence shall be delivered by the Escrow Agent to the Paying Agent for further distribution distributed to the Shareholders based on in accordance with their ownership interests in the Waterfall following Company and entitlement to consideration in accordance with the completion terms of this Agreement. For tax purposes, the Shareholder Representative Expense Amount will be treated as having been received and voluntarily set aside by the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders at the time of Closing.
(d) The grant of authority provided for herein (i) is coupled with an interest and shall be irrevocable and survive the death, incompetency, bankruptcy or liquidation of any Shareholder, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient and Phantom Award Holder and (ii) shall survive the consummation of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfalltransactions contemplated hereby.
4.7. To the extent required in order for the Company to exercise rights (e) Any Action against Parent or any of its subsidiaries that is brought by or on behalf of a Shareholder, including, for the Shareholders prior to Closing pursuant avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient or Phantom Award Holder, either individually or as a group, with respect to this Agreement, including Agreement or the exercise of the right to waive rights or termination transactions contemplated by this Agreement pursuant to Section 3 above, may be brought only by the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Representative and/or either Founder.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue Effective automatically upon the approval of the execution or adoption Merger and the other Transactions by the Company Shareholders, and without further act of this Agreementany Company Shareholder, each Company Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints Nshall be deemed to have appointed ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact of such Company Shareholder (except such Company Shareholders, if any, that have perfected their dissenters’ rights under Alabama law), with full power and authority, including power of substitution, acting in the name of and for and on behalf of such Company Shareholder and to, in his sole discretion: (a) enter into and amend or waive any provision of this Agreement; (b) terminate this Agreement pursuant to the provisions of Article 9; (c) do all other things and take all other action under or related to this Agreement which he may consider necessary or proper to effectuate the Merger and the other Transactions; (d) resolve any dispute with Parent, Purchaser or the Surviving Corporation over any aspect of this Agreement or any instrument or document delivered hereunder; (e) execute and take any actions under the Escrow Agreement; (f) give and receive notices and communications; (g) authorize delivery to Parent of cash from the Escrow Fund in satisfaction of claims by Parent and the Escrow Agent; (h) object to such deliveries; (i) agree to, negotiate, enter into settlements and compromises of, and demand litigation or arbitration and comply with orders and awards of courts and arbitrators in respect of such claims; (j) on behalf of such Company Shareholder to enter into any agreement to effectuate any of the foregoing items (a)–(i) which shall have the effect of binding such Company Shareholder as if such Company Shareholder had personally entered into such agreement(s), taken such actions or refrained from taking such actions described in Sections (a)-(i) above; and (k) take all other actions necessary or appropriate in the judgment of the Shareholder Representative for the accomplishment of the foregoing. Notwithstanding the foregoing, all actions taken or decisions made by the Shareholder Representative on behalf of the Company Shareholders shall be taken or made in a manner which is ratable and equitable among all Company Shareholders. This appointment and power of attorney shall be deemed an agency coupled with an interest and all authority conferred hereby shall be irrevocable and shall not be subject to termination by operation of law, whether by the death or incapacity or liquidation or dissolution of any Company Shareholder or the occurrence of any other event or events and any action taken by the Shareholder Representative pursuant to this Section 2.13 shall be as valid as if any such death, incapacity, liquidation, dissolution or other event had not occurred, regardless or whether or not the Shareholder Representative, the Company, Parent or Purchaser shall have received notice of any such death, incapacity, liquidation, dissolution or other event. The Shareholder Representative may not terminate this power of attorney with respect to any Company Shareholder or such successors or assigns without the consent of Parent. Effective automatically upon approval of the Merger and the other Transactions by the Company Shareholders, and without further act of any Company Shareholders, each Company Shareholder agrees to hold the Shareholder Representative harmless and indemnify the Shareholder Representative, severally (and not jointly) in accordance with the amount of themMerger Consideration received by such indemnifying Company Shareholder, with respect to any and all matters arising out of loss, damage or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement liability and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes expenses (including hiring counsel and other litigation assistance and including in court legal fees) which such Company Shareholder may sustain as a result of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad good faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in In the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for death, physical or mental incapacity or resignation of the payment of all fees and expenses reasonably incurred by the initial Shareholder Representative in performing its duties under this Agreement and or any successor, the agreements ancillary hereto; provided that any portion Company Shareholders shall, by a vote of the Expense Fund not ultimately required for Company Shareholders who held at least a majority of the payment outstanding shares of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based Company Common Stock on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining Execution Date, promptly appoint a substitute and shall in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallwriting advise Parent thereof.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Merger (Tier Technologies Inc)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of approving this Agreement and the Escrow Agreement; transactions contemplated hereby or by executing and delivering a Letter of Transmittal, and by the consummation of the Merger or participating in the Merger and receiving the benefits thereof, including the right to negotiate and sign all documents receive the consideration payable in connection with the Transaction Merger, each Shareholder shall have irrevocably authorized and amendments theretoappointed Shareholder Representative as of the Closing as such Person’s representative, whether before or after Closing (including, without limitation, Escrow agent and attorney in fact to act on behalf of such Person with respect to this Agreement, the Payment Agent Agreement, share transfer deeds Promissory Note and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations any other agreements ancillary hereto and to take any and all other actions called for under and make any decisions required or contemplated permitted to be taken by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and Representative pursuant to this Agreement, the Paying Agent Promissory Note or such other ancillary agreements, including the exercise of the power to:
(i) give and receive notices and communications;
(ii) agree to, negotiate, enter into settlements and compromises of, and comply with orders or otherwise handle any other matters described in Section 2.16;
(iii) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Parent pursuant to Article VI and Article VIII;
(iv) litigate, arbitrate, resolve, settle or compromise any claim for indemnification pursuant to Article VI and Article VIII;
(v) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any Ancillary Document (including the Escrow AgreementPromissory Note);
(vi) make all elections or decisions contemplated by this Agreement and any Ancillary Document (including the Promissory Note);
(vii) engage, employ or appoint any agents or representatives (including attorneys, accountants and consultants) to assist Shareholder Representative in complying with its duties and obligations; and
(viii) take all actions necessary or appropriate in the good faith judgment of Shareholder Representative for the accomplishment of the foregoing. From and after After the Closing, the Purchaser Parent shall be entitled to deal exclusively with the Shareholder Representative in on all matters relating to this Agreement (including Article VIII) (except with respect to any payments required to be made by the Shareholders directly) and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder by Shareholder Representative, as being fully binding upon such Person. After the Closing notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Parent relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder, shall constitute a decision or action of all Shareholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any one or Shareholders, incapacity or incompetence by operation of each such ShareholderLaw, whether by death or other event.
4.3. (b) The Shareholder Representative may resign at any time. Should and the Shareholder Representative die, become legally incapacitated may be removed for any reason or bankrupt, dissolve, liquidate no reason by the vote or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve written consent of a majority in his or her stead, interest of the Shareholders according to each Shareholder’s Pro Rata Share (the “Majority Holders”); provided, however, in no event shall Shareholder Representative be removed without the Majority Holders having first appointed a new Shareholder Representative who have held, shall assume such duties immediately prior to upon the Closing, removal of Shareholder Representative. In the majority event of the voting power death, incapacity, resignation or removal of Shareholder Representative, a new Shareholder Representative shall be appointed by the vote or written consent of the Company Majority Holders. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Parent, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Parent; provided, that until such notice is received, Parent, Merger Sub and the Surviving Corporation shall be entitled to rely on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable decisions and actions of the prior Shareholder Representative as the successor described in Section 10.1(a) above.
(c) The Shareholder Representative hereunder. If at will incur no liability of any time there shall not be a Shareholder Representative kind with respect to any action or omission by it in connection with its services pursuant to this Agreement and any agreements ancillary hereto, except in the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt event of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all liability directly resulting from the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential gross negligence or contingent liabilities of the Shareholders hereunder).
4.4willful misconduct. The Shareholder Representative shall not be liable to the Shareholders for any act done action or omitted hereunder in its capacity as the Shareholder Representative, except omission pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereundercounsel. The Shareholders shall severally indemnify, defend and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any lossand all losses, liabilityliabilities, deficiencydamages, damageclaims, costpenalties, claimfines, penaltyforfeitures, fineactions, forfeiturefees, or expense costs and expenses (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment)) (collectively, or actions incurred by the Shareholder “Representative and Losses”) arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder execution and under the Transaction Documents (collectively, “Representative Losses”)performance of this Agreement and any agreements ancillary hereto, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part willful misconduct of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faithwillful misconduct. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, Escrow Amount and (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement to the contrary, the any restrictions or limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5section. The Purchaser shall not be liable to any Shareholder for any act done foregoing indemnities will survive the Closing, the resignation or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses removal of the Shareholder Representative incurred in connection with or the termination of this Agreement.
(d) The Expense Escrow Amount will be used for the purposes of paying directly, or reimbursing the Shareholder Representative for, any third party expenses pursuant to this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closinghereto. The Shareholders will not receive any interest or earnings on the Expense Fund Escrow Amount and irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund Escrow Amount other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall As soon as practicable following the completion of the Shareholder Representative’s responsibilities. All amounts , the Shareholder Representative will deliver any remaining in balance of the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by Escrow Amount to the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on Shareholders. For tax purposes, the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of Expense Escrow Amount will be treated as having been received and voluntarily set aside by the Shareholders prior to Closing pursuant to this Agreement, including at the exercise time of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Closing.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) The Company (and pursuant to the terms of the execution or adoption of this AgreementCompany Shareholder Approval, each of the Company Shareholders) irrevocably appoints the Shareholder irrevocably approves the constitution and appointment ofRepresentative to act as representative, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative proxy and attorney-in-fact for and on behalf of the Company Shareholders for all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with purposes under this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement Merger and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents otherwise in connection with the Transaction and amendments theretoContemplated Transactions, whether before or after Closing (including, without limitation, Escrow Agreementthe full power and authority on each such Company Shareholder’s behalf to: (i) receive notices or service of process, the Payment Agent Agreement(ii) negotiate, share transfer deeds determine, compromise, settle and endorsements and termination instruments and including amendments that may require price reductions take any other action permitted or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the any Company Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, (iii) execute and deliver any termination, amendment or waiver to this Agreement in connection therewith, (iv) engage such counsel, experts and other agents and consultants as the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or deems necessary in connection with exercising the acceptance, performance or administration of the Shareholder Representative’s duties powers granted hereunder and under the Transaction Documents (collectively, “Representative Losses”)and, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or absence of bad faith on the part of the Shareholder Representative, will be entitled to conclusively rely on the opinions and advice of such Persons, (v) receive funds and make or release payments of funds to pay any amounts that the Shareholder Representative will reimburse has incurred or reasonably expects to incur in connection with the Shareholders Company Shareholders’ obligations under this Agreement, the amount Merger and otherwise in connection with the Contemplated Transactions, including amounts required to pay the fees and expenses of such indemnified Representative Loss to professionals incurred in connection with the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense FundContemplated Transactions, (iivi) the to execute closing statements, settlement statements and funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds flow statements on behalf of the Company Shareholders or otherwiseand the Company. The Company Shareholders acknowledge that Parent and agree that the foregoing indemnities Merger Sub will survive the resignation be entitled to conclusively rely upon, without independent investigation, any act, notice, instruction or removal communication of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything as provided in this Agreement to Section 9.1 as the contrary, acts of the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Company Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall and will not be liable to in any Shareholder manner whatsoever for any act done of Parent or omitted hereunder Merger Sub’s actions, as applicable, taken or not taken in reliance upon the acts or omissions or communications or writings given or executed by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to (b) The Company Shareholders agree that such agency and proxy are coupled with an interest, and are therefore irrevocable without the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses consent of the Shareholder Representative incurred in connection with this Agreement and will survive the agreements ancillary hereto (the “Expense Fund”)death, incapacity, bankruptcy, dissolution or liquidation of any Company Shareholder. All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders decisions and received and voluntarily set aside actions by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership will be binding upon the Company Shareholders, and no Company Shareholder will have the right they may to object, dissent, protest or otherwise have had in any such interest or earningscontest the same. The Shareholder Representative will not have no duties or obligations hereunder except those specifically set forth herein and such duties and obligations will be liable for any loss determined solely by the express provisions of principal of the Expense Fund other than as a result of its gross negligence or willful misconductthis Agreement. The Company Shareholders will jointly and severally indemnify and hold harmless the Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of against all fees and expenses reasonably liabilities incurred by the Shareholder Representative in performing connection with the performance of his, her or its duties as the Shareholder Representative, including, without limitation, any action, suit or proceeding to which the Shareholder Representative is made a party by reason of the fact that the Shareholder Representative is or was acting as the Shareholder Representative under this Agreement. Neither the Shareholder Representative nor any agent employed by the Shareholder Representative will incur any Liability to any Company Shareholder relating to the performance of Shareholder Representative’s duties hereunder except for actions or omissions constituting fraud or bad faith. The Shareholder Representative will have no Liability in respect of any action, claim or proceeding brought against the Shareholder Representative by any Company Shareholder if the Shareholder Representative took or omitted taking any action in good faith.
(c) The provisions of this Section 9.1 will be binding on the executors, heirs, legal representatives, personal representatives, successor trustees, and successors of each Company Shareholder, and any references in this Agreement to a Company Shareholder means and includes the successors to such Person’s rights hereunder, whether pursuant to a testamentary disposition, the Legal Requirements of descent and distribution or otherwise.
(d) If the Shareholder Representative shall die, become disabled or otherwise be unable or unwilling to fulfill his, her or its responsibilities as agent of the Company Shareholders, then a majority in interest of the Company Shareholders (based on the ownership of the capital stock of the Company immediately prior to the Effective Time) shall appoint a successor agent for the Company Shareholders. The Person serving as the Shareholder Representative may be replaced from time to time by the holders of a majority in interest of the Company Shareholders (based on the ownership of the capital stock of the Company immediately prior to the Effective Time). In either case, the successor Shareholder Representative shall promptly notify Parent of the identity of such successor Shareholder Representative. Any such successor shall become the “Shareholder Representative” for purposes of this Agreement and the agreements ancillary hereto; provided that any portion Escrow Agreement.
(e) All expenses incurred by the Shareholder Representative in connection with the performance of the Expense Fund not ultimately required for the payment of such fees and expenses his, her or its duties as Shareholder Representative shall be delivered borne and paid exclusively by the Escrow Agent Company Shareholders, pursuant to their respective ownership of Company Common Stock immediately prior to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (Effective Time, and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandismay, to the extent available, be deducted from the Escrow Funds once eligible for release to the Company (as if it was a Shareholder Representative)Shareholders.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Raven Industries Inc)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Existing Shareholder irrevocably approves the constitution hereby covenants and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ agrees that ▇▇▇▇▇ ▇. ▇▇▇▇▇ is hereby fully and exclusively authorized, empowered and appointed to serve as his sole representative and agent (the “"Existing Shareholder Representative”) "), to take any and all actions, with all respect to the rightsexecution, powers delivery and obligations contemplated performance of the Escrow Agreement, dated as of the Closing Date, by this Section 4and among City, ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and SouthTrust Bank ("Escrow Agreement"), and to make any successor and all decisions and determinations, which may be required or permitted to be taken or made pursuant to any of the provisions of the Escrow Agreement by the Existing Shareholders, to perform all of the obligations of the Existing Shareholders required or permitted to be performed thereunder, and to execute, deliver and perform on behalf of the Existing Shareholders any and all amendments thereto. Any such action, decision or determination taken or made by the Existing Shareholder Representative(sRepresentative and any such amendment, shall be absolutely and irrevocably binding on each Existing Shareholder as if such Existing Shareholder had personally taken such action or made such decision or determination in his individual (or, as applicable, fiduciary) designated under this Section 4 capacity.
(b) Each Existing Shareholder hereby irrevocably makes, constitutes and appoints the Existing Shareholder Representative as the sole, exclusive, his true and lawful agent, representative proxy and attorney-in-fact for and on behalf fact, with full power of all Shareholderssubstitution, and each of them, to act with respect to any and all matters arising out of or in connection with the Escrow Agreement. By granting this Agreement (excluding pursuant to Section 10.2)proxy, the Paying Agent Agreement, Existing Shareholder hereby revokes any other proxy granted by him to vote or act by written consent with respect to the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionspower and authority hereby conferred by the Existing Shareholder in this subsection (b) is coupled with an interest and is irrevocable, notices, communications and determinations shall not be terminated by or on behalf any act of the Shareholders in accordance herewith shall be given Existing Shareholder or made by operation of law, by death, incapacity or dissolution, by lack of appropriate power or authority, or by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized byoccurrence of any other event or events, and shall be binding uponupon all beneficiaries, any heirs, legatees, distributees, successors, assigns and all Shareholders.
4.2legal representatives of such Existing Shareholder. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and If after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion execution of the Escrow Amount Agreement, an Existing Shareholder shall die or become incapacitated or cease to have appropriate power or authority, or if any other such event or events shall occur, the Existing Shareholder Representative, acting as provided herein, is remaining at nevertheless authorized to act with respect to the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and Escrow Agreement) in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with as if such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity incapacity, lack of appropriate power or incompetence authority or other event or events had not occurred and regardless of each such Shareholdernotice thereof.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Asset Contribution Agreement (City Truck Holdings Inc)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative as Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative proxy, and attorney-in-fact for each of the Shareholder Group Members for all purposes authorized under this Agreement, including the full power and authority on behalf of all Shareholdersthe Shareholder Group Members (i) to disburse any funds received hereunder to the applicable Shareholder Group Members; (ii) to endorse and deliver any certificates or instruments representing the Shares and execute such further instruments of assignment as Buyer shall reasonably request; (iii) to execute and deliver on behalf of such Shareholder Group Member any amendment or waiver hereto; (iv) (A) to dispute or refrain from disputing, or to deliver instructions, on behalf of such Shareholder Group Member relative to any amounts to be received by such Shareholder Group Member under this Agreement or any other agreement contemplated hereby, any claim made by Buyer under this Agreement or any other agreement contemplated hereby, (B) to negotiate and compromise, on behalf of any Shareholder Group Member, any dispute that may arise under, and exercise or refrain from exercising any remedies available under, this Agreement or any other agreement contemplated hereby, and (C) to execute, on behalf of each of themShareholder Group Member, any settlement agreement, release or other document with respect to any and all matters arising out such dispute or remedy; (v) to engage attorneys, accountants, agents or consultants on behalf of or the Shareholder Group Members in connection with this Agreement or any other agreement contemplated hereby and pay any fees related thereto; (excluding pursuant vi) to Section 10.2), take all other actions to be taken by or on behalf of such Shareholder Group Member in connection herewith; and (vii) to do each and every act and exercise any and all rights which such Shareholder Group Member individually or collectively with the Paying Agent other Shareholder Group Members are permitted or required to do or exercise under this Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreementdocument contemplated hereby. From and after the Closing, the Purchaser shall be entitled to deal exclusively with Each of the Shareholder Representative in respect of any matter arising under the Transaction Documents, Group Members agrees that such agency and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being proxy are coupled with an interest, is are therefore irrevocable without the consent of Shareholder Representative and shall survive the death, incapacity incapacity, bankruptcy, dissolution or incompetence liquidation of each any such Shareholder Group Member. If any Shareholder Group Member dies or becomes incapacitated, disabled or incompetent (such deceased, incapacitated, disabled or incompetent Shareholder Group Member being a “Former Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die”) and, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadas a result, the Shareholders who have held, immediately prior to the Closing, the majority of the voting agency and power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there attorney conferred by this Section 11.15 is revoked by operation of law, it shall not be a breach by such Former Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement if the heirs, beneficiaries, estate, administrator, executor, guardian, conservator or other legal representative of such Former Shareholder (including with respect each a “Successor Shareholder”) confirms the appointment of Shareholder Representative as agent and attorney-in-fact for such Successor Shareholder. All decisions and actions by Shareholder Representative (to potential or contingent liabilities the extent authorized by this Agreement) shall be binding upon all of the Shareholders hereunder)Shareholder Group Members, and no Shareholder Group Member shall have the right to object, dissent, protest or otherwise contest the same.
4.4(b) Each Shareholder Group Member agrees that Buyer and Company shall be entitled to rely on any action taken by Shareholder Representative, on behalf of such Shareholder Group Member, pursuant to Section 11.15(a) (an “Authorized Action”), and that each Authorized Action shall be binding on each such Shareholder Group Member as fully as if such Shareholder Group Member had taken such Authorized Action. The (c) Shareholder Representative shall not have by reason of this Agreement a fiduciary relationship in respect of any Shareholder Group Member, except in respect of amounts received on behalf of such Shareholder Group Member. Shareholder Representative shall not be liable to any Shareholder Group Member for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that Shareholder Representative shall not be relieved of any liability imposed by law for willful misconduct. Shareholder Representative shall not be liable to the Shareholders Shareholder Group Members for any act done apportionment or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused distribution of payments made by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel in good faith, and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that if any such Representative Loss apportionment or distribution is finally adjudicated subsequently determined to have been directly caused by made in error the fraudsole recourse of any Shareholder Group Member to whom payment was due, willful misconductbut not made, gross negligence or bad faith on shall be to recover from the part other Shareholder Group Members any payment in excess of the Shareholder Representative, the amount to which they are determined to have been entitled. Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If shall not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf make any inquiry concerning either the performance or observance of any of the Shareholders terms, provisions or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination conditions of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Neither Shareholder Representative under this Section 4.4.
4.5. The Purchaser nor any agent employed by it shall not be liable incur any liability to any Shareholder Group Member by virtue of the failure or refusal of Shareholder Representative for any act done reason to consummate the transactions contemplated hereby or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing relating to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result performance of its gross negligence other duties hereunder, except for actions or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes omissions constituting actual and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallintentional fraud.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution (a) Each Seller, for himself and for his or adoption of this Agreementher successors and assigns, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably makes, constitutes and appoints Nthe Shareholder Representative as his or her true and lawful attorney-in-fact to act for and on behalf of such Seller with respect to any matter arising under this Agreement and/or any of the Transaction Documents, and, by executing below in her capacity as the Shareholder Representative, ▇▇▇ ▇▇▇▇▇▇▇▇ hereby expressly accepts such appointment. Each Seller acknowledges that the appointment of the Shareholder Representative is coupled with an interest and may not be revoked.
(b) In furtherance of the “appointment of the Shareholder Representative”, each Seller, fully and without restriction: (i) with acknowledges receiving, reviewing and understanding the terms and provisions of this Agreement and the other Transaction Documents; (ii) agrees to be bound by all notices given and received and agreements and determinations made by and documents executed and delivered by the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated Representative under this Section 4 as Agreement, the sole, exclusive, true Expense Agreement and lawful agent, representative the Transaction Documents; and attorney-in-fact for (iii) authorizes the Shareholder Representative to (A) deliver to Buyer all certificates and documents to be delivered to Buyer by the Sellers (or the Shareholder Representative on behalf of all Shareholdersthe Sellers) pursuant to this Agreement, the Expense Agreement and each the Transaction Documents, together with any certificates and documents executed by the Sellers and deposited with the Shareholder Representative for such purpose, (B) dispute or refrain from disputing any claim made by Buyer under this Agreement, the Expense Agreement or the Transaction Documents, (C) negotiate and compromise any dispute which may arise under this Agreement, the Expense Agreement or the Transaction Documents, (D) pay any amounts due Buyer from the Sellers under this Agreement or the Transaction Documents, (E) exercise or refrain from exercising any remedies available to the Sellers (or the Shareholder Representative on behalf of themthe Sellers) under this Agreement, the Expense Agreement or the Transaction Documents, (F) sign any releases or other documents with respect to any and all matters arising out of such dispute or remedy, (G) waive any condition contained in connection with this Agreement or the Transaction Documents, (excluding pursuant H) give such notices and instructions and do or refrain from doing such other things as the Shareholder Representative, in her sole discretion, deems necessary or appropriate to Section 10.2), carry out the Paying Agent provisions of this Agreement, the Expense Agreement or the Transaction Documents, (I) take any and all actions and make any decisions required or permitted to be taken by her under the Escrow Agreement and Agreement, including, without limitation, the agreements ancillary hereto following exercise of the Closing and taking power to authorize delivery to Buyer of cash out of the Escrow Account in satisfaction of claims by ▇▇▇▇▇, to petition the Escrow Agent for the release of any action or omitting all funds due to take action on behalf of all Shareholders or each of them hereunder or the Sellers under the Escrow Agreement and, subject to the Shareholder Representative's other responsibilities under this subsection, to pay to each Seller such Seller's Pro-Rata Share of such funds, (J) receive all amounts payable by Buyer to the Sellers under this Agreement or the Paying Escrow Agreement on behalf of the Sellers and, subject to the Shareholder Representative's other responsibilities under this subsection, pay to each Seller such Seller's Pro-Rata Share of such amounts, (K) pay out of funds coming into the hands of the Shareholder Representative from Buyer (including from the Expense Account) or the Escrow Agent Agreement. All actionsall fees and expenses of the Sellers (and of the Shareholder Representative acting in such capacity) incurred in connection with the transactions contemplated by the Transaction Documents, noticesincluding without limitation the fees and expenses of counsel, communications accountants, investment bankers and determinations other professional advisors retained by or on behalf of the Shareholders Sellers (or the Shareholder Representative) in connection with such transactions, (L) retain such counsel, accountants and other professional advisors as the Shareholder Representative reasonably deems necessary to assist it in the performance of its duties hereunder and pay the fees, costs and expenses thereof out of the funds coming into the hands of the Shareholder Representative, (M) retain out of funds coming into the hands of the Shareholder Representative from Buyer or the Escrow Agent, including by depositing such amounts into the Expense Account, such amounts as the Shareholder Representative, in its sole discretion, deems appropriate to be held as reserves, including for expected or potential future expenses or liabilities of the Sellers hereunder or as otherwise deemed appropriate by the Shareholder Representative as a litigation reserve or otherwise, (N) control, maintain and use the Expense Account as the Shareholder Representative determines in its sole discretion is in the best interests of the Sellers and (O) to petition the Escrow Agent for the release to the Sellers of the Expense Reserve Amount in accordance herewith shall be given or with each Seller's Pro Rata Share of such amounts. Except for any obligations for which the Sellers are severally, but not jointly, liable, payments made by the Shareholder Representative and under this subsection will be considered to be paid by all Sellers in accordance with their respective Pro-Rata Share. As used in this Agreement, a Seller's "Pro-Rata Share" means such Seller's Percentage Interest.
(c) All actions, notices, decisions and determinations by instructions of the Shareholder Representative shall conclusively be deemed to conclusive and binding upon the Sellers and no Seller nor any other Person shall have been authorized byany claim or cause of action against the Shareholder Representative, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent no liability to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law any Seller or any other legal proceeding) and to receive all noticesPerson, requests and demands that may be for any action taken, decision made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken or instruction given by the Shareholder Representative in connection with this Agreement or any other Transaction Document, except in the case of his or her own gross negligence or willful misconduct (it being the explicit intention of the Sellers that any act done or omitted pursuant to the advice of counsel (acting in good faith) shall be without gross negligence or willful misconduct). In determining the occurrence of any such matters. By virtue event or contingency, the Shareholder Representative may request from any one or more of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Sellers such reasonable additional evidence as the Shareholder Representative in the exercise of the power of attorney granted its sole discretion may deem necessary to determine any fact relating to the Shareholder Representative pursuant to this Section 4.2occurrence of such event or contingency, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative inquire of and consult with others, including any one or more of the Sellers, and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders any Sellers for any act done or omitted damages resulting from its delay in acting hereunder in pending its capacity as the Shareholder Representative, except to the extent caused receipt and examination of additional evidence requested by its willful misconduct, gross negligence or bad faithhim. In all questions arising in respect the performance of any matter arising under this Agreementits duties hereunder, the Shareholder Representative may shall be entitled to rely on the advice of counsel upon any document or instrument reasonably believed by it to be genuine, accurate as to content and signed by any action based upon such reliance shall relieve Seller.
(d) If the Shareholder Representative resigns, dies or becomes incapacitated, her successor will be appointed within fifteen (15) days of such event by the Sellers owning a majority of the Shares immediately prior to the Closing. The Sellers owning a majority of the Shares outstanding immediately prior to Closing have the right, at any time, to remove the then-acting Shareholder Representative and to appoint a successor Shareholder Representative determined in their discretion; provided, however, neither such removal of the then-acting Shareholder Representative nor such appointment of a successor Shareholder Representative shall be effective until the delivery to each of Buyer and the then-acting Shareholder Representative of executed counterparts of a writing signed by Sellers owning a majority of the Shares outstanding immediately prior to the Closing, together with an acknowledgment for the benefit of the Sellers signed by the successor Shareholder Representative whereby he, she or it agrees to perform and be bound by all of the provisions of this Agreement applicable to the Shareholder Representative. The decisions and actions of any liability hereundersuccessor Shareholder Representative will be, for all purposes, those of the Shareholder Representative as if originally named herein. The Shareholders shall death or incapacity of any Seller will not terminate the authority and agency of the Shareholder Representative. Any successor Shareholder Representative will provide Buyer with prompt written notice of its or his appointment.
(e) Buyer will be entitled to rely exclusively upon any communication given or other action taken by the Shareholder Representative and will not be liable to the Sellers or any other Person for any action taken or not taken in reliance upon the Shareholder Representative. ▇▇▇▇▇ will not be obligated to inquire as to the authority of the Shareholder Representative with respect to the taking of any action that the Shareholder Representative takes on behalf of the Sellers.
(f) The Sellers will, severally and not jointly (based on each Shareholder’s pro rata share and in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thattheir respective Pro-Rata Share, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him or her harmless against any lossand all Loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or willful misconduct on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance his or administration of her duties as the Shareholder Representative’s duties hereunder . The Shareholder Representative shall have the option, but not the requirement, to pay for such Losses, liabilities or expenses out of the Expense Account or, to the extent funds remain in the Escrow Account and under are otherwise payable or distributable to the Transaction Documents (collectivelySellers, “Representative Losses”), in each case as such Representative Loss is suffered or incurredout of the Escrow Account; provided, that in the event that any however, reasonable documentation exists therefor. The Shareholder Representative shall not be entitled to be paid for his or her services hereunder unless and until a separate agreement relating to such Representative Loss is finally adjudicated to have been directly caused compensation shall be signed by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, on the Shareholder Representative will reimburse one hand, and the Shareholders Sellers owning a majority of the amount of such indemnified Representative Loss Shares outstanding immediately prior to the extent attributable to such fraudClosing, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallhand.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Stock Purchase Agreement (Kratos Defense & Security Solutions, Inc.)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) The Parties have agreed that it is desirable to designate B▇▇▇▇ ▇▇▇▇▇▇ (and if B▇▇▇▇ ▇▇▇▇▇▇ is unable or unwilling to serve, then M▇▇▇ ▇▇▇▇▇▇) to serve as the representative of the holders of the Company Stock (the “Shareholder Representative”) with all for certain limited purposes as set forth herein. The approval of this Agreement by the rightsholders of the Company Stock will constitute ratification and approval of such designation. The Shareholder Representative will have such power and authority necessary to carry out the functions assigned to the Shareholder Representative under this Agreement and the Escrow Agreement, powers including the power and obligations contemplated by this Section 4authority:
(i) to execute and deliver the Escrow Agreement, and to enter into any successor amendments, modifications and/or waivers in respect thereof;
(ii) to enforce, defend and protect the rights and interests of the holders of the Company Stock following the Closing under Article IX of this Agreement and under the Escrow Agreement, and to take any and all actions that the Shareholder Representative(s) designated Representative believes are necessary or appropriate under Article IX of this Section 4 as Agreement and under the sole, exclusive, true and lawful agent, representative and attorney-in-fact Escrow Agreement for and on behalf of all Shareholdersthe holders of the Company Stock, including, without limitation, asserting, pursuing or defending any claim by or against Parent or the Surviving Corporation, consenting to, compromising or settling any such claim, and each of themconducting negotiations with Parent or Surviving Corporation; and
(iii) to make, with respect execute, acknowledge and deliver all such other agreements, notices, requests, instructions and other writings, and, in general, to do any and all matters arising out of things and to take any and all actions that the Shareholder Representative may consider necessary or proper in connection with this Agreement (excluding pursuant to Section 10.2), carrying out the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf responsibilities of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions Article IX of this Agreement and the Escrow Agreement; .
(b) The Shareholder Representative will be entitled to negotiate engage such counsel, experts and sign all documents other agents as the Shareholder Representative deems necessary or proper in connection with performing its obligations hereunder and under the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, and will be promptly reimbursed by the Payment Agent Agreementholders of the Company Stock for all reasonable expenses, share transfer deeds disbursements and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken advances incurred by the Shareholder Representative in connection with such matterscapacity upon demand, pro rata based upon each such holder’s share of the Company Stock as of the Closing. By virtue Each holder of executing or adopting this Agreementthe Company Stock shall indemnify and hold harmless the Shareholder Representative, each Shareholder agrees to ratify pro rata based upon such holder’s share of all Company Stock as of the Closing, from any and confirm, and hereby ratifies and confirms, any action taken all Damages that are incurred by the Shareholder Representative in as a result of actions taken, or actions not taken, by the exercise Shareholder Representative herein, except to the extent that such Damages arise from the gross negligence or willful misconduct of the power Shareholder Representative.
(c) All amounts received by the Shareholder Representative on behalf of attorney granted the holders of the Company Stock (whether under this Agreement or the Escrow Agreement), will be promptly paid by the Shareholder Representative to the holders of the Company Stock, in accordance with Section 1.7; provided, however, that the Shareholder Representative will be entitled to set off any amounts payable to the Shareholder Representative under Section 10.13(b) against amounts otherwise payable to holders of the Company Stock pursuant to this Section 10.13(c).
(d) Parent and Surviving Corporation shall have the right to rely upon all actions taken or not taken by the Shareholder Representative pursuant to this Section 4.2Agreement and the Escrow Agreement, all of which power of attorney, being coupled with an interest, is irrevocable and actions or omissions shall survive be legally binding upon the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power holders of the Company on an as converted basis shall designate in writing to Purchaser within five Stock.
(5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a the Shareholder Representative and resigns, dies or becomes incapable of acting, the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt holders of a written request delivered by Purchaser to majority of the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court Company Stock as of competent jurisdiction to appoint a Shareholder the Closing shall choose another holder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Agreement.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Geisel Brian R)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, execution or submission of a Form of Election or the acceptance of any portion of the Merger Consideration, each Company Holder hereby designates the Shareholder irrevocably approves the constitution Representative to execute any and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and instruments or other documents on behalf of all Shareholderssuch Company Holder, and each of them, with respect to do any and all matters arising out of other acts or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action things on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionssuch Company Holder, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by which the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with the Transaction Documents; and to prosecuteadvisable, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that which may be made under and required pursuant to this Agreement, the Paying Agent Ancillary Agreements or otherwise, in connection with the consummation of the transactions contemplated hereby or thereby and the performance of all obligations hereunder or thereunder at or following the Closing, including, but not limited to, the exercise of the power to: (i) execute the Ancillary Agreements on behalf of each Company Holder; (ii) act for each Company Holder with respect to any the Ancillary Agreements; (iii) give and receive notices and communications to or from the Parent relating to this Agreement, the Ancillary Agreements or any of the transactions and other matters contemplated hereby or thereby (except to the extent that this Agreement or any Ancillary Agreement expressly contemplates that any such notice or communication shall be given or received by such Company Holders individually); (iv) to enforce and protect the rights and interests of the Company Holders and to enforce and protect the rights and interests of such Persons arising out of or under or in any manner relating to this Agreement and the Escrow Agreement. From transactions provided for herein, from and after the Closing; (v) directing the method of payment for any deferred payments owed to the Company Holders pursuant to Tax Receivables Agreement and coordinating with Parent with respect thereto; (vi) execute a Section 431 Election, to the Purchaser shall be entitled to deal exclusively with extent applicable; and (vii) take all actions necessary or appropriate in the judgment of the Shareholder Representative in for the accomplishment of the foregoing. The Shareholder Representative shall have authority and power to act on behalf of each Company Holder with respect to the disposition, settlement or other handling of any matter all claims under this Agreement or the Ancillary Agreements and all rights or obligations arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, hereunder or thereunder. The Company Holders shall be bound by all actions taken and documents executed by the Shareholder Shareholders Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify Agreement and confirmthe Ancillary Agreements, and hereby ratifies the Parent and confirms, Surviving NewCo and any of their affiliates shall be entitled to rely on any action taken by or decision of the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any timeshall receive no compensation for its services. Should Notices or communications to or from the Shareholder Representative die, become legally incapacitated shall constitute notice to or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve from each Company Holder.
(b) In performing the functions specified in his or her steadthis Agreement, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to any Company Holder in the Shareholders for any act done absence of gross negligence or omitted hereunder in its capacity as willful misconduct on the part of the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders Each Company Holder shall severally and not jointly (based on each Shareholdersuch Company Holder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thatPro Rata Share), for the avoidance of doubtand not jointly, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, loss incurred without gross negligence or expense (including willful misconduct on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of its duties hereunder. The Shareholder Representative may draw at any time, and from time to time, from the Shareholder Representative’s Administrative Expense Account to pay any amounts due by the Company Holders hereunder, including, any losses, third-party fees, expenses or costs it incurs in performing its duties hereunder and obligations under this Agreement by or on behalf of the Transaction Documents Company Holders, including, without limitation, legal and consultant fees, expenses and costs for reviewing, analyzing and defending any claim or process arising under or pursuant to this Agreement or any Ancillary Agreement (collectively, “Representative LossesAdministrative Costs”). From and after the Closing, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, if the Shareholder Representative will reimburse determines that the Shareholders amounts in the amount Administrative Expense Account are
(c) The grant of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from authority provided for herein (i) is coupled with an interest and shall be irrevocable and survive the funds in the Expense Funddeath, incompetency, bankruptcy or liquidation of any Company Holder and (ii) shall survive the funds in consummation of the Escrow Amount at such time as such amounts would otherwise be distributable Mergers, and any action taken by Shareholder Representative pursuant to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything authority granted in this Agreement to the contraryshall be effective and binding on each Company Holder notwithstanding any contrary action of or direction from such Company Holder, the limitations on liability except for actions or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the omissions of Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or constituting willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Transaction Agreement (Avista Healthcare Public Acquisition Corp.)
Shareholder Representative. 4.1. By virtue of the execution (a) Each Shareholder, for itself or adoption of this Agreementhimself and for its or his successors and assigns, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably makes, constitutes and appoints N▇▇▇▇ ▇▇▇▇▇ (the “▇, in his capacity as Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true sole and lawful exclusive agent, representative and attorney-in-fact and representative of such Shareholder, to act for and on behalf of all Shareholders, and each of them, such Shareholder with respect to the matters set forth in this Section 11.17, and the Shareholder Representative hereby accepts such appointment. Each Shareholder acknowledges that the appointment of the Shareholder Representative is coupled with an interest and may not be revoked. Any such actions taken, exercises of rights, power or authority, and any decision or determination made by the Shareholder Representative consistent with this Section 11.17, shall be absolutely and irrevocably binding on each Shareholder as if such Shareholder personally had taken such action, exercised such rights, power or authority or made such decision or determination.
(b) In furtherance of the appointment of the Shareholder Representative, each Shareholder, fully and without restriction (in each case, other than in the case of any Ancillary Documents solely between a particular Shareholder and a third party, for which such Shareholder will retain all matters arising out of rights and obligations, including notice), (i) agrees to be bound by all notices given and received and agreements and determinations made by and documents executed and delivered by the Shareholder Representative under or in connection with this Agreement, the Ancillary Documents or any of the transactions contemplated thereby, and (ii) authorizes the Shareholder Representative to (A) execute, deliver and receive deliveries of all agreements, certificates, statements, notices, certificates, approvals, extensions, waivers, undertakings, amendments, and other documents required or permitted to be given in connection with Section 2.2, Section 3.3 and Section 7.3 and to waive any closing deliverables of the Buyer or approve any press releases or public announcements in connection therewith, (B) deliver to Buyer any agreements, certificates, statements, notices, certificates, approvals, extensions, waivers, undertakings, amendments, and other documents required or permitted to be given pursuant to this Agreement and have been executed by Shareholders and deposited with the Shareholder Representative for purpose of such delivery, (excluding C) on behalf of the applicable Shareholders, dispute or refrain from disputing any claim made by Buyer under this Agreement or the Escrow Agreement, and negotiate and compromise any dispute which may arise under Section 3.3 or Section 9.2(a) of this Agreement or the Escrow Agreement, (D) sign any releases or other documents with respect to any such dispute or remedy described in subsection (C), (E) subject to any additional consents required pursuant to Section 10.2)11.9, the Paying Agent negotiate, execute, and deliver any amendments to this Agreement, (F) petition the Escrow Agent for the release of any or all funds due to the Founders or the Shareholders under Section 3.3 and Section 3.1 of this Agreement, respectively, and the Escrow Agreement and, subject to the Shareholder Representative’s other responsibilities under this subsection, pay to each Founder or other Shareholder, as applicable, such Founder’s or other Shareholder’s Pro Rata Share of such funds, (G) pay out of the Reserve Account or funds otherwise payable to Shareholders by Buyer or the Escrow Agent all fees and expenses of Shareholders (and of the Shareholder Representative acting in such capacity) incurred in connection with the transactions contemplated by this Agreement and the agreements ancillary hereto following Ancillary Documents, including without limitation the Closing fees and taking any action or omitting to take action on behalf expenses of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsAgent, noticescounsel, communications accountants, investment bankers and determinations other professional advisors retained by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmtransactions, and hereby ratifies (H) bring or refrain from bringing any action, suit or proceeding after the Closing, by and confirmson behalf of any or all Shareholders, against Buyer, any Company Group Member or any other Indemnifying Party in connection with this Agreement and the Ancillary Documents and the transactions contemplated hereby and thereby pursuant to Section 9.2(f). Except for any obligations for which Shareholders are severally, but not jointly, liable, payments made by the Shareholder Representative under subsection (G) above will be considered to be paid by all Shareholders in accordance with their respective Pro Rata Shares. Any amounts remaining in the Reserve Account following the final resolution of the Closing Working Capital and Closing Cash under Section 3.3 shall be promptly paid to the Shareholders in accordance with their respective Pro Rata Shares.
(c) If any Shareholder Representative resigns, ceases to be a legal entity, dies or becomes incapacitated, its or his successor will be appointed within 15 days of such event by the Shareholders owning a majority of the Shares held by all of the Shareholders immediately prior to the Closing, including each of the Founders. The decisions and actions of any successor Shareholder Representative will be, for all purposes, those of the Shareholder Representative as if originally named herein. The death or incapacity of any Shareholder will not terminate the authority and agency of the Shareholder Representative. Any successor Shareholder Representative will provide Buyer with prompt written notice of its or his appointment.
(d) Buyer will be entitled to rely exclusively upon any communication given or other action taken by the Shareholder Representative in accordance with this Agreement and will not be liable to Shareholders or any other Person for any action taken or not taken in reliance upon the exercise Shareholder Representative. ▇▇▇▇▇ will not be obligated to inquire as to the authority of the power of attorney granted to the Shareholder Representative pursuant with respect to this the taking of any action set forth in Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should 11.17(b) that the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, takes on behalf of Shareholders.
(e) Each Shareholder agrees that the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and liable for any actions taken or omitted to be taken under or in connection with this Agreement or the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser Escrow Agreement or the transactions contemplated hereby or thereby, except to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition extent such actions or omissions shall have been determined by a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential have constituted willful misconduct or contingent liabilities of the Shareholders hereunder)intentional fraud.
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative(f) As used herein, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on “Pro Rata Share” means each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify issued, outstanding and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and vested Shares held by all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that such group of Shareholders, as the foregoing indemnities will survive the resignation or removal case may be, determined as of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Closing Date.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue For purposes of this Agreement the shareholders of Benelytics and the holders of the execution or adoption Benelytics Notes, without any further action on the part of this Agreementany such person, each Shareholder irrevocably approves shall be deemed to have consented to the constitution and appointment of, and hereby irrevocably constitutes and appoints Nof ▇▇▇ ▇▇▇▇▇▇ as the representative of such persons (the “"Shareholder Representative”) with all the rights"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholderseach such person, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative of any and all such actionsactions and the making of any decisions required or permitted to be taken by him under this Agreement, noticesincluding, without limitation, the exercise of the power to (i) execute the Escrow Agreement, (ii) authorize delivery to InsWeb of the Escrow Shares, or any portion thereof, in satisfaction of Indemnification Claims, (iii) agree to, negotiate, enter into settlements and compromises of, and determinations by demand arbitration and comply with orders of courts and awards of arbitrators with respect to such Indemnification Claims, (iv) resolve any Indemnification Claims and (v) take all actions necessary in the judgment of the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any for the accomplishment of the foregoing and all Shareholders.
4.2. Without limiting the generality of the foregoingother terms, the Shareholder Representative shall have full power conditions and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions limitations of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement. Accordingly, the Payment Agent AgreementShareholder Representative has unlimited authority and power to act on behalf of each shareholder of Benelytics and each holder of a Benelytics Note with respect to this Agreement and the Escrow Agreement and the disposition, share transfer deeds settlement or other handling of all Indemnification Claims, rights or obligations arising from and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and taken pursuant to this Agreement, the Paying Agent Agreement . The shareholders of Benelytics and the Escrow Agreement. From and after holders of the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall Benelytics Notes will be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees and InsWeb shall be entitled to ratify and confirm, and hereby ratifies and confirms, rely on any action taken by or decision of the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including will incur no liability with respect to potential any action taken or contingent liabilities of suffered by him in reliance upon any notice, direction, instruction, consent, statement or other document believed by him to be genuine and to have been signed by the Shareholders hereunderproper person (and shall have no responsibility to determine the authenticity thereof).
4.4. The Shareholder Representative shall not be liable to the Shareholders , nor for any act done other action or omitted hereunder in its capacity as the Shareholder Representativeinaction, except to the extent caused by its his own willful misconduct, bad faith or gross negligence or bad faithnegligence. In all questions arising in respect of any matter arising under this Agreement or the Escrow Agreement, the Shareholder Representative may rely on the advice of counsel counsel, and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share for anything done, omitted or suffered in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred good faith by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as based on such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representativeadvice, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earningsanyone. The Shareholder Representative will not be liable for required to take any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or action involving any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for expense unless the payment of such fees and expenses shall be delivered by expense is made or provided for in a manner satisfactory to him. At any time during the term of the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion Agreement, holders of a majority of the Escrow Shares can appoint a new Shareholder Representative’s responsibilitiesRepresentative by written consent by sending notice and a copy of the written consent appointing such new Shareholder Representative signed by holders of a majority of the Escrow Shares to InsWeb and the Escrow Agent. All amounts remaining Such appointment will be effective upon the later of the date indicated in the Expense Fund upon termination of consent or the Shareholder Representative’s engagement (date such consent is received by InsWeb and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallAgent.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) The Shareholder Representative will act as the agent of the execution Sellers in connection with, and to facilitate the consummation of the transactions contemplated by, this Agreement and the other documents contemplated hereby, and in connection with the activities to be performed on behalf of the Sellers under this Agreement, and will have the full power and authority to settle and resolve any disputes which may arise hereunder and to agree to or adoption modify the methodology or timeframe by which such disputes are to be resolved. Each of the Sellers hereby authorizes the Shareholder Representative to take any action on the Sellers’ behalf in connection with the Sellers’ performance or enforcement of this Agreement, each including (i) negotiating, settling or compromising any adjustment to the Purchase Price, including under Section 2.3, (ii) performing all covenants to be performed by the Sellers hereunder, (iii) negotiating, asserting, prosecuting, settling or compromising on behalf of the Sellers any claim for indemnification against MFRM or the Buyer, (iv) negotiating, defending, settling or compromising on behalf of the Sellers any claims against any Seller arising under this Agreement or (v) entering into the Escrow Agreement and negotiating, asserting, prosecuting, defending, settling or compromising on behalf of the Sellers any disputes or claims that may arise under the Escrow Agreement. MFRM and the Buyer shall be entitled to rely exclusively upon the communications of the Shareholder irrevocably approves Representative relating to the constitution foregoing matters and appointment of, such communications shall be deemed to be made on behalf of any or all Sellers and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (neither MFRM nor the “Buyer shall be required to comply with any instructions or communications from a Seller even if such instructions or communications are contrary to the instructions or communications of the Shareholder Representative”.
(b) Neither MFRM nor the Buyer (a) need be concerned with all the rights, powers and obligations contemplated by this Section 4, and any successor authority of the Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and Representative to act on behalf of all ShareholdersSellers as provided hereunder, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith b) shall be given held liable or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, accountable in any and all Shareholders.
4.2. Without limiting the generality manner for any act or omission of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholdercapacity.
4.3. (c) The Shareholder Representative may resign at any time. Should the Shareholder Representative dieSellers agree to, become legally incapacitated or bankruptjointly and severally, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, losses or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions damages incurred by the Shareholder Representative (including reasonable fees and expenses of any legal counsel retained by the Shareholder Representative) arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder. The Shareholder Representative shall not have any liability to any Seller or other Person arising out of or relating to the Shareholder Representative’s actions under this Agreement, the Escrow Agreement or any other certificate, exhibit, annex, schedule or other document or agreement delivered or entered into in connection with this Agreement, or with respect to any other matter in this Agreement, the Escrow Agreement or any other certificate, exhibit, annex, schedule or other document or agreement delivered or entered into in connection with this Agreement, including any of his negligent acts or omissions.
(d) Unless a Seller or other Person entitled to receive payments from or at the direction of the Shareholder Representative hereunder and under the Transaction Documents (collectively, “Representative Losses”), has provided in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated writing wire transfer instructions to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse shall pay any amounts due to such Person from the Shareholders Shareholder Representative by check payable to the amount order of such indemnified Representative Loss to the extent attributable Person and mailed to such fraud, willful misconduct, gross negligence Person’s last known address. The Shareholder Representative may rely on the wire transfer instructions or bad faith. If not paid directly notice address provided by each Seller in writing until such time as such Seller provides written notice of new wire transfer instructions or notice address to the Shareholder Representative by (which shall be effective only upon the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder receipt thereof by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will shall not be responsible or otherwise liable for any loss of principal of the Expense Fund other than misdirected payments (or to see that any Person receives any such payment) under this Agreement because such Person’s wire transfer instructions or notice address is incorrect, illegible or outdated.
(e) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall serve as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and until he resigns or is otherwise unable or unwilling to serve. In the agreements ancillary hereto; provided event that any portion a Shareholder Representative resigns from such position or is otherwise unable or unwilling to serve, the Sellers shall select, by the vote or consent of Sellers whose aggregate Allocation Percentages immediately prior to the Expense Fund not ultimately required for Closing exceed 50%, a successor representative to fill such vacancy, shall provide prompt written notice to the payment Buyer of such fees change and expenses such substituted representative shall then be delivered by the Escrow Agent deemed to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of be the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination Representative for all purposes of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Mattress Firm Holding Corp.)
Shareholder Representative. 4.1. (a) By virtue of the execution approval of the Merger and this Agreement by the Escrow Participants and without any further action of any of the Escrow Participants or adoption of this Agreementthe Company, each Shareholder irrevocably approves the constitution and appointment ofFortis Advisors LLC, and a Delaware limited liability company, is hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 appointed as the sole, exclusive, Shareholder Representative and as the true and lawful agent, representative and attorney-in-fact for and on behalf exclusive agent under this Agreement and the Escrow Agreement. The rights of all Shareholders, the Escrow Participants to receive disbursements from the Escrow Fund and each Holdback Account shall be subject to the right of them, with respect Fortis Advisors LLC (the "Shareholder Representative") to take any and all matters arising out of actions and make any and all decisions required or in connection with this Agreement (excluding pursuant permitted to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given taken or made by the Shareholder Representative and all such actionsunder this Agreement, notices, and determinations by the Escrow Agreement or the Shareholder Representative shall conclusively be deemed Engagement Agreement, including the exercise of the right to: (i) give and receive notices and communications under Section 2.6, Article 8 or the Escrow Agreement; (ii) authorize delivery to have been authorized byParent of cash from the Escrow Fund pursuant to Section 2.6(f)(ii) or in satisfaction of claims for indemnification made by Parent under Article 8; (iii) object to, agree to, negotiate, bring matters before the Neutral Accounting Arbitrator, or enter into settlements and shall be binding uponcompromises with respect to, any adjustment to the Merger Consideration pursuant to Section 2.6; (iv) object to claims for indemnification made by Parent under Article 8; (v) agree to, negotiate, enter into settlements and compromises of and comply with court orders with respect to claims for indemnification made by Parent under Article 8; (vi) undertake any defense of Third‑Party Claims; and (vii) take all Shareholders.
4.2actions necessary or appropriate in the good faith judgment of the Shareholder Representative for the accomplishment of the foregoing. Without limiting the generality of Notwithstanding the foregoing, the Shareholder Representative shall have full power no obligation to act on behalf of the Escrow Participants, except as expressly provided herein, in the Escrow Agreement and authority to: from and after in the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Shareholder Representative Engagement Agreement, and such portion for purposes of the Escrow Amount as is remaining at the end clarity, there are no obligations of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The identity of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmmay be changed, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five may be appointed, from time to time (5including in the event of the resignation or the death, disability or other incapacity of the Shareholder Representative) Business Days after receipt of a written request delivered by Purchaser to Escrow Participants whose aggregate Escrow Participation Percentages exceed sixty percent (60%), and any such successor shall succeed the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement immunities and rights to indemnification shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. For No bond shall be required of the avoidance Shareholder Representative. From and after the Effective Time, a decision, act, consent or instruction of doubt the Shareholder Representative taken under this Agreement, the Escrow Agreement or the Shareholder Representative Engagement Agreement shall be final, binding and notwithstanding anything conclusive upon each Escrow Participant and such Escrow Participant's successors as if expressly confirmed and ratified in writing by such Escrow Participant, and all defenses which may be available to any Escrow Participant to contest, negate or disaffirm the action of the Shareholder Representative taken in good faith under this Agreement, the Escrow Agreement or the Shareholder Representative Engagement Agreement are waived.
(b) At the Closing, Parent shall make a cash payment to the contraryShareholder Representative, by wire transfer of immediately available funds to an account designated by the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable Shareholder Representative prior to the indemnities provided Closing Date, in an amount equal to the Representative Reimbursement Amount. The Representative Reimbursement Amount shall be held by the Shareholder Representative for (i) reimbursement payable to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done 9.1 or omitted hereunder (ii) use as otherwise determined by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earningsAdvisory Group. The Shareholder Representative will is not be liable providing any investment supervision, recommendations or advice and shall have no responsibility or liability for any loss of principal of the Expense Fund Representative Reimbursement Amount other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate fundsis not acting as a withholding agent or in any similar capacity in connection with the Representative Reimbursement Amount, and has no tax reporting or income distribution obligations. The Escrow Participants will not use these receive any interest on the Representative Reimbursement Amount and assign to the Shareholder Representative any such interest. Subject to Advisory Group approval, the Shareholder Representative may contribute funds to the Representative Reimbursement Amount from any consideration otherwise distributable to the Escrow Participants. Any portion of the Representative Reimbursement Amount that has not been utilized by the Shareholder Representative pursuant to the terms of this Agreement on or prior to the date specified by the Shareholder Representative on or after the Escrow Release Date, shall be paid by the Shareholder Representative to the Escrow Agent for distribution to the Escrow Participants pro rata in accordance with their respective Escrow Participation Percentages.
(c) Certain Escrow Participants have entered into an engagement agreement (the "Shareholder Representative Engagement Agreement") with the Shareholder Representative to provide direction to the Shareholder Representative in connection with its operating expenses services under this Agreement, the Escrow Agreement and the Shareholder Representative Engagement Agreement (such Escrow Participants, including their individual representatives, collectively hereinafter referred to as the "Advisory Group"). Neither the Shareholder Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the "Shareholder Representative Group"), shall be liable for any liability, loss, damage, penalty, fine, cost or any other corporate purposes expense incurred without gross negligence by the Shareholder Representative while acting in good faith and will not voluntarily make these funds available to its creditors in the event exercise of bankruptcyits good faith judgment and arising out of or in connection with the acceptance or administration of its duties or the exercise of its rights hereunder (it being understood that any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith). The Escrow Participants shall indemnify, defend and hold harmless the Shareholder Representative Group from and against any and all losses, claims, damages, liabilities, fees, costs, expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers), judgments, fines or amounts deposited paid in settlement incurred without gross negligence or willful misconduct on the Expense part of the Shareholder Representative and arising out of or in connection with the acceptance or administration of its duties hereunder, under the Escrow Agreement or under the Shareholder Representative Engagement Agreement. The Escrow Fund shall be available for to indemnify and hold the payment Shareholder Representative harmless against any liability, loss, damage, penalty, fine, cost or expense incurred by the Shareholder Representative without gross negligence or bad faith on the part of all fees the Shareholder Representative and arising out of or in connection with the acceptance or administration of its duties under this Agreement and the Escrow Agreement. The powers, immunities and rights to indemnification granted to the Shareholder Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Escrow Participant and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Escrow Participant of the whole or any fraction of his, her or its interest in the Escrow Fund and Holdback Account.
(d) The Shareholder Representative shall be entitled to deduct and recover from any amounts payable to the Escrow Participants pursuant to this Agreement or the Escrow Agreement any costs and expenses reasonably incurred by the Shareholder Representative in performing its duties under connection with actions taken by the Shareholder Representative pursuant to the terms of this Agreement or the Escrow Agreement (including the hiring of legal counsel and the agreements ancillary hereto; provided that any portion incurring of the Expense Fund not ultimately required for the payment of such legal fees and expenses shall be delivered by costs), after the Representative Reimbursement Amount has been exhausted. The Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of Participants acknowledge that the Shareholder Representative’s responsibilities. All amounts remaining Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the Expense Fund upon termination exercise or performance of the Shareholder Representative’s engagement (and following the completion any of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Shareholder Representative shall not be required to take any action unless the Shareholder Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Shareholder Representative against the costs, expenses and liabilities which may be incurred by the Shareholder Representative in performing such actions.
(e) From and after the Effective Time, Parent and the Surviving Corporation shall promptly afford to the Shareholder Representative reasonable access to the books, records (including accountants' work papers) and employees of Parent and the Surviving Corporation to the extent reasonably determined by the Shareholder Representative to be necessary to permit it to investigate or determine any matter relating to (i) its rights or obligations or the rights or obligations of the Escrow Participants under this Agreement, or (ii) the rights or obligations (under any law or otherwise) of the Escrow Participants with respect to any period ending on or before the date of this Agreement. Unless otherwise consented to in writing by the Shareholder Representative, neither Parent nor the Surviving Corporation shall, for a period of four years after the date of this Agreement, destroy, alter or otherwise dispose of any of the books and records of the Surviving Corporation relating in whole or in part to any period prior to the date of this Agreement without first offering to surrender to the Shareholder Representative such books and records or any portion thereof which Parent or the Surviving Corporation may intend to destroy, alter or otherwise dispose of.
(f) Parent may rely and shall be protected in acting, or refraining from acting, upon any written notice, instruction or request furnished to it hereunder or under the Escrow Agreement and reasonably believed by Parent to be genuine and to have been signed or presented by the Shareholder Representative as if such written notice, instruction or request had been furnished to it by all the Escrow Participants.
(g) Parent hereby consents to the retention by the Shareholder Representative of L▇▇▇▇ ▇▇▇▇▇ & N▇▇▇▇▇▇▇▇▇▇▇ LLP ("L▇▇▇▇ ▇▇▇▇▇") as counsel following the Closing, notwithstanding that L▇▇▇▇ ▇▇▇▇▇ has represented the Company in connection with the transactions contemplated by this Agreement, including the exercise negotiation of this Agreement, and waives any right Parent or the Surviving Corporation may have to object to such representation.
(h) The Shareholder Representative shall be entitled to: (i) rely upon the Schedule of Escrow Participants, (ii) rely upon any signature believed by it to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the right to waive rights applicable Escrow Participant or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)other party.
Appears in 1 contract
Sources: Merger Agreement (Aerocentury Corp)
Shareholder Representative. 4.1. By virtue (a) The Shareholders and the DolEx Class B Shareholders hereby agree and acknowledge that the Shareholder Representative shall act as an agent of the execution or adoption of Shareholders and the DolEx Class B Shareholders and is entitled with such powers as are delegated under this Agreement, each Shareholder irrevocably approves which shall include the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ power (the “Shareholder Representative”i) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 to act as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect Shareholder or DolEx Class B Shareholder to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), execute the Paying Agent Escrow Agreement, the Escrow Agreement Earnout Agreement, and the agreements ancillary hereto following the Closing any Company Ancillary Agreement, (ii) to give and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, receive notices and communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by and the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and DolEx Class B Shareholders under this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Earnout Agreement, share transfer deeds any Stock Pledge Agreement, and endorsements any Company Ancillary Agreement, (iii) to waive provisions of any such agreements, (iv) to update the Schedules to this Agreement and termination instruments provide same to Parent, (v) to authorize delivery to the Parent Group Members of the funds or other property pursuant to the Escrow Agreement in satisfaction of claims by Parent Group Members, (vi) to object to any Claim Notice, (vii) to conduct, control and including amendments that may require price reductions or holdbacks); cooperate with respect to the defense of the litigation described in Article X herein, (viii) to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to grantsuch claims, provide, negotiate and sign all waivers, consents, instructions and authorizations and (ix) to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; judgment of the Shareholder Representative for the accomplishment of the foregoing and to prosecute, defend otherwise act on behalf of the Shareholders and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant DolEx Class B Shareholders with respect to this Agreement, the Paying Agent Escrow Agreement, the Earnout Agreement, any Stock Pledge Agreement and any Company Ancillary Agreement and the Escrow Agreement. From transactions contemplated hereby and after thereby, each of which the ClosingShareholders and the DolEx Class B Shareholders have received, the Purchaser shall be entitled to deal exclusively with reviewed and approved in their execution form.
(b) A decision, act, consent or instruction of the Shareholder Representative in respect accordance with Section 12.13(a) shall constitute a decision of any matter arising under the Transaction Documentsall Shareholders and all DolEx Class B Shareholders and shall be final, binding and conclusive upon each such Shareholder or DolEx Class B Shareholder, and the ShareholdersParent may rely upon any decision, in their relationship with the Purchaseract, shall be bound by all actions taken by consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of each and every such Shareholder and DolEx Class B Shareholder. Each Parent Group Member is hereby relieved from any liability to any Person for any acts done by them in connection accordance with such matters. By virtue decision, act, consent or instruction of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. (c) The Shareholder Representative shall not be liable to the Shareholders or the DolEx Class B Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel while acting in good faith and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part exercise of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholdersreasonable judgment, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by pursuant to the Shareholder Representativewritten advice of counsel shall be conclusive evidence of such good faith.
4.6. A total of US$100,000 (d) Neither Parent nor any Parent Group Member shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent responsible or liable for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses any acts or omissions of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcapacity as such.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) ▇▇▇▇ ▇. ▇▇▇▇ (the “Shareholder Representative”) with all the rights▇▇▇, powers and obligations contemplated by this Section 4Ph.D., and any successor Shareholder Representative(s) designated under this Section 4 is hereby irrevocably appointed as the solerepresentative, exclusive, true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholders, the Company and each of themShareholder, with respect (i) to any give and all receive notices and communications relating to the transactions and other matters arising out of or in connection with contemplated by this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsSeller Ancillary Documents, notices, communications including those relating to adjustments to the Merger Payment and determinations by or indemnification claims; (ii) to make decisions on behalf of the Company and the Shareholders in accordance herewith shall with respect to the transactions and other matters contemplated by this Agreement or the Seller Ancillary Documents, including regarding (A) adjustments to the Merger Payment, (B) indemnification claims, (C) amendments to this Agreement or the Seller Ancillary Documents and (D) the defense of third party suits that may be given the subject of indemnification claims, and to negotiate, enter into settlements and compromises of, and demand litigation or made arbitration with respect to such third party suits or claims by the Parent for indemnification; and (iii) to take other actions on behalf of the Company and the Shareholders as contemplated by this Agreement or the Seller Ancillary Documents, including the exercise of all rights granted to the Company and the Shareholders under this Agreement or the Seller Ancillary Documents.
(b) The Company and each Shareholder Representative agrees that (i) the provisions of this Section 12.1 are independent and all such actionsseverable, notices, are irrevocable and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, coupled with an interest and shall be binding upon, enforceable notwithstanding any and all Shareholders.
4.2. Without limiting rights or remedies the generality of the foregoing, the Company or any Shareholder Representative shall may have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or transactions contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense FundSeller Ancillary Documents, (ii) the funds in remedy at law for any breach of the Escrow Amount at such time as such amounts provisions of this Section 12.1 would otherwise be distributable to the Shareholdersinadequate, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 12.1 shall apply, mutatis mutandis, to be binding upon the successors and assigns of the Company and each Shareholder.
(c) A decision, act, consent or instruction of the Shareholder Representative relating to this Agreement or the Seller Ancillary Documents shall constitute a decision for the Company and all Shareholders, and shall be final, binding and conclusive upon the Company and the Shareholders, and the Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative as if it was a being the decision, act, consent or instruction of the Company and every Shareholder. The Shareholders shall indemnify and hold harmless the Parent from any action or omission on their behalf at the request or instruction of Shareholder Representative).
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Shareholder Representative. 4.1. By virtue (a) In order to efficiently administer the transactions contemplated hereby, including but not limited to the waiver of any condition to the obligations of the execution TEXONA or adoption of this Agreementits SHAREHOLDERS to consummate the transactions contemplated hereby, each Shareholder irrevocably approves the constitution and appointment of, and SHAREHOLDERS hereby irrevocably constitutes and appoints Ndesignate Earl ▇▇▇ . ▇▇▇▇▇▇▇, ▇▇., ▇▇ their SHAREHOLDER Representative.
(b) The SHAREHOLDERS hereby authorize the “Shareholder Representative”SHAREHOLDER Representative (i) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to take any and all matters arising out of or action necessary in connection with this Agreement (excluding the waiver of any condition to the obligations of the SHAREHOLDERS to consummate the transactions contemplated hereby, including, without limitation, pursuant to Section 10.2), the Paying Agent Agreement, the Escrow this Agreement and the agreements ancillary hereto following Registration Rights Agreement, (ii) to give and receive all notices given under this Agreement and the Closing Registration Rights Agreement, and taking any action or omitting (iii) to take any and all additional action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations as is contemplated to be taken by or on behalf of the Shareholders in accordance herewith shall be given or made SHAREHOLDERS by the Shareholder terms of this Agreement or the Registration Rights Agreement.
(c) In the event that the SHAREHOLDER Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, the persons constituting the Board of Directors of TEXONA immediately prior to the Effective Time shall select another representative to fill such vacancy and all such actions, notices, and determinations by the Shareholder Representative substituted representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and the SHAREHOLDER Representative for all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions purposes of this Agreement and the Escrow Agreement; documents delivered pursuant hereto.
(d) All decisions and actions by the SHAREHOLDER Representative shall be binding upon all of the SHAREHOLDERS and no SHAREHOLDER shall have the right to negotiate object, dissent, protest or otherwise contest the same.
(e) By his, her or its approval of the Merger and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or this Agreement as contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement terms hereof and/or execution of that certain Subscription and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Release Agreement, each Shareholder agrees to ratify SHAREHOLDER will agree that:
(i) all actions, decisions and confirm, instructions of the SHAREHOLDER Representative shall be conclusive and hereby ratifies binding upon all of the SHAREHOLDERS and confirms, no SHAREHOLDER shall have any cause of action against the SHAREHOLDER Representative for any action taken taken, decision made or instruction given by the Shareholder SHAREHOLDER Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice except for fraud or willful breach of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder SHAREHOLDER Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, ;
(ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 3.4 are independent and severable, are irrevocable and coupled with an interest and shall applybe enforceable notwithstanding any rights or remedies that any SHAREHOLDER may have in connection with the transactions contemplated by this Agreement;
(iii) remedies available at law for any breach of the provisions of this Section 3.4 are inadequate; therefore, mutatis mutandisTAC, SHAREHOLDER Representative and TEXONA shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if either the TAC, TEXONA and/or the Company brings an action to enforce the provisions of this Section 3.4; and
(iv) The provisions of this Section 3.4 shall be binding upon the executors, heirs, legal representatives, personal representatives, successor trustees, and successors of each SHAREHOLDER, and any references in this Agreement to a SHAREHOLDER or the SHAREHOLDER shall mean and include the successors to the Company (as if it was a Shareholder Representative)SHAREHOLDER's rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably authorizes, constitutes and appoints N▇▇▇ ▇▇▇▇▇ the Person identified in Exhibit 12 attached hereto as such “Shareholder Representative” as such Shareholder’s representative (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, such Shareholder’s true and lawful agentattorney in fact, representative and attorney-in-fact for and to act on such Shareholder’s behalf in the absolute discretion of all Shareholders, and each of them, Shareholder Representative with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant relating to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, including execution and such portion delivery of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8any amendment, in accordance with the Waterfall and in accordance with the terms and conditions supplement, or modification of this Agreement and any other Transaction Document and any waiver of any claim or right arising out of this Agreement and giving and receiving all notices pursuant to this Agreement; and in general, to do all things and to perform all acts, including executing and delivering all agreements, certificates, receipts, instructions, and other instruments contemplated by or deemed advisable to effectuate the provisions of this Section 5.09 (Shareholder Representative), including the exercise of the power to:
(i) give and receive notices and communications;
(ii) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Buyer;
(iii) litigate, arbitrate, resolve, settle or compromise any claim for indemnification or Earn Out Payments;
(iv) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement, including the Escrow Agreement;
(v) make all elections or decisions contemplated by this Agreement and any Transaction Document; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing and,
(including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to vi) take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in good faith judgment of Shareholder Representative for the Shareholder Representative’s discretion all indemnification disputes accomplishment of the foregoing
(including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingb) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser Buyer shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder by Shareholder Representative, as being fully binding upon such Person. Notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Buyer relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder or the amount of any Earn Out Payments, shall constitute a decision or action of all Shareholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any Shareholder, incapacity either individually or incompetence collectively, or by operation of each such ShareholderLaw, whether by death or other event.
4.3. (c) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the Shareholder Representative die, become legally incapacitated vote or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve written consent of a majority in his or her stead, interest of the Shareholders who have held, according to each Shareholder’s percentage ownership in the Company immediately prior to the ClosingFirst Closing (the “Majority Holders”); provided, the majority of the voting power of the Company on an as converted basis however, in no event shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as resign or be removed without the successor Shareholder Representative hereunder. If at any time there shall not be Majority Holders having first appointed a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The who shall assume such duties immediately upon the resignation or removal of Shareholder Representative’s engagement shall terminate following . In the completion event of all the death, incapacity, resignation or removal of Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The , a new Shareholder Representative shall not be liable to appointed by the Shareholders for any act done vote or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate written consent of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwiseMajority Holders. The Shareholders acknowledge and agree that, if a Shareholder is available that the foregoing indemnities will survive the resignation or removal is also an employee of the Company, any Shareholder Representative appointed hereunder must at the time of such appointment be an employee of the Company and shall be deemed to have immediately resigned such appointment upon the effective date of any cessation of employment with the Company. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Buyer, such appointment to be effective upon the later of the date indicated in such consent or the termination date such notice is received by Buyer; provided, that until such notice is received, Buyer shall be entitled to rely on the decisions and actions of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the prior Shareholder Representative under this Section 4.4as described in subsection (b) above.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract